How's this for a movie blockbuster: Amazon has confirmed it will acquire movie studio MGM in a deal worth $8.45 billion.
In a statement Wednesday, the tech giant said they will help preserve MGM's heritage of films, which includes 4,000 titles, including the James Bond franchise, "The Magnificent Seven," "Raging Bull" and "Rocky."
MGM also owns several popular TV series including "The Handmaid's Tale," which is in the midst of its fourth season on Hulu.
The deal is still subject to regulatory approvals. Amazon did not disclose when the deal would close.
"The real financial value behind this deal is the treasure trove of IP (intellectual property) in the deep catalog that we plan to reimagine and develop together with MGM’s talented team," said Mike Hopkins, senior vice president of Prime Video and Amazon Studios, in a statement. "It’s very exciting and provides so many opportunities for high-quality storytelling."
Amazon's acquisition of MGM highlights a shift to consolidation in a competitive market for streaming services. Earlier this month, AT&T announced a deal to combine its media business, which includes CNN and the app HBO Max, with Discovery, home to networks such as Food Network and HGTV.
Although Amazon has a robust selection of TV shows through its Prime Video service, including "The Boys" and "The Marvelous Mrs. Maisel," its movie slate was thin, said Edward Jones analyst Brian Yarbrough.
Adding MGM's trove of classic movies will inject a new rush of content for consumers who subscribe to Prime Video.
"This elevates the potential for new Prime members, as well as maybe even helping out people when their Prime membership expires to renewing their membership," he said.
The American appetite for streaming media has surged, particularly in the past year as the COVID-19 pandemic forced people to remain isolated. According to a Digital Media Trends Survey from research firm Deloitte, the average subscriber has four paid video streaming services. Meanwhile, 82% of U.S. consumers pay for at least one streaming video platform.
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