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Amazon talks with MGM bring a new shine to old film libraries

(Bloomberg) – James Bond and Rocky Balboa may have passed their prime, but an almost voracious appetite for content in today’s streaming era has made them all the more appealing. The characters are from a Metro-Goldwyn-Mayer portfolio of films and shows that has attracted, according to someone familiar with the matter, this is a $ 9 billion offer from Amazon.com Inc. that is part of a massive cast reshuffle from Streaming content this week is on. AT&T Inc. is merging its WarnerMedia division with Discovery Inc. to create a new media company with supposedly more material than Netflix Inc., the leader in streaming. The frenzy also raises the stakes of another potential target, Lions Gate Entertainment Corp. The film and television studio rose 7.3% on Tuesday. The stock is now up 57%. The latest speculation follows bidding wars in recent years for previous sitcom catalogs, with “South Park” and “Seinfeld” fetching $ 500 million or more apiece. The question now is whether the largest streaming providers will continue to consolidate the market, collect larger arsenals of content and crowd out smaller competitors. “There will be a handful of winners in the streaming wars, and content will always be the big factor,” said Tuna Amobi, media and entertainment analyst at CFRA Research. “Everyone increases their spending significantly. It seems almost what You have to do to be considered a very serious or viable competitor. ”The few studios that weren’t completely sold out to streaming services still have lucrative one-time deals, with Netflix paying $ 450 million for the rights in March The next two films in the Knives Out franchise, produced by Media Rights Capital and distributed by Lions Gate, which was one of the largest film rights deals of all time, valued at $ 140 million more than the first film to be generated in global box office sales. Streamers also pay a lot for old ideas. Walt Disney Co. announced that it will spend $ 16 billion annually on content through 2024 mainly by exploring the depths of its own intellectual property. The company announced in December that it would produce 10 Star Wars series and 10 Marvel series, as well as shows based on characters from Moana, Zootopia and Big Hero 6. Even Dug, the dog from Pixar’s 2009 film Up, will get his own spotlight – all part of a push to bolster the company’s 18-month-old Disney + service. is important, ”said Ian Whittaker, founder of analytics firm Liberty Sky Advisors. “These players are now effectively global pay-TV operators – and weaker players risk tossing good money at bad.” A deal for MGM would give Amazon hit franchises like James Bond, The Handmaid’s Tale, and The Hobbit, and it’s unclear when they might appear on the company’s streaming service, given existing distribution deals. In the AT&T transaction, programs such as “Friends”, “The Big Bang Theory”, “Game of Thrones” and “The Wire” will be merged with the reality TV shows from Discovery and “Food Network”. Players are the smaller ones US media companies that are outperformed both in their home countries and overseas, Whittaker said, “For example, what strategy is ViacomCBS pursuing in a streaming world divided between the global giants and consolidated national players in Europe?” Whittaker asked. Amobi said the strategy is clearer for a company like Amazon, which has the weight of becoming one of the few essential streamers for everyday entertainment consumers – and adding value to the online retailer’s Prime membership. Amazon is less reliant on streaming than its media competitors, as the service is essentially an add-on to Prime, its free shipping program. However, if the MGM purchase is successful, Amazon may also be able to make additional money on the content by licensing it to third parties. “Keep in mind that Netflix is ​​spending more than $ 20 billion this year,” said Amobi. “If you’re an Amazon video, all you have to do is pay attention. You can’t just stand idle when your competitors want to spend money. “You can find more stories like this on bloomberg.com. Sign up now to stay up to date with the most trusted business news source. © 2021 Bloomberg LP

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