By Alice Seeley
Last week, Amazon acquired MGM movie and television studio for $8.5 billion, adding 4,000 films to its online streaming platform.
The completion of the acquisition has been anticipated since Amazon announced the deal in May 2021. MGM owns a few massive film franchises, including the Rocky, The Silence of the Lambs, and James Bond franchises.
“We are excited for MGM and its bounty of iconic brands, legendary films, and television series, and our incredible team and creative partners to join the Prime Video family,” Chris Brearton, chief operating officer of MGM, stated.
The acquisition was announced after Amazon certified to the Federal Trade Commission that it had provided more than three million documents needed for the review process. Even though Amazon completed the deal, the Federal Trade Commission can still challenge the acquisition later if it wishes. The Commission currently consists of two Democrats and two republicans with one vacant seat.
The European Commission also had to approve the deal. The European Commission approved the deal on Tuesday, March 15, saying it determined that the purchase “would not significantly reduce competition.” The Commission determined the overlap between Amazon and MGM is limited and would not significantly impact Amazon’s position as a provider of marketplace services.
According to associate professor of finance at Loyola Marymount University, David Offenberg, consumers will be impacted by this deal differently than expected.
“There is no doubt that in my mind that 2021 will go down as a great year for streaming,” Offenberg said.
However, “it’s all downhill from here.” This deal ultimately means “less choice for consumers and higher prices” in the future, Offenberg predicted.
Some also predicted that this deal would impact the new television series and movies created by Amazon. Bradley Gorham, an associate professor and chairperson of communications for Syracuse University, said, “Amazon is trying to bolster its reserves of intellectual property to take on Disney and WarnerMedia” and other major streaming services.
There will likely be more spin-off shows and movies which means “there will be less unique stories,” and “it’s going to be harder for new ideas to shine through,” Gorham stated.
This is Amazon’s second-biggest acquirement after its $13.7 billion purchase of Whole Foods in 2017.
