Why Amazon’s $8.5 billion acquisition of MGM should be blocked

In Tuesday’s announcement of Amazon’s $8.5 billion acquisition of MGM—the historic movie studio behind the Rocky, Legally Blonde, and James Bond franchises—Mike Hopkins, senior vice chairman of Prime Video and Amazon Studios, naturally dropped two main Hollywood buzzwords. 

“The true monetary worth behind this deal,” Hopkins stated, “is the treasure trove of” —ding-ding-ding— “IP within the deep catalog that we plan to reimagine and develop along with MGM’s proficient crew. It’s very thrilling and gives so many alternatives for high-quality” —ding-ding-ding— “storytelling.”

Sure, within the newest proposed media merger, mental property will be married with progressive storytelling to create an organization like no different. This has by no means been finished earlier than . . . in the event you don’t rely Disney, Comcast, Sony, ViacomCBS, or the 10-day-old potential merger of Warner-Discovery. Certainly, simply as Marvel and Star Wars spin-off TV exhibits now populate Disney Plus, put together your self for a Rocky-themed reality-TV present (with actual boxers!) and as many Bond prequels as Barbara Broccoli and Michael G. Wilson (the extremely protecting producers of the franchise) will permit for, to roll out on Amazon Prime Video. 

Advertisements

What’s extra worrisome, although, is the even larger monopolistic foothold that this deal provides one of the world’s richest and strongest corporations, one whose market cap shouldn’t be within the billions however trillions. Now, past simply promoting its personal merchandise, like child oils, in its personal market and thus edging out smaller, impartial companies, Amazon will be doing the identical factor with films and TV exhibits at a scale of 10 occasions what it’s presently been doing in leisure. The MGM library consists of greater than 4,000 movies and 17,000 TV episodes.

It’s a difficulty that politicians on all sides of the spectrum have been railing about for years now in terms of Massive Tech, and people cries will undoubtedly develop louder within the coming weeks, doubtlessly even affecting this deal, which rests upon regulatory approval. (Simply this week, the District of Columbia sued Amazon on antitrust grounds regarding its pricing contracts with third-party sellers.)

Again when she was a presidential hopeful in 2019, Democratic Senator Elizabeth Warren of Massachusetts drafted an antitrust bill aimed toward corporations like Amazon and Fb that will not solely block mergers and acquisitions however have an effect on how these corporations deal with their opponents and the way they worth their merchandise. Extra just lately, one other 2020 presidential aspirant, Democratic Senator Amy Klobuchar of Minnesota, revealed a 702-page e-book titled, Antitrust: Taking over Monopoly Energy From the Gilded Age to the Digital Age. And Republican Senator Josh Hawley of Missouri, who revealed The Tyranny of Massive Tech in Could, launched the “Trust-Busting for the Twenty-First Century Act” this spring, taking goal at “a small group of woke mega-corporations,” together with Amazon, that “management the merchandise Individuals should purchase, the knowledge Individuals can obtain, and the speech Individuals can have interaction in.” Hawley particularly seeks to ban all mergers and acquisitions by corporations with a market capitalization larger than $100 billion. Amazon’s market cap as of the market shut on Wednesday was $1.65 trillion.

Certainly, Senator Hawley expressed his disapproval shortly after the information broke:

Senators Warren and Klobuchar had not tweeted concerning the merger as of late Wednesday.

Getting away from the big-picture argument a couple of free market, let’s return to the extra micro sense of what this deal will imply. Let’s think about what it means for leisure to be much more firmly within the grip of an organization that’s in the end extra involved about what number of rolls of bathroom paper it sells on Amazon every year than how many individuals stream Jack Ryan. In Brad Stone’s just lately revealed book about Amazon, he recounts Amazon CEO Jeff Bezos being confused as to why it wasn’t potential to “check” TV exhibits the way in which one would check, say, a mechanical toothbrush to ensure it labored earlier than placing it available on the market. 

“You might be telling me that we’re making $100 million choices and we don’t have time to guage whether or not they’re good choices?” he stated incredulously to former Amazon Studios head Roy Worth. “There should be a means for us to see what is going to work and what gained’t, so we don’t should make all these choices in a vacuum.” 

Advertisements

He then proceeded to tick off a laundry record of all the weather that make present (humor, betrayal, violence, cliffhangers, and so forth.), saying, “This should not be that tough.”

A behemoth like Amazon shopping for MGM could, equally, not be that tough. However whether or not it’s proper for shoppers and the vitality of the leisure trade is one other story.