So Amazon decides to form Amazon Studios and to give away $2.7 million to wannabe screenwriters. (Here’s the actual 21-page Amazon Studios Development Agreement contract they have to sign.) Sounds good, right? Not necessarily creatively or financially. It’s easy to understand why Amazon wants to get involved with the creation of entertainment and not just its distribution. Or why filmmakers would want to break into the biz through this contest that gets them noticed, lets them win money, and maybe even lets Warner Bros release their movies. But a growing echo chamber of Hollywood scribes is warning wannabes to beware because of problems with copyright, authorship, Amazon Studios’ free 18-month option on a writer’s work the moment it’s uploaded, and rewriting by Amazon readers. Here’s some of the most confounding language:

Amazon Studios invites filmmakers and screenwriters from all over the world to submit full-length movies and scripts, which will then get feedback from Amazon readers, who will be free to rewrite and amend. Based on reaction (“rate and review”) to stories, scripts and rough “test” films, a panel of judges will award monthly prizes… You agree to be automatically entered into any future contests for which your work is eligible. The specific contest rules for future contests will be posted on this page when they are announced.

Prominent scribe and blogger John August asks this: “Do you really want random people rewriting your script? To me, this feels like the biggest psychological misstep of the venture… Sure, most aspiring screenwriters yearn for access to the film industry and the chance to get their movies made. That’s why they enter screenwriting competitions, including things like Project Greenlight, which feels like its closest kin. But here’s the thing: each of these writers wanted to get his movie made. I’ve never met a single screenwriter who hoped anonymous strangers would revise him.” August quotes from the Amazon Studios’ FAQ:

Can I make it so that no one else can revise my original work?

No. But if someone makes changes that are bad, their version is not likely to get a lot of attention. And if someone comes along and makes your work better, you’re more likely to win a prize and get your project made. Sometimes other people can bring a different viewpoint or a different set of skills that take the story in a new direction or add new elements that make it even more compelling.

August (Big Fish, Charlie And The Chocolate Factory) gripes: “Hollywood already has a bad track record of messing up projects by bringing in too many writers — and that’s when they’re paying people who have already written and produced movies. The idea that an undiscovered screenwriter in Wichita will rewrite someone else’s screenplay on his own time seems far-fetched, and to me smacks of spec labor. I’m pro new ideas. I think you can make interesting, artistically worthwhile projects through crowdsourcing… But I don’t see Amazon’s model working.”

Blogger Craig Mazin, whose insights into screenwriting are far better than his own hack scripts (Scary Movie 3 and 4, Superhero Movie) opines that the Amazon Studios scheme “kind of disgusts” him because it’s a “bad, bad, bad, bad, bad, bad” deal. “They put this whole ‘Hollywood is old and lame, and we’re the new hotness’ vibe out there. In their intro video, their hip spokesman with the spiky haircut is an inclusive, welcoming voice. Hollywood is represented by a fat old Jew at a desk. Funny thing, though. The actual terms of Amazon’s ‘studio’ are so much worse than those offered by Hollywood studios, it’s grotesque.”

Mazin worries about the lack of credit protection or residuals: “WB could hire a WGA writer under a WGA contract to rewrite the script (if they hire any writer directly at all, it must be under a WGA deal). At that point, the Amazon work becomes source material, and the original writers are not eligible for ANY WGA credit at all. Just a ‘based on a screenplay by’ credit. The WGA writers – even if they only wrote five words – would be the only writers eligible for WGA credit and residuals.”

I’m sure this is just the tip of the iceberg in terms of outcry.