Amazon's $8.45 Billion Gamble Clashes with Broccoli Family's Iron Grip on 007

James Bond and Amazon are at war with each other in a clash between an Old Hollywood studio and a digital New Hollywood brand. Advantage: James Bond.

Here are the two players in this epic struggle as reported in The Wall Street Journal:

• On the one hand, Amazon has a 50% stake in the James Bond franchise through its acquisition of MGM. Amazon wants to tap into the value of that franchise to create a multi-faceted cash cow, including movies, TV shows, spinoffs, and even a re-imaging of James Bond at a fundamental level.

• But Amazon does not have full control over the James Bond name. The Broccoli family, through their company EON Productions, has maintained creative control over the James Bond film franchise since its inception. And the Broccolis are unhappy with Amazon’s ambitions.

Since the Broccolis control the Bond brand, we won’t be seeing Bond movies onscreen anytime soon. And this is a major problem with Amazon, which needs to exhibit tentpole movies in theaters to drive their streaming success. But Amazon has cash and muscle. As New Hollywood increasingly understands how to monetize the offline/online interplay between entertainment, Amazon will likely play it the way the Broccolis want it – for now.

Amazon’s GoldenEye: Cashing In on the Value of a Franchise

In 2021, Amazon acquired MGM Studios for $8.45 billion. MGM co-owns the rights to the James Bond film franchise alongside Danjaq LLC, which is controlled by EON Productions (and thus by Barbara Broccoli and her half brother Michael G. Wilson). This acquisition gave Amazon access to MGM’s extensive film library and intellectual property, including its 50% stake in James Bond.

Amazon is not content to have access to movies. Amazon wants to create entertainment options beyond movies. This is not surprising. Amazon views entertainment as a means to generate revenue multiple streams, including Prime memberships -- to sell more baby wipes, coffee, vacuum cleaners, acne patches, and more. As Jeff Bezos once famously said, “When we win a Golden Globe, it helps us sell more shoes.” So, when Amazon has access to a lucrative franchise, the company milks its value.

Case in point: the Lord of the Rings (LOTR). Amazon has monetized the LOTR franchise primarily through its streaming platform, Amazon Prime Video, while using LOTR to enhance its brand, attract subscribers, and explore merchandising and licensing opportunities:

Prime Video Subscriptions

Amazon’s primary strategy with its LOTR series, The Rings of Power, is to drive subscriptions to Amazon Prime. By offering exclusive access to the show, Amazon aims to attract fans of the franchise and new viewers globally. This approach helps increase the number of Prime subscribers, who pay $139 annually or $8.99 monthly for Prime Video alone. The series serves as a flagship product to boost customer loyalty and retention within the competitive streaming market.

Brand Expansion and Prestige

Amazon also views the series as a long-term play to enhance the prestige of its brand and establish itself as a major player in entertainment. By associating with a globally beloved name like LOTR, Amazon aims to position itself alongside streaming giants like Netflix and Disney+. This strategy aligns with Jeff Bezos’s original vision of creating a Game of Thrones-level cultural phenomenon that generates buzz and awards recognition.

Merchandise Sales

Amazon is capitalizing on the LOTR franchise’s merchandising potential. From action figures to apparel, LOTR-related products have historically been highly sought after by fans. By selling merchandise through its eCommerce platform, Amazon can create additional revenue streams tied directly to the series.

Licensing Deals

Amazon has opportunities to monetize through licensing agreements for video games, tabletop games, and other products based on the LOTR universe. Such deals allow Amazon to extend the franchise’s reach while earning royalties from third-party creators.

Long-Term Franchise Development

Amazon’s $250 million rights acquisition includes a commitment to producing five seasons of The Rings of Power, with total costs projected to exceed $1 billion when factoring in production and marketing expenses. Beyond the main series, Amazon may explore spin-offs or other Middle-earth content, which could further monetize the franchise over time.

Boosting Related Sales

The release of The Rings of Power has reportedly driven increased sales of Tolkien’s books and related media on Amazon’s retail platform. This cross-promotion benefits both the streaming service and eCommerce divisions, reinforcing Amazon’s ecosystem.

Global Reach

With Tolkien’s works enjoying worldwide popularity, Amazon has positioned The Rings of Power as a global product available in multiple languages via Prime Video. This international appeal broadens its audience base and maximizes revenue potential from diverse markets.

Indirect Benefits

While direct profitability from The Rings of Power may be challenging given its massive production costs (e.g., $465 million for Season 1 alone), Amazon benefits indirectly by increasing overall engagement with its ecosystem. For example: Prime members who join for LOTR may also use Amazon’s retail services. The series enhances investor confidence by showcasing Amazon’s ability to compete in high-stakes entertainment markets.

Shaken, Not Stirred: The Broccoli Family’s Risk-Taking Legacy

Despite owning 50% of the franchise through MGM, Amazon does not have full control over James Bond. The Broccoli family retains ironclad creative control through EON Productions. Albert R. “Cubby” Broccoli, along with Harry Saltzman, co-founded EON Productions in 1961 to bring Ian Fleming’s James Bond novels to the screen. Broccoli’s family has maintained control over the creative direction of the franchise ever since. Barbara Broccoli and Michael G. Wilson, who run EON, are considered the custodians of the James Bond character and hold significant authority over all aspects of the films, including casting, scripts, and marketing decisions. This means that any new Bond films, spin-offs, or projects must receive their approval. The Broccolis decide when a new Bond film is made, who plays the iconic role, and whether spin-offs or remakes are allowed. The family also proceeds at its own pace. Years can pass between one Bond film and the next.

The Broccolis view James Bond as a sacred name that not only generates revenue but influences culture. They are protective of how the James Bond name is licensed. And they treat the release of a James Bond movie as a global event akin to the Super Bowl. For the Broccolis, Bond lives and dies in theaters. The Broccolis have resisted efforts to expand Bond into areas like television series or cinematic universes. This doesn’t mean that the Broccolis are unwilling to license the Bond name. They may have standards, but they ain’t stupid. The Broccolis understand that keeping the Bond name relevant requires flexibility. For example, EON Productions has partnered with various game developers to create James Bond-themed video games. Activision held the rights from 2006 to 2014 to develop games based on Bond films and original storylines. Earlier successes include GoldenEye 007 (1997), which became a cultural phenomenon. James Bond’s iconic Aston Martin vehicles have appeared in video games like Rocket League as part of cross-promotional licensing deals. This strategy introduces the brand to younger audiences through popular gaming platforms

EON Productions and MGM partnered with Scientific Games in 2017 to license James Bond for slot machines, lottery games, and social gaming platforms. This deal allowed for the integration of iconic elements from past and future Bond films into casino experiences. This makes sense given the association of the Bond name with casino gambling.

The Broccolis are also risk takers, such as casting unknowns to play the lead – a risk that famously paid off when Daniel Craig was chosen to play Bond in 2005. The decision was controversial. Craig was an unknown. Critics scoffed. But the Broccolis had the last laugh: Daniel Craig helped fuel James Bond to artistic and commercial heights. He updated Bond for the 21st Century and ensured 007’s cultural relevance.

Reportedly, the Broccolis have baffled Amazon with their willingness to take creative risks with the Bond name, especially with the Broccoli’s willingness to cast unknowns for the lead role, which is difficult to swallow for Amazon decision makers. Amazon calculates factors such as an actor’s known bankability. Not surprisingly, Amazon reportedly wants more say into who plays Bond.

Meanwhile, in an early meeting with the Broccolis, Amazon Studios referred to James Bond as “content.” As reported in The Wall Street Journal, such a sterile term was a red flag to the Broccolis that James Bond was nothing more than a commodity to Amazon.

We won’t be seeing any Bond movies until the Broccolis and Amazon agree on fundamental issues such as who plays Bond. The Broccolis hold the cards, and they are patient. We last saw James Bond onscreen in 2021, with No Time to Die. Before that, Bond last appeared in 2015 with Spectre. In the digital age, years are like centuries.

Live and Let Stream

The impasse comes at a time when New Hollywood and Old Hollywood are rethinking the value of movies shown in theaters. On the one hand, the film industry is enduring a difficult time. Worldwide movie ticket sales in 2024 are projected at $31.5 billion, which is lower than the $33.4 billion forecast for 2023 and 25% below the pre-pandemic peak of $42.3 billion in 2019. Total ticket sales have declined noticeably from 2000 to 2024. But in one important way, theatrical releases of movies are becoming more valuable: by stoking demand for their eventual release on streaming platforms.

As The New York Times reports, the value of theatrical releases as a driver for streaming success is becoming increasingly clear in the entertainment industry – including Amazon Prime Video. For example, Amazon Studios poured a hefty $250 million into producing Red One, a comedic holiday action movie featuring Dwayne Johnson and Chris Evans. The company then backed the film with a major theatrical rollout, debuting in over 4,000 theaters and spending tens of millions on marketing.

With the domestic box office pulling in just $80 million — half of which is shared with theater operators — the movie might seem like a significant misstep. But according to Courtenay Valenti, Amazon’s head of film, Amazon invested the money to make Red One a streaming sensation.

Amazon reports that when Red One appeared on Prime Video, it quickly claimed the top spot as the platform’s most popular movie, attracting 50 million viewers globally within its first four days. The film marked the most-watched streaming debut in Amazon MGM Studios’ history, all while continuing its theatrical run on over 3,000 screens across North America.

Amazon has plenty of competition in its quest to achieve offline/online success. Paramount said that the theatrical release of A Quiet Place: Day One sparked a 207% rise in interest for earlier entries in the Quiet Place franchise that were streaming on the Paramount+ streaming service.

And when Kingdom of the Planet of the Apes hit theaters in May, Disney-owned Hulu offered subscribers an “exclusive look” at the film. This movie built anticipation for the theatrical release and also encouraged viewers to explore the eight other Planet of the Apes films available in Hulu’s library. When Kingdom of the Planet of the Apes screened in theaters, the film’s visibility then built anticipation for its release on streaming. Talk about creating a virtuous circle.

Streaming is also giving poorly reviewed movies a second chance with audiences unwilling to spend money on a flop (Joker: Folie à Deux, trashed by critics and a financial flop in theaters, is a hit on MAX.)

On HackerNoon, I wrote about this phenomenon a few years ago as the lingering effects of the Covid-19 pandemic forced studios to figure out how to distribute movies online and in theaters amid uncertainty over when people would return to movie theaters and how often they would attend. Some studios sold movies originally intended for theaters directly to streaming services. Others experimented with simultaneously releasing films in movie theaters and streaming services, known as day-and-date releases.

But studios that gambled on exhibiting movies in theaters discovered that sometimes they could have it both ways: enjoy a hit in the theaters followed by streaming success. For example, in 2022, The Batman earned $750 million globally before Warner Brothers premiered the film the HBO Max streaming service. The Batman then enjoyed a first-week viewership of an estimated 4.1 million households (per Samba TV) — the second best first-week for a theatrical release on HBO Max. One of the biggest movie success stories of 2022 (or any year), Top Gun: Maverick, took seven months to arrive on its studio’s streamer (Paramount+), which didn’t stop it from immediately becoming the service’s №1 offering. Black Panther: Wakanda Forever banked $842 million globally during an 82-day run in theaters — and then became the most-watched Marvel premiere on Disney+ based on hours streamed within the first five days.

Now the tail is wagging the dog. Studios see theatrical releases as a means to a streaming end. They are figuring out how to manage this interplay with effective marketing.

The biggest winners are Old Hollywood/New Hollywood hybrids like Disney, Paramount, and WarnerBros. Discovery that already possess film distribution and marketing know-how. And credit must be given to Warner Bros. Discovery CEO David Zaslav. When the WarnerBros. Discovery merger was announced in 2022, Zaslav articulated a blueprint for how New and Old Hollywood are operating now. Zaslav said, “We are not trying to win the direct-to-consumer spending war.” He noted that company would resist the trend of taking movies directly to streaming amid a pandemic-era decline in moviegoing. Instead, he actually increased the number of theatrical releases for the company’s movies.

He reasoned that movies in theaters would create buzz for their eventual streaming release while making box office revenues at the same time. “There’s an ecosystem of economic return when you open something in the theaters,” he said during an analyst conference in November 2022. For instance, the WarnerBros. movie Elvis was a smash in theaters before going to HBO Max, where it also proved to be popular.

Advertising Royale: How Theatrical Releases Shape Streaming Ads

Theatrical releases are important for another major reason: bolstering the advertising models for streaming platforms like Amazon, Disney, Netflix, and Paramount+.

Theatrical releases enable streaming platforms like Amazon, Disney+, Netflix, and Paramount+ to enhance their advertising strategies by creating more compelling and targeted campaigns. For example, when a film transitions from theaters to a streaming platform’s ad-supported tier, advertisers benefit from the platform’s ability to identify patterns in viewer engagement. By analyzing aggregated data from pre-release marketing campaigns, box office performance, and eventual streaming metrics, platforms can offer advertisers tailored slots that align with audience preferences. These highly curated ad placements tend to deliver stronger results, such as improved ad recall and higher click-through rates.

Advertisers are particularly drawn to the ability of streaming platforms to segment their audience based on first-party data. For instance, after a theatrical release, Amazon might use behavioral insights from its retail ecosystem — such as consumer purchases of related merchandise or engagement with promotional content — to predict which audience segments are most likely to stream the movie. Armed with this information, Amazon Ads can deliver highly targeted campaigns on Prime Video, serving ads for products or services that align with the viewer’s interests. For example, a viewer who purchased tickets to a theatrical action movie might later see ads for travel gear or high-end gadgets tailored to their demographic, increasing the likelihood of ad engagement.

Unlike traditional streaming platforms, Amazon can integrate its eCommerce capabilities with Prime Video ads, enabling product placement and direct shopping opportunities. For instance, viewers could see an ad for a product featured in a movie – like a James Bond film -- and purchase it immediately through Amazon’s retail platform. This creates a closed-loop system where advertising drives sales within Amazon’s ecosystem, further boosting revenue streams. Additionally, by offering premium content supported by ads, Amazon can attract price-sensitive consumers who might otherwise avoid subscription fees, expanding its audience base while maintaining profitability.

Disney+, using its integration with Disney’s broader ecosystem, similarly enriches its advertising by combining viewer insights from theatrical campaigns with proprietary subscriber data. When a major film becomes available on Disney+, advertisers are offered premium slots during the high-traffic premiere period. These ads can feature immersive formats, such as interactive overlays or exclusive brand sponsorships, allowing brands to align themselves with blockbuster content and engage viewers on a deeper level. This strategy works particularly well for Disney+, as its ad-supported tier draws from a family-oriented audience, enabling brands to focus on cross-generational products with a strong emotional appeal.

Platforms like Paramount+ go a step further by tying advertising opportunities to the broader lifecycle of a film franchise. When A Quiet Place: Day One debuted in theaters, Paramount+ used the event to promote related streaming content, bundling ad slots that spanned both the theatrical lead-up and the streaming release. Advertisers could opt for integrated campaigns, such as showing trailers for upcoming movies or launching thematic ad creatives tied to the film’s suspenseful tone. This multi-phase strategy extends the ad lifecycle, giving advertisers multiple touchpoints to interact with highly engaged audiences.

By capitalizing on the cultural momentum of theatrical releases, streaming platforms transform ad-supported streaming into a high-value proposition for advertisers. These platforms provide an ecosystem where ads are become integrated parts of the viewer experience. For advertisers, this approach helps make sure that campaigns are both contextually relevant and strategically timed, resulting in higher engagement rates, better conversion outcomes, and greater ROI.

In 2024 alone, over-the-top (OTT) ad spending in the U.S. exceeded $10 billion in the first eight months. Amazon positions itself to capture a significant share of this expanding market while capitalizing on its unique ability to connect entertainment with commerce – but the key is to master the interplay between theatrical releases and streaming.

James Bond Will Return

In the digital age, there are few cultural phenomenon with the ability to make us drop what we are doing and really pay close attention. The Super Bowl is one. A Bond movie is another. And now, Bond has the ability to not only capture our attention but also keep it through its second life on streaming. Amazon knows this. That’s why Bond will return – the Broccoli way. Down the road, if Amazon can build trust with the Broccolis, I do believe it’s possible for the Broccolis to agree to more creative ways to share James Bond with the world beyond movies. They’ve done it before, as noted above. They can do it again.