Amazon gives Sundance filmmakers incentives to race to their streaming VOD window.

Amazon Video Direct launched its Film Festival Stars program at the 2017 Sundance Film Festival, offering a one-time publishing, non-recoupable bonus of up to $100,000 to festival films, plus double royalty rates for each stream on Amazon Prime.

More specifically, official selections of the festival are eligible for the following distribution package:

Publishing bonus (non-recoupable) U.S. Dramatic or Premieres: $100,000 U.S. Documentaries or Documentary Premieres: $75,000 World Dramatic, World Documentaries, Next, Spotlight, Kids, Midnight and New Frontier: $25,000

Streaming VOD royalty: $0.30/hour viewed (U.S); $0.12/hour viewed (non-U.S.). Earnings begin to accrue with first second streamed.

Scope of Rights/Territories: Worldwide streaming VOD (or U.S. plus all other available territories).

"We recognized that a lot of films at Sundance don't get full-service distribution deals. We want to provide a new distribution pathway for those films."

No Film School spoke with Eric Orme, head of Amazon Video Direct (AVD), to learn about the announcement and get specifics on how the deal will work for Sundance filmmakers. Orme confirmed that Sundance filmmakers that opt into the Film Festival Stars program with AVD will need to make their films available to stream on Amazon Prime starting September 2017 for a 24-month period with the first 12 months streaming VOD rights exclusive to Amazon Prime. Sundance filmmakers will have until February 28, 2017, to opt into the deal.

Orme explained, "We recognized that a lot of films at Sundance don't get full-service distribution deals. We want to provide a new distribution pathway for those films. Expanding distribution options means more great films have the opportunity to reach wider audiences."

Credit: Amazon

Films that aren’t acquired in a bidding war at Sundance can take several months to find a distribution deal, and many continue to play the festival circuit as they seek distribution. Amazon's deal essentially gives Sundance filmmakers one month after the festival to figure out if they are going to get a distribution deal—an incredibly short timeframe to make what could ultimately be a monumental decision for a filmmaking team.

Orme noted that this opt-in service is really geared toward filmmakers that plan on going down the self-distribution route. "The non-recoupable bonuses are intended to help filmmakers market their films to audiences prior to their release on Amazon Prime," Orme said. He sees these bonuses as a way for filmmakers to put together plans for their own releases, be it short theatrical runs or transactional VOD releases in the months prior to September 2017, and use the money from Amazon to promote these releases.

"AVD right now is focused on incremental steps to help these independent filmmakers. The upfront bonus is there to help with a theatrical release and any other marketing the filmmaker chooses."

Since many filmmakers are still interested in theatrical releases—especially those fortunate enough to premiere at Sundance—we asked Orme if AVD had considered partnering with the Amazon Studios side of their business to provide opportunities for theatrical releases.

"AVD right now is focused on incremental steps to help these independent filmmakers," Orme replied. "The upfront bonus is there to help with a theatrical release and any other marketing the filmmaker chooses."

Orme also confirmed that Sundance films that opt into Film Festival Stars will receive more prominent placement in the Amazon Prime store than other films upon release, and AVD will be available to these filmmakers to offer advice on how they should promote their films to take full advantage of the AVD platform.

Credit: IFC Films

Gauging how much money a Sundance film could make from streaming royalties on Amazon Prime is much more difficult. Orme stated, "Every film is unique, so it is really hard to speculate how well a film will do on Amazon Prime. We've had a lot of great successes in the eight months since we initially launched AVD." When asked if specific genres play better than others on Amazon Prime, Orme could only say that individual films have done well, but he couldn't point to any particular genre that has performed better than another.

So should Sundance filmmakers take the deal from Amazon?

For Sundance filmmakers who know they are going to take the self-distribution route, this could be a good deal. But getting a film into Sundance gives a filmmaker some hope of finding a more lucrative theatrical distribution and streaming deal, too. Certainly, bidding wars seem to be less frequent at Sundance in recent years, and many films finish the festival without a distribution deal in place. Yet the publicity around the festival and its films ensures that indie film fans who can't make it to Park City are—pardon the pun—primed to watch these films as soon as possible. So should Sundance filmmakers take the deal?

Let's take a closer look at those bonuses. These are not advances to be recouped once the film is released; filmmakers receive these bonuses free and clear, and then accrue revenue as soon as their films begin streaming on Amazon Prime. Now, $100,000 may sound like a lot, but I would venture to guess that many of the U.S. Dramatic Films and Premieres at Sundance cost significantly more than $100,000 to make. Some documentaries may break even at $75,000, but $25,000 for films in the World Dramatic, World Documentary and other categories may not be a big enough incentive to give up worldwide streaming VOD rights exclusively for 12 months starting this September.

By the time films make it to Sundance, they may not have any budget left for marketing, so Amazon's offer could look enticing.

The reality for many of these films, however, is even if they do get a distribution deal sometime after Sundance, they may not receive any advance from a distributor, and they may be on the hook for their marketing expenses, too. I certainly won't claim my feature film CENTS is on the same level as Sundance 2017 films, but I can speak from experience that many VOD distribution deals don't provide advances or marketing support. By the time films make it to Sundance, they may not have any budget left for marketing, so Amazon's offer could look enticing.

Credit: Amazon Studios

But the biggest drawback of this deal, in my opinion, is the February 28 deadline to opt in. Maybe savvy filmmakers will use this as leverage to get distributors to make distribution offers in the short window after the festival, and maybe the non-recoupable bonuses that Amazon is offering will sweeten the deal when filmmakers negotiate with other distributors. But Sundance filmmakers will have virtually no time to play at other festivals and seek out distributors before Amazon's deadline comes and goes. I wouldn't be surprised to learn that deals with AVD's Film Festival Stars happen on February 28 with announcements hitting on March 1.

"Amazon's algorithms are definitely putting our film in front of viewers they think may want to watch it."

For the rest of us, Amazon Video Direct is still an option for direct distribution, without the non-recoupable bonuses and regardless of whether your film screened at festivals or not. To learn more about the value of the service for indie filmmakers, I reached out to Lauren Myers, producer and lead actress of the film Dead Billy, which launched on Amazon Prime through AVD this fall. When I asked Myers whether AVD had helped Dead Billy reach its intended audience, she replied, "Yes and no. The main problem [with AVD] is we have to do all of the marketing. We have to push the film on social media, email, and word-of-mouth. However, when we saw that people were watching and reviewing it, we noticed people we didn't know were discovering the film and reviewing it, too. So, Amazon's algorithms are definitely putting our film in front of viewers they think may want to watch it."

Myers' distribution partner Indie Rights pushed her film's team to work hard to get reviews on Amazon. "It's a popularity contest, like everything else," noted Myers. Although Myers has yet to receive the film's first quarterly statement from Amazon, she believes AVD has helped with other opportunities to distribute Dead Billy: "You want the film up on as many platforms as possible, so AVD can only help. Plus, when people recommend the film to friends who don't have Amazon Prime, they have to rent or buy it to watch it."

We'll have to wait and see how many Sundance 2017 films take advantage of the Film Festival Stars program from Amazon—and whether or not the distribution deal ultimately works in their favor.

For more, see our complete coverage of the 2017 Sundance Film Festival. No Film School's video and editorial coverage of the 2017 Sundance Film Festival is sponsored by RODE Microphones.