Amazon is buying MGM for $ 8.4 billion. What will he do with it?
Amazon has signed an agreement to acquire one of the oldest and most renowned Hollywood studios in the world, MGM (Metro Goldwyn Mayer) – yeah, the one with the roaring lion logo – for $ 8.45 billion. The goal of this massive transaction? Strengthening its Prime Video ambitions, of course. The deal is currently awaiting regulatory approval and is expected to be closed by the end of 2021. However, antitrust concerns and calls to quash a monopoly move have already started to surface on social networks.
The e-commerce giant notes that the real financial value of the deal lies in the potential to turn MGM’s vast catalog of movies and TV shows into an IP address that will generate a ton of fresh content for Prime Video. The company has made it clear that it wants to reinvent MGM content for its existing audience of over 200 million Prime Video users.
Amazon should be separated from warehouses, this MGM nonsense is exactly in the wrong direction. Stop the monopoly madness.
– Zephyr Teaching (@ZephyrTeachout) May 26, 2021
MGM currently hosts over 4,000 films which include blockbuster franchises such as James bond, Rocky, tomb Raider, Robocop, and Thesilenceofthelambs, alongside approximately 17,000 television shows. With a total of over 180 Oscars to its name, the MGM Library will not only provide Amazon with the opportunity to energize the Prime Video catalog, but it will also act as a treasure trove of IPs that the company can seek out to create spin- offs and restart.
Regarding the acquisition, Amazon chief Jeff Bezos mentioned that this opens the doors for the company to re-imagine MGM content for the 21st century. But at the heart of it all, Amazon also doesn’t want to be left behind in blank streaming wars against pocket rivals like Netflix and HBO Max.
Another day. Another mega fusion. Amazon’s proposed purchase of MGM reinforces what we already know – they are focused on expanding and consolidating their monopoly power. It is bad for workers, consumers and small businesses.
– David Cicillin (@davidcicillin) May 26, 2021
Earlier this month, AT&T created Warner Media and merged it with Discovery to create a media conglomerate in a deal valued at around $ 43 billion. The MGM deal isn’t Amazon’s biggest acquisition, but the company has spent liberally on its video and music content – totaling $ 11 billion last year.
Where is Amazon going with the MGM deal?
As mentioned above, the direct beneficiary of the acquisition is Prime Video which will become the new home of MGM’s vast catalog. While the library of MGM-owned movies and TV shows is impressive, Amazon will actually treat it as a gold mine for new content creation.
The jewel in the crown, however, will be the James Bond franchise.. The spy series is one of Hollywood’s hottest film franchises, raising billions of dollars over the past decades. Even though MGM only partially owns it, Prime Video will get a major boost simply with the potential exclusive availability of the franchise in its catalog.
It’s too early to predict whether Amazon can secure the rights to create derivative content and make more money from the spy series, but the prospect of exclusively hosting the next Bond film – No time to die – starring Daniel Craig in his latest outing as an iconic character will be a major move. We’ve seen services like HBO Max before (courtesy Justice League by Zack Snyder) and Peacock, which is driving subscriber growth through the popularity of a single franchise – Office.
After scoring Oscar nods with critically acclaimed films such as Manchester by the sea and Sound of metal, Amazon has lately leaned more towards blockbuster cinema. The company recently paid hundreds of millions to obtain the rights to Coming 2 America and the next Chris Pratt The war of tomorrow.
On top of that, the next the Lord of the Rings The show – considered the most expensive in television history – is a clear sign that Amazon isn’t afraid to spend a lot. Netflix, for example, has been able to capitalize on the success of original content like Stranger Things and even the licensing of popular video games like The witcher to create a very popular TV show.
With movie and TV studios finding new homes recently in billion dollar media conglomerates not shy about spending big, Amazon certainly doesn’t want to miss an opportunity to ramp up its Prime Video efforts. At the time of its acquisition, MGM already had a list of developing IP addresses that will now be developed under the umbrella of Amazon.
But at the end of the day, Prime Video will focus more on making millions by creating new content from MGM’s catalog rather than just sitting on the stack as another addition to its streaming service. And with billions of dollars in its coffers, Amazon is a streaming player who can afford to experiment and spend big.