Gerry Palmers Tech 05.27.2021 11:May AM EDT

Amazon vs. Netflix: Jeff Bezos Spends $8 Billion in MGM Purchase Amid Streaming War

With news that Amazon has entered into an agreement to purchase a controlling stake at the classic Hollywood studio MGM, nothing else could strengthen the tech giant more as it bulds its streaming portfolio.

Amazon Builds Content Muscle in Streaming War Against Netflix

This $8.45 billion deal, as reported by CNBC, would build immense content muscle for Amazon's streaming platform--the Amazon Prime Video--in a head-to-head battle against Netflix, as well as other players in the fast-rising market. After all, MGM has a widely acclaimed catalogue of movies, numbering 4,000, that cover a century of noted Hollywood filmmaking.

Amazon's acquisition of MGM is part of an entertainment push as people remain at their homes to stream series and movies by demand.

Amazon-MGM Merger, Welcome Twist to Changing Media Landscape

The merger presents a welcome twist in the ever-changing media landscape, with leading content providers turning to offer streaming services. Amazon would leverage on this immense catalogue to further catapult its Amazon Prime streaming service to a fair share of the booming market.

With a strengthened Amazon Prime, viewers will have more iconic, Oscar-winning films to watch, as Amazon bets on the MGM expertise to "further complement" its Amazon Studios to produce original content, Variety stressed.

Jeff Bezos Excited With Amazon-MGM Deal

In his farewell appearance at the Amazon annual stockholder's meeting as chief executive, Jeff Bezos could not hide his excitement over the deal as they got MGM's "vast, deep catalog of much beloved, intellectual property," per a Hollywood Reporter article.

"People who love stories are going to be big beneficiaries," said Bezos, who will be stepping down as the CEO of Amazon as he moves on from his other ventures.

MGM's vast catalog include classic films such as "James Bond," "Thelma and Louise," "Rocky," "Raging Bull," "Robocop", "Legally Blonde" and "Tomb Raider," as well as TV shows like "Vikings," "The Real Housewives of Beverly Hills," and "The Handmaid's Tale."

The Amazon-MGM merger is a welcome development because consumers want more content, Frost and Sullivan media analyst Dan Rayburn said in an interview with Agence France-Presse. It would expand Amazon's capabilities as a media company, transforming it further as a movie producer, Rayburn added.

Amazon Faces Roadblock in Integrating MGM Titles

Amazon, however, faces a roadblock in integrating the entire MGM catalog into its platform. A big share of the MGM titles have since not been the sole property of the studio. MGM titles before 1986 is currently owned by the cable channel Turner Classic Movies (TCM), including some films the studio owned in its purchase of United Artists in 1981.

Amazon has announced that Amazon Prime Video has 175 million subscribers worldwide. The original film "Manchester by the Sea" had emerged as the first film from a streaming service to earn an Oscar Best Picture nomination.

The MGM acquisition is considered Amazon's second-largest ever after its purchase of the grocery chain Whole Foods for $13.7 billion in 2017.

It remains to be seen what's the next step for Amazon after the MGM acquisition. However, there's no doubt that it will level up the competition in providing quality content in streaming sites.