Amazon's Indie Spirit

There's more than a love of the arts in play as Amazon (Nasdaq: AMZN) and Microsoft (Nasdaq: MSFT) announce their collaboration on the "1,000 HD-DVD Indies Project," which has the stated goal of providing independent filmmakers an easy way of getting their work out to the masses.

While quirky films and their makers stand to benefit, the project also will bolster Amazon's relevance to the media industry and perhaps give a nudge to the technology whose name appears in capital letters in the project's title.

Amazon's CustomFlix unit will facilitate an on-demand distribution model in which inventories need not be maintained; when a customer wants a film, it is manufactured after it is ordered. Microsoft technology will be used during the authoring process. (Mr. Softy, of course, is a big supporter of HD-DVD in the war between that format and Sony 's Blu-ray.)

The new approach is actually a cool little system for independent producers who want to become players in the Hollywood game. No, it won't suddenly give a newcomer the power of Spielberg, but it does offer a realistic opportunity for distribution -- including the opportunity to offer the DVDs on Amazon and a CustomFlix E-Store in addition to a personal website. As for Amazon, it gives the online retailer exposure to a portfolio of unique products that target an audience with potential to grow. Film festivals are expanding in popularity, helping create a whole lot of offbeat content just waiting for more efficient delivery systems. CustomFlix is a sound solution precisely because it offers no inventory exposure.

And let's not forget that it isn't just minor filmmakers that benefit from CustomFlix. If content is indeed king, then the Amazon unit should become increasingly vital to any content player. As the libraries of companies such as Time Warner (NYSE: TWX), Disney (NYSE: DIS), Viacom (NYSE: VIA), and others grow, they will hold movies which appeal to niche audiences -- demonstrating the benefit of manufacturing discs after demand. As an example, CBS (NYSE: CBS) sells old news programming through CustomFlix, and episodes of PBS' The Charlie Rose Show are available through the service as well.

This new "1,000 HD-DVD" project, which will commence with a series from the Sundance Film Channel, is yet another brand-builder for Amazon and CustomFlix. Although the analogy isn't perfect, I see this platform almost as something of an eBay -type (Nasdaq: EBAY) model. It's a simple way for individuals and businesses to enter the world of e-commerce. Amazon doesn't have to do any heavy capital lifting. It just sits back and takes a piece of the action in this win-win scenario.

Amazon is wise to invest in different methods of distribution, whether it be its Unbox paradigm or delivering discs on demand. It's a great way for the company to become increasingly relevant to the media industry. And, of course, it's a practical way of chasing new revenue streams. To all those budding filmmakers out there, who knows -- maybe Amazon can help you break through to the big time.