Jeff Bezos continues to grow his empire after recently closing Amazon’s $8.45 billion acquisition of MGM Studios. In the battle for people’s attention, Amazon has added 25,000 content hours of reinforcements, featuring classic and beloved sagas like James Bond and Rocky.
Through acquiring well-known movie franchises, Amazon provides what movie industry professionals call “preawareness.” Preawareness makes it easier for studios to market a movie to existing audiences, widens the potential audience across generations through nostalgia, and allows for greater merchandising opportunities. This makes investing millions of dollars in a film a less risky proposition.
Last year, U.S. Senators introduced a bill that would prevent $600+ billion companies from making acquisitions, putting Amazon, Meta, Microsoft, and others in the anti-trust crosshairs. While many claim these companies are engaging in monopolistic behavior, others argue that acquisitions actually promote increased entrepreneurship, innovation, and efficiency. The prospect of being bought by a behemoth can actually increase competition.
In his book Zero to One, Peter Thiel argues that monopolies are drivers of progress, and that all companies should strive to be monopolies. It’s easy to wonder how large Amazon can grow before it gains the title of “monopoly” and Bezos dons a top-hat and cane. What do you think, is Amazon acquiring MGM an example of monopoly power, or just another move in the competitive streaming wars?