Jeff Bezos has been desperately pursuing his family for years Game of Thrones – a successful escape that will allow Amazon’s video streaming activity to enter the big Hollywood leagues.
“It can’t be that hard,” the billionaire entrepreneur told his team, according to Brad Stone’s recent book Amazon Unbound. Bezos is said to have then broken down the ingredients of Hollywood success into essential essential criteria: a protagonist hero, “high stakes civilization,” betrayal, violence, among others.
At MGM, the film studio behind historical franchises like James Bond and Rocky, Bezos might have found what he was looking for. But many remain skeptical that the purchase is their silver bullet.
The only asset MGM considers to be a jewel of good faith for years to come is the James Bond franchise, which the company co-owned with the Wilson / Broccoli family through a separate vehicle. This means that for any future Bond project, Amazon will depend on the approval of producers Barbara Broccoli and her brother Michael G. Wilson.
“Barbara and Michael are the ones who decide when they want to film. For a long time, MGM’s hedge fund guys were trying to turn around. James Bond in a TV series that could rival Games of Thrones and the two have been firmly against it, ”said one person who knows Broccoli and Wilson.
“They’re very, very sensitive to the franchise. So all MGM has is that when Barbara and Michael decide to make a Bond film, they [MGM] get the right to fund and distribute the film. But Bond’s real decision, creative business, is with Barbara and Michael, ”the person added.
MGM has a rich library of award-winning films, including classics such as The usual suspects, Good and Evil and the Brute and Silence of the Lambs, but his creative ability as a film studio is widely considered to have culminated. Meanwhile the first MGM titles that defined the era as Gone With The Wind and The Wizard of Oz are gone, having been sold in the previous business.
“It’s not the biggest studio in town,” said Thomas Hughes from film and television rights platform Vuulr, and a former MGM executive. “Change the face of Hollywood because MGM is bought? Not exactly. Change the face of Hollywood because it’s Amazon that makes it? Maybe.”
Amazon is investing in content creation, seeing it as the bond between attracting Primary members and retaining them. Last year, Amazon spent $ 11 billion creating, purchasing or licensing music and video content for Prime subscribers, up from $ 7.8 billion in 2019.
Through its own Amazon Studios, the company has seen critical acclaim for series like this Transparent and The Wonderful Mrs. Maisel, which won two Golden Globes and five Emmys. Amazon 2017 movies Manchester At Sea it became the first product for a streaming platform to be nominated for an Award at the Academy of Best Picture.
“I think it tells you they’re serious about content,” says Brian Yarbrough, senior analyst at Edward Jones. But he added: “It’s a business based on success, and there’s always the risk of spending billions and billions on content – and it’s content that people don’t want to see.”
MGM has been in the hands of financial magicians since its bankruptcy in 2010. The blows are called by its largest shareholder, hedge fund Anchorage Capital, which began buying MGM’s debt in 2010 as part of a bankruptcy plan after the financial crisis.
“Anchorage and other types of hedge funds that control MGM won’t bring much to the table once sold,” said one person who has worked with MGM in the past. “The only decent material of recent years has been Bond and The servant’s account would be. ”
The person who worked with MGM added that it might have made more sense for Amazon to follow the Netflix model, which includes paying a premium for the best creative talent rather than buying an old studio, which many believe has its best days behind it.
What Amazon will get is a larger library to give its users more choice. “The Amazon boys are not stupid. Sure, the deal may seem a little unusual and expensive, but I think they just learned that they needed more content for their streaming services and that’s what they were willing to pay for that, ”said one person close to Amazon. “Sure, this may be an old, tired library but it’s better than what Apple has on offer at the moment.”
In all, analysts at Morgan Stanley estimate, Amazon will have its hands on about 4,000 movies and 17,000 TV episodes. It will also earn Epix and MGM HD cable TV channels – all the outlets with which Amazon can build its growing advertising business, now worth about $ 20 billion a year.
Apple was also in the race to acquire MGM, but was willing to pay just $ 6 billion, according to two people briefed on the matter. Comcast, the cable company had also considered an offer, but ultimately left, adding those people.
“Amazon was really trying to get a license agreement with Sony Pictures, which ended up going to Netflix and Disney. And they realized that they really needed content for the streaming service, which is why they bought MGM at the price that’s. absolutely stupid, ”said a banker not directly involved in the affair.
For Amazon, the transaction won’t break the bank and it’s worth doing, given that there are few studies to be purchased, according to the initiators.
The deal is expected to be the target of political attacks since Republican and Democratic lawmakers have repeatedly accused Amazon of using its commercial power to buy companies and future rivals.
“This proposed merger is another example of Big Tech’s commitment to total dominance in every sector of our economy,” he said. in a tweet Republican Congressman Ken Buck, a member of a House Justice subcommittee on antitrust issues.
But observers are skeptical that regulators will do much to stay on Amazon’s path. Although it is a dominant player in ecommerce, the same cannot be said for streaming and content creation, where Amazon will continue to compete fiercely with Netflix, Disney and others.
“It would be relatively difficult for the government to challenge this agreement,” said Professor Chris Sagers, antitrust expert at Cleveland-Marshall College of Law. “But it’s not because I don’t think the deal is potentially dangerous. Amazon is into several companies, and they use the synergy of combining them to gain power.”