All You Need To Know About The Amazon-MGM Deal


Apr 2, 2022

We all watch prime, right? And don’t we just love watching it?! The great news for Amazon prime video lovers is that Amazon has secured a deal of $8.5B to acquire Hollywood studio MGM. The deal was locked in just after a few days that European regulators said that the deal wouldn’t reduce competition.

What is MGM Studio?

Let’s first know what exactly Amazon bought and its significance.

  • MGM stands for Metro-Goldwyn-Mayer. It is one of the leading Hollywood studios concerned with entertainment, production, and distribution of films and television shows globally.
  • Some of the MGM production companies include Bigfish, Evolution, Gato Grande, Light Workers, and many more.
  • MGM owns an extensive range of movies and TV series, which indeed proves this deal to be a good move for both parties.

How Amazon works

To understand the contract better, we need to know how exactly Amazon earns a profit and why it closed this deal.

  • Amazon is a massive platform. It started with online shopping for its customers. However, it soon achieved success. It now sells even grocery or food items and has another section, the ‘Prime video,’ an OTT platform with many entertaining shows and movies.
  • One of its business strategies is getting a membership of Prime. Yes! We all have been there. Impressed by the features one may get if he upgrades his membership in Amazon was just too good of a deal. It provides us with free deliveries and makes us the priority customers, thereby helping us get orders faster. 
  • Similarly, they launched Prime video. One may take its membership separately. You need to enter the membership with a small amount of money, say for a month. And then you can enjoy all the shows there for free for the whole 30 days.

About the deal

  • This acquisition is the second-largest deal for Amazon after its first being the $13.7B deal with Whole Foods in 2017.
  • MGM owns more than 4000 movies and 17000 television episodes and awards, making it a bold step for Amazon to compete and stay intact in the market.
  • Amazon has to give customers facilities and make revenue out of it. By availing of these memberships, Amazon makes sure of holding its audience. We are unlikely to leave a prime membership if we once taste the sweetness of its features.
  • Amazon needs to keep its library updated to stay in the competition. Netflix, Disney Hotstar, and other OTT channels have been there for ages. If one doesn’t do something better, it will reach its audience. So you may say that it was just a way of earning profit. However, it’s a win-win for the subscribers.
  • MGM is a big shot for Amazon itself. It has blockbusters like Rocky and James Bond. Since Amazon has access to MGM’s intellectual properties, it can bring out as many sequels of James Bond as it wants. Isn’t it fabulous?!

All of this being said, the acquisition is a piece of good news for Amazon itself and also for the subscribers. The library’s upgrade is something every OTT channel has to do once in a while to stay put in this competitive industry, and that’s exactly what Amazon did. So just lean on your couch with a bowl of popcorn and enjoy watching Prime!