Amazon is buying MGM, the film and television studio behind James Bond, “Legally Blonde,” and “Shark Tank” to expand its video streaming service.
MGM will cost Amazon $8.45 billion, making it the company’s second-largest acquisition after Whole Foods, which it paid nearly $14 billion for in 2017.
The agreement is the latest in a series of deals in the media industry to boost streaming services to compete with Netflix and Disney+. On May 17, AT&T and Discovery announced a merger of media companies, resulting in a powerhouse that includes HGTV, CNN, Food Network, and HBO.
Amazon does not disclose the number of people who use its Prime Video service. However, more than 200 million people have access to it as part of Amazon’s Prime membership. Aside from Prime Video, Amazon offers a free streaming service called IMDb TV, through which the company earns money by showing advertisements during movies and shows.
Amazon will gain access to more films, shows, and well-known characters since it purchased MGM, including Rocky, RoboCop, and Pink Panther. Amazon will also receive cable channel Epix, which MGM also owns.
MGM is a studio founded in 1924 during the silent film era and one of the oldest in Hollywood. It has an extensive list of classics, such as “Singin’ in the Rain.” Recent reality series include “Shark Tank” and “The Real Housewives of Beverly Hills,” as well as the upcoming movie of James Bond “No Time to Die,” and an Aretha Franklin biopic “Respect.”
Amazon already has its own studio, but the results have been mixed. Two of its shows, “The Marvelous Mrs. Maisel” and “Fleabag,” won an Emmys for best comedy series. Despite winning several Oscars, many of its films have underperformed at the box office. Amazon has recently increased its spending on sports and high-profile shows. It plans to stream “Thursday Night Football” next season and is developing a “Lord of the Rings” series that will reportedly cost $450 million in its first season.
The deal will bolster Amazon’s position as one of the world’s most powerful and valuable corporations. Amazon’s business practices are being scrutinized by regulators worldwide, particularly the way it collects information from businesses that sell goods on its site and uses it to create its own Amazon-branded products.
In October, the House Judiciary Committee recommended that Amazon and other companies be broken up, making it more difficult for them to buy other companies and imposing new competition rules.
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