Netflix and Apple interested in purchasing MGM

0
208

On January 27, The Information reported that Apple and Netflix are both interested in buying Metro-Goldwyn-Mayer Studios. The two firms have held talks with the entertainment company in hopes of acquiring its extensive media library, which includes the James Bond franchise.

CNBC reports insiders peg MGM’s current value in excess of $10 billion. But the Information notes the studio has a $7 billion asking price.

Why MGM is on the Auction Block

Founded in 1924, MGM has established itself as one of the most lauded studios in Hollywood history. The firm has produced a slew of critically acclaimed and commercially successful movies, including “The Wizard of Oz,” “West Side Story,” “Rocky,” and “The Silence of the Lambs.” As a result, it acquired other film companies like Orion Pictures and United Artists.

Advertisement
Build your hardware projects with Surcle.io today

Unfortunately, poor management decisions led MGM down a path of unprofitability that resulted in it racking up $4 billion in debt. Consequently, the studio declared bankruptcy in 2010, and a consortium of investment firms subsequently bought it. Since then, the brand’s new owners have revitalized it. In recent years, the firm has co-produced hit films such as the “Hobbit” trilogy and the 2018 “A Star Is Born” remake.

The studio has also launched several successful television series like A&E’s “Live PD” and Hulu’s “The Handmaid’s Tale.”

As a result, the investment groups that own MGM are looking to cash in on their rehabilitated asset. Indeed, corporations operating within the streaming video sector have recently been paying top dollar to acquire popular legacy media.

Why Apple and Netflix Want MGM’s Library

Apple and Netflix want to acquire MGM’s content library to increase their subscriber counts.

For the iPhone maker, the film studio’s wealth of movies and TV shows would buttress its Apple TV+ streaming service. Though the corporation launched its content platform to much fanfare last November, it hasn’t set the world on fire. Notably, critics decried the poor quality of its first wave of TV series.

Plus, other media giants debuted their subscription-video-on-demand (SVOD) services around the same time to greater acclaim and popularity.

As such, Apple could use MGM’s vast library to entice consumers who are unenthusiastic about its streaming platform. In addition, the corporation could up the ante by producing new versions of classic properties like “RoboCop” and “Pink Panther.” However, the electronic device manufacturer has never spent more than $3 billion to make a corporate acquisition. Therefore, the firm could decide that purchasing the film company is cost-prohibitive.

Conversely, Netflix has no problem spending lots of money to bolster its content library. Deadline reports the entertainment brand will spend around $17 billion on movies and TV shows this year. Accordingly, the company could view buying MGM as a worthwhile investment.

It’s worth noting the film studio’s catalog includes 4,000 movies, including more than 200 Academy Award-winning features.

If Netflix bought MGM, it could advertise that it’s the exclusive streaming home of a raft of beloved content. Moreover, the corporation could draw in subscribers by reviving “The Outer Limits” and expanding the “Hot Tub Time Machine” cinematic universe. Also, as the owner of those properties, it wouldn’t have to worry about losing their streaming rights to a rival firm.

LEAVE A REPLY

Please enter your comment!
Please enter your name here