Amazon has reached a deal to acquire the TV and film company MGM for $8.45 billion, the companies announced today. The acquisition is significant for the company, and it means it will own a library of content that has around 4000 films and 17000 hours of TV. The acquisition is likely to help the company to attract even more big-spending Prime subscribers. The prime video competes with Disney+ and Netflix.
MGM is known for being the Hollywood studio behind the Rocky and James Bond franchise. In its gallery, there are classic films as well as modern TV shows and also unscripted TV shows. Amazon says the acquisition will “provide customers with greater access to MGM’s works and empower the studio to continue its “great storytelling.”
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.”
Amazon’s media business has been a relatively small part, although billions are spent each year on content. The included free Prime Video streaming, which a substantial portion of Prime subscribers makes use of. Amazon Prime currently has 200 million-plus people worldwide and out of which over 175 million streamed video last year. Adding thousands more TV shows and films will be added advantage for both figures.
Reports of Amazon’s possible acquisition of MGM came 1st in mid-May. It was reported by Variety that the deal was being negotiated by Hopkins. On May 24, The Wall Street Journal reported that Amazon was nearing a deal to buy MGM. A collection of private equity firms owns MGM including, Solus Alternative Asset Management, Highland Capital Management, and Anchorage Capital Group. Last December news came that MGM is up for sales.
During the Hollywood consolidation, the sale of MGM comes as the companies increase its content libraries to compete with Disney+ and Netflix.