Amazon will purchase MGM for $8.45 billion, the studio is known for its James Bond franchise will now render Amazon to gain access to its rich catalog of film titles and TV shows to augment the competition with rival streaming platforms Netflix and Disney+.
The goal of the deal is to expand the content of Amazon which is more television-focused with MGM films including popular franchises like Rocky and Tomb Raider since its launch in 1924, according to Asiaone.
The streaming service also helps the planet’s online market to make people subscribe to Prime, a membership that offers fast shipment and other perks.
What’s In The Deal?
MGM also known as Metro Goldwyn Mayer which is a private property also holds ownership over Epix cable channel who makes prominent TV series like Vikings, Fargo, and Shark Tank.
Jeff Bezos, the founder of Amazon laid out the grounds for the deal at Amazon’s annual shareholder’s conference on May 26.
He said, “MGM has a vast, deep catalog of much-beloved intellectual property. With the talented people at MGM and the talented people at Amazon Studios, we can reimagine and develop that IP for the 21st century.”
Bezos even mentioned that it is too early to call Amazon Studios the fourth pillar of the firm after its online marketplace, cloud division, and Prime but they are working hard towards that goal. It was reported that more than 175 million members of Prime have watched its content and streaming audiences are increasing its number by 70%.
Bezos said that on July 5, the date that Amazon was founded in 1994 will be the date that Andy Jazzy of the cloud-computing division will take over as CEO.
The Competition Continues
As we all know, Amazon’s Prime Video is one of the rivaling streaming giants like Netflix, Disney+, Apple TV+, and HBO Max.
These companies have aimed to spend and expand to international markets with new and original content to accommodate the streaming boom of 2020 because of the pandemic.
One of the competitive moves of Amazon includes catering sports fans with live shows and game streaming licenses. They also include a long-term deal with the National Football League which costs about $1 billion annually.
These streaming giants have also been competing to search for franchises they can expand. Analysts have pointed out that this healthy competition is an encouragement to make up for the losses of media networks from the hiatus caused by the pandemic.
A Big Risk
Jim Nail of research company Forrester, “With new entrants to streaming from all the major studios and TV networks, Amazon has to increase its commitment to video or risk losing engagement.”
This consolidation trend was furthermore highlighted in the recent deal of AT&T Inc. to merge WarnerMedia with Discovery Inc. for $43 billion and it is considered a bold move in the streaming world.
The procurement is also Amazon’s second-biggest purchase after Whole Foods Market which they bought for $13.7 billion in 2017. Amazon has posted its annual quarterly profit in April.
Profitable Franchise Rights
Amazon has chosen Academy Awards masterpieces these past few years and slowly transitioned from art house films to more mainstream content.
The MGM acquisition became a catalyst, providing Amazon with rights to James Bond films like Casino Royale, one of the profitable franchises in movie history that already earned nearly $7 billion globally.
Other classic films in the MGM catalog include Moonstruck, Silence of the Lambs, and RoboCop.
However, translating the next Bond franchises into streaming is going to be difficult and tricky because Barbara Broccoli of Eon Productions, one of the producers of Bond films, is committed to bringing the James Bond films in theatre releases.