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Amazon buying MGM for U.S. $8.45 billion


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Amazon buying MGM for U.S. $8.45 billion
Amazon is buying MGM for U.S. $8.45 billion. (FP)

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SEATTLE – Amazon said on Wednesday it is buying MGM, the fabled U.S. movie studio home to the James Bond franchise, for U.S. $8.45 billion, giving it a huge library of films and TV shows and ramping up competition with streaming rivals led by Netflix and Disney+.

Privately-held MGM, or Metro Goldwyn Mayer, was founded in 1924, owns the Epix cable channel and makes popular TV shows including “Fargo”, “Vikings” and “Shark Tank”.

The deal is designed to help Amazon supercharge its Amazon Prime Video service by keeping customers engaged and paying an annual subscription that also guarantees rapid delivery of purchases from its online store.

“The real financial value behind this deal is the treasure trove of (intellectual property) in the deep catalogue that we plan to reimagine and develop together with MGM’s talented team,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios. “It’s very exciting and provides so many opportunities for high-quality storytelling.”

Amazon’s Prime Video faces a long list of competitors including Netflix, Disney+, HBO Max and Apple TV+. The companies are increasing spending and expanding in international markets, aiming to capture the pandemic-led shift to binge-watching shows online.

Amazon has also made big bets courting fans of “live” sports and has picked up lucrative licences to stream games, including a long-term deal with the National Football League (NFL) that was estimated to cost about U.S. $1 billion a year.

The proliferating streaming services are also scrambling for brands that they can expand and libraries of older shows and movies. Analysts have said this is a big motivation for another round of consolidation of media properties after a brief hiatus during the pandemic.

Underscoring the trend, AT&T announced a U.S. $43 billion deal last week to spin out its WarnerMedia business and combine it with Discovery, one of the most ambitious yet in the streaming era.

(Reuters)