Amazon's acquisition of MGM laid the groundwork for Amazon's recent commitment to the theatrical experience, enabling access to a library of IP and talent. Amazon engenders change, and the cinema industry is likely to feel the effects soon.
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Summary
Amazon acquired MGM in 2021 for $8.5bn—much of that for the brand name of a historic studio. The company is about to try something that hasn’t been achieved in many decades: launching a new studio with a global theatrical reach. If it succeeds, the price tag will look cheap. A new Omdia report in the Cinema and Movies Intelligence Service lays out the strategy behind the purchase.
Amazon acquires brand, studio, and library with MGM purchase
When Amazon announced its acquisition of MGM in late 2021, the purchase price was $8.45bn. The catalogue was valued at $3.4bn, with the rest of the purchase price being labelled goodwill. The launch of Amazon Studios in 2011 had not yet returned the IP needed, and it turns out that building a 100-year-old prestigious brand takes around 100 years. In essence, Amazon paid $5bn for a roaring lion and access to the high-quality talent that comes with it. One of the key drivers was to acquire readymade IP within the film and TV libraries, primed to be mined by the Amazon MGM theatrical team.
Amazon now looks ready to capitalize on this three-year-old acquisition, having become a member of the Motion Picture Association (MPA) in late November 2024; launched a global theatrical distribution network; acquired creative control over the jewel in MGM’s crown (actually the United Artists’ crown), James Bond; and embraced theatrical “financially and philosophically,” with a slate of up to 16 movies planned by 2027. This is a very different approach to both Netflix and Apple; it is much more about allying Amazon to cinemas than the two other non-studio streamers. No one has attempted to build a new studio for a long time, and Amazon has put in place the foundations for precisely that result. With Fox’s slate largely disappearing from cinemas, this effort could not be better timed. The lion of MGM is about to roar on your cinema screens again, helping push up studio output to pre-pandemic levels (studio slates for 2026 are not yet complete).
Figure 1: US major studios – first-run theatrical output, 2015–26
Source: Omdia
Amazon has the lowest proportion of IP among the larger studios and streamers, at around 30% of its library on Amazon Prime, and this was one of the reasons behind the MGM purchase. This is set to rise as that studio ramps up production. One of the IP linkups it does have is with toymaker Mattel, in the form of a Masters of the Universe movie to be released in 2026, with a very long gestation period now behind it. The most recent release is Jason Statham’s A Working Man, which has taken double its budget in cinemas so far and is approaching a theatrical breakeven before it goes to Amazon Prime for its next window.
The arrival of Amazon into the cinema world is likely to significantly alter the sector, as Amazon drives its businesses with data analytics, and increasingly AI, in a way that many in cinema do not yet do. The mining of MGM’s IP is a key reason for the acquisition, and will provide a rich seam of source material, but it is not the only reason. Could Amazon return to the idea of buying a cinema circuit, in the same way it bought Whole Foods when it entered that sector? How could Amazon’s control of online retail benefit cinema customers with or without buying a circuit?
Cinema is about to change, and Amazon has the clout to make this happen. The company is about to try something that hasn’t been achieved in many decades—launching a new studio with a global theatrical reach. If it succeeds, the price tag will look cheap. The cinema industry needs to wish it luck, as it will push up the supply of major movies.
Appendix
Further reading
Amazon MGM: Lion Ready to Roar to Plug Theatrical Gap (April 2025)
Author
David Hancock, Chief Analyst, Media & Entertainment
