Why Amazon is buying MGM now

The online retailer pays more than eight billion dollars – and gets the rights to 4,000 films and 17,000 television shows.

Future secured: Amazon takes over the traditional film studio

Dhe traditional Hollywood studio Metro-Goldwyn-Mayer (MGM) will in future belong to the online retailer Amazon.com. The transaction, which was speculated about last week, was officially announced on Wednesday.

Amazon is paying $ 8.45 billion for MGM. It is the second-costliest acquisition in the company’s history after grocery chain Whole Foods, which was bought for more than $ 13 billion in 2017. This gives Amazon access to a library of more than 4,000 films, including the “James Bond” series and classics such as “Rocky” as the crown jewel.

Lord of the rings

MGM also has some highly anticipated films in the pipeline, such as House of Gucci starring Lady Gaga. The catalog also includes 17,000 television shows such as “The Handmaid’s Tale” and “Fargo”. With the acquisition, Amazon is strengthening its Prime Video streaming service, which competes with platforms such as Netflix and Disney +.

With its film and television offering, the group is pursuing a slightly different strategy than its competitors. It is part of the customer loyalty program Prime, which was originally primarily a shipping offer that enabled subscribers to get their order delivered very quickly for an annual fee. The more than 200 million Prime subscribers are a particularly attractive clientele for the online retailer, because they buy an above-average amount from him. With the video service, the group is trying to create a further incentive to become a Prime customer.

Compared to its big rivals such as Netflix, the supply of content on Prime Video is still considered to be weak, but the company has recently increasingly tried to change this. He has recently bought a lot of money for the rights to popular films such as “The Prince from Zamunda 2” or “Borat Anschluss Moviefilm”, and he is currently having a television series based on the “Lord of the Rings” novels produced for 465 million dollars should cost a single season.

He has also spent billions on sports rights, opening up an area previously unoccupied by Netflix. The billion-dollar purchase from MGM is now another way for Amazon to expand its offering. MGM is one of the most famous Hollywood studios and was founded in 1924. But it also looks back on an eventful history and had to file for bankruptcy in 2010. The latest “James Bond” episode entitled “No Time to Die”, which has been delayed due to the Corona crisis, is due to be released this fall.