Amazon buys MGM for $8.45 billion
E-commerce giant's largest entertainment acquisition ever
Amazon has signed a deal to acquire film and TV company MGM for $ 8.45 billion, the companies announced today. This is a significant acquisition for the e-commerce giant, and means that it will own a library of content consisting of approximately 4,000 films and 17,000 hours of TV. The acquisition is likely to help Amazon attract even more spending Prime customers as its Prime Video service competes with the likes of Netflix and Disney Plus.
MGM is perhaps most notable for being the Hollywood studio behind the James Bond and Rocky franchises, but its library runs from classic films like 12 Angry Men to modern TV shows such as The Handmaid's Tale and Vikings. MGM's library also includes unscripted TV shows such as The Voice and Shark Tank. Amazon says the acquisition will "give customers greater access" to MGM's works and "empower" the studio to continue with a "great story".
Prime Video and Amazon Studios senior vice president Mike Hopkins said in a statement, "The real financial value behind the deal is a deep-rooted IP treasury, which we plan to develop and develop together with MGM's talented team Huh." "It's very exciting and offers a lot of opportunities for high-quality storytelling."
Amazon's media business has so far been a relatively small part of its overall empire, although it still spends billions on content every year. A large proportion of Prime subscribers use the included Free Prime video streaming. Of the more than 200 million people worldwide who are currently subscribed to Amazon Prime, over 175 million streamed videos last year. Adding thousands more movies and TV shows can be a boon for both figures.
Reports of Amazon's possible acquisition of MGM first surfaced in mid-May. Variety reported that the deal was being negotiated by Hopkins. The Wall Street Journal reported on May 24 that Amazon was close to a deal to buy MGM.
MGM is currently owned by a collection of private equity firms including Anchorage Capital Group, Highland Capital Management, and Solus Alternative Asset Management. Reports that MGM was up for sale surfaced last December.
MGM sales occur during the period of Hollywood consolidation, as companies attempt to consolidate their content libraries to compete with Netflix and Disney. AT&T recently left its media business WarnerMedia to merge with TV company Discovery, making it the second-largest media firm in the world by revenue outside of Disney. Both companies have their own streaming services (HBO Max and Discovery Plus), increasing their chances of being combined into a single, more important service.