Because the over-populated streaming video panorama continues to broaden, Amazon is vying to maintain its prime tier rating by buying MGM for $8.45 billion. Whereas MGM’s library isn’t well worth the premium worth Amazon is paying, the expertise behind the display screen is the actual deal.
The principle purpose for this acquisition is easy: to allow Amazon to ship a extra constant stream of authentic content material that streaming viewers crave, stop defection among the many 43% of on-line customers who view Prime Video month-to-month, and guaranteeing Amazon’s maintain on the excessive worth of Prime members.
Of the greater than 4000 movies and 17,000 TV exhibits within the MGM library, solely a handful have top-tier worth: ‘Legally Blonde,’ ‘The Handmaid’s Story,’ ‘The Actual Housewives,’ and the James Bond sequence. With different companies providing extra compelling content material to lure customers, Amazon wants to spice up its content material creation to forestall defections.
Enter MGM movie chief Michael De Luca, actuality producer Mark Burnett, and chairman Kevin Ulrich: skilled leisure professionals that present a powerful basis to create and produce notable authentic programming titles.
A bonus for the deal is its potential to strengthen Amazon’s plans to broaden Prime internationally. Amazon introduced the return of Jeff Blackburn, previously a prime lieutenant to Bezos, to spearhead a brand new International Media & Leisure division. The Bond franchise’s international recognition provides Blackburn a catalyst for Amazon’s worldwide plans (hat tip to Sucharita Kodali for her perception into how the Bond franchise suits into Amazon Prime’s worldwide ambitions).
Amazon wants another aspect for this acquisition to succeed: a battle chest to permit these executives to amass new titles and produce a gentle stream of content material. Earlier this yr, Amazon paid the NFL $1 billion per yr for the rights to Thursday Night time Soccer, signaling a brand new route for his or her content material ambitions. Amazon might want to write a a lot bigger examine if the MGM buy is one other sign of ambitions to develop into a serious media participant.