Amazon on Wednesday signed an $ 8.45 billion deal to buy MGM, the iconic Hollywood studio company known for releasing films in theand the Rocky franchises. The deal sets a course to amplify Amazon Prime Video with new programming drawn from MGM’s long history and to strengthen Amazon’s existing original production arm, Amazon Studios.
Amazon has said that MGM’s beloved TV and film franchises are a gold mine it can dig into as it seeks to create new lineup – think reboots, sequels, spinoffs and other interpretations.
“The real financial value of this deal is the treasure trove of intellectual property in the detailed catalog that we plan to reinvent and develop with the talented team at MGM,” said Mike Hopkins, Amazon senior vice president for Prime Video and Amazon Studios, in a statement. . “It’s very exciting and offers a lot of opportunities for high quality storytelling. “
The deal is the biggest for Amazon since its $ 13.7 billion acquisition of the Whole Foods grocery chain in 2017.
Beyond movies, MGM operates a television studio that makes shows such as A Handmaid’s Tale on Hulu and Fargo on FX. (It’s common for studios to create programs for other streaming services and networks that they don’t own.) MGM also runs Epix, a cable TV network and app. MGM has been on sale for months, and several outlets have previously reported progress in negotiations that ultimately resulted in a deal being struck by Amazon and MGM.
But – thanks to the Byzantine nature of video licensing and ownership – Amazon’s purchase of MGM doesn’t necessarily mean that new MGM movies will be delivered direct to Amazon Prime Video exclusively. It also doesn’t mean that Prime Video is automatically going to receive a huge influx of all the classics you associate with MGM’s Roaring Lion intro. Amazon said Wednesday it had no comment on MGM’s content library or its access on Prime Video or elsewhere.
Take the James Bond film franchise. MGM is helping produce James Bond films, including No Time to Die, the next episode which hits theaters on October 8. But the creative control of Bond films resides with a small independent MGM production company called Eon Productions; the people calling the shots are basically a sister and brother whose father handed down creative control of the franchise. This company makes the big decisions, like when should the next Bond film be released, who will be the new Bond, if Bond should get a TV series.
The new MGM films also have a licensing deal with ViacomCBS’s Paramount Plus, which is expected to release films like No Time to Die, House of Gucci and Creed III, after their full theatrical releases and a time window when they are. exclusive to Epix. . The terms of MGM’s license agreement with Paramount Plus are not publicly known, including whether Paramount Plus obtains exclusivity on the streaming availability of the films. It’s also unclear what would happen to Epix’s exclusive domain when releasing new MGM movies if Amazon, for example, reinvented Epix as part of Prime Video. (Paramount Plus did not respond to messages seeking comment on streaming licenses.)
And you definitely shouldn’t expect Amazon Prime Video to get those classic movies MGM shot at the height of the Hollywood studio system – think Wizard of Oz and Singin ‘in the Rain. These movies are streaming on HBO Max now because the service’s parent company, WarnerMedia, has owned them for years. Amazon would have to bring WarnerMedia to the negotiating table if it wanted to get them back.
The news from Amazon comes as streaming video has never been so popular and the competition has never been so fierce. Last year, a parade of media giants and tech heavyweights launched their own rivals on Amazon Prime Video and Netflix, with services such as, , and deployment. The so-called streaming wars affect the number of services you have to use – and often pay – to watch your favorite shows and movies online.
But the intensifying competition in streaming has also sparked a wave of consolidation among media companies. Disney bought Fox, Viacom and CBS merged, and AT&T bought Time Warner (then struck a deal last week to sell everything as WarnerMedia to Discovery). MGM was one of the few remaining small media properties, as the industry’s competitive advantage solidifies around being a giant – or part of a giant – to survive.
The Amazon MGM buyout is still subject to regulator approval and other customary conditions before it can close.