Amazon has reached a deal to acquire film and TV company MGM for $ 8.45 billion, the companies announced today. It’s a major asset to the e-commerce giant, and it means it will own a library of content that is said to consist of roughly 4,000 movies and 17,000 hours of TV. The acquisition is likely to help Amazon attract even more major Prime subscribers as the Prime Video service competes with those of Netflix and Disney Plus.
MGM is perhaps most notable for being the Hollywood studio behind the James Bond and Rocky franchises, but the library spans the entire spectrum of classic films such as Gone with the wind to modern TV programs such as The Handmaid’s Tale and Vikings. MGM’s library also includes non-scripted TV shows such as The voice and Shark cage.
“The real financial value behind this deal is the wealth of IP in the extensive catalog that we want to reimagine and develop with the talented team at MGM,” Mike Hopkins, senior vice president of Prime Video and Amazon Studios said in a statement. “It’s very exciting and offers so many opportunities for high quality storytelling.”
Amazon’s media company is a relatively small part of its overall empire so far, although it still spends billions on content each year. A significant portion of Prime subscribers use the included free Prime Video streaming. Of the more than 200 million people worldwide who currently subscribe to Amazon Prime, more than 175 million streamed video last year. Adding thousands of movies and TV shows could be a boon for both figures.
In mid-May, reports appeared for the first time about the possible acquisition of MGM by Amazon. Variety reported that the deal was negotiated by Amazon’s senior VP of Amazon Studios and Prime Video Mike Hopkins. The Wall Street Journal reported on May 24 that Amazon was approaching a deal to buy MGM.
MGM is currently owned by a collection of private equity firms, including Anchorage Capital Group, Highland Capital Management and Solus Alternative Asset Management. Reports that MGM was for sale was created last December.
MGM sales come during a period of consolidation in Hollywood as companies try to expand their content libraries to compete with Netflix and Disney. AT&T recently expanded its media company WarnerMedia to merge it with the TV company Discovery, creating the world’s second largest media company based on revenues outside of Disney. Both companies have their own streaming services (HBO Max and Discovery Plus), increasing the possibility of them being combined into a single, more substantial service.