Publisher’s Note: Amazon is one of NPR’s financial backers.
Amazon’s nearly $8.5 billion deal to buy film and television studio MGM is official. The two companies announced Wednesday that MGM is now part of Prime Video and Amazon Studios — solidifying the merger, which was first announced last May.
This is the second largest acquisition for Amazon after buying Whole Foods. Buying the film and television studios behind iconic films like the James Bond franchise, Rocky, The silence of the Lambs and Naturally blond is just the latest fusion of big-name media and streaming services.
Last year, AT&T announced a merger of WarnerMedia with Discovery, which includes major networks like HBO, CNN, HGTV, and others to create a streaming giant. The US government approved this plan last month.
The European Commission concluded that the merger of Amazon and MGM “would not significantly restrict competition in the markets”. But the US government has yet to weigh the deal in any way, but the two companies signed the plan anyway.
It’s unclear when Amazon Prime subscribers will see the full MGM catalog, which includes more than 4,000 movie titles and 17,000 TV episodes.
Consumers will likely be impacted by this deal in other ways, entertainment industry experts told NPR.
“There’s no doubt in my mind that 2021 will go down in history as a great year for streaming,” said David Offenberg. “It’s all downhill from here.”
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Offenberg is an Associate Professor of Finance at Loyola Marymount University and an expert in entertainment finance.
He said deals like this multibillion-dollar merger ultimately mean “less consumer choice and higher prices.”
“As the streaming wars continue, we’re getting a consolidation. That is expected and is already happening,” he said.
Bradley Gorham, an associate professor and chair of communications at Syracuse University, predicts an impact on the types of new television series and films that Amazon will develop with its new approach to MGM’s intellectual property.
“Amazon is trying to bolster its intellectual property reserves to take on Disney and WarnerMedia” and other streaming services that have extensive catalogs of video games, movies, and television.
Disney bought LucasFilm and Marvel Studios, giving the company the ability to create exclusive content for Disney+ using story arcs and popular characters from Star Wars or the Marvel Universe. The company has developed extremely popular programs such as Loki, WandaVision and The Mandalorian as a result.
Amazon wants to do the same, Gorham said. That probably means, on popular series such as e.g Rocky or even the James Bond franchise, he said.
Consumers like spinoffs based on stories and characters they love, but they lose out in other ways, Offenberg says.
“That will mean there will be fewer unique stories,” he said, as Amazon churns out revisions.
Offenberg said: “We are in this situation because we like the brands we know, but it is becoming more difficult for new ideas to take hold.”