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When streamers become studios: Amazon is reportedly in talks to buy MGM for $9B

Wednesday, May 19, 2021 by Snacks

When Bezos buys a lion... it comes with a whole movie studio. Amazon is reportedly in negotiations to purchase MGM for $9B. This would be the 'Zon's biggest move yet into entertainment. Amazon has made big investments in Prime Video, which attracted 175M viewers over the past year. But Netflix still gets most of Hollywood's spotlight. With this acquisition...

  • Content: MGM has a major library. Think: 4K movie titles, from James Bond to Rocky. It also has 17K TV episodes — from The Handmaid's Tale to Real Housewives.
  • Swagger: MGM is old Hollywood. Its historic name and titles would bring prestige to "newbie" Prime Video.

Coming to America... and the red carpet. Streamers are investing to become more Hollywood, less Chrome tab. In 2020, the 'Zon spent $11B on shows, movies, and music for Prime, up 40% from 2019. Netflix spent more than $17B on content last year, mostly on originals. But it's deeper than content splurges...

  • Theaters: Netflix bought iconic theaters in Hollywood and NYC to premiere its Oscar-worthy films, like Roma. Last May, there were rumors that Amazon wanted to buy AMC.
  • Awards: Netflix snagged 36 Oscar noms this year, the most of any studio. Disney won five, Amazon won two, and Nomadland — which premiered on Hulu — got Best Picture.
THE TAKEAWAY

Streamers are becoming studios... In 2017, Netflix and Amazon became the first streamers to ever win Oscars (and there was pushback). Now, streamers are getting dozens of Oscar noms and spending billions on big originals. Meanwhile, studios are leaning into streaming. Think: Universal's Peacock, Warner's HBO Max, and Viacom's Paramount+ — plus, more direct-to-streaming releases.

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