According to the latest news, Amazon has announced today that it has reached a deal to acquire the well-known film and TV company MGM with a deal valued at $8.45 billion. This is going to be a significant acquisition for the e-commerce giant.
With this deal, Amazon would be the owner of a library of content that reportedly consists of around 4,000 films and 17,000 hours of TV. This acquisition will likely attract more big-spending Amazon Prime subscribers as its Prime Video service would start directly competing with the likes of Netflix and Disney Plus.
MGM is known as the Hollywood studio behind the James Bond and Rocky franchises but its library runs include classic films like 12 Angry Men and modern TV shows like The Handmaid’s Tale and Vikings. It is worth mention that MGM’s library also includes unscripted TV shows like The Voice and Shark Tank.
Amazon said that this acquisition will “provide customers with greater access” to MGM’s works and “empower” the studio to continue its “great storytelling.” According to Amazon, “The real financial value behind this deal is the treasure trove of IP”
In a statement, Mike Hopkins, senior vice president of Prime Video and Amazon Studios said “The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team. It’s very exciting and provides so many opportunities for high-quality storytelling.”
So far, Amazon’s media business has been relatively small in terms of size especially though the company spends billions on content each year. A good number of Prime subscribers make use of the included free Prime Video streaming. Currently, Amazon has over 200 million Amazon Prime subscribers worldwide out of which more than 175 million subscribers streamed video last year. It seems Amazon decided to add thousands of more shows and films to boost these figures.
It is worth mention that currently, MGM is owned by a collection of private equity firms like Anchorage Capital Group, Highland Capital Management, and Solus Alternative Asset Management among others.