Amazon Buying MGM Studios to Further Expand Streaming Service
Amazon continues to expand into the film industry by purchasing long-standing MGM Studios for $8.45 billion. This marks the companies second-largest acquisition since Whole Foods in 2017. The move was already teased around a week ago, but now they made the move to continue their rapid expansion into streaming and the entertainment industry. They aim to leverage MGM’s filmography of 4,000 films and 17,000 TV shows. Senior Vice President of Prime Video and Amazon Studios, Mike Hopkins, gave the following statement:
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.
Amazon has been investing quite a bit to strengthen its hold in the streaming market to keep up with competitors Netflix and Disney. It’s becoming quite a competitive market, especially with AT&T’s move to combining WarnerMedia with Discovery also enhancing their move forwards with HBO Max. It also aligns with the recent revelation that their new Lord of the Rings series costs a whopping $465 million to produce, which is one of the most costly television shows ever produced. They also expanded through NFL deals to broadcast Thursday Night Football. Their flywheel effect remains their main focus to expand Prime subscribers. Not only would it bolster their streaming offering, but also further supports new purchases directly in the eCommerce offerings of the site. It will be interesting to see what other purchases they have planned in the near future if they continue down this path.