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Thursday, January 27, 2022

Amazon’s Hollywood Ambitions Are Very Outdated-College

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Out of every thing Jeff Bezos has ever mentioned, one quote might finest sum up simply how, precisely, Amazon will influence Hollywood: “Once we win a Golden Globe, it helps us promote extra footwear.” He mentioned this again in 2016, on the Vox Code Convention, however the level stays true. In contrast to Netflix, streaming isn’t Amazon’s core enterprise. Status TV and flicks are simply one other providing to get clients to re-up their Prime memberships, which in flip will get them to purchase extra issues via Amazon. It’s a really old-school enterprise technique: All the time hold them coming again for extra.

Maybe it’s no surprise, then, that Amazon is buying MGM. It’s a legacy Hollywood studio with some 17,000 TV exhibits and 4,000 motion pictures—together with RoboCop and the James Bond movies—in its coffers. The deal, introduced in Might, has but to shut, and it has already obtained scrutiny from the Federal Commerce Fee. But when it goes via, it’ll give Amazon entry to all that content material, in addition to a studio infrastructure to make extra, which the corporate can then share and monetize nonetheless it needs. This too, looks like a much less auspicious throwback, like Comcast buying NBCUniversal or Time Warner merging with AOL (keep in mind that?). Or AT&T’s more moderen, ill-fated acquisition of Time Warner, the majority of which it will definitely spun off into Warner Bros. Discovery. However Amazon isn’t any telecom, and it’s constructing a a lot wider portfolio than nearly every other firm earlier than it. “I believe they did what AT&T did,” says Sarah Henschel, a streaming analyst for Omdia, “simply higher and broader.”

The acquisition of MGM, greater than something, may give Amazon the best benefit within the streaming wars. Analysts predict streaming companies received’t see the identical subscriber development in 2021 that they noticed throughout the peak of final yr’s Covid-19 lockdowns, so for now the secret is retention. Netflix has north of 200 million subscribers; Disney+, round 100 million. Amazon claims that greater than 175 million of its 200 million Prime members have streamed one thing from its video service previously yr, but it surely’s arduous to say whether or not these customers would subscribe to Prime Video as a stand-alone service. Streaming contains 26 % of all TV time within the US, in response to analytics firm Nielsen; Netflix alone occupies 6 %, thrice as a lot as Amazon Prime. However finally, that hole might not matter, because the content material is only a bonus for individuals who need two-day delivery. Amazon can hold pumping all that cash it is making from footwear into Amazon Studios and acquisitions like MGM and nonetheless come out forward. Like Apple, which is a {hardware} enterprise that simply occurs to have a streaming service, its core enterprise(es) buoy its inventive ones. That issues quite a bit, particularly proper now as new streamers like Paramount+ and Peacock emerge, demanding viewers’ cash and eyeballs. 

“We’re in a brand new period of TV and video consumption now,” says Eric Schmitt, an analyst at Gartner. “Eighty years in the past, 75 years in the past, we had NBC, CBS, and ABC. Now we now have Netflix, YouTube, and … Amazon? It’s up for grabs, and why wouldn’t you make a play for it?”

For Amazon, a giant a part of that play is the MGM deal. Netflix has spent billions of {dollars} to fill its warfare chest of authentic motion pictures and TV. HBO Max will get its large catalog because of mother or father firm WarnerMedia, residence to Warner Bros., HBO, Grownup Swim, and scores of different established content material machines. Disney+ is similar; so is Hulu. Amazon Studios has churned out some great things—Bezos wasn’t kidding concerning the Golden Globes—however the service has by no means had a giant trove of choices. As a substitute of constructing one, Amazon went out and purchased it, just like the way it pushed into reside sports activities earlier this yr—one thing few of its rivals provide.

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