We’ve recently talked about how the pandemic may have a long-term impact on cinema attendance and the box office, with many folks getting used to the convenience and practicality of streaming big blockbusters at home. But it seems cinemas just can’t catch a break, because it was recently announced that Amazon will be buying legendary Hollywood studio MGM.
Make no mistake, this is all about streaming. Amazon Prime Video looks set to benefit greatly from this acquisition, helping the service compete with the likes of Netflix and Paramount+ in terms of films. Though Amazon does have its own film studio, and has had a hand in titles like the Academy Award-winning Manchester By The Sea, most films available to stream via Amazon Prime Video were licensed from other companies. As more and more companies try to launch their own streaming platforms, these licensing deals are increasingly difficult (and expensive) for the likes of Netflix and Amazon, so finding ways to get their own in-house content is hugely important.
Netflix has branched out into making more and more of its own original films – for better or worse! But Amazon is one of the world’s largest and most successful companies, having grown massively during the last year, and can throw its money around to buy up studios – and the rights to properties like The Lord of the Rings. We’ve recently seen Microsoft do something similar in the gaming realm, buying up Bethesda and adding that studio’s games to Xbox Game Pass. Amazon is doing the same thing with MGM.
I’ve seen some outlets trying to make the case that this is Amazon further diversifying its business model. What began as an online bookseller in the mid-1990s has grown to sell practically everything and has involvements and holdings in industries as far apart as space technology and baby nappies. But this MGM acquisition is not about diversification. Amazon doesn’t want to break into the film distribution market any more than they’re already involved; they want films, both old and new, to add to Amazon Prime Video for the sole purpose of driving more subscriptions. It’s that simple.
This is a hammer blow for cinemas and cinema chains already reeling from the pandemic and associated closures and cancellations. We’ve already seen many films that would otherwise have received a theatrical release go direct-to-streaming, and Amazon’s acquisition of MGM comes with the real threat of all future MGM titles following suit. There aren’t many studios the size of MGM, releasing multiple high-budget titles per year, so this is a coup for Amazon.
Upcoming titles like the sequel to Tomb Raider, Legally Blonde III, Soggy Bottom, and House of Gucci would have all been draws at reopened cinemas around the world, but their theatrical releases are now in doubt. And that’s before we even consider one of the biggest upcoming MGM titles (at least from a UK perspective!) No Time To Die, the latest instalment in the James Bond series.
It’s not unfair in the slightest to say that British cinemas have been desperately waiting for No Time To Die’s release, as no other upcoming film has quite as much potential to bring audiences back after well over a year of closures, lockdowns, and cancelled titles. Even the mere threat of No Time To Die going direct to streaming is enough to make a lot of people involved in the UK cinema industry very nervous, and I’m not sure we can rely on promises that the film will still meet its planned theatrical release in September – especially if the pandemic causes further disruption in the months ahead.
As I said when Microsoft acquired Bethesda, companies don’t spend these vast sums of money and expect nothing in return. With Amazon making this move to shore up and expand its library of streaming titles, any future MGM release now has the potential to end up on Amazon Prime Video either exclusively or alongside a release in cinemas. Even if imminent titles like No Time To Die meet their theatrical obligations – which will almost certainly be due to pre-existing contracts if it happens – future titles, both announced and unannounced, are almost certain to join Amazon’s streaming line-up. In short, cinemas may get a temporary reprieve from the fallout of this acquisition, but it won’t last much beyond the end of 2021.
The way people consume media has been changing for years. The pandemic may have accelerated some of those changes to light-speed, but it isn’t the fundamental cause of a shift in audiences away from cinemas and broadcast television to online on-demand streaming. Just like the pandemic isn’t the root cause of problems with many high street shops, it can’t be blamed for people moving en masse toward an all-digital streaming future. The future of companies like MGM is in the digital space, and unfortunately for cinemas that means fewer films, smaller audiences, and growing irrelevance as bigger titles bypass a theatrical release altogether. Even in the pre-pandemic years, going to the cinema had become, for many folks, an occasional treat rather than a regular outing, and this move is simply a reflection of the changing way in which people choose to watch films.
Amazon’s acquisition of MGM is a big deal, but it’s unlikely to be the last such move as the so-called “streaming wars” look for new battlefields. It isn’t yet clear how many streaming services people are willing to put up with, nor which will ultimately survive, so it seems inevitable that more big studios and distributors will eventually team up with – or be bought out by – other big players in the streaming landscape. None of which is particularly pro-consumer, it has to be said, but then again I’d rather see MGM films go to Amazon Prime Video – a streaming service I already have access to – than wait for MGM to set up their own “MGM Plus” or whatever they would’ve called it!
It’s a serious blow to cinemas in the medium-to-long-term, even if some titles scheduled for this year will still get a full theatrical release. But will audiences really care? As I said last time, the shift away from the cinema had already set in long before the pandemic struck, and with film studios and audiences alike having discovered the many advantages of at-home streaming, it seems like we’ll be seeing a lot more of this type of acquisition or merger in the months and years ahead, with many more films going direct-to-streaming in the very near future. MGM may be one of the biggest so far, but it won’t be the last. Cinema chains and owners are already feeling the effects.
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