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Amazon may be dishing out big money to acquire MGM, a film studio known for its blockbuster franchises and popular one-off films. This could mean big things for the tech conglomerate, as it slowly builds its media portfolio, making it a more deadly contender against fellow streaming services like Netflix, Disney+, and HBO Max.
The deal would give Amazon access to MGM’s huge library, enough to make the famous lion roar. Some of its franchises include James Bond, Rocky, and Vikings, all with millions of die-hard fans ready to follow those shows wherever they land. Right now, MGM titles are scattered across streaming services, with The Handmaid’s Tale on Hulu, The Big Shot on HBO Max, and Clarice on CBS. If Amazon decides to shell out the big sum, it could mean winning big names for Amazon Prime.
The deal could set Amazon back anywhere from $7 billion to $10 billion, with some financial experts claiming the studio is only valued at $5 billion. The Observer reports that hands will shake at the $9 billion sweet spot, sealing the fates of over 4,000 films and 17,000 episodes of TV under the MGM umbrella.
This deal isn’t quite out of left field because MGM had been looking for a buyer for a while. In January of 2020, THR reported that MGM was hunting for a new home with a $10 billion price tag. Apple was at the top of the list, with its own streaming service to beef up.
MGM could be a gold mine for Amazon and its Prime Video service. Right now, there are more than 200 million paid subscribers to Amazon Prime, which includes access to its already expansive media library. Streaming hours on Prime Video are up more than 70 percent, and it will likely continue to skyrocket with Amazon’s huge projects getting close to wrapping up – like its Lord of the Rings series with a $465 million budget.
While MGM hasn’t been the focus of the film industry for a while, surpassing its golden age in Hollywood years ago, it still has quite a presence in the industry. The Bond market alone is worth billions of dollars. Since Casino Royale in 2006, the Daniel Craig James Bond films have grossed over $500 million each, with Skyfall (2012) grossing over $1.1 billion. Add the Rocky franchise with its recent Creed films, as well as some other heavy hitters like its Stargate franchise and Amazon may be buying its way to streaming superiority.
It seems to be a trend in the entertainment industry to continuously acquire and consolidate heavy-hitting franchises under a single roof. After AT&T’s $85 billion purchase of Time Warner and Disney’s $71 billion acquisition of Fox, other media companies need to be ready to spend in order to keep up. Adding expansive libraries of content is the only way to stay relevant in the age of streaming, with Netflix, Disney+, and HBO Max funneling billions of dollars to create original content.
Though it isn’t as imperative for Amazon to stay relevant in the media realm, it’s clear that the empire is looking to keep entertainment in its domain. The company spent $11 billion on TV shows, movies, and music for its Prime services in 2020 alone. This was up 40 percent from 2019. This $9 billion purchase could allow a breather from producing original content, enticing potential subscribers in much the same way as Disney+; using a huge backlog of content to entice paying customers.
If the MGM buyout goes through, Amazon is sitting on a golden egg for its entertainment division. This could be the next big phase in its expansion toward media dominance.