Woody Allen
Cannes Film Festival Woody Allen

The specialty distribution world is shifting. 

At Sundance, the media spotlight was on Amazon and Netflix, as established vets like Sony Pictures Classics and Fox Searchlight were forced to play a higher stakes game. That's not something SPC co-presidents Michael Barker and Tom Bernard care to do. They've watched many new players come and go over the years, overbidding to get into the game, and then folding when the chips run out. 

READ MORE: How Sony Pictures Classics Bought Four Films at Sundance

But this is different. Digital disrupters Amazon and Netflix aren't going anywhere. And if they figure out after some experimentation that they need to change their approach, they will. They're not competing on the same playing field as a studio specialty subsidiary focused on theatrical distribution.

Amazon is a gigantic online retailer that wants to lure potential customers, and can dip into its deep pockets to do so. Long-term Amazon vet and Amazon Studios founder Roy Price, son of old-school studio chief Frank Price, has brought in theatrical pros Ted Hope and Bob Berney to lure film talent, and they have, from Spike Lee ("Chi-Raq") and Whit Stillman ("Love and Friendship") to 80-year-old Woody Allen. In a major surprise, Amazon picked up his untitled new movie starring Steve Carell, Jesse Eisenberg, Blake Lively and Kristen Stewart. He was already on board via a TV series deal.

To steal Allen away from SPC, which had a long and productive relationship with the master auteur over eight films and 10 Oscar nominations and two wins, is unusual. How did it happen? According to sources, Amazon, which does not comment on such deals, made an offer, including some $5 million for P & A, valued at $20 million. That is far beyond what any self-respecting distributor would pay based on its value in conventional markets. SPC advanced $1 million for "Irrational Man," which grossed $4 million domestically vs. $20 million overseas. 

And this Amazon deal was not the result of any normal bidding war—they made a sky high offer to pull the movie away from Barker and Bernard. And succeeded. But this was an unusual situation, with a period film that cost over $30 million, double the usual Allen budget. SPC usually picks up Allen's films after they are completed, and has a perfectly good working relationship with the filmmaker, as his sister and producer, Letty Aronson, confirms: 

"We have always been exceptionally pleased working with Michael Barker and Tom Bernard at SPC. Amazon made us an offer that we couldn't refuse and we have a responsibility to our investors. Woody wishes that SPC could be the subdistributer for this film but apparently they would not. It's their policy to not do that. We certainly look forward to working with them again in the future."

Sony wasn't averse to releasing the movie, but couldn't do the honors on North American rights because the studio is tied to output deals with Starz and Encore, plus home entertainment and VOD, among other things. According to Barker, back from Madrid (where he saw the new Pedro Almodovar movie, "Julieta," based on three Alice Munro stories—which could land a Cannes competition berth before it opens in December): “We are as close to Woody and his producers as we have ever been. And we look forward to working with them on the next one. As far as we’re concerned this doesn’t change anything in our relationship."

The key going forward, as was proved by Netflix losing its "Birth of a Nation" world rights bid at Sundance to Fox Searchlight, is the ability to deliver a theatrical success. Amazon is more friendly to theatrical releases than Netflix, which really isn't in that business. But while Amazon usually gives a movie a month in theaters before making it available on their site (while Netflix met resistance from exhibitors on "Beasts of No Nation" and Weinstein's "Crouching Tiger, Hidden Dragon" reboot because they insist on going day-and-date), the question is whether Amazon will keep violating the exhibitors' preferred 90-day window convention, which makes booking the top-tier theaters where the most money can be made a challenge. Watch Amazon fall in line with official windows for "Manchester by the Sea" and Woody Allen in order to land the top screens.