E-commerce giant Amazon will acquire one of Hollywood's oldest film studios MGM Holdings in a whopping $8.45 billion deal, pulling out all stops to survive in the competitive digital streaming market.
This deal may help Amazon raise the stakes for Prime Video in the streaming industry, where Apple, Netflix, Hulu and Disney are also vying for the top position. This comes soon after Discovery and AT&T's WarnerMedia merged to amplify its content palette, combining the forces of Discovery Plus and HBO Max.
This is Amazon's biggest purchase since the acquisition of Whole Foods for $13.7 billion in 2017.
Here is a look at why this deal is key for the e-commerce major.
MGM is a big player
Everyone knows the iconic roaring lion, the mascot of the Metro-Goldwyn-Mayer, the first shot of some of the most memorable films and cartoons. MGM has been in Hollywood since 1924 when films used to be silent. In the decades that followed, the studio produced films that have come to be identified as classics including Singin' in the rain, The Wizard of Oz and Ben-Hur, and more recent public favourites like Legally Blonde and Silence of the Lambs.
MGM's trove of characters and films
This acquisition will help Amazon bring to Prime Video a century's worth of films and characters from MGM like 007, Rocky, Creed and Pink Panther. Amazon will also get access to MGM's cable channel Epix. Famous reality shows like 'Shark Tank' and 'Real Housewives of Beverly Hills' will also be a benefit to Amazon.
Prime Video's watchers
Amazon does not share statistics of its streaming service, but we know that over 200 million people have access to Prime Video, as they have signed up for the Prime subscription. Amazon's studio has also seen mixed results in its releases. While two of its shows, 'Marvelous Mrs Maisel' and 'Fleabag' won big at the Emmy's, other projects have not brought out desired results. In terms of number of subscribers, Prime Video is only behind Netflix, which has over 200 million subscribers. This acquisition will help the company diversify its offering to these subscribers, giving it an edge in the cut-throat streaming space.