What They Say
Amazon and MGM announced that a deal for the tech giant to buy the studio for $8.5 billion had closed. MGM has a library of 4,000 films and 17,000 TV show episodes.
What We Think
On the face of it, this deal is mainly about content for Amazon Prime, I think, to enable it to better compete with Netflix and Disney+. However, the deal may also help Amazon in generating advertising revenues, according to Protocol Business and in developing an AVOD service.
The deal will increase the pressure on Apple’s TV services to compete. Analysts have pointed out that is plenty of cash to buy content companies, but at the moment, with relatively lower numbers, high marketing costs and significant churn, it is ‘almost certainly’ losing money. (BR)
