COMMENT: Amazon Snare MGM Studio Now They Are Going After Formula One
Amazon’s purchase of iconic James Bond Studio Metro Goldwyn Mayer (MGM) for a reported US$8.45 billion is set to make life difficult for Netflix Australia’s #1 movie streaming provider while delivering new pressure for Stan and Foxtel especially as they are also looking to beef up their sports content.
Mike Hopkins, senior vice president of Prime Video and Amazon Studios said on the purchase, “The real financial value behind this deal is the treasure trove of (intellectual property) in the deep catalogue that we plan to reimagine and develop together with MGM’s talented team. It’s very exciting and provides so many opportunities for high-quality storytelling,”
Outside of the more mainstream Hollywood intellectual property (IP), Amazon will also inherit cable channel Epix, responsible for scripted shows Fargo and Vikings, and non-scripted products such as The Real Housewives of Beverly Hills and Shark Tank to add a further offering to Amazon Prime.
But the next big battle for Amazon Prime is set to be sport and the Amazon entity gaining the global rights to events such as Formula One, all of the US NFL League as well as Premier League Soccer in the UK.
Amazon insiders have told ChannelNews that a major bidding battle is looming with Stan, Foxtel and Amazon Prime all looking to gain the next round of rights to Formula One in Australia.
A battle is also looming over EPL rights.
This month Prime Video became the exclusive home of Thursday Night football in the USA.
Their new NFL distribution deal is now kicking off with the 2022 season instead of the 2023 season as previously announced.
The 11-year agreement will see Prime Video carry 15 Thursday Night Football games with the retail giant also keen to get all NFL deals.
Also set to be a problem is who will own the rights to ESPN and ESPN + with a large volume of key US sport potentially available during the Australian summer.
Recently Amazon Prime Video, in partnership with free-to-air broadcaster SBS, pitched for the rights to Australia’s A League soccer, this went to ViacomCBS owned Network Ten and their new Paramount + streaming service that is about to be rolled out in Australia.
This is not a big sports win as A League games were only averaging around 27,000 a game on Foxtel and were not seen as being commercially attractive for a lot of brands who sponsor sport.
The purchase of MGM delivers for Amazon’s streaming service – Amazon Prime Video an arsenal of content including James Bond movies with some insiders claiming that it’s highly likely that the new James Bond movie No Time to Die could be available on Prime Video at the same time as cinemas.
Amazon CEO Jeff Bezos said 175 million Prime members streamed video in 2020. Total Prime members just surpassed 200 million earlier this year.
The level of Prime Video adoption and engagement among members bodes extremely well for the growth of Prime and Amazon’s continued dominance of online retail claims Bloomberg.
Amazon says total Prime Video streaming hours increased 70% year over year in 2020.
Internal documents leaked to Reuters in early 2018 found just 26 million Americans used the video-streaming service included with their Prime membership in 2017. At that point, Amazon had only just started offering Prime Video globally. Previously, it only included Prime Video in the U.S., U.K., Japan, Germany, and Austria.
Additionally, estimates indicate that only about half of Prime members used Prime Video in 2019. Today, that number is closer to seven out of every eight with Australians now able to access the service in Australia.
Analysts claim that the coronavirus pandemic was a big catalyst for engagement with Prime Video. Consumers experiencing Netflix fatigue may have activated their Prime Video account for the first time just to see what else is available without paying for another streaming service.
And it’s likely they were quite pleased with what they found.
The Service has also cranked up their investment in content, last year the company’s total video and music content expense grew to $11 billion in 2020, up from $7.8 billion in 2019. Amazon had planned increases in spending for its original films and series, as well as licensed content. It also took advantage of opportunities with theatre closures to buy the rights to other studios’ films.
The company’s video and music content expense grew another 25% year over year in the first quarter of 2021 to $3 billion.
So, people started paying attention to Prime just as Amazon was stepping up its content investments. That bodes well for continued engagement with the service post-pandemic, even when we have more options for entertainment.