Amazon has agreed to pay up to US$9 billion for MGM. The story was picked up by most of the press very quickly at the end of May with the main focus being the ‘James Bond 007’ franchise. The purchase followed the earlier merger by AT&T, owners of Warner Bros, with the assets associated with the Discovery channel. Consolidation of the major streamers is in full spate with Disney leading the way after its acquisition of Twentieth Century Fox. Apart from the realisation that what was a cartel of major studios running Hollywood has now changed dramatically with the emergence of Amazon, Apple and Netflix, what else is there to say?
In this particular case, quite a lot, I think. Most importantly, in terms of film history, MGM is not a ‘studio’ any more and hasn’t been a major distributor under that name for many years. Many of the reports in the press have been factually incorrect and quite misleading in terms of history. MGM was one of the first Hollywood majors, being created by Marcus Loew, owner of a major theatre chain who bought the film companies ‘Metro’, ‘Goldwyn’ and ‘Mayer’ to create a large integrated film studio founded in 1924. From then up to the 1950s MGM developed to become the biggest of all the studios with the proud boast of ‘more stars than in the heavens’. However, once Loew’s theatres were divorced from the film production and distribution as a result of the 1948 anti-trust ‘Paramount Decision’, MGM became prey to possible corporate raiders. Though the studio carried on through the 1960s, it was finally acquired by Kirk Kerkorian with a controlling share. Gradually it was asset-stripped but still carried on distribution as a major. Kerkorian was more interested in creating the MGM luxury hotel in Las Vegas. In 1981 in an attempt to save the company MGM took over United Artists which had itself folded after the fiasco of Heaven’s Gate. MGM-UA continued as a not very successful distributor and in 1985 the final blow fell with sale of the studio to Ted Turner. Turner’s main interest was MGM’s library of titles (including some pre-1950 Warner Bros titles and various rights to RKO titles). Once he had acquired the library, Turner sold the other parts of the business back to Kerkorian, but the studio assets were quickly bought by Lorimar. Turner was early into the market for ‘content’ and he used the MGM library as the basis for his TCM cable channel. Later, Turner’s library was in turn taken over by Warner Bros. when it brought Turner Communications into the conglomerate. Today Time Warner controls the pre-1986 MGM library.
In reality, the 4,000 titles that Amazon might acquire do not include the famous MGM titles that most of us would recognise. The post 1986 library does have some interesting titles, but not many and some of the 4,000 will be titles from other libraries that MGM has acquired both before the sale to Turner and subsequently. This includes the United Artist’s library and that’s where James Bond comes in. The Bond films were distributed by UA from 1962 up until 1983 when Octopussy was distributed by MGM-UA in the US but UIP in the UK. As far as I am aware, MGM co-owns the copyright for the James Bond film rights with Eon Productions, the company now run by Barbara Broccoli and Michael Wilson, heirs to Albert ‘Cubby’ Broccoli who founded the original company with Harry Saltzman. MGM’s share in the rights comes from the purchase of Saltzman’s interest. If the Amazon deal goes through Amazon will have a share of the James Bond rights but not complete control. Much of the press coverage seems to be based on the idea that Amazon has acquired its own major film franchise and I’m not sure that is the big prize.
Intellectual Property is an increasingly complex field and I don’t claim any great expertise in it. I’m not sure what all the ramifications of Amazon’s deal might be, but I do think that most press reports about the news of the proposed acquisition were published with very little knowledge of what actually constitutes MGM in 2021. For most film scholars with an interest in classic MGM films, I don’t think the proposed takeover will mean very much but I’m prepared to be proved wrong. I do note that the acquisition would give Amazon access to a range of US TV titles (such as The Handmaid’s Tale, 2017-) which might be the most valuable content in the deal?
The COVID pandemic has increased everyone’s interest in streaming films and TV programmes. Netflix in particular saw a big leap in subscribers and it all looked good news for the streamer which had officially become a ‘Hollywood major’ with its entry into the MPA (the Motion Pictures Agency), the Hollywood trade association and the most powerful agency in filmed entertainment. However, Netflix has a single weakness in its position in that it has no other source of revenue apart from its subscriptions. The other MPA members each have other revenue streams or access to content libraries. Netflix must spend to create new ‘content’ and generate enough new revenue to from new subscribers to balance the books. Amazon is clearly in a different position and if this purchase goes ahead it will have boosted its own stock of library titles. I doubt the ‘consolidation’ in the streaming market has concluded yet. The question is whether Netflix can survive without buying a library or finding a new revenue source.