- The media business keeps consolidating, and Amazon’s purchase of MGM Holdings isn’t the first sign.
- Disney bought 21st Century Fox in 2019, gaining control of Hulu, and AT&T is merging WarnerMedia with Discovery.
- The deals signal a trend that many in the media world realize survival lies in the streaming market.
- See more stories on Insider’s business page.
It’s official – Amazon is acquiring MGM Studios’ parent company for $8.45 billion, it announced Wednesday.
That means that movies and shows owned by MGM could eventually appear on Amazon’s Prime video streaming platform for users to watch.
It’s yet another instance of a tech company partnering with a film industry power player to round out its streaming offerings and compete with deeply entrenched rivals like Disney and Netflix.
And as streaming services continue to gain favor over traditional TV, media firms are likely happy to oblige, helping further industry consolidation. Film studios without their own streaming service are especially keen on finding a way to get eyeballs on – and monetize – their libraries.
Here are some of the biggest mergers, acquisitions, and deals amongst tech platforms and traditional film companies that have set the stage for the streaming wars.
Disney and 21st Century Fox
Disney bought the film company 21st Century Fox and its decades-old 20th Century Studios subsidiary, in a $71 billion sale that closed in 2019. Disney’s streaming platform, Disney+, launched in December of that year with films like “Never Been Kissed” and “Ever After” available to watch.
Those 21st Century Fox films will join Disney’s already attractive library it built with past acquisitions of LucasFilm -home to “Star Wars” and “Indiana Jones” – and Marvel.
The Fox deal also gave Disney control of Hulu
Hulu has always had a complicated ownership setup, but Disney now owns a majority of the company and maintains full operations of the streaming platform.
Through its 21st Century Fox acquisition, Disney also absorbed the corporation’s 60% stake in Hulu, one of the original streaming services that launched in 2007. It later acquired AT&T’s 9.5% stake in Hulu, bringing its stake to about 70%.
Comcast is the only other shareholder, which is guaranteed to own a minimum of 21% thanks to a 2019 deal.
Disney even offers a $13.99 bundle that includes Disney+, Hulu, and ESPN+.
Netflix announced a deal with Sony in April
The agreement will allow Netflix to offer Sony’s future 2022 films in the US, including installments of the “Spider-Man” franchise with Tom Holland. Other potential future Sony releases could include “Jumanji” and “Ghostbusters.”
After Sony’s movies are released in theatres in 2022, they’ll first go to pay-per-view and then hit Netflix.
As Insider’s Travis Clark reported, the deal gives Sony – which doesn’t have its own streaming platform – an avenue to showcase its films. And it gives Netflix even more theatrical releases to entice paying customers.
Disney will also have Sony movies after Netflix has its turn
After a Sony film is released in theatres in 2022, has its pay-per-view television run, and spends an expected 18 months on Netflix, it’ll be offered on Disney+ and Hulu. Sony and Disney said the US licensing deal will be in effect from 2022 until 2026.
The agreement means that future “Spider-Man” movies could eventually call Disney+ home alongside Disney-owned Marvel’s film franchise, which Holland appears in as well.
Sony and Disney ran into a snag in the past over Sony’s movie rights to hundreds of Marvel characters and Disney’s Marvel productions. The solution was for Disney and Sony to agree on the Spider-Man character being allowed to appear in one more standalone film and another Marvel Cinematic Universe installment.
AT&T’s massive WarnerMedia-Discovery merger will create a new streaming giant
The communications giant announced last week that it was spinning off its WarnerMedia content arm, which includes HBO and Warner Bros., both of which AT&T acquired when it bought then-Time Warner for $81 billion in 2018. AT&T plans to merge WarnerMedia with the media company Discovery.
That means content from the two companies’ 100-plus brands, including HGTV and Discovery, would all exist under one umbrella. Such a service could give Netflix, the reigning streaming champ, a run for its money. The deal is expected to close in mid-2022.
The Discovery Plus streaming platform had already launched in early January with subscriptions starting at $4.99 and showing programs from Food Network, HGTV, TLC, BBC, and Discovery Channel, home to Shark Week. It was the first new streaming service to launch in 2021.
MGM Studios is home to the oldest and most beloved film classics
Amazon is shelling out $8.5 billion to acquire MGM Holdings, whose 97-year-old MGM Studios is behind some of the world’s most classic movies and TV shows. The company said that the “more than 4,000 films” and “17,000 TV shows” were big factors in making the purchase.
Movies include “Silence of the Lambs” starring Anthony Hopkins, “Rocky,” and the extensive James Bond film catalog. Although as Insider’s Travis Clark reported, MGM owns just half of the rights to Bond, with the rest belonging to producers that handle the creative direction of the franchise. That means that it could get tricky if Amazon ever wanted to, say, produce a TV series starring the famous character.
Viacom merged with CBS in 2019 with Paramount already under its belt
Viacom’s acquisition of Paramount may have closed in 1994, but the move set the company up well for what would become the 21st-century streaming wars. So did Viacom’s merger with CBS in 2019.
The streaming service CBS All Access launched in 2014 and was rebranded as Paramount Plus in 2020 as the pandemic drove a business boom in the streaming market.
Since “A Quiet Place 2” is distributed by Paramount Pictures, the movie starring Emily Blunt will be available on the streaming service on July 12.