Amazon set to shake-up and stir streaming rivals if it lands MGM deal

James Bond is the next valuable franchise set to change hands in what’s becoming a rampant period of deal-making in a media sector which in the wake of the pandemic is increasingly being dominated by online streaming.

Amazon is set to buy Bond studio MGM in a deal that’s believed to be worth some US$9bn.

As an IP ‘get’ the deal looks to be a winner for Amazon. The Bond franchise comfortably ranks culturally and commercially alongside the Star Wars and Marvel properties over on Disney+.

Star Wars and Marvel have been a massive factor in Disney’s rapid growth in streaming as new exclusive shows The Mandalorian, Falcon and the Winter Soldier and WandaVision helped drive subscriber numbers above 100mln in recent months.

READ: Amazon in talks to buy MGM

Netflix has a global subscriber count of around 208mln and Amazon’s last reported tally was just over 200mln though clearly Silicon Valley firm isn’t content with second place.

With 007 in tow, Amazon’s MGM deal may prove to have a quick impact.

In the context of the deal it is perhaps noteworthy that the fifth and final Bond movie starring Daniel Craig, ‘No Time To Die’, has been a bellwether for Covid-recovery in the cinema industry.

The studio has been determined to hold out for a cinema release. When, or indeed whether, MGM eventually puts the movie out in cinemas will say something about the viability of cinema industry more broadly.

Since mid-2020, delayed release dates have come and gone leaving the title ‘No Time To Die’ as a uncomfortably apt.

MGM has been holding firm on to plans for a full red-carpet cinema release of the new Bond movie with the premiere so far set back three times. An October 2021 release is currently scheduled for the blockbuster.

Whether or not the cinema roll-out strategy remains intact once MGM is in the hands of the world’s second-largest streaming company remains to be seen.

Certainly, there can be no doubt that 007 will be front and centre in the marketing of Amazon Prime Video in the months and years ahead. And to kick it off with a streaming-based launch of the movie would send a strong message to consumers and rivals alike.

Little explanation is needed as far as what the deal means for the broader industry, as frankly its merely the latest of many consolidating deals.

Content assets at centre of deals

Amazon’s move for James Bond studio MGM is the latest in what’s almost becoming a daily procession of deals by streaming platforms to claim and consolidate ownership of premium IP assets.

A land grab is very much on for premium exclusive content with Amazon and major media conglomerates fight to outdo each other for subscriber numbers.

The model is quiet simple – if you can’t beat ‘em, buy ‘em.

Content catalogues clearly matter, a lot.

In the MGM deal Amazon would not only get Bond, it would also absorb the ownership of many other IP assets for Prime’s binge-watchers to gorge on.

MGM for example produces The Handmaid’s Tale, Fargo and Vikings whilst its future releases will include Clarice (a TV series spin-off from Silence of the Lambs) and a second season of an American reboot of Four Weddings & a Funeral.

A deeper look at the MGM portfolio, beyond Bond, gets to the nub of the deal for Amazon.

The combination of streaming platform and Hollywood studio brings Prime closer to the integrated ‘direct-to-consumer’ model used by Disney.

Amazon already has the rights to multiple MGM shows and movies, alongside a host of other TV networks and streaming services.

It is probably safe to assume they will eventually all become Prime exclusives as existing licensing arrangements expire. In the meantime, MGM likely gives Prime greater wherewithal to challenge the seemingly endless conveyor belt of original content released by Netflix.

AT&T Inc only yesterday struck a US$43bn deal to demerge its WarnerMedia businesses which are being consolidated with Discovery Inc to create a new industry ‘heavyweight’ comprising Warner Bros, HBO, Discovery, HGTV, TLC, History Channel and CNN along with the TNT and TBS cable TV networks.

Warner’s launch of the HBO Max streaming platform was launched in May last year and its Christmas day release of a new Wonder Women movie helped spike subscribers.

The Warner deal is a notable entry in the M&A deal book for 2021, which has so far seen nearly US$2 trillion of transaction across US sectors.

Further media transactions are probably as predictable as a drinks order from a certain British secret agent.

Story by ProactiveInvestors