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MGM, the James Bond studio, is being purchased by Amazon for $11.6 billion

Amazon is buying MGM, the film and television studio behind James Bond, Legally Blonde, and The Voice, in order to expand its video streaming service with new content.

MGM will cost Amazon $8.45 billion ($NZ11.6 billion), making it the company’s second-largest acquisition after Whole Foods, which it paid over $14 billion for in 2017.

Amazon does not disclose how many people use its Prime Video streaming service, but it has more than 200 million subscribers who pay for Prime membership, which includes faster shipping and other benefits.

Amazon announced that it would create new movies and shows based on MGM’s extensive catalog, which includes well-known characters such as Rocky, RoboCop, and Pink Panther.

“It’s going to be a lot of fun work,” said Amazon founder Jeff Bezos, during the company’s shareholder meeting on Wednesday (Thursday NZ time). “People who love stories are going to be the big beneficiaries.”

In order to stand out and compete, According to Sucharita Kodali, an e-commerce analyst at Forrester Research Inc, streaming providers require shows that viewers can’t watch anywhere else.

“There is an arms race to get what you can while the window is open,” she said. Plus, the price tag is just a tiny fraction of Amazon’s valuation, which is nearing US$2 trillion.

MGM, which was formed in 1924 when movies were still silent and is known for its roaring lion emblem, is one of Hollywood’s oldest studios. However, its luster has waned significantly over time. It sold majority of its pre-1948 repertoire, including The Wizard of Oz and Gone with the Wind, to Warner Bros. in the mid-1980s. Sony purchased the company’s huge California property.

MGM juggled bankruptcy and a revolving door of owners for much of the last decade, as its new releases decreased. MGM’s appeal has dwindled in recent years, not just because of its partially auctioned-off collection, but also because its main asset, James Bond, isn’t held entirely.

Barbara Broccoli and Michael G Wilson, who have ultimate control over the series, share ownership with MGM.

The latest James Bond film, No Time to Die, has been delayed due to the epidemic, but it will finally be released in the autumn.

Other films in the pipeline include Paul Thomas Anderson’s Soggy Bottom, starring Bradley Cooper; Ridley Scott’s House of Gucci, starring Lady Gaga and Adam Driver; and Jennifer Hudson’s Aretha Franklin biopic Respect.

It still has over 4000 movies in its library, including Silence of the Lambs and Thelma & Louise, as well as 17,000 TV series, including reality shows like The Voice and The Real Housewives of Beverly Hills.

Amazon already has its own studio, but the results have been uneven. The Marvelous Mrs. Maisel and Fleabag, two of its shows, received Emmys for best comedy series. Despite winning multiple Oscars, including the most recent for Sound of Metal, many of its films have underperformed at the box office.

Amazon has recently increased its expenditures on sports and high-profile productions. It will stream Thursday Night Football in the United States next year and is developing a Lord of the Rings series that will allegedly cost US$450 million in its first season.

Amazon.com Inc, located in Seattle, declined to indicate when it expects the purchase to be completed.

Amazon’s business methods are being scrutinized by regulators all around the world, particularly the way it looks at information from businesses that sell things on its site and utilizes it to produce its own Amazon-branded products.

In October, the US House of Representatives Judiciary Committee recommended that Amazon and others be broken up, making it more difficult for them to buy other businesses and enforcing additional competition regulations.

And the agreement came only a day after the District of Columbia filed an antitrust complaint against Amazon, claiming the business of enforcing restrictions that prevent its vendors from offering lower prices for their products outside of Amazon.com, resulting in higher pricing for consumers.

“This is a major acquisition that has the potential to impact millions of consumers,” said Senator Amy Klobuchar, a Democrat from Minnesota. “The Department of Justice must conduct a thorough investigation to ensure that this deal won’t risk harming competition.”

Representative Ken Buck, a Republican from Colorado, said in a tweet that he is concerned about the deal and that monopoly mergers and acquisitions should be scrutinized more closely.

Amazon, which began as an online bookstore in 1995, has grown into a US$1.6 trillion giant that does everything.

It has a delivery network that delivers items in two days or less; it sells inhalers and insulin; it has a cloud-computing firm that runs Netflix and McDonald’s apps; and it wants to launch more than 3200 satellites into space to beam internet service to Earth.

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