Amazon struck a $8.45 billion deal Wednesday to buy MGM, the iconic Hollywood studio known for releasing movies in the and Rocky franchises. The deal sets a course to amp up Amazon Prime Video with new programming mined from MGM's long history and to bolster Amazon's existing original production arm, Amazon Studios.
MGM's beloved film and TV franchises, Amazon said, are a goldmine it can dig into as it looks to create new programming -- think reboots, sequels, spin-offs and more new interpretations.
"The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM's talented team," Mike Hopkins, Amazon's senior vice president of Prime Video and Amazon Studios, said in a release, referring to intellectual property. "It's very exciting and provides so many opportunities for high-quality storytelling."
The deal is the biggest for Amazon since its $13.7 billion acquisition of the Whole Foods grocery chain in 2017.
Beyond films, MGM operates a TV studio that makes shows such as A Handmaid's Tale on Hulu and Fargo on FX. (It's common for studios to make programming for other streaming services and networks they don't own.) MGM also runs Epix, a cable TV network and app. MGM has been up for sale for months, and multiple outlets earlier reported progress in the negotiations that eventually resulted in Amazon and MGM consummating a deal.
But -- thanks to the byzantine nature of video licensing and ownership -- Amazon's purchase of MGM may not necessarily mean new MGM movies will come straight to Amazon Prime Video exclusively. Nor does it mean that Prime Video is automatically going to get a huge influx of all the classics you associate with MGM's roaring lion intro. Amazon said Wednesday it didn't have any comment about MGM's library of content or access to it on Prime Video or anywhere else.
Take the James Bond film franchise. MGM helps produce James Bond movies, including No Time to Die, the next installment set to hit theaters Oct. 8. But creative control of Bond films resides in a small production company unrelated to MGM called Eon Productions; the people calling the shots are essentially the Broccoli family, a sister and brother whose father passed down creative control over the franchise. That company makes the big decisions, like when should the next Bond film come out, who will be the new Bond, whether Bond should get a TV series.
MGM's new films also have a licensing arrangement with ViacomCBS' Paramount Plus, which is set to stream films like No Time to Die, House of Gucci and Creed III, after their full theatrical releases and a window of time when they're exclusive to Epix. The terms of MGM's licensing deal with Paramount Plus aren't publicly known, including whether Paramount Plus gets any exclusivity over the streaming availability of the movies. It's also unclear what would happen to Epix's exclusive domain over streaming some new MGM movies first if Amazon, say, reinvented Epix as a part of Prime Video. (Paramount Plus didn't respond to messages seeking comment on streaming licenses.)
And you definitely shouldn't expect Amazon Prime Video to get those classic films MGM made back in the heyday of the Hollywood studio system -- think The Wizard of Oz and Singin' in the Rain. Those movies stream over at HBO Max now because the service's parent company, WarnerMedia, has owned them for years. Amazon would have to bring WarnerMedia to the negotiating table if it wanted to claw them back.
Amazon's news comes as streaming video has never been more popular, and the competition never more fierce. In the last year, a parade of media giants and tech heavyweights have launched their own rivals to Amazon Prime Video and Netflix, with services like streaming wars affect how many services you must use -- and often pay for -- to watch your favorite shows and movies online., , and rolling out. The so-called
But intensifying competition in streaming has also triggered a wave of consolidation among media companies. Disney bought Fox, Viacom and CBS merged, and AT&T bought Time Warner (and then struck a deal last week to sell it all off as WarnerMedia to Discovery). MGM was one of the few smaller media properties left, as the competitive advantage in the industry solidifies around being a giant -- or part of a giant -- in order to survive.
Amazon's MGM takeover is still subject to regulator approval and other customary conditions before it can close.