Wednesday, July 24, 2024

Inside Amazon Studios: Confusion and Frustration Limit Big Swings

Despite bold bets like ‘Daisy Jones & The Six’ and the forthcoming ‘Citadel,’ sources say there is still “no vision for what an Amazon Prime show is.” But, according to Jen Salke, chief executive officer, they are missing the point: “You don’t reverse-engineer true creative vision.”

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It’s long been an open secret that Jeff Bezos has yearned for his own Game of Thrones, and that Amazon’s big swing as it reached for its own massive hit was The Lord of the Rings: The Rings of Power, believed to be the most expensive series ever made.

Last September, the show began with a bang, delivering the biggest debut ever on the streamer in what Amazon Studios chief Jennifer Salke called “a very culturally defining moment” for the company. But when season one wrapped, the show was less defining than hoped, falling short of being the breakout hit that Amazon had envisioned. 

While Amazon, like other streaming services, releases very limited data — and internally, it guarded information on the series even more securely than normal — sources corroborate that The Rings of Power had a domestic completion rate of 37% (customers who watched the entire series). It reached 45 percent overseas. (A 50 percent completion rate would be a decent but not outstanding achievement, according to sources). The show has also not been a huge award candidate, having been passed over by the major guilds with the exception of a SAG-AFTRA nomination for stunt ensemble.

But, according to Salke, the series was successful. “This desire to portray the show as anything other than a success — it’s not reflective of any internal conversation I’m having,” she says. She adds that the second season, which is currently in development, will have more dramatic plot twists. “That is a tremendous opportunity for us.” The first season required a lot of preparation.”

According to Nielsen data on minutes seen, Amazon has underperformed in terms of original series in general. Netflix took the top ten slots for original streaming shows in 2022, with Amazon’s The Boys coming in 11th – ahead of The Rings of Power at No. 15. Using the same metric, none of the top 15 originals of 2021 originated on Amazon. (Netflix once again dominated, with the exception of Hulu’s The Handmaid’s Tale in 10th place, Apple’s Ted Lasso in 12th, and Disney+’s WandaVision in 14th.)

Many current and former Amazon executives, as well as showrunners with programmes on the streaming service and agencies who work with them, feel this is no coincidence. They characterise Amazon Studios as a perplexing and frustrating place to work. When it comes to films, an experienced producer adds that “there has been no sense of what the philosophy is” in recent years, despite Amazon’s $8.5 billion acquisition of MGM a year ago.

Numerous sources indicate they are unsure what kind of material Salke and head of television Vernon Sanders plan to create for the series. “There’s no vision for what an Amazon Prime show is,” says a showrunner with extensive experience at the studio. ‘They stand for this style of storytelling,’ you can’t say. What they make and how they make it is absolutely arbitrary.” Another Amazon showrunner with many series finds it perplexing that the streaming service hasn’t had more success: Amazon has “more money than God,” this person claims. “They certainly have the resources to produce incredible television if they wanted to.”

Salke, on the other hand, believes the studio’s approach matches Amazon’s broad mandate. “I’ve never been one to say to the creative community, ‘We need five action franchise shows and three workplace comedy shows.'” “That is the kiss of death,” she declares. “True creative vision cannot be reverse-engineered. We are programming for approximately 250 million households worldwide. We’d say we have a large, diverse audience, and we’re searching for content that appeals to all four quadrants.” (That is, male and female, under and over 35).

Many in Hollywood are concerned about whether Amazon Studios’ masters in Seattle believe they are receiving enough bang for their cash. The last thing the industry needs in this period of austerity is a reduction in spending from a wealthy buyer. That concern, according to Salke, is misplaced. “There is proof that the big tentpole shows are driving people to Prime,” she argues. “Do we put ourselves under pressure to be more disciplined and strategic? Without a doubt. We always assess whether we’re providing the correct amount of content at the right price to maximise engagement throughout our service.”

Amazon, like Apple, is not a traditional entertainment corporation, but rather a massive retailer with a Hollywood side hustle. According to Amazon, the more hours you spend viewing Prime Video, the more likely you are to renew your subscription and shop on the site. Amazon, like Netflix, is pursuing international expansion in the aftermath of saturation in the United States. According to Salke, Amazon’s programming is the tip of the spear in some nations, such as South Africa and Argentina, infiltrating the region before retail sales or rapid, free shipping are even accessible. “Everything is international,” she explains. “We are in the business of producing global shows for a global audience.”

The streamer has had several notable successes, including buzzy shows like Transparent, The Marvelous Mrs. Maisel, and Fleabag, as well as popular series like The Boys, Jack Ryan, Jack Reacher, and The Terminal List. However, it has arguably never had a brand-defining show that is a commercial and critical juggernaut in the same way that HBO’s Game of Thrones, Netflix’s Stranger Things, or Apple’s Ted Lasso have. Except for Jack Reacher and The Terminal List, all of those Amazon programmes debuted when Salke’s predecessor, Roy Price, was in charge of the studio. (Price resigned in 2017 amid claims of inappropriate behaviour; Salke took over in 2018.)

Daisy Jones & The Six, based on the Taylor Jenkins Reid novel and co-produced by Reese Witherspoon’s Hello Sunshine, was one of Salke’s first greenlights. Lauren Neustadter, Hello Sunshine’s president of film, says she and Witherspoon had lunch with Salke shortly after she started at Amazon. Neustadter describes her as “really clear and articulate in her vision” for what she intended to do with the job. “Reese and I both said Daisy is everything she was saying. We had enormous plans for the book, the show, and the clothes.”

Amazon invested more than $140 million in production, owing to the high COVID protocol expenses. The show premiered on March 3 and quickly topped Parrot Analytics’ weekly engagement ranking. The two-year-old novel has returned to Amazon’s best-seller list, and the store is also selling tie-in goods. Aurora, a collection of songs from the imaginary band, is climbing the Billboard charts. However, insiders say the show has yet to become the breakout hit that the studio had hoped for. (At the same time, Donald Glover’s Swarm, released around the same time, is also yielding good results for Amazon on a more modest $30 million budget.)

Citadel, which opens on April 28th, was a significantly more expensive and challenging production. According to Anthony Russo, Salke approached AGBO, the Russos’ production firm, with the overall idea of creating a US show with international foreign-language versions. According to Russo, AGBO developed “a global spy show where you would have a mothership US language show” with foreign-language counterparts in other nations. The different versions are “related to one another, but they also exist independently and separately.” He says that some of the international productions may be set in different time periods.

Amazon has committed to three seasons of three different versions of the show; so far, local-language productions in Italy and India are in the works. “We love being able to communicate with people all over the world and connect people through stories,” says Russo. “Amazon and Jen basically gave us a brand-new opportunity to do that on a scale never before attempted.”

However, with shooting well started in December 2021, the Russo brothers opted to replace showrunner Josh Appelbaum. “After some audience feedback and discussion, it was clear that some changes were needed,” explains Mike Larocca, president and co-founder of AGBO. “We felt it needed more character development early on to draw people into the show.” It was really that simple.” Appelbaum did not respond.

Showrunner David Weil took charge. According to an insider, when Joe Russo arrived on set, a “huge bunch of material” was thrown out. According to sources, the series’ budget has risen to $300 million, making it Amazon’s second-most expensive show after Lord of the Rings. (During an onstage interview with Salke on March 10 at SXSW, Priyanka Chopra stated that her work on Citadel was the first time she had achieved wage parity in 22 years. Because she and the other leads on the programme were paid substantially more than intended owing to the lengthy reshoots, several Amazon executives joked internally that this was truly the first and second time.)

While the initial concept called for eight hour-long episodes, the show, which will premiere on Amazon in April, was reduced to six, about 40-minute segments. It has already been renewed for a second season of six hour-long episodes by Amazon. “In a couple of relationships, I don’t really understand the bet that is being made,” says one Amazon veteran of the project’s devotion. “However, Jen believes in the Russos.”

Citadel difficulties can occur with the “best-managed creative endeavours with the highest level of talent,” according to Salke. “Given the option of making it mediocre or fucking great, we chose the latter.” And, in the end, our customers will be the judge.”

Hunters and A League of Their Own, which is concluding with a shortened season two, stand out as costly flops of the Salke era. The latter was estimated to cost around $90 million for eight episodes, including a fee paid to Sony for certain rights.

Some of the sources’ irritation in contacts with Amazon stems from Salke, who was previously head of NBC Entertainment and appears to be pursuing competing objectives. Despite her claim that Amazon is a “home for talent,” sources say the mandate is increasingly focused on finding more middle-of-the-road, meat-and-potatoes programming like Jack Reacher, rather than the curated hits that characterise HBO. “We’re desperate for safe hits right now,” an Amazon executive admits. (Netflix has also been looking for more diverse content.)

However, present and former Amazon executives believe Salke has a tendency of “chasing what she perceives to be hot,” as one insider puts it. That person mentioned paying a premium for Daisy Jones due to the Witherspoon connection, as well as developing a Dead Ringers series based on the 1988 David Cronenberg film that included Rachel Weisz. According to an Amazon veteran, Salke strikes deals with auteur talent in order to “deliver Jack Reacher results.” “However, they don’t.”

Amazon recently renewed The Peripheral, a Jonah Nolan and Lisa Joy sci-fi drama that cost close to $175 million for eight episodes (sources claim their final eight-episode season of Westworld at HBO cost around $140 million). Despite what sources say has been lacklustre viewer response, Amazon has bought six extra hours of The Peripheral. “It should have been canceled,” a source said. “But they made a big deal, and the political capital they’d lose with Lisa and Jonah would be too much.” And there will be more shows.” According to a source, Nolan and Joy’s next show, Fallout, is similarly “extremely expensive.”

Since signing on in 2019, Nolan and Joy’s contract has been valued at least $20 million per year. According to one source, the Nolan contract is the worst example of Salke’s motto that Amazon is “a home for talent.” “We cede decisions to powerful producers,” he continues. We maintain our stance on other producers who perform excellent job for us.” Nolan and Joy did not respond to requests for comment.

Some lucrative Amazon collaborations have failed to yield any results. Following her role as an executive producer on Them, Lena Waithe signed a two-year deal worth $8 million per year that delivered nothing; she switched her banner to HBO Max in November 2021.

In September 2019, Amazon announced a contract with Phoebe Waller-Bridge, who had just won six Emmys for her work on Fleabag’s second season. Waller-Bridge was supposed to work with Donald Glover on a Mr. and Mrs. Smith series based on the 2005 film.
However, Waller-Bridge left the show after only a few months owing to competing creative styles. Her three-year pact was for $20 million per year, but Amazon just renewed it, claiming that Waller-Bridge would write (but not star in) a Tomb Raider series. Some Amazon insiders have expressed doubts about how much she will contribute to the project, pointing out that Amazon has been looking for a showrunner to help develop and oversee it.

The understated Sanders raises an eyebrow at the allegation. “Phoebe has not only fully embraced Tomb Raider and I believe is feeling very committed to it, but she is currently working on it in a writer’s room,” he explains. Waller-Bridge is also working on other content for the streamer, he says. “She’s a perfectionist, so she absolutely wants to make sure that what she does is great and right, but she’s proven that when she does deliver, she delivers,” he says. Waller-Bridge did not respond to a request for comment.

However, a showrunner with extensive experience at Amazon believes otherwise: “They don’t learn from their mistakes.” ‘We can’t do any more transactions like that,’ they say. When you turn around, they’re back to — the unpleasant term is “star-fucking.” The outcome has been irritation among the studio’s creative executives. “They say, ‘We don’t want to buy from outside studios,'” a former Amazon executive explains. “Then packages arrive, and they buy everything that comes in, and our development is thrown out.”

Sanders, who had previously worked closely with Salke as NBC’s chief of current programming, was one of Salke’s early recruits at Amazon. Salke promoted him to co-head and eventually single head of television at Amazon. Prior to joining Amazon, Sanders was in charge of overseeing existing NBC shows rather than developing and launching new ones. Some Amazon insiders complain that he doesn’t provide enough guidance.

“No one knows what he likes,” a former executive at the streaming service says. A producer who has worked with Amazon says, “Vernon seems so sincere, but when you talk to him about a project, you come away not knowing where you stand.” What kinds of shows does he actually want to make? Finally, this makes it difficult for talent to genuinely trust him.”

Sanders emphasizes the relevance of international programming by stating that his goal is simply not to program for his personal tastes. “We have over 250 million global customers,” he says, “so our goal is to program for everyone — we have a large, broad, and diverse audience.” “That is one of our strengths.” We can create both worldwide tentpoles and creative, character-driven series, with lots of variety in between. And our customers appreciate it all. That is why Lord of the Rings and Swarm can coexist and thrive on our platform.”

Another complaint is that Sanders relies heavily on feedback from focus groups, which tend to favor broad and less inclusive programming. Several Amazon insiders say the reliance on testing and data led to a clash late last summer, when an Amazon executive said in a marketing meeting for the series A League of Their Own that data showed audiences found queer stories off-putting and suggested downplaying those themes in materials promoting the show. Series co-creator Will Graham became greatly concerned about bias built into Amazon’s system for evaluating shows, which multiple sources say often ranked broad series featuring straight, white male leads above all others. One executive calls A League of Their Own “a proxy for how diverse and inclusive shows are treated.” 

Graham began interrogating the system, interviewing several executives about it. Amazon took the matter seriously and abandoned its system of ranking shows based on audience ratings. According to sources, Sanders was a big fan of this show, but there was no word on whether it would be renewed for months. Amazon eventually agreed to a four-episode second and final season. Nonetheless, other Amazon veterans say the system is still overly reliant on those same test scores. “The perpetuation of white guys with guns is a self-fulfilling prophecy,” one observes. Another quote: “Relying on data is soul shattering… “There is never anything like, ‘I know the testing wasn’t great, but I believe in this.'” Graham did not respond.

According to one executive, things were different when Salke first took over at Amazon. “She shot from the hip, she went with her gut instinct, and she didn’t let data overrule her,” says one person. “However, she hired a staff that was in over their heads in terms of being able to produce those shows on time.” I believe it would be much easier to spend less if we had [FX chief] John Landgraf or [HBO’s] Casey Bloys or someone with greater credibility and direct engagement with program creation. But we act as though it doesn’t matter if we have in-depth conversations with talent.’No way in hell I’m doing a contract with these guys unless they overpay me,’ a guy like Donald Glover would think. I know we’re third or fourth on their list of priorities. ‘You guys pay a premium for being Amazon,’ said the agents. They have clients who might prefer to work somewhere else.”

Salke responds: “If people say my gut’s been tamped down, there’s no evidence for that.”  

Even some successful television producers claim Amazon’s executive structure is complicated to the point of obscurity. A recent reorganization, the latest in a series, does not appear to have done much to clarify matters. It’s difficult to know “who you should go to if you want to bring [a project] to them,” according to an executive of a production company that has done repeat business with Amazon. “I couldn’t honestly tell you who reports to whom,” says a successful showrunner on the streamer. It’s always evolving.”

Some of the misunderstanding around Amazon may be due to competing goals at the top. Mike Hopkins, Amazon’s senior vice president for Prime Video & Amazon Studios, is a seasoned business executive with experience at Sony and Hulu, but he does not come from a creative background. According to a prominent industry executive who worked with him at Hulu, he is “a seemingly egoless, laid-back, efficient manager.” Hopkins, according to a former Amazon executive, is a “very intelligent, very calm and collected leader, but all he seems to care about is the bottom line.” He doesn’t know anything about production because he doesn’t come from it.” Hopkins would not comment.

According to one agency, Salke is a dynamic leader with “a great touch around talent.” However, one persistent issue is that she can be difficult to reach and inattentive to texts or emails. “I really like Jen,” says one executive whose company has done business with Amazon several times. “She’s incredibly engaged when you get her. She’s definitely overworked, but if you catch her, you can get a really clear answer.” That problem may be compounded by Salke’s recent assumption of responsibility for MGM’s film and television studios, as well as marketing control.

Hopkins and Salke were doomed to disagree on the fundamental problem of money. “Her aim is to get whatever appears to be trendy. “Mike’s vision was to cut costs on shows and focus on football,” a former source said. In 2021, Amazon became the first streaming service to negotiate an exclusive agreement with the NFL, agreeing to an 11-year deal worth $1 billion per season for the rights to Thursday Night Football. In a September memo, Amazon’s sports chief, Jay Marine, told workers that the premiere game resulted in “the biggest three hours for U.S. Prime sign-ups ever in Amazon’s history.”However, despite telling sponsors that it projected 12.5 million viewers per game, Amazon reported 11.3 million viewers at the end of the season, while Nielsen computed 9.6 million average viewers. Amazon stated that it reimbursed advertising for the shortfall but provided no details.

According to current and former Amazon executives, Salke appeared to be in a political war with Hopkins in recent months. “Mike is all about budgets, and that doesn’t sit well with her,” one says. However, a top executive at another entertainment company claims that his lack of creative skills makes it difficult for him to manage expenditure on series and movies. “That’s why he says yes when Jen says we have to pay Simon Kinberg $8 million for a project,” explains one source.

That’s an allusion to the spy thriller Red Shirt, penned by writer-producer Kinberg and starring Channing Tatum. The project, which was acquired in November based on a treatment and a short movie showcasing Tatum significantly, had numerous bidders, but Amazon provided the best overall package. Tatum will be paid $25 million for the film, with director David Leitch receiving a whopping $18 million. When you factor in Kinberg’s $8 million for writing and producing services, the transaction constitutes one of, if not the, largest payments for an original idea in Hollywood dealmaking history. Kinberg, Tatum, and Leitch did not respond to requests for comment.

And that’s just one of numerous high-stakes cinematic bets Amazon has taken. Salke made an early bid for Air, the Nike film starring Ben Affleck and Matt Damon. Salke was Affleck’s point of contact during the film’s production, and he found her to be “straightforward and true to her word.” He adds that Salke “always had thoughtful ideas and notes.” “We took nearly all of them.”

However, a competing executive called the Air deal “crazy,” alleging that “she just bought it off a pitch, went in and bought it for $160 million.” (According to industry sources, it costs significantly less to make.) “Matt made more money with [Air] than any other film except Bourne.” “She just took it off the table,” the executive explains. (Affleck and Damon both declined to comment on the agreement.) Another source close to the project believes a competitor would have matched the offer. While it’s unclear whether the critically acclaimed film will make enough money at the box office to be successful, the value of having it to entice customers to the streaming service may justify the expenditure.

Salke has recently been viewed as shifting toward movies. According to several Amazon sources, there was a tug of war with Hopkins about who would oversee the MGM film studio. Initially, Hopkins planned to hire Emma Watts, a former Fox and Paramount executive, and have her report to him. Watts, a seasoned but occasionally sharp-elbowed executive, was then ruled out, despite having gone through vetting. Despite her lack of film experience, Amazon stated in November that Salke, not Hopkins, would have direct management of the film studio. Amazon has declined to comment on the change.

Given Salke’s background in television, many in the film industry felt she would need to recruit a movie executive to supervise MGM pictures. Some Amazon insiders believe she planned to offer the role to Julie Rapaport, the executive in charge of the streamer’s original movies. While Rapaport is well-liked, numerous outside movie executives believe she lacks the experience to lead MGM movies.

If Salke truly want Rapaport for the position, there remained one major stumbling block. The James Bond franchise, which Barbara Broccoli controls, is MGM’s crown treasure. According to sources, Broccoli made it plain that she required an experienced movie executive to lead MGM’s film division. According to the sources, Salke stepped on Broccoli’s toes by discussing a future Bond TV project, something Broccoli would not want. And, following the acquisition of MGM’s distribution arm, they claim, Broccoli was unimpressed when Amazon failed to connect with longtime marketing and distribution officials that Broccoli regards as critical to handling the Bond films.They were unsure whether they would keep their employment. (According to a source, one of those execs, the late Erik Lomis, battled to move Creed III from a packed November release date to a March release date, causing Amazon a $250 million hit.) “We have deep respect for Barbara and Michael,” Salke continues, referring to her Bond producing partner Michael G. Wilson. Broccoli did not respond to an interview request.

Amazon went through a lengthy interview process before landing on former Warner Bros. executive Courtenay Valenti. According to sources, Salke was cold to Valenti during the recruiting process, which Salke denies. Valenti will work alongside Sue Kroll, a former Warner Bros. executive who was named head of marketing for Amazon Studios and MGM in October. Even Amazon detractors agree that Salke made a wise decision in hiring Kroll, who will help promote Amazon films and programs. Valenti and Kroll will report to Salke now that they have been reunited.

Part of what irritates some Amazon entertainment executives is that the studio, as part of a massive internet conglomerate, must deal with a distinctive culture that frequently clashes with established Hollywood procedures. (In some ways, Amazon the parent is as foreign to Hollywood as past outsiders such as Coca-Cola, Matsushita, and a wave of German investors.) Amazon culture displays itself in a variety of ways, including the well-known everyone-flies-coach rule. The compensation system caps base cash pay for all employees at $350,000 (excluding of signing bonuses) plus stock options, which will make up the majority of pay for a high-level CEO.The base pay cash ceiling was $160,000 until last year, when the cap was increased due to the declining stock price. Over the past 12 months, the stock has been down more than 35 percent. (In contrast, at Netflix, executives can decide what percentage of their compensation they will take in stock options.) 

“A lot of people there aren’t incentivized to stick their necks out,” one agent says. “Everyone is sort of counting down the days until they can get as much stock [to vest] as they can.” That is not how it should be done. “This is a hit-driven, high-risk business.”

Another Amazon custom is that only the most senior executives have offices. Other high-level executives have previously worked in designated cubicles before last year. Since January, however, the great majority of employees have had to deal with “agile seating,” which means they work in unassigned cubbies in designated “neighborhoods” and are given lockers for their stuff. “These things are coming from so far up [in the company],” an Amazon Studios insider said. “It just adds to the feeling of anonymity — that no one knows where their own spaces and belongings are.” This arrangement appears to be popular among some tech leaders; according to a source, Jason Kilar was “adamant” about enforcing a similar plan at HBO and HBO Max, but analogous high executives at Netflix do have offices.

Meanwhile, the broader corporation is suffering very public challenges: In January, Amazon announced the company’s largest personnel layoffs in history, cutting off more than 27,000 of its 1.6 million employees. So far, the studio has been spared, despite a hiring freeze.

Industry executives believe it is critical to keep as many buyers as possible in the game, and some are concerned that the NFL contract has given Amazon a way to sign up subscribers that is less unpredictable than developing scripted entertainment. According to one former insider, “they wanted to keep Jen in check by bringing Mike in.”When you include sports, you can accomplish more in 24 hours than you could in eight years of TV. The entire sports launch transformed their perspective on the ecosystem and the role that cinema, television, and music play in it.”

So far, Amazon hasn’t indicated any dissatisfaction with the return on its content investment, which was $7 billion in 2022 on Amazon Originals, live sports, and licensed third-party video content. This is a 28 percent increase over the previous year, owing in part to the high expense of football and Lord of the Rings. (By comparison, Netflix spent approximately $18 billion.) Amazon’s U.S. Prime subscribers halted last year at 168 million, roughly flat from 2021, according to Consumer Intelligence Research Partners. (The business last announced a Prime subscriber number in 2021, when it stated that it had “over 200 million” worldwide.)

Amazon CFO Brian Olsavsky seemed bullish on a February earnings call. “We evaluate the return on content spend on a regular basis and are encouraged by what we see, as video has proven to be a strong driver of Prime member engagement and new Prime member acquisition.” Speaking at a New York Times Dealbook summit in November, CEO Andy Jassy suggested that Amazon’s entertainment activities could operate as a separate firm “with very attractive economics.” “All of that content is a really important ingredient in why people choose to sign up for Prime,” he continued.However, Amazon customers may have noticed that he specifically referenced Thursday Night Football. According to him, the corporation would continue to spend in sports since they are “a unique asset with an unrivaled ability to drive Prime sign-ups.”

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