From the C-Suite: Insights and Advice from Corporate Leaders
Corporate leaders occupy a unique vantage point in the business world, offering insights and guidance shaped by their …
May 27, 2021: On Wednesday, Amazon said it would acquire MGM Studios for $8.45 billion, marking its boldest move into the entertainment industry and turbocharging its streaming ambitions.
The deal is the second-largest acquisition in the history of Amazon, behind its $13.7 billion purchase of Whole Foods from 2017.
Amazon hopes to leverage MGM’s storied filmmaking history and wide-ranging catalog of 4,000 films and 17,000 TV shows to help bolster Amazon Studios, its movie, and TV division.
“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,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios, in a statement. “It’s fascinating and provides so many opportunities for high-quality storytelling.”
The deal emphasizes Amazon’s willingness to spend deeply to remain competitive in the crowded streaming market. Amazon, Netflix, Disney, and other video streaming services have been looking to beef up their content libraries to win over subscribers, commit billions toward licensing content, and develop original programming.
Meanwhile, media juggernauts have undergone further consolidation to achieve a grander scale to take on the likes of Amazon and Netflix. Discovery’s $43 billion deal to merge with Warner Media after a spinoff from AT&T, announced last week, is the latest symptom of that.
Amazon has long been willing to make significant investments in video content as a strategy to buoy Prime memberships, which now surpass 200 million globally. It spent $11 billion on video and music content last year, up from $7.8 billion in 2019. CEO Jeff Bezos has argued that these investments reinforce Amazon’s “flywheel effect,” in that it attracts more Prime subscribers, who in turn tend to spend more on the site.
Amazon has also made an aggressive push into sports content, inking a deal with the NFL in May to broadcast Thursday Night Football starting in 2022.
Amazon has a seasoned representative in Hollywood. The company announced last week that it would bring back Jeff Blackburn, formerly a top lieutenant to Bezos, to oversee a new Global Media & Entertainment division, which consolidates its entertainment offerings under one heading, including Prime Video, Amazon Studios, its music and podcasting businesses, Amazon Games and Twitch.
MGM will make Amazon’s TV and film library even more robust. The Hollywood studio owns the James Bond catalog, and its studio has produced several hit shows, including “The Handmaid’s Tale” and “Fargo.” It also owns premium cable network Epix and holds several popular reality TV shows, including “Shark Tank,” “Survivor,” and “The Real Housewives” series.
The MGM deal could heighten antitrust concerns for Amazon. The company faces ongoing probes by multiple federal agencies, state attorneys general, and Europe’s antitrust watchdog. The House Judiciary antitrust subcommittee issued a comprehensive report last October that found Amazon has monopoly power over third-party sellers on its marketplace.
Corporate leaders occupy a unique vantage point in the business world, offering insights and guidance shaped by their …
Corporate leaders today stand at the nexus of unprecedented technological evolution, where digital transformation reshapes industries and redefines …
Corporate leaders stand at the helm of their organizations, often tasked with making decisions that can steer their companies toward …
Corporate leaders are often tested by crises that threaten the very foundation of their organizations. How do these leaders navigate turbulent …
In the vast and often tumultuous seas of corporate leadership, have you ever wondered how some captains …
In the high-stakes game of corporate leadership, where every decision reverberates through the echelons ….
The US Department of Justice (DOJ) has filed a groundbreaking antitrust lawsuit against Google, seeking to break up the …
Corporate leaders occupy a unique vantage point in the business world, offering insights and guidance shaped by their …
The United Kingdom’s economy has experienced a disappointing period of stagnation, contracting by 0.1% in September. This contraction …
Appaloosa Management, a prominent hedge fund led by billionaire investor David Tepper, significantly increased its stake …
Leave us a message
Subscribe
Fill the form our team will contact you
Advertise with us
Fill the form our team will contact you