Amazon Procures MGM Studios for $8.45 Bn, Cinema Biz Would Remain Unaffected

eCommerce giant Amazon intends to acquire  Hollywood TV and movie studio MGM for $8.45 billion, giving it a huge library of films and TV shows and escalating its competition with streaming rivals led by Netflix and Disney+. This acquisition may not affect the cinema business in India.

This is Amazon’s biggest acquisition since it agreed to buy Whole Foods in 2017 for $13.7 billion but follows investments of about $11 billion on content for its streaming video and music services last year alone. Mike Hopkins, senior vice president of Prime Video and Amazon Studios, in a statement pointed to MGM’s “deep catalog” as justification for the purchase.

Karan Taurani, Vice President, Elara Capital’s says, Amazon procuring MGM would increase the platform's content depth, it would not impact the cinema business in India.

He further adds, "Don’t see much of an impact of the above on content flow for India as Indian cinema has the scale to generate healthy collections at box office. We saw this with the likes of Warner Bros, which released its films on hybrid mode or OTT globally, but released the films Wonder Woman 1984, Godzilla (vs Kong), Tenet only in cinemas (in India)."

Karan hinted that due to the scale of opportunity Indian cinema has for such films, no production house would want to lose on the above opportunity. He continued that due to dubbing of content into multiple languages (Hindi and regional languages), new marketing initiatives (having voiceovers of leading Indian actors) and new forms of scripting for regional and Hindi languages so that audiences can relate to the subject, theatrical window is more lucrative for Hollywood ventures.

Furthermore, Karan thinks that Amazon’s acquisition of studios would only change the window period of over-the-top (OTT) platform and satellite in global markets where it is around 120 -150 days. Although, in India the window already is low at 40-60 days.

This is why he expects more large films to hit either the simultaneous release route or lower window period globally but not in India.

Karan  further states, "I believe there is a very low likelihood of simultaneous release of a Hollywood film in India through a PPV (pay per view) format as piracy is a big threat and Indian audience pay for an overall experience of watching the film in a big screen including family outing.”

The new owners hired a moviemaker CEO in Gary Barber, a Hollywood heavyweight known for films such as The Hitchhiker’s Guide to the Galaxy and Ace Ventura: Pet Detective. He oversaw a new James Bond movie, Skyfall, that generated more than $1 billion in ticket sale and partnered with Warner Bros. on Hobbit films.