The war between the video-streaming giants has picked up pace with today’s announcement that Amazon.com Inc will buy legendary Hollywood movie studio MGM for US$8.45 billion.
MGM, famed for its roaring lion, is home to the highly-successful James Bond, Rocky and Pink Panther franchises.
With the purchase, Amazon will have access to thousands of films and TV shows which will give it lots of ammunition to compete with streaming rivals such as Netflix, Disney+, HBO Max and Apple TV+.
Reuters reported that streaming video helps the world’s largest online retailer draw consumers to subscribe to Prime, a club with fast shipping, and to shop more once they’re members.
Privately-held MGM, or Metro Goldwyn Mayer, also owns the Epix cable channel and makes popular TV shows including “Fargo,” “Vikings” and “Shark Tank”.
Mike Hopkins, senior vice president of Prime Video and Amazon Studios, said in a news release that MGM’s library is rich with opportunities.
“The real financial value behind this deal is the treasure trove of (intellectual property) in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” he said.
Amazon’s Prime Video faces a long list of rivals including Netflix Inc, Walt Disney Co’s Disney+, HBO Max and Apple Inc’s Apple TV+. The companies have increased spending and expanded in international markets, capturing the pandemic-led shift to binge-watching shows online, Reuters reported.
To stay competitive, Amazon has also courted fans of live sports and picked up lucrative licenses to stream games, touting a long-term deal with the National Football League that was estimated to cost about US$1 billion per year.
Underscoring the trend, AT&T Inc announced a US$43-billion deal last week to spin out its WarnerMedia business and combine it with Discovery Inc, one of the most ambitious yet in the streaming era, Reuters reported.