Amazon announced Wednesday that it is buying MGM Studios for $8.45 billion. In a press release, Amazon said the deal gives Amazon a library of over 4,000 films — including the 'James Bond' franchise — and 17,000 TV shows, which it will use to strengthen its Prime Video offering.
The deal is Big Tech's biggest foray yet into the traditional movie industry, but it isn't necessarily centered on building a Netflix-killer. As Recode's Peter Kafka said, Amazon's primary goal with Prime Video is to keep people in the Amazon ecosystem — or, in Jeff Bezos' words, "I'm pretty sure we're the first company to have figured out how to make winning a Golden Globe pay off in increased sales of power tools and baby wipes!" Amazon also makes money from selling other companies' streaming services, such as Starz or HBO Max, via Prime Channels, and having more content on Prime Video helps attract potential buyers for those.
Amazon's spending more than just $8.5 billion on this bet: It's also developing a 'Lord of the Rings' TV show that reportedly cost $465 million for the first season alone; and it recently spent a reported $10 billion to get the rights to certain NFL games.
Shakeel Hashim (
@shakeelhashim) is a growth manager at Protocol, based in London. He was previously an analyst at Finimize covering business and economics, and a digital journalist at News UK. His writing has appeared in The Economist and its book, Uncommon Knowledge.