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2021-06-02
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Amazon: The Brilliance Behind The MGM Purchase As Its Offensive And Defensive
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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":113097485,"tweetId":"113097485","gmtCreate":1622582710047,"gmtModify":1631892239053,"author":{"id":3566218798350603,"idStr":"3566218798350603","authorId":3566218798350603,"authorIdStr":"3566218798350603","name":"MCYR","avatar":"https://static.tigerbbs.com/d0a29de257327dedf4ada72586cf9c09","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":6,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":7,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p>coolz</p></body></html>","htmlText":"<html><head></head><body><p>coolz</p></body></html>","text":"coolz","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/113097485","repostId":1169405526,"repostType":4,"repost":{"id":"1169405526","kind":"news","pubTimestamp":1622558396,"share":"https://ttm.financial/m/news/1169405526?lang=&edition=full","pubTime":"2021-06-01 22:39","market":"us","language":"en","title":"Amazon: The Brilliance Behind The MGM Purchase As Its Offensive And Defensive","url":"https://stock-news.laohu8.com/highlight/detail?id=1169405526","media":"seekingalpha","summary":"Summary\n\nAmazon just strengthened its position by taking a chess piece off the table while dealing a","content":"<p><b>Summary</b></p>\n<ul>\n <li>Amazon just strengthened its position by taking a chess piece off the table while dealing a blow to its competitors leaving one less major media company to be acquired.</li>\n <li>$8.45 billion is a drop in the bucket for Amazon as they can write a check and replenish the cash on its balance sheet with Q2 net income.</li>\n <li>MGM provides Amazon with a treasure trove of I.P. and content while enhancing Prime, while providing new sources of revenue.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f993c6a99f047b97fc636df4d1472117\" tg-width=\"768\" tg-height=\"512\"><span>Photo by Sundry Photography/iStock Editorial via Getty Images</span></p>\n<p>Content has become a valuable commodity in the digital era. The hours in a day are set in stone, and how people allocate their content consumption is what media companies fight over. In Q1 of 2021,Disney(DIS) had 103.6 million subscribers to Disney+, 13.8 million for ESPN+ and 41.6 million across Hulu's options.Netflix(NFLX) finished Q1 with 208 million memberships, whileAT&T(T) had 44.2 million domestic HBO Max & HBO subscribers and 64 million worldwide.Amazon(AMZN) just announced they would be purchasing MGM(OTC:MGMB)for $8.45 billion. This is a brilliant acquisition for AMZN as it strengthens Prime offensively while reinforcing it defensively.</p>\n<p>AMZN has committed to content and, over the years, expanded its depth. AMZN acquired a company called Twitch, and unless you're a gamer, there is a low probability you know what Twitch is. Twitch is the YouTube of gaming mixed with an ESPN and professional league aspect. In March 2021, more than 2.23 billion hours of streaming content were watched onTwitch, with more than 9 million people streaming themselves playing video games. On the Prime side, Amazon Studios won 2 Academy Awards and had 12 nominations. Over 175 millionPrime membersstreamed content over the past year, with streaming hours increasing more than 70% YoY. The MGM acquisition provides a treasure trove of content, franchises that can be built upon, and a direct line onto the big screen.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/bd14793a79a19322f5f021f1e6a061b7\" tg-width=\"640\" tg-height=\"269\"><span>(Source: Amazon)</span></p>\n<p><b>Financially $8.45 billion is a drop in the bucket for Amazon</b></p>\n<p>At the close of 2020, AMZN was still growing faster than actual growth companies. AMZN has increased its annual revenue by $279.06 billion or 260.79% from the close of the 2015 fiscal year. Since 2015 AMZN's revenue has had an average annual growth rate of 29.38%. In 2019 its YoY growth rate was 20.45%, and in 2020 AMZN grew at a rate of 37.62%. In 2020 AMZN had increased its cash on hand by $6.03 billion or 16.71% and its marketable securities by 123.33% to $42.27 billion from $18.93 billion.</p>\n<p>Q1 2021 was the first time AMZN exceeded $100 billion in revenue in any of their Q1s to date. AMZN's Q1 revenue has increased by $72.80 billion (203.85%) over the past 4 years. AMZN has built a trend of sequentially increasing their net income QoQ. Over the past three-quarters, AMZN's net income grew by 20.75%, 14.07%, and 12.25%. In Q1 2021, AMZN generated $8.11 billion in net income, which was 30.13% of the total net income ($26.90 billion) produced in 2020.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/2761d38cf7c8e319ac813ea55a428361\" tg-width=\"640\" tg-height=\"459\"><span>(Source: Amazon)</span></p>\n<p>AMZN has $33.83 billion in cash on its balance sheet and another $39.44 billion in marketable securities. AMZN doesn't need to borrow one red cent to acquire MGM; they can simply write a check. AMZN's net income has been sequentially increasing QoQ and in Q1 2021 exceeded $8 billion. If this trend continues, the net income generated in Q2 will replenish the depleted cash on AMZN's balance sheet from acquiring MGM. This deal is a drop in the bucket because of AMZN's revenue and net income growth metrics. Based on its previous trends AMZN will continue to grow, and they will be pulling in around the $8.45 billion acquisition price every 3 months in net income. Spending money to make money is nothing new for AMZN, as they have allocated astronomical sums of capital building out their business. The billions being spent are a drop in the bucket as the MGM acquisition has a chance at being 3 months profit at some point in 2021.</p>\n<p><b>The MGM deal isn't just about Intellectual Property, it's about revenue</b></p>\n<p>Additional reasons why the MGM deal is a tremendous strategic play are hidden in plain sight within thesupplemental financial information and business metricsAMZN provided during the Q1 earnings release. Subscription services include annual and monthly fees associated with Amazon Prime memberships and digital video, audiobook, digital music, e-book, and other non-AWS subscription services. Over the past 5 quarters, this business segment has had an average annual growth rate of 7.69% while increasing its revenue by $2.02 billion (36.43%) YoY. AMZN's Other line item includes sales of advertising services and sales related to other service offerings. While YoY, this business segment has increased by $3 billion (76.78%), it incurred a more significant drop from Q4 to Q1 in 2021 by -$171 million than it did in 2020.</p>\n<p>The MGM deal can help grow both of these business segments and add the revenue MGM currently generates to AMZN's business. MGM can add an immediate impact to Prime by increasing its intellectual property and expanding its catalog. Believe it or not, there are people who don't have Prime, which can help entice them to switch to Prime or include Prime in their monthly services. Next, AMZN can become more enticing to run ads on. Not everyone uses the dedicated Prime app, and people log into the main Amazon website to utilize Prime Video. AMZN has been generating revenue from running sponsored ads on their site, and the dip from Q4 to Q1 has expanded. Adding MGM's library to Prime could increase traffic to AMZN's site while adding a new dimension of ad placement for AMZN.</p>\n<p>AMZN is in the business of making money.AMZNbreached the 200 million Prime member threshold in 2021. Maybe AMZN will increase its Prime membership by $1 or $2 annually after the MGM acquisition. How many people would leave? This would be $200 million in revenue for every $1 increase on the Prime membership. I have a feeling that unless Prime increased by a drastic amount, the amount of revenue lost to cancelations would be absorbed by the additional generated revenue. AMZN could easily increase Prime a few dollars annually after MGM is incorporated, and my guess is we would see a QoQ increase in revenue on the Subscription services line item.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/def7ca4065550bcc4f78c7e3f45e94c5\" tg-width=\"640\" tg-height=\"366\"><span>(Source: Amazon)</span></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7afa23d930372dcacaad1bb60b0b0714\" tg-width=\"640\" tg-height=\"741\"><span>(Source: Amazon Q1 2021 report)</span></p>\n<p><b>Acquiring MGM studios is a fantastic offensive move</b></p>\n<p>AMZN is playing offense, and I love it. AMZN has been in the content business for years and has acquired companies such as Twitch and audible to expand their reach and offerings. AMZN understands that the amount of quality intellectual property (I.P.) is just as important as future creations when it comes to content. This is one of the reasons AMZN started creating its own shows proprietary to Prime and created Amazon Studios to create its own movies. Creating content such as the Jack Ryan Series or Movies like Without Remorse AMZN is creating buzz about their new projects and providing unique offerings for their subscribers while increasing their I.P. and catalog of offerings in video.</p>\n<p>MGM is one of the premier studios that owns some of the most well-known movies and tv shows in the world. AMZN will own the rights to more than 4,000 movies in addition to some very large T.V franchises. Part of MGM's movie catalog includes the entire James Bond franchise, Rocky franchise including the new Creed movies, and other films, including 12 Angry Men, Silence of the Lambs, Dances with Wolves, and Raging Bull. MGM also has 17,000 T.V shows, including Fargo, The Handmaid's Tale, and Vikings. MGM's treasure trove of I.P. boasts a catalog that has won more than 180 Academy Awards and 100 Emmys. This bolt-on acquisition will create a massive addition of content to Prime's current catalog.</p>\n<p>AMZN is going on the offensive and increasing its media operations. This isn't just about I.P.; it's about the future. AMZN has been serious about T.V. and Movies for some time, investing capital into these projects. AMZN can now combine its efforts with MGM and create world-class content for the big screen, for T.V., and for Prime. AMZN will have tremendous options as new movies can come out on Prime days, weeks, or months before other networks or services. The MGM acquisition just put everyone on notice, and I would be shocked if this is the last acquisition in the space AMZN announces. I think AMZN is looking at the WarnerMedia deal and wants to solidify its position in the field. I think sports will be the next area where AMZN allocates capital.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/845d0b5b40726921960078e8ca32a3cf\" tg-width=\"640\" tg-height=\"427\"><span>(Source: Goalshakers)</span></p>\n<p><b>Defensively the MGM acquisition strengthens Amazon's position while hurting its competitors</b></p>\n<p>From a defensive aspect, AMZN just dealt a blow to its competitors. While an argument can be made about which streaming service is the best, many are subscribers of multiple services. Who has a better service is an unwinnable debate because it comes down to personal preference. What AMZN just did was take a chess piece off the table and increased their I.P. and content. As further consolidation occurs, I think we will see users reduce the number of streaming services they subscribe to.</p>\n<p>I think the real losers here are Apple (AAPL) and Netflix. NFLX was dealt a considerable blow when Disney created their streaming service and pulled the Marvel content. NFLX has also been hurt by the amount of content other services have incorporated into their catalogs that weren't available on NFLX. I also believe that AAPL has lost a lot of ground on the streaming front due to the consolidation of content with other providers. Looking at AAPL's service, it's hard to compare to NFLX, Disney+, and what the WarnerMedia combination with Discovery will become.</p>\n<p>Take Prime's other services out of the picture. From a dedicated streaming service, Prime got a lot stronger and became more appealing with the addition of MGM. If the past is any indication of the future, AMZN is going to allocate more than enough capital to expand their future content through MGM and continue to be a film powerhouse on the big screen while expanding their Prime-only offerings. When the merger between WarnerMedia and Discovery occurs, I believe this will add another blow to NFLX and AAPL, as Prime members are unlikely to drop Prime due to the added benefits throughout the AMZN ecosystem. I think we're going to see further consolidation as the acquisition of MGM may start a buying spree to stay relevant in the streaming space.</p>\n<p><b>Conclusion</b></p>\n<p>AMZN just made one hell of a chess move taking MGM off the table and bringing them into the fold. This puts them on the offensive by increasing their current I.P. and video catalog while adding a layer of defense and possibly disrupting other streaming services. AMZN has more than enough cash on hand to write a check for MGM and is approaching the point where $8.45 billion is generated in net income over 1 quarter. MGM provides opportunities to expand AMZN's reach while taking a prominent movie studio off of the table, leaving fewer options for the competition to acquire. I think this deal is brilliant as the transition is easily embedded in AMZN's ecosystem, fortifies AMZN's position in streaming, provides access to the big stage, and hurts their competitors at the same time. Strategically when you can strengthen your position while weakening your competitors, it's a decisive win.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Amazon: The Brilliance Behind The MGM Purchase As Its Offensive And Defensive</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAmazon: The Brilliance Behind The MGM Purchase As Its Offensive And Defensive\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-01 22:39 GMT+8 <a href=https://seekingalpha.com/article/4432210-amazon-the-brilliance-behind-the-mgm-purchase-as-its-offensive-and-defensive><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nAmazon just strengthened its position by taking a chess piece off the table while dealing a blow to its competitors leaving one less major media company to be acquired.\n$8.45 billion is a ...</p>\n\n<a href=\"https://seekingalpha.com/article/4432210-amazon-the-brilliance-behind-the-mgm-purchase-as-its-offensive-and-defensive\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://seekingalpha.com/article/4432210-amazon-the-brilliance-behind-the-mgm-purchase-as-its-offensive-and-defensive","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1169405526","content_text":"Summary\n\nAmazon just strengthened its position by taking a chess piece off the table while dealing a blow to its competitors leaving one less major media company to be acquired.\n$8.45 billion is a drop in the bucket for Amazon as they can write a check and replenish the cash on its balance sheet with Q2 net income.\nMGM provides Amazon with a treasure trove of I.P. and content while enhancing Prime, while providing new sources of revenue.\n\nPhoto by Sundry Photography/iStock Editorial via Getty Images\nContent has become a valuable commodity in the digital era. The hours in a day are set in stone, and how people allocate their content consumption is what media companies fight over. In Q1 of 2021,Disney(DIS) had 103.6 million subscribers to Disney+, 13.8 million for ESPN+ and 41.6 million across Hulu's options.Netflix(NFLX) finished Q1 with 208 million memberships, whileAT&T(T) had 44.2 million domestic HBO Max & HBO subscribers and 64 million worldwide.Amazon(AMZN) just announced they would be purchasing MGM(OTC:MGMB)for $8.45 billion. This is a brilliant acquisition for AMZN as it strengthens Prime offensively while reinforcing it defensively.\nAMZN has committed to content and, over the years, expanded its depth. AMZN acquired a company called Twitch, and unless you're a gamer, there is a low probability you know what Twitch is. Twitch is the YouTube of gaming mixed with an ESPN and professional league aspect. In March 2021, more than 2.23 billion hours of streaming content were watched onTwitch, with more than 9 million people streaming themselves playing video games. On the Prime side, Amazon Studios won 2 Academy Awards and had 12 nominations. Over 175 millionPrime membersstreamed content over the past year, with streaming hours increasing more than 70% YoY. The MGM acquisition provides a treasure trove of content, franchises that can be built upon, and a direct line onto the big screen.\n(Source: Amazon)\nFinancially $8.45 billion is a drop in the bucket for Amazon\nAt the close of 2020, AMZN was still growing faster than actual growth companies. AMZN has increased its annual revenue by $279.06 billion or 260.79% from the close of the 2015 fiscal year. Since 2015 AMZN's revenue has had an average annual growth rate of 29.38%. In 2019 its YoY growth rate was 20.45%, and in 2020 AMZN grew at a rate of 37.62%. In 2020 AMZN had increased its cash on hand by $6.03 billion or 16.71% and its marketable securities by 123.33% to $42.27 billion from $18.93 billion.\nQ1 2021 was the first time AMZN exceeded $100 billion in revenue in any of their Q1s to date. AMZN's Q1 revenue has increased by $72.80 billion (203.85%) over the past 4 years. AMZN has built a trend of sequentially increasing their net income QoQ. Over the past three-quarters, AMZN's net income grew by 20.75%, 14.07%, and 12.25%. In Q1 2021, AMZN generated $8.11 billion in net income, which was 30.13% of the total net income ($26.90 billion) produced in 2020.\n(Source: Amazon)\nAMZN has $33.83 billion in cash on its balance sheet and another $39.44 billion in marketable securities. AMZN doesn't need to borrow one red cent to acquire MGM; they can simply write a check. AMZN's net income has been sequentially increasing QoQ and in Q1 2021 exceeded $8 billion. If this trend continues, the net income generated in Q2 will replenish the depleted cash on AMZN's balance sheet from acquiring MGM. This deal is a drop in the bucket because of AMZN's revenue and net income growth metrics. Based on its previous trends AMZN will continue to grow, and they will be pulling in around the $8.45 billion acquisition price every 3 months in net income. Spending money to make money is nothing new for AMZN, as they have allocated astronomical sums of capital building out their business. The billions being spent are a drop in the bucket as the MGM acquisition has a chance at being 3 months profit at some point in 2021.\nThe MGM deal isn't just about Intellectual Property, it's about revenue\nAdditional reasons why the MGM deal is a tremendous strategic play are hidden in plain sight within thesupplemental financial information and business metricsAMZN provided during the Q1 earnings release. Subscription services include annual and monthly fees associated with Amazon Prime memberships and digital video, audiobook, digital music, e-book, and other non-AWS subscription services. Over the past 5 quarters, this business segment has had an average annual growth rate of 7.69% while increasing its revenue by $2.02 billion (36.43%) YoY. AMZN's Other line item includes sales of advertising services and sales related to other service offerings. While YoY, this business segment has increased by $3 billion (76.78%), it incurred a more significant drop from Q4 to Q1 in 2021 by -$171 million than it did in 2020.\nThe MGM deal can help grow both of these business segments and add the revenue MGM currently generates to AMZN's business. MGM can add an immediate impact to Prime by increasing its intellectual property and expanding its catalog. Believe it or not, there are people who don't have Prime, which can help entice them to switch to Prime or include Prime in their monthly services. Next, AMZN can become more enticing to run ads on. Not everyone uses the dedicated Prime app, and people log into the main Amazon website to utilize Prime Video. AMZN has been generating revenue from running sponsored ads on their site, and the dip from Q4 to Q1 has expanded. Adding MGM's library to Prime could increase traffic to AMZN's site while adding a new dimension of ad placement for AMZN.\nAMZN is in the business of making money.AMZNbreached the 200 million Prime member threshold in 2021. Maybe AMZN will increase its Prime membership by $1 or $2 annually after the MGM acquisition. How many people would leave? This would be $200 million in revenue for every $1 increase on the Prime membership. I have a feeling that unless Prime increased by a drastic amount, the amount of revenue lost to cancelations would be absorbed by the additional generated revenue. AMZN could easily increase Prime a few dollars annually after MGM is incorporated, and my guess is we would see a QoQ increase in revenue on the Subscription services line item.\n(Source: Amazon)\n(Source: Amazon Q1 2021 report)\nAcquiring MGM studios is a fantastic offensive move\nAMZN is playing offense, and I love it. AMZN has been in the content business for years and has acquired companies such as Twitch and audible to expand their reach and offerings. AMZN understands that the amount of quality intellectual property (I.P.) is just as important as future creations when it comes to content. This is one of the reasons AMZN started creating its own shows proprietary to Prime and created Amazon Studios to create its own movies. Creating content such as the Jack Ryan Series or Movies like Without Remorse AMZN is creating buzz about their new projects and providing unique offerings for their subscribers while increasing their I.P. and catalog of offerings in video.\nMGM is one of the premier studios that owns some of the most well-known movies and tv shows in the world. AMZN will own the rights to more than 4,000 movies in addition to some very large T.V franchises. Part of MGM's movie catalog includes the entire James Bond franchise, Rocky franchise including the new Creed movies, and other films, including 12 Angry Men, Silence of the Lambs, Dances with Wolves, and Raging Bull. MGM also has 17,000 T.V shows, including Fargo, The Handmaid's Tale, and Vikings. MGM's treasure trove of I.P. boasts a catalog that has won more than 180 Academy Awards and 100 Emmys. This bolt-on acquisition will create a massive addition of content to Prime's current catalog.\nAMZN is going on the offensive and increasing its media operations. This isn't just about I.P.; it's about the future. AMZN has been serious about T.V. and Movies for some time, investing capital into these projects. AMZN can now combine its efforts with MGM and create world-class content for the big screen, for T.V., and for Prime. AMZN will have tremendous options as new movies can come out on Prime days, weeks, or months before other networks or services. The MGM acquisition just put everyone on notice, and I would be shocked if this is the last acquisition in the space AMZN announces. I think AMZN is looking at the WarnerMedia deal and wants to solidify its position in the field. I think sports will be the next area where AMZN allocates capital.\n(Source: Goalshakers)\nDefensively the MGM acquisition strengthens Amazon's position while hurting its competitors\nFrom a defensive aspect, AMZN just dealt a blow to its competitors. While an argument can be made about which streaming service is the best, many are subscribers of multiple services. Who has a better service is an unwinnable debate because it comes down to personal preference. What AMZN just did was take a chess piece off the table and increased their I.P. and content. As further consolidation occurs, I think we will see users reduce the number of streaming services they subscribe to.\nI think the real losers here are Apple (AAPL) and Netflix. NFLX was dealt a considerable blow when Disney created their streaming service and pulled the Marvel content. NFLX has also been hurt by the amount of content other services have incorporated into their catalogs that weren't available on NFLX. I also believe that AAPL has lost a lot of ground on the streaming front due to the consolidation of content with other providers. Looking at AAPL's service, it's hard to compare to NFLX, Disney+, and what the WarnerMedia combination with Discovery will become.\nTake Prime's other services out of the picture. From a dedicated streaming service, Prime got a lot stronger and became more appealing with the addition of MGM. If the past is any indication of the future, AMZN is going to allocate more than enough capital to expand their future content through MGM and continue to be a film powerhouse on the big screen while expanding their Prime-only offerings. When the merger between WarnerMedia and Discovery occurs, I believe this will add another blow to NFLX and AAPL, as Prime members are unlikely to drop Prime due to the added benefits throughout the AMZN ecosystem. I think we're going to see further consolidation as the acquisition of MGM may start a buying spree to stay relevant in the streaming space.\nConclusion\nAMZN just made one hell of a chess move taking MGM off the table and bringing them into the fold. This puts them on the offensive by increasing their current I.P. and video catalog while adding a layer of defense and possibly disrupting other streaming services. AMZN has more than enough cash on hand to write a check for MGM and is approaching the point where $8.45 billion is generated in net income over 1 quarter. MGM provides opportunities to expand AMZN's reach while taking a prominent movie studio off of the table, leaving fewer options for the competition to acquire. I think this deal is brilliant as the transition is easily embedded in AMZN's ecosystem, fortifies AMZN's position in streaming, provides access to the big stage, and hurts their competitors at the same time. Strategically when you can strengthen your position while weakening your competitors, it's a decisive win.","news_type":1,"symbols_score_info":{"AMZN":0.9}},"isVote":1,"tweetType":1,"viewCount":396,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":5,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/113097485"}
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