How Amazon is changing the rules for books and movies

If you want a glimpse into the way Amazon sees your digital future, look no further than Jeff Ragsdale's new book, "Jeff, One Lonely Guy."

Last October, after being dumped by a girlfriend and mired in depression, Ragsdale posted a flier around New York City on a whim that read, "If anyone wants to talk about anything, call me." It listed his mobile phone number. Calls streamed in, by the dozens, then the hundreds, and now well into the tens of thousands.

Some callers left messages. Others texted. And many spoke with Ragsdale, sharing their own tales of depression, breakup, loss, substance abuse, and more. Ragsdale transcribed many and put them into a book that's something of a window into the lives of people from around the globe, coping with their daily demons.

"Jeff, One Lonely Guy" is the first book from Amazon Publishing, the retail giant's year-old New York imprint run by publishing industry veteran Larry Kirshbaum. It has won plaudits from Bret Easton Ellis, author of "American Psycho" and "Less Than Zero," who called the book "a legitimate new form of narrative." There have been only a few reviews, including one from Bookforum.com, which lamented the lack of Ragsdale's voice in the book, but nevertheless described it as "worth the read."

The book is slim by publishing industry standards -- a mere 138 pages. And while the messages are grouped into chapters with titles such as "Love Sucks" and "No God Created This Mess," there's no narrative, no storyline that has a beginning, middle, or end. What's more, the book debuted a mere five months after Ragsdale posted his flyer, Usain Bolt-like speed in an industry that typically publishes books at a meandering pace.

For Jeff Belle, vice president of Amazon Publishing, that's what makes "Jeff, One Lonely Guy" so exciting. It challenges preconceived notions about how publishing is done.

"We're most interested in working with authors who want to innovate, who want to experiment," Belle said in an interview with CNET. "What's a book? What's it becoming?"

These are questions that beg a much larger one: How is Amazon reshaping the way books, movies, and television programs are created?

Amazon is jumping headlong into the business of creating content because, more than any other company, it has the potent combination of a massive base of customers and the vast technical underpinning with which to bring those customers new ways of consuming books, movies, and television programs. And as that content becomes ever more digitized, Amazon wants to call the shots as to how those books and programs are created, delivered, and sold.

"Amazon doesn't want to be anyone's bitch," said Sucharita Mulpuru, an analyst with Forrester Research. "Amazon has the ability to create better content and not be encumbered by existing rules."

Amazon's Kindle family of electronic reading devices gives it the ability to offer books in a way that hasn't been available before. The company can crank out short works, such as Ragsdale's book. It can mine sales data from its international operations to find bestsellers that it then translates and sells to its English-speaking customers, as it did with "The Hangman's Daughter," a German work of historical fiction by Oliver Pötzsch.

Amazon is trying to change the rules in Hollywood as well. The company is creating a new model for making movies and television programs, tapping its vast Web presence to crowdsource concepts. Anyone can upload a screenplay or television pilot script to the Amazon Studios Web site, where Amazon and the community it's developed weed out the weakest and refine the most commercial, before the company commits significant financial resources to production.

"The cost of creating a prototype movie is so much lower than it used to be," Amazon Studios director Roy Price said in an interview with CNET. "We can prototype a movie again and focus-test it again.... You can really have it become more of an iterative process."

Of course, creating a new set of rules poses a threat to the businesses that have thrived playing the old game. The ability to buy books online with just a click, as well as the cut-rate pricing pressure that online retailers such as Amazon offer, have undermined brick-and-mortar booksellers. TV and movie studios are trying to figure out how to make money when consumers can often swipe their programming for free or watch those shows on subscription services, such as Amazon Instant Video, and its rivals Netflix and Hulu.

"Amazon is not afraid to invest ahead of the curve," said Dan Geiman, an analyst at McAdams Wright Ragen in Seattle. "They have a huge group of customers who view them very favorably, and they can leverage that."

Amazon's business model isn't just about getting ahead of those changes; it wants to force them as well. Amazon's mission is to seek out those seismic industry shifts and position itself to be in the right spot for the new world order.

"As a company, we are culturally pioneers, and we like to disrupt even our own business," Amazon Chief Executive Jeff Bezos told Wired last fall. "Other companies have different cultures and sometimes don't like to do that. Our job is to bring those industries along."

More than any other company, Amazon is driving the evolution of the book publishing world. With its various imprints, Amazon is publishing books that it will also sell. And the Kindle gives the company a retail store in the home of every consumer who owns one.

To fill that direct link to consumers with content, Amazon intends to offer some titles exclusively on the device. It's created Kindle Singles -- short books that the company sells for 99 cents to $4.99. Singles such as Andy Borowitz's "An Unexpected Twist" and Mara Altman's "Bearded Lady" have ranked among the bestselling titles among all books sold by Amazon. And, of course, they're only available through Amazon.

Amazon, though, wants to produce bestsellers that are full-length books as well. To do that, it's not just signing low-rent authors such as Ragsdale, who created his book with a former writing teacher, David Shields, and another writer, Michael Logan. Amazon Publishing has also inked a deal to publish a book by bombastic basketball coach-cum-announcer Bobby Knight titled "The Power of Negative Thinking." Self-help guru Timothy Ferriss is working on "The 4-Hour Chef" for Amazon Publishing. And according to Crain's New York, Amazon paid $850,000 for "My Mother Was Nuts," a memoir by Hollywood director Penny Marshall, anteing up almost $100,000 more than the next highest bid.

Amazon's Belle said some but certainly not all of the publishing unit's titles will be exclusive. Seeding the Kindle with must-have titles only available on it is one reason the company is so keen to obtain original content.

"It's not insignificant," Belle said.

The fear for publishers, booksellers, and even some authors is that Amazon will wield too much power as the publishing industry takes its new form. When the Department of Justice reached antitrust settlements for alleged e-book price fixing with three large publishers, it opened the door for Amazon to lower prices on books sold on its site, rather than letting publishers themselves set the prices as they do on Apple's iTunes. (One of the publishing houses to settle was Simon & Schuster, which is owned by CBS, parent company of CNET.)

Some corners of the publishing world, though, see the settlement and the DOJ's decision to pursue the publishers that didn't settle, along with Apple, as giving Amazon a cudgel to wield over the industry. Scott Turow, the best-selling author and president of the Authors Guild, worries that Amazon will be able to use predatory pricing to undermine rivals, giving it even more control over bookselling. Macmillan Publishers and Pearson's Penguin Group are fighting the Justice Department, in part, to maintain pricing control that Amazon would otherwise seize.

There's little of that anxiety regarding Amazon's move into movie and television production. In that industry, the company is still a pipsqueak, despite its deep pockets. And the concerns, to the extent they were raised, were largely that Amazon's approach wouldn't work because it turned the creativity of creating movies on its head.

The company launched Amazon Studios in November 2010 with a novel notion of crowdsourcing concepts. The idea was to let anyone who wanted to be a filmmaker upload their screenplay to the Amazon Studios Web site. Anyone with a browser and some time on their hands could review the projects and pass judgment on the idea. The best ones get refined and can be turned into test movies, which Web audiences again review.

For Amazon, the process is about creating a platform that allows it to rethink the traditional approach to movie development. It lets the company jump into the movie business and to only move ahead with films that have enough positive buzz that they should be commercially viable. At least, that's the idea.

"It's not just a focus group. It's thousands of people," Amazon Studios' Price said. "It makes a difference."

Since its launch, more than 700 test movies and 7,000 scripts have been submitted to the Amazon Studios site. The company currently has 15 movie projects in various stages of development.

One of those is Touching Blue, a film about a teenage girl whose psychic powers enable her to track people by holding objects they've touched. The screenplay has been refined to the point where Amazon Studios has turned it into a 96-minute test movie. Actors voice over the screenplay while storyboard art stands in for live action video. Anyone can go to Amazon.com, watch the test movie, and pass along their feedback as to whether or not they'd want to see it as a full-length feature film.

Unlike its publishing efforts, Amazon Studios has no plans to make its movies exclusive to Amazon customers. Price hopes they'll screen at theaters around the globe, in addition to being available for viewing on Amazon Instant Video, its rival to Netflix and Hulu.

Earlier this month, Amazon Studios announced plans to seek pilots for comedies and kids television shows. Amazon wants to create must-see programming that's only available on Amazon Instant Video as a way to differentiate it from rivals. Price said the TV shows that Amazon Studios produces will have their first run on the service.

It's a strategy that Netflix and Hulu are also pursuing. Netflix is working on its first original series, "Lilyhammer," about a mobster who moves to Lillehammer, Norway, in the federal witness protection program. And yesterday, Hulu unveiled three original shows, including "Spoilers," a talk show about movies starring "Clerks" and "Chasing Amy" filmmaker Kevin Smith.

Like its movie production, Amazon Studios wants to crowdsource its television programming as well. The company is asking writers to submit a five-page description of the show, along with a 22-minute pilot script for a comedy or an 11-minute pilot script for a children's show. Within 45 days, the studio will either option the project for $10,000 or invite the creator to add it to the Amazon Studios site, where the community can review it.

Just as Amazon is experimenting with publishing, the company is rethinking how movies and television programs are made.

"We are moving from an age of monarchy to an age of democracy in creating content," Price said. "There is a role for us to play."