In May 2021, Amazon announced its acquisition of the iconic Metro-Goldwyn-Mayer (MGM) Studios for a whopping $8.45 billion. This deal marked Amazon’s second-largest acquisition following its $13.7 billion purchase of Whole Foods in 2017, and it sent ripples through the entertainment industry. But what does this mean for Amazon, MGM, and the broader film and television industry? Let’s delve into the details.
Amazon’s acquisition of MGM means a strategic move to boost its content offerings and strengthen its position in the streaming wars. This deal allows Amazon to leverage MGM’s extensive catalog of films and TV shows to attract more subscribers to Prime Video and compete with other streaming giants. It also provides Amazon with the opportunity to reimagine and develop MGM’s famous franchises for new films and series. Furthermore, the acquisition is expected to benefit Amazon’s advertising business and signifies Amazon’s commitment to invest in content to remain competitive in the entertainment industry.
Amazon’s Strategic Move: A Deep Dive
Amazon’s decision to purchase MGM is a strategic move to boost its content offerings and strengthen its position in the streaming wars. The acquisition includes an extensive catalog of over 4,000 films and 17,000 TV show episodes, featuring franchises like Rocky, James Bond, and The Pink Panther, and series like “The Handmaid’s Tale,” “Fargo,” and “Vikings”. By adding MGM’s content to Prime Video, Amazon aims to attract more subscribers and compete with other streaming giants like Netflix and Disney+.
Another strategic objective behind the acquisition is to leverage MGM’s famous franchises to create new films and series. Amazon founder Jeff Bezos stated that the company bought MGM because of its “vast, deep catalog of much-beloved intellectual property,” and plans to “reimagine and develop that IP for the 21st century”.
Additionally, the acquisition is expected to benefit Amazon’s advertising business. While Prime Video is a significant part of Amazon’s streaming strategy, the company also operates IMDb TV, an ad-supported streaming platform. By incorporating MGM’s content into its advertising business, Amazon can further expand its $31 billion advertising revenue.
The Impact on Amazon’s Position in the Streaming Market
Amazon’s acquisition of MGM has strengthened its position in the streaming market. The deal added MGM’s extensive catalog of more than 4,000 film titles and 17,000 TV episodes to Amazon’s offerings. The addition of MGM’s content library has the potential to attract more subscribers to Amazon Prime Video and increase viewer engagement. This, in turn, can lead to higher purchases of everyday products on Amazon’s website, as there is a direct link between viewer engagement on Prime Video and increased usage of Prime shipping benefits.
What Does This Mean for MGM’s Existing Franchises?
One of the most notable franchises in MGM’s portfolio is the James Bond series. While it is still too early to determine the exact impact of the deal on the future of the franchise, Amazon’s acquisition of MGM provides numerous opportunities for high-quality storytelling and the potential to reimagine and develop the existing intellectual property.
The Wider Impact on the Film and Television Industry
The acquisition has significant implications for the broader film and television industry, with potential effects including technological advancements, the rise of streaming services, globalization, changing viewer habits, economic factors, and environmental concerns. The industry must continuously adapt and innovate to stay relevant and successful in this ever-changing landscape.
The Future of Amazon and MGM Post-Acquisition
After Amazon’s acquisition of MGM, the future holds a significant expansion of content for Amazon Prime Video and Amazon Studios. Amazon Studios is actively developing new projects based on MGM’s intellectual property. The acquisition is expected to help Amazon compete with other streaming giants by offering a more diverse range of entertainment choices to its customers.
In conclusion, Amazon’s acquisition of MGM is a strategic move that strengthens its position in the streaming market, expands its content offerings, and provides new opportunities for content creation and distribution. It signifies Amazon’s commitment to investing in content to remain competitive in the entertainment industry and provides an exciting future for MGM’s existing franchises.
Frequently Asked Questions
When was the acquisition of MGM by Amazon finalized?
The acquisition of MGM by Amazon was finalized in May 2021.
What is Amazon’s largest acquisition to date?
Amazon’s largest acquisition to date is its purchase of Whole Foods in 2017 for $13.7 billion.
What are some of the renowned franchises and series that MGM owns?
Some of the renowned franchises and series that MGM owns include Rocky, James Bond, The Pink Panther, “The Handmaid’s Tale,” “Fargo,” and “Vikings.”
How does Amazon plan to use MGM’s intellectual property?
Amazon plans to leverage MGM’s intellectual property to create new films and series. They plan to “reimagine and develop that IP for the 21st century.”
How does Amazon’s acquisition of MGM benefit its advertising business?
The acquisition of MGM allows Amazon to incorporate MGM’s content into its advertising business, which could further expand its $31 billion advertising revenue.
What is the potential impact of the acquisition on MGM’s James Bond franchise?
While the exact impact is unclear, the acquisition provides opportunities for high-quality storytelling and the potential to reimagine and develop the existing James Bond franchise.
What changes can we expect in the film and television industry due to this acquisition?
The acquisition could lead to technological advancements, the rise of streaming services, globalization, changing viewer habits, economic factors, and environmental concerns within the film and television industry.
What does the future hold for Amazon and MGM after the acquisition?
The future holds a significant expansion of content for Amazon Prime Video and Amazon Studios. Amazon is expected to compete with other streaming giants by offering a more diverse range of entertainment choices to its customers.
