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Amazon has made a deal to buy Hollywood studio MGM for almost $8.5 billion. It's the second-largest acquisition for the company after purchasing Whole Foods.
The tech company already runs a film studio, Prime Video streaming service, and video game streaming site Twitch. But the MGM deal is its biggest move into entertainment. Amazon will get the rights to the Golden Age studio's film and television library.
The announcement was made Wednesday morning by the two companies. In a statement, Amazon's senior vice president of Prime Video and Amazon Studios, Mike Hopkins, emphasized the intellectual property value of MGM's vast holdings, which go back to the 1920s. "The real financial value behind this deal," Hopkins said, "is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM's talented team."
With its mascot lion roaring logo, MGM made such movie classics as Singin' In the Rain and 2001: A Space Odyssey. MGM also owns the EPIX cable channel and runs a TV studio that produced The Handmaid's Tale and Fargo.
MGM also splits the highly lucrative James Bond movie franchise with a family that holds creative control of the 007 movies. According to Variety, as of 2020 the 24 films released so far in the series have generated $16.3 billion in global ticket sales, adjusted for inflation.
In all, MGM's catalog includes more than 4,000 films — including such pop-culture staples as Moonstruck, Legally Blonde, Rocky, The Pink Panther, The Silence of the Lambs and Poltergeist — and 17,000 television shows. Access to those movies and shows will certainly augment Amazon's Prime Video offerings, particularly at a time when other studios and networks have created their own platforms to reach consumers, such as HBO Max, Paramount+ and Disney+. As of last month, there were more than 200 million Amazon Prime account holders worldwide, Amazon founder Jeff Bezos told Variety.
The Wall Street Journal reported on Wednesday that the deal for $8.45 billion includes taking on MGM's current debts. The deal has not yet closed, an Amazon spokesperson noted to NPR, and is subject to regulatory approvals. The company is already facing antitrust inquiries in both the U.S. and Europe.
STEVE INSKEEP, HOST:
For about $8.5 billion, Amazon has acquired this...
(SOUNDBITE OF MGM LION ROARING)
INSKEEP: The roaring lion of MGM is the symbol of a Hollywood studio with an enormous library of films and TV, ranging from "Singin' In The Rain" to the Bond films.
(SOUNDBITE OF ARCHIVED RECORDING)
UNIDENTIFIED ACTOR: (As James Bond) Bond, James Bond.
INSKEEP: We're now going to discuss this with a very important correspondent, and perhaps we should let you introduce yourself, correspondent.
MANDALIT DEL BARCO, BYLINE: Del Barco, Mandalit del Barco.
INSKEEP: OK, good. (Laughter) Well, thank you very much.
DEL BARCO: (Laughter).
INSKEEP: So what's this deal about?
DEL BARCO: Well, you know, Amazon needs to compete with the likes of Disney, which had a really successful launch of its streaming platform, Disney+, and also Netflix, which continues to spend billions of dollars every year producing original content for its streaming platform. So an easy way for Amazon to grow is to buy, to acquire.
DEL BARCO: So, you know, Amazon reportedly spent $11 billion last year, in 2020, on buying movies, TV shows and music for Amazon Prime. So you can see how important their content is to their service. Amazon also includes a streaming site, Twitch, Audible and Amazon Studios. They have all the groceries, books and all that other stuff that we've been buying during the pandemic, and now they have this storied Hollywood movie studio, too.
INSKEEP: I'm glad you point out storied because this is a studio that's been around for generations, and there must be generations' worth of films in the vault.
DEL BARCO: That's right. Well, you know, MGM is very historic, as you know, and its studio has a library with over 4,000 films. They have everything from "Singin' In The Rain" to "Silence Of The Lambs" to "Poltergeist," "RoboCop" and "Rocky." And big films that are coming out that will now be under the Amazon banner include "House Of Gucci," "Respect," the Aretha Franklin movie, and "No Time To Die," the next James Bond movie. But - and that big star in the library, of course, is 007. It's not clear if the family that runs the - controls the 007 franchise is going to give that up, but we'll see what happens with that.
INSKEEP: So that I understand the economics, is it as simple as this? Amazon Prime is paying people to put movies on Amazon Prime, and now it doesn't have to pay for these 4,000 films; Amazon is going to pay itself.
DEL BARCO: Yes, that's right. You know, MGM has a television catalog, too, and that includes 17,000 TV shows. Among the most popular is "The Handmaid's Tale," "Fargo" and "Vikings." And television has gotten really competitive this last year with so many deals happening, especially in the last few weeks with AT&T spinning off Warner Media and merging with Discovery.
INSKEEP: Is this, then, a larger trend? Studios, like so many media companies - media companies in general just feel they have to be bigger and bigger to compete with competitors that are bigger and bigger.
DEL BARCO: That's right. I mean, like I mentioned, you know, Disney+, Netflix, the streaming sites are very, very big players in Hollywood now. So, you know, here's Amazon coming in, and they're going to get this huge library. MGM is 97 years old, the studio. It's collectively won more than 180 Academy Awards, 100 Emmys.
INSKEEP: Got to stop you there. Mandalit, go have a drink - shaken, not stirred. Thank you very much.
DEL BARCO: (Laughter) Thanks.
INSKEEP: NPR's Mandalit del Barco.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.