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2 minutes read

Reasons Why Amazon Is Looking To Acquire Hollywood’s MGM Studios

| Published on May 26, 2021

Amazon is soon to announce its acquisition of the Hollywood studio MGM. This acquisition will mark the start of the Hollywood career of the e-commerce giant.  On Monday, the Wall Street Journal reported that the deal is pegged to cost almost $9 billion as per sources.

As per Verdict, an acquisition of MGM Studios will ‘bolster Amazon’s streaming portfolio with strong content’, most notably the James Bond Franchise which is the fifth most valuable movie franchise of all time grossing more than $7bn.

MGM had been looking for a buyer for some time now. Earlier, Apple & Comcast had decided that the studio’s worth should be roughly $6 Billion. The MGM takeover would be Amazon’s second-biggest acquisition after it agreed to buy Whole Foods in 2017 for $13.7 billion.

Reasons Behind The Acquisition

MGM has an extensive catalog of more than 4,000 films and 17,000 TV episodes. It is also regarded as the number one unscripted television producer. Furthermore, the studio’s extensive experience in film and television production will also help in the future operations of Amazon Studios.

The deal would bring a vast library of movies and shows to Amazon, which operates on the Prime Video streaming service. MGM’s catalog includes the James Bond, Pink Panther, RoboCop, and Rocky franchises, as well as films such as “The Silence of the Lambs.”

Another reason for Amazon to acquire MGM is that in 2020 Amazon spent $11bn on content creation alone. Therefore the acquisition would suggest a significant increase in content which MGM already has for $9 Billion.

Apart from this, the updated content library will be able to make the gap of the difference in the number of subcribers from its rivals. Amazon’s biggest rival, Netflix has over 208 million users, while Prime Video has around 175 million users. Having the benefit of freshly added content will give Amazon the edge in the streaming space.

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