Amazon confirms $8.5 billion MGM purchase
Amazon has confirmed its rumoured acquisition of MGM, the movie studio behind the James Bond and Rocky movie franchises, for $8.45 billion.
The e-commerce behemoth said the acquisition of the almost-century-old studio would provide an entertainment complement to Amazon Studios, which has been mostly focused on producing TV shows.
However, Amazon’s studio division has acted as a challenger movie player, having initially focused on awards-driven projects such as Manchester by the Sea, to more recent commercially-minded films such as Coming 2 America and Without Remorse.
In an effort to attract and retain Prime members, who benefit from free delivery for product purchases and added entertainment services, Amazon increased its spend on content by 42% last year to $11 billion.
There are currently 200 million Prime members worldwide, outgoing CEO Jeff Bezos recently told shareholders.
It is the second biggest acquisition Amazon has made to date, behind the $13.7 billion purchase of Whole Foods in 2017.
The deal follows AT&T’s decision last week to combine WarnerMedia with Discovery to create a $130 billion movies and TV company.
Disney, Apple, Comcast (owner of NBC and Sky), WarnerMedia and Discovery have launched streaming platforms in the last 18 months and media companies are looking to make deals that will arm them with a war chest of content for these video-on-demand services.
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 catalogue 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.”