Amazon is reportedly looking to acquire legacy film and TV studio MGM to the tune of $7 billion to $10 billion, The Information reports. Media and entertainment consolidation seems to be the hottest trend this spring, as the news comes directly on the heels of WarnerMedia and Discovery announcing their merger earlier this week.
As the streaming space gets more crowded, Amazon is looking to bolster its Prime Video content offerings, and MGM’s library is attractive both in terms of quantity (boasting over 4,000 movies and 17,000 hours of TV programming) and quality (with popular and critically acclaimed franchises like "James Bond" and "Rocky"). Acquiring such a popular studio is also a financial win for Amazon. “The benefit is ownership versus licensing. It’s a one-time purchase, so they don’t have to keep paying out these licensing fees to studios,” said Audrey Schomer, eMarketer senior analyst at Insider Intelligence.
In addition to reducing recurring costs, the purchase would also position Amazon as a content licensor for a major independent studio. That would give it newfound leverage over rival streaming services—free ad-supported TV streaming services in particular tend to license out older movies and shows for their platforms, Schomer said, and MGM is a heavyweight for that.
But Amazon doesn’t need the same draw of exclusive content to get people to sign up for Prime Video, since it comes bundled with Prime membership—instead, it needs to keep users watching longer.