Amazon Buys Prime Hollywood Studio For $8.45 Billion

Samantha Kemp-Jackson

Online shopping leader acquires MGM in latest deal

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Daniel Craig as James BondMGM

Popular Franchises Including James Bond and The Real Housewives Included in Sale

In a prime deal straight out of the movies, online shopping giant Amazon has announced its acquisition of MGM studios. The popular online retailer is paying $8.45 billion US for MGM. This decision has made it the company's second-largest acquisition after its record purchase of Whole Foods for $14 billion US in 2017.

MGM movie and TV studios are behind such popular movie franchises as the James Bond series, as well as TV hits such as the Real Housewives series and Survivor.

The purchase of the studio will provide Amazon with considerable content for its video streaming service, offering subscribers a wealth of viewing options.

“The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios. “It’s very exciting and provides so many opportunities for high-quality storytelling

A Highly Competitive Industry

The highly competitive media industry is in a constant state of one-upmanship in an effort to have the most comprehensive streaming options in order to match or exceed offerings by such popular players as Netflix and Disney+. Perhaps not surprisingly, the announcement by Amazon comes on the heels of AT&T and Discovery's announcement on May 17 that they would be mercing media companies. In that $43 billion US deal, AT&T's entities including CNN, HBO, TBS and TNT would combine with Discovery properties which include lifestyle networks such as The Food Network and HGTV.

With the acquisition of MGM by Amazon, the latter's 200 million subscribers will have access to additional content, making an Amazon Prime membership appealing to a larger audience. The cable channel: Epix, which is owned by MGM, is just one of the new entities that will be included in the sale.

Netflix, long seen as the leader in the streaming service industry, is increasingly challenged by new competitors in the field, a fact confirmed by the Amazon/MGM news.

Netflix has its committed fans, however, as digital technology, streaming and subscription prices come down, and more options become available, the victor in the streaming wars is anyone's guess.

Netflix Statistics

  • Netflix currently has 203.66 million subscribers. Up from only 24.30 million subscribers in 2011.
  • Netflix generated $24.99 billion in 2020.
  • Netflix has 5,415 content titles in their US library.
  • 63.7% of Netflix subscribers are based outside of the US & Canada.
  • In 2020, 80% of the most watched original series in the US belonged to Netflix.
  • Netflix subscribers spend an average of 3.2 hours per day watching content on the platform.
  • Netflix’s mobile app for iOS & Android was downloaded 19 million times in January 2021 alone.

(Source: Backlinko)

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“I am very proud that MGM’s Lion, which has long evoked the Golden Age of Hollywood, will continue its storied history." - Anchorage Capital Group LLC CEO Kevin Ulrich (MGM’s lead shareholder)

The Iconic MGM Lion Will Remain

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MGM Lion circa 1938Wikipedia

One of the most recognized symbols of MGM studios is the roaring lion that appears at the start of the studio's films. For those who are concerned about its future based on the acquisition news, fears can be put to rest following a statement by Anchorage CEO Kevin Ulrich. MGM’s lead shareholder is the Anchorage Capital Group LLC.

“I am very proud that MGM’s Lion, which has long evoked the Golden Age of Hollywood, will continue its storied history, and the idea born from the creation of United Artists lives on in a way the founders originally intended, driven by the talent and their vision,” said Ulrich. “The opportunity to align MGM’s storied history with Amazon is an inspiring combination.”

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https://img.particlenews.com/image.php?url=3kdDCd_0aCFPk4P00 You will find more infographics at Statista

Consolidation of previously independent media entities appears to be the new normal, according to experts.

David Offenberg, Associate Professor of Entertainment Finance in Loyola Marymount University’s College of Business Administration, has divided the streaming industry into four different buckets. He sees them as an evolution of where streaming services are going in the continual need to meet customer expectations.

Four Streaming Service Categories

  1. Premium: Comprised of major streaming services such as Netflix and Disney+
  2. Niche: Smaller, more targeted services such as Shudder, Discovery+, Starz and Crunchyroll
  3. Free: Pluto, Tubi, Roku Channel, etc.
  4. Sports: ESPN+, DAZN, etc.

“Premium is fascinating because we’ve already been given sneak peeks into how that consolidation is going to work,” said Offenberg. “There’s merger, which we’ve seen with Disney and Fox, and failure, which we saw with Quibi."

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I write about Lifestyle content with a focus on Parenting, Society and Trends. I also talk about how things have changed on my podcast, "Parenting Then and Now."

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