Back in 2017, Jeff Bezos pushed the Amazon Studios team to find him a “Game of Thrones”-like franchise to boost the Prime Video streaming service.
On Wednesday, Amazon delivered a media coup, but Bezos didn’t get dragons. Instead, he got the “James Bond” franchise as part of an $8.45B deal for MGM Studios.
This is Amazon’s biggest deal…
… since acquiring Whole Foods for $13.7B in 2017, per CNBC.
In addition to 007, Amazon scores 4k films and 17k TV shows including “Fargo,” “The Handmaid’s Tale,” “Shark Tank,” and “Survivor.”
MGM Studios is the latest in Amazon’s media cash drop:
- ~$19B on content spend in the past 2 years
- $1B a year for the NFL’s Thursday Night Football (an 11-year agreement starting in 2022)
- $465m in production cost for the forthcoming 1st season of the “Lord of The Rings” series
What’s the play?
Bezos has previously said, “When we win a Golden Globe, it helps us sell more shoes.”
Amazon’s Prime membership now has 200m subscribers worldwide. Keeping these people from churning is critical, and an attention-grabbing streaming service helps to lock them in.
This is particularly important with streaming competitors, from Netflix and Disney+ to the forthcoming WarnerMedia-Discovery merger, spending 10s of billions of dollars on content.
Helping another business line
The MGM acquisition will also provide content for Amazon’s free, ad-supported IMDb TV streaming service, per Protocol.
If you’re thinking, “what do ads have to do with Amazon?”…
In 2020, ad revenue pulled in 2.4x the combined ad rev ($9.3B) for Twitter, Snap, Roku, and Pinterest.
While Bezos didn’t get “Game of Thrones,” MGM will turbocharge many parts of his business… and give him tons of content to binge when he officially leaves the Amazon CEO role on July 5.
