Amazon buys MGM for $11.2b as streaming war heats up
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The James Bond movie franchise looks certain to survive Amazon's takeover of the MGM film studios, and analysts say the whole deal should escape antitrust concerns, despite criticism from some US politicians.
WASHINGTON • Amazon has said it is buying MGM, the fabled US movie studio home to the James Bond franchise, for US$8.45 billion (S$11.18 billion), giving it a huge library of films and television shows and ramping up competition with streaming rivals led by Netflix and Disney+.
Privately held MGM, or Metro Goldwyn Mayer, was founded in 1924. It owns the Epix cable channel and makes popular TV shows including Fargo and Shark Tank.
The deal is designed to help Amazon supercharge its Amazon Prime Video service by keeping customers engaged and paying an annual subscription that also guarantees rapid delivery of purchases from its online store.
"The real financial value behind this deal is the treasure trove of (intellectual property) in the deep catalogue that we plan to re-imagine and develop together with MGM's talented team. It's very exciting and provides so many opportunities for high-quality storytelling," Mr Mike Hopkins, senior vice-president of Prime Video and Amazon Studios, said yesterday.
Amazon's Prime Video faces a long list of competitors including Netflix, Walt Disney's Disney+, HBO Max and Apple's Apple TV+. The companies are increasing spending and expanding in international markets, aiming to capture the pandemic-led shift to binge-watching shows online.
Amazon has also made big bets courting fans of live sports and has picked up lucrative licences to stream games, including a long-term deal with the National Football League that was estimated to cost about US$1 billion per year.
The proliferating streaming services are also scrambling for brands that they can expand and libraries of older shows and movies. Analysts have said this is a big motivation for another round of consolidation of media properties after a brief hiatus during the pandemic.
"Amazon is seeking to become a more prominent player in the entertainment world, and there's no better way to do that than by buying one of the most iconic movie studios in Hollywood,"said Mr Jesse Cohen, senior analyst at Investing.com.
REUTERS
