Amazon buys MGM in a mega media deal

Amazon (AMZN) is investing much more closely in rising its place within the leisure world. The corporate introduced Wednesday that it made a deal to amass MGM, the house of James Bond and one of the iconic film studios in Hollywood.

The deal, which is valued at $8.45 billion, offers Amazon an in depth library of movie and TV exhibits that it might use to fill out its Prime Video content material coffers. MGM has a catalog with greater than 4,000 movies and 17,000 TV exhibits, in accordance with Mike Hopkins, who heads Prime Video and Amazon Studios.

“The actual monetary worth behind this deal is the treasure trove of IP within the deep catalog that we plan to reimagine and develop along with MGM’s gifted staff. It’s totally thrilling and gives so many alternatives for high-quality storytelling,” he added.

The 2 firms mentioned that the completion of the deal “is topic to regulatory approvals and different customary closing situations.”

Though streaming is a small a part of Amazon’s empire, the corporate has centered on turning into a extra distinguished participant within the leisure world as of late. For instance, a extremely anticipated collection primarily based on “The Lord of the Rings” is within the works.
Prime Video — which additionally options unique and award-winning exhibits resembling “The Marvelous Mrs. Maisel” — is tied to Amazon’s immensely standard Prime program, which gives quicker supply and has greater than 200 million paid subscribers. These sorts of numbers make it a competitor to the likes of Netflix (NFLX), which has 208 million subscribers.

MGM and 007

Though MGM’s emblem of a roaring lion has performed in entrance of a few of Hollywood’s most beloved movies, together with “The Wizard of Oz,” it does not have the deep franchise bench that different studios have.

So why would Amazon need MGM? Three phrases: Bond, James Bond.

The studio owns a chunk of the spy franchise, one among Hollywood’s most well-known movie collection. The Bond model, which Eon Productions additionally controls, is greater than a field workplace success story racking up billions of {dollars} over the previous 60 years. The movies and their lead character additionally signify a way of life that branches out to all components of the globe and popular culture. If Prime Video is the brand new dwelling of James Bond, that is an alluring proposition for potential customers.

Plus, “No Time to Die,” the newest Bond movie, is ready to open this October after being delayed multiple times because of the Covid-19 pandemic.

Away from the suave British spy, MGM additionally homes franchises together with “Rocky,” “The Handmaid’s Story,” “RoboCop,” “Legally Blonde” and the Epix TV community.

A consolidating media business

One more reason Amazon would need to purchase MGM is that the media world is consolidating at a breakneck tempo. To compete with Netflix and Disney (DIS), firms want scale, and shopping for up content material, networks or studios is the easiest way to try this.
The newest main media deal occurred on Monday when AT&T introduced that CNN mother or father firm WarnerMedia could be spun off and combined with Discovery. The deal brings collectively a litany of manufacturers underneath the Discovery and WarnerMedia banner, together with Warner Bros., Discovery Channel, HBO, CNN and HGTV.

Amazon buying MGM might not be as earth-shaking as that Discovery and WarnerMedia deal, however it’s nonetheless fairly notable due to MGM’s historic status and Amazon’s attain and assets.

However the easiest cause Amazon wished to purchase MGM is that it might afford to.

The hefty price ticket for the acquisition is nothing of serious consequence for Amazon, one of many world’s wealthiest firms. Amazon, which paid practically $14 billion for Whole Foods in 2017, has a market cap of $1.7 trillion.

Finally, the deal offers Amazon extra content material, a revered studio in Hollywood and a trendy tremendous spy. That can solely assist it additional compete within the ruthless world of streaming.

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