Bezos, Jeff Bezos: Amazon to Buy MGM with Rights to James Bond for $8.5B
Amazon is a company known for bold decisions and big bets. Under the guiding hands of founder and CEO Jeff
Ivy Griffith
Amazon is a company known for bold decisions and big bets. Under the guiding hands of founder and CEO Jeff Bezos, Amazon has grown from a small book company to a multi-billion dollar mega corporation that lives in nearly everyone’s homes and meets almost every need. Now, just months before Bezos is to step down as CEO and assume a less central role, the company is making another big move: purchasing the rights to Metro-Goldwyn-Mayer (MGM), including the ultra-popular James Bond series.
The Details of the Purchase
On Wednesday, MGM and Amazon announced that they had reached a deal for Amazon to purchase film rights for MGM’s long list of beloved movies. Although the company’s value has waned in recent years, it was once responsible for some of the biggest hits in movie history. Rights to MGM pre-1986 films like Singin’ in the Rain, The Wizard of Oz, and Gone with the Wind have already been purchased by Warner Bros, and Sony Pictures long ago purchased the famed MGM movie lot.
Per the New York Times, “Although its library is diminished, MGM still owns 4,000 older movies, including pre-1986 films that come from two MGM divisions, United Artists and Orion. Those movies include Rocky, RoboCop, The Pink Panther, Silence of the Lambs and the James Bond catalog. (Fun fact: In true Hollywood fashion, MGM’s roaring lion mascot is lip-syncing; a cranky tiger sounded more ferocious.)
In addition, MGM has several movies in its pipeline that could be Oscar contenders, including Respect, an Aretha Franklin biopic starring Jennifer Hudson; Ridley Scott’s House of Gucci, starring Lady Gaga and Adam Driver; and Paul Thomas Anderson’s latest project, which stars Bradley Cooper in his first film since A Star is Born.”
It will also, of course, include the famed James Bond series, along with the Legally Blonde franchise and successful Shark Tank series. MGM also owns a studio that filmed The Handmaid’s Tale and Fargo, and the cable channel EPIX. The sale will move forward for around $8.5 billion, pending some regulatory approvals.
Jeff Bezos Stepping Down
This is happening as Bezos is priming the company to run without him at the helm. Bezos will be stepping down at the start of quarter 3 which begins July 1st. Bezos’ replacement is a man named Andy Jassy. CELEB wrote late last year; “Jassy joined Amazon in 1997, and has been an integral board member ever since. Jassy, a Harvard Business School graduate, has been instrumental in growing Amazon’s cloud and web services, later founding Amazon Music and helping Bezos grow from nearly the beginning. Jassy was often called Bezos’, ‘shadow,’ in their early years together as he stuck to the business guru and learned his clever ways.”
Although this move is huge for Amazon, the pricetag on the deal is only the second most expensive one; taking a backseat to a deal where Amazon purchased Whole Foods for $13.7 billion. Bezos seems to be wanting to go out with a splash with this multi-billion dollar purchase and a push from the company to increase streaming services for Prime members.
What the MGM Purchase Means for Amazon
There’s a reason Amazon is pushing so hard to increase its Prime Video offerings, and it has little to do with anyone at Amazon being a movie enthusiast. As big movie studios like Paramount are looking to capitalize on their own creative property and create their own streaming platforms, Amazon is looking to offer as much as a viewer could want and more.
The NYT shares, “In addition to paying Amazon $119 a year or $13 a month for free shipping and other perks — notably access to the Prime Video streaming service — households with Prime memberships typically spend $3,000 a year on Amazon. That is more than twice what households without the membership spend, according to Morgan Stanley. About 200 million people pay for Prime memberships.”
So if you increase people’s desire to join Prime for Video offerings, you increase their value to the company by tacking on the cost of their free-shipping and Prime-only purchases to their membership cost. It’s a clever way for Amazon to corner a market increasingly closed due to those big studios closing ranks. Amazon is also successfully creating a variety of original series and movies, joining Netflix and others in being a publisher instead of waiting for the content to come to them.
Consumers online are reacting warily to the announcement. Although Amazon has healthy competition in the streaming department, every rights purchase they make closes the doors for other companies a little bit. But the company has the unnerving ability to walk right up to the line where customer comfort lies and not step an inch over it. Although Amazon has been hit in recent years with criticisms of worker’s rights violations and poor working conditions in their factories, the company continues to offer services and goods that people are buying, especially during the Pandemic when no one could leave home. While this purchase and Amazon’s continued unprecedented growth may make some customers nervous, it’s unlikely to change the numbers unfavorably for Bezos and company. In fact, if their gamble wins, they’ll bring in even more Prime subscribers with their $3K+ a year.
While $8.5B seems like a lot for a bet that people will join to watch movies and spend money elsewhere, it’s chump change for Amazon.