Amazon is coming for you, James Bond. According to numerous reports, Amazon is . The acquisition, if It succeeds, would add more than 4,000 MGM movie titles to Amazon’s burgeoning film library available to subscribers of the Amazon Prime Video streaming service. Those titles include many James Bond films (of which MGM owns partial rights) and many other popular movies such as . Although the news has triggered a predictable “ ” reaction, the bigger story here is really the triumph of . negotiating to buy MGM for $9 billion Silence of the Lambs Amazon is getting too big New Hollywood Why MGM Is for Sale The COVID-19 pandemic such as MGM. Movie theaters around the world have teetered on the edge of collapse because of declining attendance and closures during lockdowns. As a result, studios have been denied an essential revenue stream to recoup the cost of making films that they’d already teed up for release in 2020.  For example, the cost of the latest MGM James Bond movie, , , saddling MGM with a heavy burden. MGM reportedly attempted to sell the movie to streaming services unsuccessfully. With revenue streams drying up, . has been cruel to Old Hollywood studios No Time to Die exceeded $300 million MGM put itself on the sale months ago Why Amazon Wants to Buy MGM Amazon has emerged as an important player in New Hollywood, which is led by the major streaming operations including Amazon, Disney+, and Netflix. New Hollywood streaming companies, unlike Old Hollywood, have been succeeding amid the rise of the during the pandemic. stay-at-home economy Amazon has been scooping up film titles for its 13,000-strong movie library and producing original content of its own to attract more Amazon Prime Video subscribers. The strategy is giving Amazon both prestige and subscribers. At the 93rd Academy Awards, Amazon movies garnered 12 nominations, including and . Amazon ended up – but rival Netflix won seven. One Night in Miami Sound of Metal winning two But the more important number is – which is how many people around the world pay more than $119 a year to be members of Amazon Prime. Among the benefits of being a Prime member: a subscription to Amazon Prime Video. Amazon that 175 million Prime members actually watch Prime Video – a sizable number (versus ). 200 million says more than 200 million for Netflix Buying MGM is all about building up those Prime membership numbers even higher. Owning MGM would expand the Amazon Prime Video library with 4,000 film titles, on top of the estimated 13,000 films available on Amazon Prime already, thus giving people more of an incentive to join and renew their Prime memberships. (By contrast, Netflix's film library numbers anywhere from 3,800-4,000 according to estimates.) More Prime members mean more revenue for Amazon from all the product purchases made by those Prime members. Indeed, Prime members spend reportedly annually than non-Prime members. As Jeff Bezos once , “When we win a Golden Globe, it helps us sell more shoes.” 133 percent more said By contrast, the other big streaming players lack this card to play. Amazon’s acquisition strategy is all about playing to the company’s strengths. The New Hollywood Advantage The New Hollywood giants are getting more competitive as the fight for subscribers intensifies. Both Disney+ and Netflix recently reported a . To keep pace with each other, the New Hollywood leaders will need to create more original content (exhibit A: Amazon is $465 million on a series), build stronger libraries, and figure out new revenue streams ( ). Part of this strategy will include New Hollywood will feast off Old Hollywood by: slowdown in subscriber growth spending Lord of the Rings such as Netflix’s fashion collaboration with Halsted Buying titles from Old Hollywood studios, – which is essentially what Amazon is doing at scale by making a run at MGM. as they did in 2020 Attracting talent. For instance, Director David Fincher recently an exclusive four-year deal with Netflix. Fincher, responsible for prestigious titles such as and , released his Academy-Award nominated movie, , on Netflix in December 2020 following a brief theatrical run. signed Fight Club Zodiac Mank Expanding film distribution beyond streaming to start capturing audiences as they return slowly to theaters, with its new Zack Snyder film, As I’ve speculated before, I could also see Amazon buying some cash-strapped theaters, where Amazon could hustle its private-label brands in the lobbies and offer special rewards for Amazon Prime members. as Netflix is doing Army of the Dead. Meanwhile, the Old Hollywood studios are going to remain in recovery mode for quite some time. Movie theater re-openings and the loosening of safety-mask restrictions will certainly help bring people back to theaters, but we’re still in the early stages of sorting through the wreckage caused by the pandemic. (including New Hollywood) have been hurt by delays in film production and distribution during the pandemic. , film production delays and the sales of titles to streaming services are going to trigger a shortage of new programming for theaters that will last at least three years. All the studios According to The Wall Street Journal Truth be told, the Old Hollywood distribution system was already changing. In 2019, ticket sales in North America totaled $11.4 billion, from 2018. As Brooks Barnes and Nicole Sperling of in March 2020, even before the pandemic, major studios were starting to route smaller dramas and comedies toward streaming services instead of theaters. And now viewers, as they return to theaters, will have fewer options. down 4 percent The New York Times reported Advantage: New Hollywood. And there’s no turning back. Note: I invest in Amazon, Disney, and Netflix.

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Amazon, MGM, and the Triumph of New Hollywood

Amazon, MGM, and the Triumph of New Hollywood

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