Amazon is reportedly having serious discussions about acquiring MGM for around $9 billion, according to Variety.
The publication said a deal is being put together by Mike Hopkins, senior vice president of Amazon Studios and Prime Video, and Kevin Ulrich, chairman of MGM’s board and a major MGM shareholder through his Anchorage Capital. The report follows a similar report Monday from The Information.
MGM has reportedly been seeking a sale of its studio since last December. The company owns an extensive film library—featuring the James Bond and Rocky franchises—and premium channel Epix. The company also produced scripted television series including “The Handmaid’s Tale,” “Vikings” and “Fargo.”
RELATED: Amazon claims over 175M Prime Video viewers in past year
A deal for MGM would strengthen Amazon Prime Video, which saw more than 175 million Prime members stream shows and movies in the past year. Amazon Prime just recently crossed the 200-million-member mark. Amazon said it had 150 million Prime members in January 2020. Consumer Intelligence Research Partners estimated that as of December 31, 2020, Amazon had 142 million Prime members in the U.S.
The new figures come out to a high level of Prime Video engagement among Prime members. Dave Fildes, director of investor relations for Amazon, was asked about it during the company’s most recent earnings call and reiterated the service’s purpose as an acquisition and retention tool.
“It's a significant acquisition channel in Prime countries. And that we look at it and see that members who watch video have higher free trial conversion rates, higher renewal rates, higher overall engagement,” he said, according to a Motley Fool earnings transcript. He added that Amazon expects to continue growing content spend on an absolute basis and to invest in that beyond original content.
Amazon revealed last month that it spent $11 billion on streaming video and music content in 2020, up from $7.8 billion in 2019. According to CNBC, that money goes toward licensing and production costs along with costs associated with digital subscriptions and sold or rented content.