Is $ 8.45 billion buying Amazon a Hollywood monopoly?

Amazon bought a library of 4,000 movies and 17,000 TV episodes to sell you more tube socks. That sums up the state of Hollywood in 2021, when movies and TV shows are offered on the cheap – often free – to trick you into buying something else.

Verizon is offering Disney + to sell you a phone plan. Apple has ceded its video service to anyone who bought a new device.

Some companies believe in the power of Hollywood as a marketing tool so much that they spend billions of dollars on acquisitions. AT&T paid Time Warner $ 85 billion to sell more phone subscriptions. Amazon just spent over $ 8 billion on MGM to attract more customers to its Prime membership.

Now none of us really know if it works. AT&T lost market share by owning Time Warner and is now selling the business. Apple and Amazon say their entertainment businesses have helped them, but they offer no hard evidence.

It could also be that the people who run these companies just like to go to fancy parties and hang out with JJ Abrams and Michael B. Jordan.

Recent successful foreigners in Hollywood realized that there was little natural synergy between filmmaking and their core business. Comcast likes to talk about a symphony between NBC and its cable box, but NBCUniversal did well because Comcast hired smart people to run it and got out of their way.

I have a few thoughts on what this long-term Hollywood product devaluation means, but I got a lot of questions about the Amazon-MGM deal from readers this week. After a few busy weeks, I decided to take advantage of this long weekend to answer readers’ questions.

(If for some reason you want to know more about this topic, check out CBS this morning and KCRW company).

“It’s going to suck having to subscribe to each different service to access each studio and network library. It sounds like a big anti-consumer movement that shouldn’t agree with the public or the government. “- Jay skotcher

I start to see #antitrust Amazon worries $ AMZN purchase of MGM. I see the potential; however, IMO, this movement is for content (mainly “vintage” television programming), without grabbing much more market share. Thoughts? – Lance A Schart, CDW

Governments are already reviewing antitrust cases against Amazon, which is accused of punishing third-party merchants in a way that inflates prices and reduces competition in ways that keep them artificially low. The case against Amazon is best described in Lina Khan’s now famous 2017 essay in the Yale Legal Journal.

But if the Justice Department tries to block Amazon’s acquisition of MGM for antitrust reasons, it won’t have much to do with MGM and everything to do with Amazon’s power everywhere else.

MGM could improve Amazon’s success rate when making TV shows and movies. But Amazon already makes TV shows and movies, and it’s not the dominant player. It is at best second behind Netflix and at worst closer to fifth in terms of cultural relevance. In terms of income, it’s even smaller.

MGM does not change the balance of power so much. It’s a small studio that’s overshadowed by those owned by other entertainment companies.

I suspect consumer advocates will make two broader points.

Gifting TV shows and movies make Amazon a more attractive destination for shoppers? Yes. Does forcing customers to pay for 6, 8 or 10 services increase prices? Yes too.

But, on this second point, the solution to this problem is ironically more consolidation. Speaking of…

Merger / acquisition predictions for small players like ViacomCBS, Lionsgate, AMC, etc.? – Dave martinson, host of Nowstalgia Pod

All the businesses that seemed small before the recent deals seem even smaller now. This includes ViacomCBS, Lions Gate, and AMC Networks. It could include NBCUniversal as well, although its management swears they’re happy with its current size.

People don’t want to pay for 8 different services and spend 20 minutes figuring out which show they want. And companies like ViacomCBS can’t justify spending more than $ 10 billion a year on programming if its streaming service isn’t one of the biggest players.

Over time, the industry will consolidate behind a few major players, the broadcast networks of the streaming age. That doesn’t rule out niche services, which are the cable networks of the streaming age. But these niche services are much, much smaller businesses than the old cable networks, and therefore cannot support the large state-owned companies. At least not for the moment.

Which of the remaining players will last? Ask yourself which service is essential. Is it Paramount +? HBO Max? Peacock? Shudder?

With the acquisition of MGM by Amazon, what happens to the shows produced by MGM TV for other streamers / networks? The story of Handmaid for Hulu, Fargo for FX and Vikings: Valhalla for Netflix to name a few. – NetflixStan

Nothing at first. Hulu retains the rights to “The Handmaid’s Tale” for as long as it continues to order new seasons, and then for at least a few years after that. The same goes for “Fargo” on FX and “Vikings: Valhalla” on Netflix.

Amazon is playing the long game here – the very long game. Most of MGM’s film library has already been licensed to Paramount + for the next two years. His films will hit theaters for a year or two. Its most popular TV shows are blocked on competing services.

But you can afford to play the long game when you’re already spending billions of dollars a year on a streaming service that’s more or less a marketing tool.

Why do people still say record companies are ending? Are they not more powerful than ever? – Frances McCahon, splice

People are interested in topics other than Amazon!

Two developments have changed the record world which seem contradictory, but which are not. Social media and streaming have given artists more power over their careers than ever before. They can record music and stream it to streaming services, then use social media to promote it for far lower prices than it used to cost.

If they release a song that becomes a hit on their own, then they can claim ownership from any label that tries to sign them.

But that doesn’t mean they don’t want to sign with a record company. Labels still provide all kinds of services and support that artists can use, from initial capital to overseas relationships. Record companies are making more money than they’ve been in years from streaming services, giving them even more money to waste on signing TikTok stars.

Do I really have to watch all the Marvel movies in order? –Matt Boyle, Bloomberg News

No. You might not want to jump into “Avengers: Infinity War” without knowing what came before it. But I’ve always had a go-to approach to Marvel movies. I’ve still never seen half a dozen films from the Marvel Cinematic Universe, including “Captain America: The First Avenger”, “Doctor Strange” and “Ant-Man and the Wasp”. I can’t defend myself at Comic-Con, but I can understand good versus evil. – Lucas Shaw

The best of Screentime (and other things)

Cinema is back in force

“A Quiet Place Part II” grossed nearly $ 60 million in North America this weekend, the largest opening since the start of the pandemic.

You’re about to read a lot of box office comeback stories, and movie theaters aren’t dying. They’re both true, but it’s also a straw man argument made by journalists whose sources are movie theater owners and mainstream theatrical distribution executives.

Cinephiles are thrilled that theaters are open again and are rushing now that they are vaccinated (hopefully). Yet, many people still prefer to watch movies at home. Before the pandemic, most studios only satisfied the first group. Now they are trying to satisfy them both.

Universal wants more parents to sign up for Peacock

Speaking of streaming movies… Universal will release a sequel to the hit movie “Boss Baby” on its Peacock streaming service the same day he appears in theaters. This is the first time that Universal has released a new movie in this way.

Universal was the first major studio to release movies online during the pandemic, but it offered “Trolls World Tour” for rent for $ 19.99. This gambit forced theaters to finally give up 90 days between a movie’s theatrical release and at home. So credit Universal for changing the way movies are shown in the home.

But no other studio has adopted the model. Instead, they started streaming movies at no additional cost (or, in Disney’s case, $ 30 more). This is now the norm. And so Universal adopts the same model as Netflix, Amazon, Warner Bros. / HBO Max and Disney / Disney +.

Also in the graphics …

John Cena apologizes for calling Taiwan a country

Cena apologized to Chinese viewers after referring to Taiwan as a country.