European regulators say Amazon can buy MGM because it's not a 'must-have'
If the FTC also approves the deal, Amazon's streaming service will add a catalog of MGM classics.
The great streaming service consolidation is only a few years away. To dominate the market, companies will need to acquire the most comprehensive catalog they can.
That’s probably what Amazon was thinking when it announced its $6.5 billion — $8.45 billion, including debt — bid to acquire Hollywood lion MGM. Today, the company just cleared the first major hurdle to making that a reality. The European Commission announced Tuesday that they will greenlight the deal.
”The addition of MGM’s content into Amazon’s Prime Video offer would not have a significant impact on Amazon’s position as a provider of marketplace services,” said the Commission. Notably, the Commission has filed charges against Amazon for its use of vendor data to compete with third-party sellers on its online retail platform. But while the EU’s executive arm finds Amazon’s ecommerce operations anticompetitive, it says the company’s acquisition of MGM wouldn’t be problematic because MGM isn’t a “must-have.” Every streaming service is facing down the inevitability of the deal between Discovery+ and HBO Max, announced last year and set to be finalized next month. AT&T is spinning off Warner Media, and the company’s shareholders will own 71% of the new company, Warner Brothers Discovery. Variety reported that content will be consolidated into a single app. That merged service, which doesn't yet have a name, could be a Netflix killer. Amazon Prime adding MGM content likely won't have the same effect. Amazon Prime passed 200 million subscribers last year, and the company said 175 million of those paying members also streamed Prime Video content. But it's unclear how many folks are watch Prime Video regularly.
Meanwhile, Netflix leads the streaming pack with 222 million global subscribers and a slate of originals that continue to drive cultural conversations. Discovery+ and HBO Max will have close to 96 million subscribers combined, though it's unclear how many will subscribe to the new mega-bundle.
Now that Amazon has been blessed by EU regulators, it faces the Federal Trade Commission, which will reportedly make its decision on the deal by mid-March.
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