UPDATE: Amazon Studios chief resigns amid Hollywood upheaval

Dive Brief:

UPDATE: Roy Price, the head of Amazon’s movie and TV unit, has resigned from the company, according to Bloomberg. Albert Cheng, Amazon Studios chief operations officer, will oversee the division until a permanent replacement is found, according to Bloomberg.
The departure of Amazon Studio’s chief follows allegations that Price sexually harassed Isa Hackett, an executive producer on Amazon’s original series "Man in the High Castle." Hackett had said that Price "repeatedly and insistently propositioned her," according to the Hollywood Reporter. Following the reports of harassment, Amazon suspended Price without pay and put Cheng in charge of the division, according to Variety. The move came nearly two years after Hackett filed a complaint against Price in 2015, which was investigated and handled privately by Amazon, according to The Information.
Amazon has also cancelled an event in London to present media projects for Prime Video, an event that Price would have headlined, according to Variety. Amazon sent invitees a statement notifying them of the cancellation but offered no explanation, according to the report. Amazon did not reply to requests for comment about the cancellation.

Dive Insight:

Price’s departure and the allegations from Hackett come amid the upheaval in Hollywood over numerous allegations about producer Harvey Weinstein’s long history of harassment and sexual assault of actresses and others in the industry.

In response, Amazon Studios, according to The Verge, cut ties with Weinstein’s company, leading to the cancellation of a television drama from acclaimed director David O. Russell. Even as the company moved to separate itself from the allegations against Price and Weinstein, actress Rose McGowan called out Amazon CEO Jeff Bezos on Twitter, alleging that she "told the head of your studio that HW raped me. Over & over I said it. He said it hadn’t been proven. I said I was the proof."

The fallout from Weinstein and Price’s alleged harassment comes at a crucial time for Amazon’s video ambitions, which are ultimately inseparable from its Prime ambitions as they are a key lure for prospective Prime members.

Variety reported in September, around a month before the first Weinstein story broke, that Bezos had given Amazon Studios a "mandate" to create a "Game of Thrones"-like series — something with mass appeal that could generate wide interest in Amazon’s proprietary video offerings.

Price told Variety last month that "there is a new focus on finding 'big shows that can make the biggest difference around the world' in growing Amazon Video’s reach and Amazon Prime subscribers." According to a memo Price wrote to employees, Amazon Studios had 67 television and 20 movie products in the works, with 9,000 people participating on them, Variety reported.

That strategy is now presumably being spearheaded by Cheng, either until Price is reinstated or replaced. While that creates uncertainty in the short-term, the larger threat could come if the allegations against Price and Weinstein tarnish Amazon’s brand or company.

As one example of how toxic the Hollywood scandals can be for brands, last week Donna Karan, a friend of Weinstein, faced calls for boycotts of her fashion brand DKNY after she made comments that seemed to fault Weinstein’s victims. Attitudes around Karan’s brand turned negative immediately following those comments.

According to Brandwatch, a social intelligence and consumer analytics agency, the percent-increase in online mentions of Karan increased by more than 37,000% from Oct. 8 to 10, and mentions of DKNY increased by more than 3,100%. Analysis those mentions were largely unfavorable, with 66.5% of categorized mentions of Karan skewing negative. According to Brandwatch, Karan’s defense of Weinstein was the cause, and the #BoycottDKNY hashtag accumulated more than 4.4 million impressions that week, making the hashtag among the most used in those conversations at the time.

Any such fallout for Amazon from the scandals carries at least the potential to affect its Prime membership, which is crucial to the company’s retail strategy. According to some outside studies, more than half of Amazon’s U.S. customers have signed up for Prime, and Prime members tend to spend more with the e-commerce giant. Some studies have put the number of Prime members at 85 million, though analysts with Moody’s Investors Services have questioned those estimates and instead believe the figure is closer to 50 million.