Amazon will acquire MGM for $8.45 billion as the company expands its entertainment business. Amazon will preserve MGM’s catalog of films and provide its customers with greater access to these works to complement the work of Amazon Studios.
The deal grants Amazon access to more than 4,000 films, including iconic movies like 12 Angry Men, Rocky and The Magnificent Seven, as well as more than 17,000 TV shows including Fargo, The Handmaid’s Tale and Vikings. If put on streaming, these could sweeten the deal for Prime members and unlock an additional revenue stream for the retailer.
“The real financial value behind this deal is the treasure trove of IP (intellectual property) in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” said Mike Hopkins, SVP of Prime Video and Amazon Studios in a statement. “It’s very exciting and provides so many opportunities for high-quality storytelling.”
Amazon has not been afraid to spend to keep up with streaming platforms such as Netflix. In 2020, the ecommerce giant spent $11 billion on content for its streaming video and music services, up from $7.8 billion in 2019.
Amazon wasn’t the only retailer with its eye on MGM: Apple reportedly considered making an acquisition as well, according to The New York Times. However, Apple valued the film company at about $6 billion, well below the price tag Amazon was willing to entertain.