Streaming Services’ Acquisitions: Shaken, Not Stirred

The days of small studios being involved in the production-to-distribution pipeline of film and television may well be over. Streaming platforms have become central in modern media consumption. Netflix, HBO Max, Hulu, Disney+, and Amazon Prime Video (as well as a consortium of other companies that seems to grow by each passing day) all aggressively compete for not only subscribers but also exclusive content and high-profile intellectual properties. 

Although Metro-Goldwyn Mayer (MGM) does not command a gargantuan stake in the film production and theatrical release market, Amazon Prime’s acquisition of MGM in 2022 strengthened its media platform considerably with titles such as Rocky, Legally Blonde, and the 007 (James Bond) franchise. The nearly $8.5 billion deal provided Amazon with MGM’s film and television library, though it did not grant it complete creative control over the future of MGM’s properties. Notably, the 007 franchise remained partially independent under EON Productions. The British production company, controlled by the Broccoli and Wilson family, still maintained authority over creative decisions. 

This changed on February 20th of this year, when it was announced that Amazon MGM would now have creative control over the James Bond character (the intellectual property rights remain in the hands of Barbara Broccoli and Michael Wilson). The change of creative control and distribution rights of the 007 franchise is illustrative of the transformation of the entertainment-media industry and regulatory scheme and essentially gives Amazon the right to take the franchise in any creative direction that it likes, including television spin-offs, character origin stories, and merchandising.

Under EON Production’s control, the Bond franchise had prioritized artistic vision over corporate interests, to the extent that it could. Broccoli had expressed disdain over Amazon executives referring to the future of the franchise as “content.” Moreover, Broccoli had privately provided her thoughts on Amazon in a rather curt manner: “These people are *** idiots.” Historically, Bond has been a staple of theatrical releases for decades, but Amazon’s endeavor into the streaming market raises questions about whether or not this will remain true. 

Intellectual property exchanges in entertainment are not a novel concept. In 1996, The Turner Deal integrated New Line Cinema and Castle Rock Entertainment into Warner Bros, while also giving Time Warner Entertainment access to MGM’s pre-1986 library, which included classics such as The Wizard of Oz and Gone with the Wind. This also explains why Amazon MGM does not own the rights to these titles. In other rather recent history, the distribution rights starting with the 2006 film Casino Royale, had been based at Sony Pictures Entertainment. That contract expired in 2015, which led to the 25th installment in the 007 franchise, No Time To Die, distributed by United Artists Releasing, which at the time was a joint venture of MGM and Annapurna Pictures (now run by Amazon MGM). 

Vertical mergers are distinct from horizontal mergers in that they do not directly eliminate a competitor from the marketplace. Instead, vertical mergers integrate different levels of the production and distribution process. This both raises concerns about reduced market competition, but also theoretically increases efficiency. Under 15 U.S.C. § 18, vertical mergers are assessed based on their potential to substantially lessen competition or create monopolies. After a Federal Trade Commission (FTC) review, it was decided that Amazon’s acquisition of MGM did not eliminate a direct competitor. Rather, just as noted by the European Committee, MGM's position as one of the smallest major Hollywood studios shielded the acquisition from antitrust scrutiny. Amazon’s acquisition of MGM was its second largest in history and came a few years after Amazon’s $13.7 billion deal with Whole Foods. 

A recent case that parallels Amazon and MGM is Microsoft (manufacturer of the Xbox) and its acquisition of Activision Blizzard (a video games holding company). In both cases, an antitrust analysis had to be conducted. However, in the FTC’s lawsuit against Microsoft, the concern was heavily focused on dominance in the gaming sector. The FTC argued that Microsoft could leverage its control over Activision’s game catalog in order to undermine competitors, like Sony Playstation and Nintendo, by making gaming titles exclusive to the Xbox platform. 

In contrast to the case of Amazon and MGM, the gaming industry is dominated by only a few hardware and distribution companies and the potential for stifled competition is much higher. Despite the FTC’s attempts to block the deal, Microsoft completed the $69 billion acquisition in October 2023. Microsoft successfully navigated the antitrust challenges by making concessions, such as agreements to keep the blockbuster video game franchise Call of Duty on PlayStation and licensing deals ensuring cloud gaming competitors could access Activisions’ titles.

Ultimately, Amazon’s ownership of MGM and creative control over the 007 franchise demonstrates the rapid changes that streaming platforms are having in the entertainment industry. Whatever road Amazon decides to take with James Bond, vertical amalgamations and acquisitions in the film and television industry pose serious threats to creative novelty and independence.

*The views expressed in this article do not represent the views of Santa Clara University.