Amazon is taking the fight to streaming giant Netflix with the news that it is purchasing veteran film studio MGM.
Amazon announced that it had “entered into a definitive merger agreement under which Amazon will acquire MGM for a purchase price of $8.45 billion.”
The move is significant for the video streaming market, which has enjoyed strong growth during the lockdowns caused by the global Coronavirus pandemic.
With the purchase of Metro Goldwyn Mayer, Amazon is gaining access to all its films gaining during a century of film making.
Indeed, MGM is said to have over 4,000 film titles including the James Bond franchise, but other notable titles including 12 Angry Men, Basic Instinct, Creed, Moonstruck, Poltergeist, Raging Bull, Robocop, Rocky, Silence of the Lambs, Stargate, Thelma & Louise, Tomb Raider, The Magnificent Seven, The Pink Panther, The Thomas Crown Affair, and many others
And Amazon Video Prime’s catalogue will be swelled by MGM’s portfolio of 17,000 TV shows, including thousands of fan favourites such as The Handmaid’s Tale, Fargo, and Vikings
“MGM has nearly a century of filmmaking history and complements the work of Amazon Studios, which has primarily focused on producing TV show programming,” said the firm.
Amazon is currently developing a Lord of the Rings TV series for example.
“Amazon will help preserve MGM’s heritage and catalogue of films, and provide customers with greater access to these existing works,” said the firm. Through this acquisition, Amazon would empower MGM to continue to do what they do best: great storytelling.”
“MGM has a vast catalogue with more than 4,000 films…as well as 17,000 TV shows…that have collectively won more than 180 Academy Awards and 100 Emmys,” said Mike Hopkins, senior VP of Prime Video and Amazon Studios.
“The real financial value behind this deal is the treasure trove of IP in the deep catalogue that we plan to reimagine and develop together with MGM’s talented team,” said Hopkins. “It’s very exciting and provides so many opportunities for high-quality storytelling.”
“It has been an honour to have been a part of the incredible transformation of Metro Goldwyn Mayer,” said Kevin Ulrich, chairman of the board of directors of MGM.
“To get here took immensely talented people with a true belief in one vision,” said Ulrich. “On behalf of the Board, I would like to thank the MGM team who have helped us arrive at this historic day.”
“I am very proud that MGM’s Lion, which has long evoked the Golden Age of Hollywood, will continue its storied history, and the idea born from the creation of United Artists lives on in a way the founders originally intended, driven by the talent and their vision,” said Ulrich. “The opportunity to align MGM’s storied history with Amazon is an inspiring combination.”
The acquisition is subject to the usual regulatory approvals.
It remains to be seen whether traditional television channels – already fighting the switch to streaming services such as Amazon Video Prime, Netflix, Disney+, Apple TV+, HBO Max etc – will lodge objections to the acquisition.
In April Amazon confirmed it had more than 200 million paid Prime subscribers, which is 50 million more than it had at the start of 2020, before Covid-19 took hold of the world.
And streaming hours on Prime Video are up more than 70 percent year-over-year, in another sign of its growth during the Coronavirus pandemic, that forced people to remain in their houses for over a year and half.
It should be noted that Netflix also has 200 million subscribers.