Amazon.com, Inc. is reportedly in talks to acquire Hollywood Studio MGM for nearly USD 9 billion. Acquiring Hollywood conglomerate Metro-Goldwyn-Mayer Studios would give the eCommerce giant access to a plethora of content from a comprehensive video catalogue. If Amazon closes the deal, it would prove beneficial for the company’s streaming service ‘Amazon Prime Video’ to raise the bar and step up their game.
By acquiring one of Hollywood’s most prestigious studios, Amazon would get the golden ticket opening up endless possibilities to access new distribution channels. With ‘advanced stage’ talks and negotiations in place, an official announcement is expected to come out soon. MGM has been seen as a takeover target by streaming platforms for years but none of them has closed a sale before. MGM currently owns “Epix” a premium-pay TV service.
Metro-Goldwyn-Mayer Studios, headquartered in Beverly Hills, California, is one of the world’s oldest film studios which was founded on 17 April 1924. Emerging from bankruptcy in 2010, the control of MGM studios was taken over by hedge funds including Anchorage Capital Group, Highland Capital Partners, Solus Alternative Asset Management, Kempner Capital Management, Davidson and Owl Creek Investments.
At roughly USD 9 billion, the MGM acquisition would mark Amazon’s second-largest ever acquisition since it agreed to buy Whole Foods in 2017 in a USD 13.7 billion deal. As of 2020, the tech company shelled out nearly $11 billion on content for its music and video streaming services. The company also agreed to pay $1 billion every year for acquiring NFL rights.
The ongoing COVID-19 pandemic has skyrocketed the growth for online video-streaming services like Amazon, Netflix and Disney among many others. With over 175 million Amazon Prime members; the 10th year for Amazon Studios and Amazon Prime Video had witnessed the most successful quarter, wherein streaming hours grew more than 70% YoY.
The agreement with MGM would bring a vast library of movies and shows to Amazon’s streaming service, including franchises like James Bond, Rocky, Stargate, Legally Blonde, Pink Panther and RoboCop. The catalogue would also include films such as The Silence of the Lambs, Spectre; and popular TV shows such as The Voice, Shark Tank, The Real Housewives, Survivor, Fargo and The Handmaid’s Tale. MGM has turned down multiple offers from video streaming platforms, including a deal for the release of the new James Bond film, “No Time to Die” which will debut on the big screen in the U.S on October 8.
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