Amazon to buy Hollywood studio MGM for $8.45 billion
The film industry has recently resumed its activity after the break it had to take in 2020 due to the pandemic, and there are already big changes being announced.
MGM, a world leader in the film industry, will be acquired by Amazon and become part of Amazon Studios, which, according to the company, will help “preserve MGM’s heritage and catalog of films”. It is believed that the acquisition will be closed by the end of 2021.
This is the second-largest purchase made by Amazon, after buying Whole Foods in 2017 for $13.7 billion.
For Amazon Prime, this will mean expanding its catalog by more than 4,000 movies and 17,000 TV shows, productions that collectively have won more than 180 Oscars and 100 Emmys. The decision is without a doubt a strategic one, as streaming platforms are becoming more popular and profitable.
In addition, Amazon will be able to develop new productions based on MGM’s franchises and movies, such as James Bond, The Handmaid’s Tale, Silence of the Lambs, Tomb Raider, and many others.
“The real financial value behind this deal is the treasure trove of [intellectual property] in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” Mike Hopkins, senior VP of Prime Video and Amazon Studios, said in announcing the deal.
Kevin Ulrich, MGM’s chairman who had worked with Hopkins to set up the deal, said in a statement, “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. The opportunity to align MGM’s storied history with Amazon is an inspiring combination.”
The announcement of the Amazon-MGM deal comes after AT&T’s decision to combine WarnerMedia with Discovery. The merger includes Warner Bros., Discovery Channel, HBO, CNN, and HGTV, and their takeover means taking over some of the biggest movie franchises, such as DC or Harry Potter. It will take place in 2022 and cost $43 billion.
As a result, platforms such as Netflix or Disney could begin to lose ground, given that, in addition to movies, the merger of Discovery and WarnerMedia will significantly expand the range of programs, including news, documentaries, or cartoons, a variety which is missing from other broadcasting services.
For the public, these changes mean bringing together and providing them with greater access to some of the most-watched productions, whereas for companies they predict a significant increase in profit. Most probably, these are not the only mergers or acquisitions down the line, as many media companies could find themselves in the situation where such deals become necessary for their survival.