Amazon made a big commitment to Prime Video today by acquiring MGM Studios for $8.45 billion, a deal that will give it valuable IP for taking on Netflix, Disney+ and HBO Max.
The deal, which is still subject to regulatory approval, will provide Amazon with a catalog with more than 4,000 films—including the James Bond series, “Legally Blonde,” “Moonstruck,” “Poltergeist,” “Raging Bull,” “Robocop,” “Rocky,” “Silence of the Lambs” and “Thelma & Louise”—along with 17,000 TV shows including “Fargo” and “The Handmaid’s Tale.” But the most important facet of the deal will be the opportunity is presents for new content based on existing titles.
“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. It’s very exciting and provides so many opportunities for high-quality storytelling,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios, in a statement.
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Danyaal Rashid, thematic analyst at GlobalData, said that Amazon Prime Video has trailed behind peers like Netflix in terms of new releases and that new entrants into the SVOD marketplace have reinforced the need for more content.
“MGM provides a great complement to the Amazon platform. Titles such as James Bond (although this will be co-owned) and Rocky not only provide Amazon with instantly recognizable blockbuster content, but also affords the firm the opportunity to spin off characters and storylines. This would allow Amazon to effectively ‘milk’ this IP for all it’s got,” he said.
Amazon’s move to buy MGM comes at a time when others in the streaming video industry are also fortifying their positions. Last week, Discovery and WarnerMedia announced a merger agreement that will bring together HBO Max and Warner Bros. with Discovery’s portfolio of cable networks and streaming services.
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Amazon is currently operating at a scale near Netflix, which has more than 200 million subscribers worldwide. The company saw more than 175 million Prime members stream shows and movies in the past year and said that Amazon Prime recently crossed the 200-million-member mark, up from 150 million in January 2020.
In addition to stocking up on scripted entertainment, Amazon Prime Video is also continuing to bolster its live sports offerings. The company is reportedly paying $1 billion per year for its exclusive deal for NFL Thursday Night Football, which kicks off in 2022 and runs through 2033.
Amazon recently revealed that it spent $11 billion on streaming video and music content in 2020, up from $7.8 billion in 2019.