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Tech Industry

Amazon spotlights the silver screen

The leading online retailer hosts home pages for movies such as "American Beauty" and the upcoming sci-fi film "Galaxy Quest" as part of a marketing agreement with upstart studio DreamWorks SKG.

Amazon.com is taking a different tack to expand its range of movie offerings: The online retailer is now hosting cinematic home pages under a deal with studio DreamWorks SKG.

Seattle-based Amazon's sites for movies such as "American Beauty" and the upcoming sci-fi film "Galaxy Quest" provide summaries, promotional pictures and links to related merchandise as part of its marketing agreement with DreamWorks.

The move represents one of the first times a film studio has teamed up with an online retailer to promote its movies. Although studios have been promoting their upcoming releases on the Web for some time, most have chosen to build their own sites.

Faced with mounting losses, "e-tailers" such as Amazon have been looking for inexpensive ways to draw in new customers and new business. In that vein, Amazon has branched into electronic greeting cards, auctions and third-party site hosting. In addition, the company recently bought a 20 percent stake in gift registry Della & James.

Analysts say that by having Amazon host its site, DreamWorks can tap into Amazon's traffic. Meanwhile, Amazon has the opportunity to attract new customers by placing its URL in DreamWorks' advertising.

"This is really a win-win situation for both companies," said Michael Goodman, Yankee Group media and entertainment analyst.

In the past, Amazon has promoted upcoming album releases in its music store through free song downloads. Its move to host movie Web sites represents one of the first times the company has promoted a product that it won't be able to sell immediately.

But the move is not Amazon's first in terms of offering movie-related content. The company acquired veteran site the Internet Movie Database, which has cast, crew and production information on thousands of films. Amazon opened its video store in November 1998.

Goodman of the Yankee Group said Amazon's next step might be to team up with other studios to promote their films; Amazon declined to comment about future deals.

Further down the road, Amazon potentially could parlay these relationships into deeper ones that would allow it to offer video on demand, Goodman said. He added, however, that before that can happen, consumers will have to have greater access to the bandwidth needed to view movies, and Amazon and the studios will have to resolve issues surrounding the studios' existing theater and video businesses.

But by playing host, Amazon gets the chance to promote related products in its books and music stores and in its auctions and zShops areas.

"It gives Amazon a way to leverage their huge traffic," said Dan Ries, a financial analyst with Unterberg Towbin.

As part of the agreement, DreamWorks licenses content to Amazon and provides the online retailer with exclusive interviews with the movie cast and directors. In return, DreamWorks includes the Amazon Internet address in all of its advertising.

Amazon then constructs the site, promotes it though its home page and links it to related merchandise such as the soundtrack and script on its site.

Jason Kilar, general manager of Amazon's video store, said the company's partnership with DreamWorks was motivated partly by its customers. Amazon provides information about the movies it sells in its video stores and through its Internet Movie Database, but Kilar said customers wanted more information about "American Beauty" and "Galaxy Quest."

"Our customers care about movies," Kilar said.

Kilar said that Amazon offered DreamWorks a passionate movie audience, as well as the ability to construct sites quickly and with an eye for what interests consumers.

DreamWorks previously promoted films through other companies' Web sites. AOL's Entertainment Asylum, for instance, hosted a Web site for "The Haunting," and DreamWorks teamed with kid site FreeZone to promote "MouseHunt."

Mike Vollman, who oversees Internet and field marketing for DreamWorks' film division, said the company chose to team with Amazon largely to tap into the company's customer base. Instead of building an audience for its Web site from scratch, DreamWorks can build on Amazon's daily traffic--and its 13 million customers.

"Amazon has a huge daily customer base," Vollman said. "If I can be a part of that real estate, it means eyeballs to my site."

Vollman said DreamWorks' agreement with Amazon is on a movie-by-movie basis, so the studio could choose to promote its films with another partner in the future. But he said the studio has been happy with its relationship with Amazon thus far and probably will partner with the retailer again in the future.

"It's a great match," he said. "We love them."

News.com's Greg Sandoval contributed to this report.