Amazon is acquiring MGM, the studio behind James Bond and Rocky, for $8.45 billion

no time to die
Daniel Craig as James Bond in “No Time to Die.”

Amazon is acquiring film studio MGM for $8.45 billion, it announced Wednesday.

Amazon’s acquisition of MGM Studios could mean a big expansion of Amazon Prime‘s streaming inventory to include MGM’s big-name movies and TV shows. These include the James Bond, Rocky, Creed, and Pink Panther franchises, alongside “Legally Blonde” and “A Star Is Born.” Its TV shows include “The Handmaid’s Tale,” “Fargo,” “Shark Tank,” and “The Real Housewives.”

“The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” Mike Hopkins, senior vice president of Prime Video and Amazon Studios, said in a press release.

Amazon said that completion of the transaction was subject to regulatory approvals.

Industry sources told Insider that Amazon had been at the table for months. One person close to talks also said another major media company had made a lower bid and had been rejected from the process last week.

The Wall Street Journal reported in December that MGM was exploring a sale. The company had already started a formal sale process, and prospective buyers had been expressing interest since last spring, per The Journal’s report, which also cited people who said the company had a market value of $5.5 billion.

Other companies were also in the running to acquire MGM, including ViacomCBS and Sony Pictures Entertainment, per the report. One person close to talks also said a major media company had made a $6 billion bid and had been rejected from the process last week.

Jeffrey Wlodarczak, principal and entertainment and interactive subscription services analyst at Pivotal Research Group, said that Apple and Comcast were also “logical” other bidders, in an analyst note seen by Insider.

MGM’s catalog would bolster up Amazon’s portfolio

Like the rest of the film industry, MGM was hit by the coronavirus pandemic, and it had to push back the release of the next Bond installment, “No Time To Die.”

Its revenue dropped 3% year-over-year to $1.5 billion in 2020. Its film segment was the worst hit, with an 83% fall in revenue from theatrical releases, as movie theaters closed or operated at lower capacity.

But the company was saved by its deep catalog, which includes about 4,000 films and 17,000 TV episodes, and its chief operating officer, Christopher Brearton, said in the company’s third-quarter earnings announcement that 2021 could be its biggest-ever year for new content.

Amazon has been knuckling down on investment in its media division as demand for streaming has boomed during the pandemic.

Last month, Amazon’s streaming service surpassed 200 million Prime members worldwide – 175 million of whom streamed Prime Video content in the past year, according to Amazon CEO Jeff Bezos, who said streaming hours were up more than 70% year-over-year.

The company said it made $7.6 billion – or about 7% of its total net sales – from its subscription services in the first quarter of 2021.

One Hollywood executive told Insider that thanks to Amazon’s distribution deal with premium TV and movie service Epix, which was acquired by MGM, “Amazon Prime Video has data on every movie played in the eco-system and they know how Bond, Creed, and Rocky perform.”

“They know on a household basis, on a geographic basis what titles are popping in 40 million-50 million households,” the executive said. “And that was the valuation equation that drove the price up.” In the end, price back and forth price negotiations meant Amazon’s deal came in a little lower than the $9 billion figure suggested in early reports.

Wlodarczak said in the Pivotal Research Group note, sent before the deal was finalized, that Amazon was “massively overpaying,” but that this investment was needed to stay competitive with Netflix.

“Amazon Prime’s originals hit rate appears dramatically below Netflix since launching in 2013, with frankly pretty limited hit success rate,” he said. He said that hits are important because they drive usage of Prime, which in turn creates “stickier” customers for Amazon’s other services.

Wlodarczak said that by acquiring MGM, Amazon would get a “decent but in my view tired” catalog.

He said that, adjusted for inflation, James Bond is the third-highest grossing film franchise of all time behind Marvel and Star Wars, but that “recent results have been trending in the wrong direction.” Of recent releases from the franchise, only Daniel Craig’s 2012 “Skyfall” has made it to the top 10 Bond box office results, adjusted for inflation, he said.

MGM only owns half of the Bond franchise. Producers Barbara Broccoli and Michael G. Wilson still have final say on the franchise’s direction, Insider’s Travis Clark reported, meaning there won’t be a Prime Video Bond TV series without their approval.

The sale to Amazon is a stunning finale for a studio brand that a decade ago was deeply in debt. MGM sold to Sony and a group of investors including private equity firm Providence Equity for $3 billion plus $1.9 billion in debt back in 2004.

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AMC drops as movie-theater chain’s CEO again discusses potential issuance of 500 million shares

AMC Entertainment
  • AMC shares fell by more than 6% during Thursday’s session after the company reiterated plans to issue 500 million shares.
  • The movie-theater chain’s CEO sees an “opportunity” to bolster cash reserves and make other operational moves.
  • “We’ll be sensitive to dilution issues,” said AMC CEO Adam Aron on CNBC.
  • See more stories on Insider’s business page.

AMC shares fell Thursday after the movie-theater chain’s chief spoke about the company’s plan to issue 500 million shares.

AMC in a March regulatory filing said it wanted to increase the number of shares to total more than 1.02 billion and for shareholders to vote on the matter on May 4.

“We’ll be sensitive to dilution issues, but at the same time there’s an opportunity to bolster our cash reserves and there’s an opportunity to buy back debt at a discount or pay deferred theater rents,” AMC CEO Adam Aron said on CNBC’s “Squawk on the Street” program. “There are a lot of good reasons for shareholders to give us the authority.”

The company is already seeing benefits from the vaccination of millions of Americans from COVID-19 as well as from the release of new movies, Aron said.

Shares of AMC fell by as much as 6.3% to $9.56 before trimmed losses to 5%. The shares, which have grown in popularity among investors on Reddit’s Wall Street Bets forum, have leapt from around $2 each at the start of 2021.

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Disney’s CEO explains how the pandemic has forever changed our relationship with cinema

Bob Chapek
Walt Disney CEO Bob Chapek said moviegoers’ relationship with cinema has changed forever.

  • Disney’s CEO said audiences’ relationship with theaters had changed forever, Bloomberg reported.
  • Bob Chapek said viewers would no longer accept a gap between a theater and on-demand releases.
  • Disney will close 60 North American stores and triple its Plus subscribers to 230 million by 2024.
  • Visit the Business section of Insider for more stories.

Walt Disney CEO Bob Chapek said moviegoers’ relationship with cinema had changed forever due to the pandemic and that the effects will last in the long-term, Bloomberg reported.

Speaking at a media and technology conference hosted by Morgan Stanley, Chapek said the old approach with a gap between when a movie comes out in theaters and when it is available on-demand wasn’t “viable anymore.”

“The consumer is probably more impatient than they’ve ever been before, particularly since now they’ve had the luxury of an entire year of getting titles at home pretty much when they want them,” Chapek said. “I’m not sure there’s going back.”

According to Bloomberg, Disney had the largest market share of any movie distributor before the pandemic hit, so any shift in focus to streaming will definitely be felt in movie theaters.

The media giant owns four streaming services – Disney Plus, Hulu, ESPN Plus, and Star, with tailored versions for key international markets.

In February, the company announced its flagship service Disney Plus had hit 95 million subscribers, bringing the total number of subscriptions across all streaming services to 146 million, according to an earnings report.

Disney expects to treble the number of Disney Plus subscribers to between 230 and 260 million by 2024 and will double its investment in original content to about $15 billion over the next four years.

On Wednesday, the company announced it would shut 60 stores across North America to focus on a “more flexible, interconnected e-commerce experience.”

“This is the perfect time to make operational changes,” said Chapek, who took over the reins at Disney in February 2020 from former CEO Bob Iger.

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Domino’s is giving out a free 30-day movie streaming subscription if you order a pizza online

Dominos Cheeseburger Pizza Taco Pizza 14
  • Domino’s is offering a 30-day subscription to streaming service Epix Now if you order your pizza online.
  • The offer is valid up to April 11, and all you have to do is click a link and provide your email — no credit card details are needed.
  • The MGM-owned platform has more than 2,000 movies on offer, including James Bond films, “Pet Sematary,” and “Sonic the Hedgehog.”
  • Visit Business Insider’s homepage for more stories.

Domino’s will give you a 30-day subscription to movie streaming platform Epix Now if you order one of its pizzas online.

Any customer who orders online up to April 11, 2021 will receive free access to the MGM-owned platform.

The subscription won’t automatically continue after the free trial, so you won’t end up accidentally paying for the $5.99 a month service beyond your one month.

Domino’s will include a link on its order confirmation page, confirmation emails, and pizza tracker page that customers simply have to click through. They don’t have to provide any credit card information – an email address is enough, Domino’s says.

Read more: An analysis of hundreds of exec interviews shows TikTok’s impact on a wide variety of companies in 2020 like Spotify, Snapchat, and Netflix

Epix Now has more than 2,000 movies, including James Bond films, “Pet Sematary,” and “Sonic the Hedgehog,” and 300 hours of original series and specials.

“Pizza and movies go hand-in-hand,” Art D’Elia, Domino’s chief marketing officer, said.

If you’re not in the mood for pizza, you can also get a free seven-day trial direct for the Epix Now directly through its app and website.

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