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Amazon Says 'Roll 'Em'

Jonathan Berr

The largest Internet retailer recently optioned the screen rights to Keith Donohue's best-selling fantasy novel The Stolen Child, according to Variety.com. Amazon now is looking to find a filmmaker and studio partner, the trade publication says.

Amazon's foray into the movie business is unusual. Companies outside of Hollywood such as Starbucks(SBUX Quote) have gotten involved in films through marketing agreements, but they don't normally get involved in helping get the project off the ground.

Amazon's show-business ambitions are well known. Earlier this year, it launched a talk show on its site hosted by comedian Bill Maher. Media reports also have mentioned the company has ambitious plans to sell downloadable videos. Amazon has declined to comment on its digital-media strategy, and a spokeswoman couldn't immediately be reached Friday.

Even though Amazon is well equipped to help market a movie, that doesn't mean it needs to be involved in other aspects of the business, says Martin Pyykkonen, an analyst with Global Crown Capital who rates Amazon underweight.

"To me, it doesn't make any sense,'' he says.

Making movies isn't cheap. In 2005, the average cost to make and market a movie was $96.1 million, according to the Motion Picture Association of America, an industry trade group.

Plus, there is no guarantee of a hit. The marketing clout of Starbucks didn't help the box-office returns for the art-house flick Akeela and the Bee.

Amazon's bet on The Stolen Child may be less risky. Some of the biggest recent hits at the box office, including the Harry Potter franchise, have been in that genre.

That may result in a happy ending for Amazon investors, who have been crushed this year by a 43% drop in its share price. Wall Street has long been concerned about the company's rising costs and declining margins. Earlier this week, it reported disappointing second-quarter results.

Its shares rose 19 cents to $26.75.