The bond works in the house built by Bezos. That’s true. After a week of speculation, now Announced by Amazon it actually made a deal to buy MGM, the studio’s home stone, RoboCop, and, yes, James Bond. The deal, valued at $ 8.45 billion, was the second most acquired by Amazon, also second only to the $ 13.7 billion purchase of Whole Foods in 2017. It’s also the latest electric move in an ongoing battle for the racetrack in the ongoing wars, one that signals what streaming services need to do to finally win – or at least survive.
In the old days – OK, 2008 – streaming services mostly provided content licensed from other studios. A few hundred movies here, a few thousand hours of TV there. As they grow, of course, they expanded into the glitzy world of the original interior. Netflix found early success in House of Cards; Amazon started making shows like Transparent; Hulu offered The Story of the Servant (which was intentionally, made by MGM). Streamers are also starting for awards with auteur -driven films like Manchester By Sea and Marriage Story. But then, the studios themselves got into the streaming game, launching their own services—Disney +, Paramount +, whatever else has a math symbol attached – and streamers will have to increase their output to the originals as companies retrieve the content they have licensed. (Very tall, office. Let’s meet at Peacock. Good compulsion Friends. You’ll be caught on HBO Max.) With Amazon’s big-ticket purchase of MGM, this struggle will enter a new phase: streaming services purchased directly from studios.
This is an inevitable development, and it’s no surprise that Amazon will do so first. Unlike Netflix, it fails to reliably produce original hits. And unlike, let’s say, NBCUniversal, the corporate model isn’t just fun. It is also a cloud computing companies, many retailers, and grocery store chains, to name a few. It had net revenue in excess of $ 21 billion last year alone. It’s easier for Amazon to dig into couch cushions to buy MGM and its 4,000 movies and 17,000 TV shows than for the company to try to launch a new studio with the same energy-especially how rocky the experience it is trying to do exactly in video games. The company all but said so in its announcement, with Amazon Video Chief Mike Hopkins stating that “the real financial value behind this deal is the wealth of IP in depth [MGM] catalog ”and said Amazon has plans to develop intellectual property for future projects.
Yet the move could prompt other streamers – and small studios – to strike their own agreements so as not to be neglected. It could mean starting to buy Netflix around, or smaller players like Apple TV + starting an inking deal with indie studios like A24 to make sure they all fit in, rather than just one movie here or there. “There’s a need to give, there’s a need to shake up for them to start dealing or partners or taking,” said Sarah Henschel, a streaming analyst at research firm Omdia. “I think smaller studios could be available, or Apple TV + and others will meet them.”
It’s a slightly different scenario, but just last week AT&T announced that it was rotating WarnerMedia to merge it with Discovery, effectively putting the company behind DC Comics and HBO films under the same roof as HGTV and Shark Week. No one knows exactly what this new outfit will look like, but perhaps whatever the kind of consequences of DiscoveryMax +, it could be a big part of the media integration trend that’s happening right now, one that will also go along with streamers buying or cutting agreements studios, or services that combine each other to integrate their stockpiles over IP. This is the R&D of M&A.