Amazon Buys MGM's Hollywood Studio. What It Means For Film Industry
STEVE INSKEEP, HOST:
Amazon said yesterday it will acquire the Hollywood studio MGM for more than $8 billion. Now, when you're Amazon, that's not even that much money, but it's the latest big acquisition for the entertainment industry. So we called John Horn, who covers entertainment for KPCC.
Broadly speaking, what's driving these changes in Hollywood?
JOHN HORN, BYLINE: Well, I'm going to make a odd analogy, but stick with me, Steve. So in 2017, Amazon spent nearly $14 billion for Whole Foods. So if you go to a grocery store like I do and you look for stuff on sale, maybe you notice that free-range chicken is on sale at Whole Foods. So you go in there and you stick around the store and you fill up your cart. This is the same thing. Amazon is streaming the next "James Bond" movie. You log in and you watch Daniel Craig and then you stick around the website and you buy stuff. Subscribers to Amazon Prime spend twice as much on Amazon as those people who don't. So I think in the thinking of Amazon, if you have good content on your streaming platform, you sign people up and they stick around and spend money.
INSKEEP: And this way they can essentially own MGM's catalogue, their library of movies. That's what this is about.
HORN: Yeah, it is. Now, there are certain things that Amazon gets with MGM, but MGM has gone through a lot of sales. So all of the classic movies, like pre-1986 films, were sold off to Ted Turner in 1986. So movies like "The Wizard Of Oz," "Singin' In The Rain," "2001: A Space Odyssey," they're not part of the deal. But there are a lot of TV episodes. There are a lot of movies. They have "Bond." They have "Rocky." And the idea is, I think, use MGM to create the big movies that Amazon so far hasn't really managed to do. I mean, if you look at Netflix, they've got big hits like "The Irishman." Disney+ has "Star Wars," Pixar Animation and Marvel movies. Amazon doesn't have those movies yet. And I think they need somebody who has some expertise in creating those because you have to make noise to get attention with consumers.
There was a movie a couple years ago called "Manchester By The Sea," and it won two Oscars. And at the time, I had a friend who worked at Amazon. So they win two Oscars and they go to the Amazon boss and say, let's get something on the homepage celebrating our Oscar wins. And they're told, well, we've got these pet food deals, these makeup sales, whatever. So we'll get your movie on months after it wins. So the question is, can Amazon adapt to Hollywood and really let whoever is kind of making these creative decisions have some say-so?
INSKEEP: If you're creative in Hollywood, if you want to make something new and different, what does this wave of acquisitions mean for you?
HORN: If you're a creator, it means really good things. I mean, so much money is being spent on content production and acquisition right now. I mean, people are just throwing money around as if there's no tomorrow. And there has been, as you know, a lot of movement around. There was a big deal not that long ago between Warner Media and Discovery. Amazon spent $11 billion on video and music content last year. That was up from $7.5 million in 2019. Netflix spent more than $17 billion last year. Disney says it's going to spend between $14 billion and $16 billion by 2024 on Disney+. So if you are selling stories, there's a lot of money coming your way. And in theory, you are going to be able to tell, you know, good stories because there are so many openings. You don't have to make just another Marvel movie. You might be able to make something original. And that's where Netflix has really succeeded and I think other people haven't yet.
INSKEEP: John Horn of KPCC, who hosts the podcast Hollywood, The Sequel, thanks.
HORN: Thank you, Steve.
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