What happened
Shares of Amazon (AMZN -1.65%) were trading up 2.7% as of 1:21 p.m. ET on Tuesday. By comparison, the Nasdaq Composite index was up 1.7%.
While the tech giant's upward move is coming during a broadly positive day for the markets, a Reuters article suggests that Amazon might be days away from closing its acquisition of the iconic Hollywood film studio MGM.
So what
Amazon announced its $8.45 billion offer to buy the studio and its catalog of more than 4,000 films, including classic franchises James Bond and The Pink Panther, in May 2021. Amazon received regulatory approval for the deal from the European Union's antitrust regulator Tuesday. The U.S. Federal Trade Commission is also expected to approve the purchase within days, according to Reuters.
Image source: Getty Images.
Now what
MGM's deep catalog would give Amazon's Prime Video service a wealth of added content to keep customers engaged, and Prime has already picked up a lot of momentum during the pandemic. The tech juggernaut reported that customers were engaging with Prime's benefits in record numbers during the fourth quarter. This fall, Amazon will release the highly anticipated original series The Lord of the Rings: The Rings of Power, which could attract more viewers to the service.
All the major streaming video services are competing to secure exclusive rights to content in their efforts to win more subscribers in a market that could hit 1.7 billion users by 2026, according to Digital TV Research. Amazon Prime is expected to rank along with Netflix and Walt Disney as one of the top streaming providers by 2026. Digital TV Research forecasts that Prime Video will have 245 million users by that year, compared to 275 million for Netflix.
Moreover, securing the MGM deal might further justify Amazon's recent move to raise the monthly cost of Prime by $2 to $14.99.
