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Amazon Vies for Viewers’ Consideration
Yesterday, Amazon (AMZN) introduced that it plans to accumulate the film studio Metro-Goldwyn-Mayer, or MGM, for $8.5 billion. By means of this buy, Amazon hopes to bolster its content material catalog because it competes with Netflix (NFLX), Apple (AAPL), and Disney (DIS).
This deal marks Amazon’s second-largest acquisition because it purchased Entire Meals for $13.7 billion in 2017.
The transfer offers Amazon entry to MGM’s mental property which it could use to develop new content material. “The actual monetary worth behind this deal is the treasure trove of IP within the deep catalog that we plan to reimagine and develop along with MGM’s proficient crew,” Mike Hopkins, Senior Vice President of Prime Video and Amazon Studios, stated when saying the deal. MGM’s library contains the James Bond and Rocky franchises, in addition to quite a few in style TV reveals together with Fargo and The Handmaid’s Story.
Deal-Making Abounds
Amazon’s acquisition of MGM comes amid a flurry of media deal-making in 2021. Earlier this month, AT&T (T) and Discovery (DISCA) introduced they’re combining their media belongings in a $43 billion deal to type a brand new stand-alone public firm. ViacomCBS (VIAC), Fox (FOX), Lionsgate (LGFA), and AMC (AMC) are all seen as potential takeover targets for bigger media corporations within the coming years.
For MGM, the cope with Amazon is a win on condition that the studio was valued at round $5.5 billion together with debt final yr when it began searching for patrons. Apple, in addition to the cable large Comcast (CMCSA), had thought of buying MGM, valuing it round $6 billion.
Amazon the Hollywood Studio
Past taking up rivals within the streaming content material market, Amazon has set its sights on turning into a serious Hollywood studio. Simply final week the corporate introduced the creation of a world media and leisure unit headed by Jeff Blackburn. Amazon can be earmarking $465 million or extra for the primary season of a Lord of the Rings TV sequence. This can be a record-setting price range for a streaming present.
For years Amazon has relied on a method of buying hit motion pictures and reveals from different studios. The acquisition of MGM marks a change in its enterprise mannequin. Traders and shoppers will probably be on the sting of their seats ready to see how Amazon’s determination will have an effect on the media panorama.
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