Amazon has done it, buying MGM and its legendary catalog of content for $8.45 billion, the company announced Wednesday.
Amazon immediately leaps firmly into the streaming competition with Netflix and Disney+ with its Amazon Prime now stocked with movie titles such as “Legally Blonde” and “A Star Is Born” television shows “The Handmaid’s Tale,” “Fargo,” “Shark Tank” and “The Real Housewives” and franchises such as Rocky and James Bond.
In a news release announcing the deal, Amazon exec Mike Hopkins said: “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.”
Amazon’s move is strategically targeted to push company toward the revenue flowing freely in the content-streaming market.
“There’s no better way to do that than by buying one of the most iconic movie studios in Hollywood,” said Jesse Cohen, senior analyst at Investing.com, in a Reuters story.
“It’s all about content as the streaming war heats up.”
Amazon seems to happily overpaid for MGM, which, according to a Wall Street Journal report, had a market value of $5.5 billion.
But Amazon, via Prime Video, has a huge chunk of cash on hand, of course, as evidenced by a project set in the “The Lord of the Rings” universe that reportedly is costing $465 million for a single season.
The MGM catalog numbers approximately 4,000 films and 17,000 TV episodes and will serve to boost an already-robust Amazon streaming service.
Last month, the company said, it rolled past 200 million Prime members worldwide. CEO Jeff Bezos said streaming hours were up more than 70% year-over-year.
The MGM acquisition is Amazon’s second-biggest. It paid $13.7 billion for Whole Foods Market in 2017.