Amazon Buying Movie Studio MGM for $8.45 Billion

Amazon is making another major purchase. This time, it is purchasing major movie studio, MGM, for $8.45 billion

There’s another major acquisition happening in the entertainment world. This time, Amazon is buying major movie studio for an estimated $8.45 billion. It marks yet another consolidation, though this time, with a twist in that it’s a major tech giant swallowing up a major player in the entertainment world.

Once completed, the acquisition will allow Amazon to boost its content in its streaming service. From the CBC:

The deal is the latest in the media industry that’s aimed at boosting streaming services to compete against Netflix and Disney+. AT&T and Discovery announced on May 17 that they would combine media companies, creating a powerhouse that includes HGTV, CNN, Food Network and HBO.

Amazon doesn’t say how many people watch its Prime Video service. But more than 200 million have access to it because they’re signed up for its Prime membership, which gives them faster shipping and other perks. Besides Prime Video, Amazon also has a free streaming service called IMDb TV, where Amazon makes money by playing ads during movies and shows.

Buying MGM would give Amazon access to more films, shows and famous characters, including Rocky, RoboCop and Pink Panther. Amazon will also get a cable channel: Epix, which MGM owns.

In north America, media consolidation has been a major point of worry for a lot of observers. In Canada, ISPs and TV and radio stations have been growing increasingly consolidated. It’s the same story in the United States. It’s this scenario that has changed former opponents to network minds and got them to be more supportive of network neutrality. This is because more companies who own TV networks also happen to own ISPs as well. This makes it possible for ISPs to add fast lanes to the same services that the ISPs parent companies own.

This latest acquisition does add an interesting flavor in that it’s an online service making such an acquisition. Still, it does nothing to solve the problem of media consolidation. For instance, what’s to stop Amazon from purchasing an ISP somewhere down the road? It’s obvious that Amazon does have the cash to make large purchases – as is evident with this latest acquisition.

While many might be focused on what this means for Amazon Prime streaming services, there are larger market concerns that can overshadow this over the long term. In 2018, after much back and forth, EMI was finally sold to another major record label. The label wound up being Sony which added further concentration for the major record labels – going from “the big four” to “the big three”. The question here is what impact is purchases from other industries going to have in the already heavily consolidated entertainment markets?

Drew Wilson on Twitter: @icecube85 and Facebook.

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