After nearly 10 months’ worth of regulatory hurdles, Amazon and MGM announced earlier today that their massive merger is officially a done deal. For the head-dizzying cost of roughly $8.5 billion, the House of Bezos now owns the nonagenarian legacy studio comprised of “more than 4,000 film titles, 17,000 TV episodes, 180 Academy Awards, and 100 Emmy Awards,” according to a statement from Amazon.
The two companies couldn’t have picked a more awkward time to announce their unholy union. Just yesterday, progressive Democrats in both chambers of Congress unveiled their “Prohibiting Anticompetitive Mergers Act,” which could not only automatically block future acquisitions deals worth over $5 billion, but grant regulatory agencies the power to retroactively cancel mergers that went on to own more than 50 percent of a given market share. Although it will be an uphill battle to make the proposed bill into law, it’s not totally out of the realm of possibility. Even without it, it’s clear that a growing number of lawmakers aren’t too keen on these kinds of gigantic, industry-dominating deals.
Netflix No-Show —
MGM’s acquisition further consolidates the entertainment industry down into two warring factions — Disney and Amazon — although one major name is conspicuously absent from courtship by either side: Netflix. The heavy-hitter for streaming content is still very much its Own Thing at the moment, and we theorize that’s a very strategic decision on everyone’s part.
Both Disney and Amazon most likely know that consuming Netflix into either of their respective, Borg-like business models could easily cross regulators’ red lines, and therefore are avoiding broaching the subject at the moment. If this is the case, Netflix would be well aware of that fact, as well, and seek to massively expand its own empire in the meanwhile. Should there come a time when Amazon or Disney approaches it, Netflix hopes to be worth that much more money.
Something’s gotta give —
None of this is likely tenable in the long-run, however. Regulators are chomping at the bit to make an example out of one of these content behemoths, and likely just waiting for the right moment to make their move. Until then, however, expect a lot more IP reboots and cash-ins coming to Amazon Prime in the near future.
