If you want to run a successful streaming service, you have to gobble up old movie studios and their collection of IP. Amazon announced that it is buying MGM for $8.45 billion, securing the rights to James Bond, Robocop, Stargate, Rocky, The Pink Panther and thousands of other titles.
Update, 3/18/22: Amazon closed its $8.45 billion acquisition of MGM on Thursday, March 17th. It seems that Amazon was waiting for regulatory approval, as the EU antitrust regulator cleared the MGM deal just two days earlier.
MGM will operate as an independent label under Amazon, and certain properties (such as James Bond) are still under the creative control of MGM producers. That said, MGM will work closely with Prime Video and Amazon Studios, and the label may reduce its theatrical output to focus on Amazon’s streaming services..
MGM was founded in 1924, and in its nearly 100-year history, it has produced over 4,000 movies and 17,000 TV shows. The studio has dipped its toes into nearly every format and genre, including cartoons and made-for-TV adaptations of books, and is currently working on titles like House of Gucci, the Aretha Franklin biopic Respect, No Time to Die, The Addams Family 2, and a Paul Thomas Anderson film.
Needless to say, acquiring MGM will greatly expand Amazon’s Prime Video library and place the company in a position to develop sequels for beloved franchises. The deal will also diminish rival streaming services’ libraries, as Prime Video will become the only service to host some of MGM’s classics. (Of course, this change will happen slowly, as Amazon has to respect contracts written before the MGM acquisition.)
The idea that Amazon can buy an iconic studio like MGM might come as a surprise, even for the high price of $8.4 billion. But MGM isn’t as profitable as it used to be. The studio has had a rough time navigating the last few decades, having been bought and sold several times by Kirk Kerkorian before falling in the hands of a consortium. After filing for bankruptcy in 2010, the studio was taken over by creditors, who are (probably) glad to see it fall under Amazon’s control.
As with any major acquisition, Amazon’s MGM purchase is still pending. But it will probably pass through lawmakers’ desks without a hitch, given what we saw when Disney bought Fox, or when AT&T bought Time Warner, or when Viacom bought CBS, or when AT&T bought DirecTV, or when T-Mobile bought Sprint, and so on.