Amazon Buying MGM Holdings: What Does This Mean for Streaming?

Amazon ($AMZN) has never been shy to expansion, and they are poised to expand again. The company that started simply as an online bookseller is on the brink of world domination. This is an exaggeration, but sometimes it feels like it is not. Amazon buying MGM Holdings is an example of when it doesn’t feel like an exaggeration. Its beginning to feel like there will be no industry Amazon doesn’t have its hand in. Unless, their ongoing Anti-Trust trials can finally slow them down.

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The Acquisition

The plan for Amazon Buying MGM is set to be at the price of $8.45 billion including debt, according to the Wall Street Journal. This would be the second largest acquisition in Amazon’s history, behind its $13.7 billion purchase of Whole Foods in 2017.

MGM had been a likely candidate to be bought out for a few years but struggled to find a buyer. The value MGM brings is a library of over 4,000 films including famous series such as James Bond and Rocky. The acquisition gives Amazon the rights to all these movies and to add it to their Amazon Prime streaming service.

How Streaming Will be Affected

This acquisition will be very impactful on the streaming industry in my opinion. Amazon knows how to strike, and strike very hard. Its grocery stores have come on very well due to their unique technology usage. They are poised to wipe out almost all grocery chains that cannot innovate with them, with a couple exceptions being Target, Walmart, and Shoprite. When Amazon gets its hands on the intellectual property of MGM, the game will be changed.

With more well-known series at its control, Amazon will tack on numerous subscribers right away. In turn, when new people are looking for a subscription service, they will have more to think about between choosing Netflix ($NFLX), Disney Plus ($DIS), among plenty of others. Netflix has seen SIGNIFICANT slow downs in subscriber growth over the past few quarters as people have ventured outside from the pandemic. Disney Plus is growing but its poor user interface has held its growth back considerably, in my opinion.

My Thoughts

Amazon’s price makes it hard to just call it a buy, but its innovation will always make it a buy for me, at least over the next two years. However, the rest of the industry is not an immediate buy for me. Netflix’s growth is almost stalled and they already have the virtually unsolvable problem of people sharing passwords. Disney can fare better because they are not only relied on streaming. Once Amazon Prime adds this to their arsenal, who knows what will be next.

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