Online retail giant Amazon is buying MGM — the movie and TV studio behind the James Bond, Legally Blonde and Shark Tank franchises — in hopes of filling its video streaming service with more content to watch.
Amazon is paying $8.45 billion (€6.9 billion) for movie studios, making it the company’s second-biggest acquisition after buying grocery store Whole Foods for nearly $14 billion (€11.5 billion) in 2017.
This is the latest deal in the media industry to push streaming services to compete with Netflix and Disney+.
US telecommunications companies AT&T and Discovery announced last week that they will merge the media companies, creating a powerful hub that will include HGTV, CNN, Food Network and HBO.
Amazon doesn’t say how many people watch its Prime Video service. But more than 200 million have access to it because they signed up for a Prime membership, which gives them faster shipping and other perks.
Apart from Prime Video, Amazon also has a free streaming service called IMDb TV where Amazon makes money by showing ads during movies and shows.
Access to the film library
Buying MGM will give Amazon access to more movies, shows and famous characters, including Rocky, RoboCop and the Pink Panther. Amazon will also get MGM’s cable channel Epix.
Known for its roaring lion logo, MGM is one of Hollywood’s oldest studios, founded in 1924 when films were still silent. It has over 4,000 films in its library, including classics such as The Silence of the Lambs and Thelma and Louise.
Amazon has said it plans to use MGM’s extensive library to create new shows and movies.
More recent work includes mainstream reality shows Shark Tank and The Real Housewives of Beverly Hills, as well as the upcoming James Bond film No Time to Die and an Aretha Franklin biopic called Respect.
Amazon already has its own studio, but the results are mixed. Two of his shows, The Marvelous Mrs. Maisel and Fleabag, won the Primetime Emmy Award for Outstanding Comedy Series. Despite winning several Oscars, most recently for The Sound of Metal, many of his films have failed to win over audiences at the box office.
Expansion of monopoly
Seattle-based Amazon.com Inc. declined to say when the deal is expected to close. But when it does, Amazon, already one of the most powerful and valuable companies in the world, will become even bigger.
Regulators around the world are scrutinizing Amazon’s business practices, in particular how it treats information from companies that sell products on its site and uses it to create its own Amazon-branded products.
A US House Judiciary Committee report in October called for a possible split between Amazon and other companies, making it harder for them to buy other businesses and introducing new rules to protect competition.
Amazon, founded in 1995 as an online bookstore, has grown into a $1.6 trillion (€1.3 trillion) giant that now sells a little bit of everything.
It has a delivery business that delivers orders to people in two days or less, sells inhalers and insulin, has a cloud computing business that powers Netflix and McDonald’s apps, and plans to send more than 3,200 satellites into space for transmission. Internet service to Earth.