Amazon has announced that it has made a deal to purchase MGM Studios for $8.45 billion, the movie and TV studio behind world-famous productions like the James Bond, Rocky, Robocop, Pink Panther, Stargate, and Shark Tank. This deal makes it the company’s second-largest acquisition after it bought grocer Whole Foods for nearly $14 billion in 2017. Founded in 1924 when films were silent, MGM is one of the oldest Hollywood Studios. Buying MGM gives Amazon access to its library of over 4,000 movies and 17,000 TV shows as well as a plethora of famous characters to derive new content from. While Amazon doesn’t say how many people watch its Prime Video service, more than 200 million have access to it because they have signed up for its Prime membership.
Zoom Out: This deal is yet another example of how big tech is merging with traditional entertainment to reshape the landscape of storytelling through understanding customer data. With the exception of Disney, which itself is shifting towards tech, the big five major Hollywood Studios are owned by tech and communication companies. NBC/Universal Studios is owned by Comcast, CBS/Paramount is owned by Viacom, Columbia Pictures is owned by Sony, and HBO/Warner Bros is owned by AT&T. The Big Data to original content revolution which has started with the rise of Netflix has now taken over the industry and continues to shape entertainment today as we consume it. This deal is the latest in the streaming wars as the various services compete against Netflix and Disney+.
