Amazon reportedly in talks to buy MGM as streaming wars intensify

Amazon is slowly taking over the world by buying up one major company after another. After the previous purchase of Whole Foods in 2017 for $13.7 billion, is any company off-limits? 

The tech giant has a market cap of approximately $1.7 trillion, so not much is out of its price range in terms of acquisition opportunities. Recent information indicates Jeff Bezos and his team may be eyeing the film studio MGM to increase its position in the streaming world. 

Currently, Amazon Prime competes with several other big-name streaming companies such as Netflix, Disney+, and HULU. However, the purchase of a major film studio like MGM would give Amazon exclusivity over a few highly coveted movie titles. 

In addition to owning classic titles and TV shows, an established film studio could either replace or bolster the current Amazon Studios film division that is continually growing and improving.

Why this is important and relevant to job seekers/changers

If and when Amazon buys MGM, it’s unknown at this time if the purchase will be strictly for the rights of their digital products or to further create additional titles and films. Amazon currently has its own Amazon Studios film division, which creates original titles but picking up MGM may give Amazon a leg up against the competition for original content. 

Another avenue may be strictly for the licensing and potential dissolution of the MGM company. The details and possible reasoning for the purchase remain unclear. Either way, current employees at MGM may want to keep their options open and dust off their resumes for other employment opportunities.

No matter what happens, there will be jobs added in certain positions within Amazon and perhaps others eliminated based on any new film division models. 

How much Amazon and MGM are worth

As previously stated, Amazon touts an impressive market cap of around $1.7 trillion, and the purchase of MGM would leave only a minor chink in their armor. The MGM corporation reported its total assets as $4.2 billion in 2017. Estimates indicate the company may be worth closer to $7 billion to $10 billion.

What you need to know to impress others at your next social gathering

If Amazon does acquire MGM, they would be the proud owners of the James Bond series, Spectre,  An American in Paris, and Ben-Hur, which it could deliver to its 200 million + paid Amazon Prime subscribers.

While Amazon is usually quiet about reporting numbers associated with Amazon Prime, it was discovered that their Prime Video streaming hours are up more than 70% year over year.

Why Amazon may want it

The Amazon Prime service offers subscribers several different benefits: fast delivery, free shipping on products, and access to Prime Video. Purchasing a studio provides immediate benefits to the Prime Video service, which can immediately enhance the Prime library and its ability to create original content. 

Amazon has long been rumored to be looking for a big entertainment company to further grow Prime Video in the ever-increasing and competitive streaming service industry.

With a larger focus on Prime Video as a benefit of the Prime subscription, Amazon could further take hold of the streaming market by adding a heavy hitter like MGM.

When the purchase and deal may be finalized

As talks continue between Amazon and MGM, a deal may be closer on the horizon than we may realize. Netflix continues to dump tens of billions of dollars into its original content libraries while Disney+ quickly gains subscribers recently growing to more than 100 million.

Once a company has gained a loyal streaming subscriber, it’s often difficult to pull them away. Amazon would be wise to quickly move on purchasing a large film company to give it a fighting chance in the highly competitive streaming world. 

Amazon is at an initial disadvantage due to the higher subscription price than Netflix and Disney+, so the more quality content it can hold over the heads of Netflix and Disney+, the better.