Is the SEC and FTC ever going to do their job? They have failed us in the 21st century. Shareholder value over everything else. It would be nice for some regulation to attack all this rent seeking.
what job do you want the FTC to do here? I assume you think there is an antitrust angle on this potential acquisition? I am an economist and that is my field. I disagree with your take, if that is what you mean. This is a vertical merger. Vertical mergers are quite different in their welfare effects to consumers than horizontal mergers. Vertical mergers can frequently be welfare-improving to consumers. Indeed, this i…
Amazon is reportedly negotiating to acquire MGM for about $9B
101–110 of 255 posts
Re: Amazon is reportedly negotiating to acquire MGM for about $9B
#102Earlier quoted context omitted.
Certainly we're moving towards a more fragmented landscape although it's also the case that Netflix (for example) will only pay so much for the rights to stream content at any given time. I daresay many of the same people who complained about the cable bundle are now complaining about having to manage a bunch of different streaming services, a la carte streaming, and yes torrents. Although, to be honest, it's cheaper…
I agree that streaming is still cheaper, but some sort of mandatory licensing scheme for video content would be able to put a stop to the current balkanization of television content.
In any other industry, having companies compete against each other to create the best product in order to attract customers is the ideal situation... except television?
People might not like balkanization of content, but it forces different services to compete against each other in a way that produces more and better content overall. More to the point, it's frankly no different to how TV channels used to work in the past.
Re: Amazon is reportedly negotiating to acquire MGM for about $9B
#103Is the SEC and FTC ever going to do their job? They have failed us in the 21st century. Shareholder value over everything else. It would be nice for some regulation to attack all this rent seeking.
What is wrong with shareholder value over everything else? What is the else? Shareholders sink a ton of capital into companies and take on significant risk of loss, why can't they be compensated for it?
Re: Amazon is reportedly negotiating to acquire MGM for about $9B
#104Earlier quoted context omitted.
I’m all ears if you have a good idea. “Obviously ridiculous” sounds like a great standard to block an acquisition. Explain what’s obviously ridiculous about it. I judge these things on the potential for harm to consumers. I don’t see that here. Perhaps you do. Do you see this leading to increased prices or a reduction in quantity consumed? (And of what, btw?) That’s how we make these judgments so if it’s obvious to y…
> Do you see this leading to increased prices or a reduction in quantity consumed? We’re way past that at this point. Amazon is closer to a level of government than traditional company. They are already under multiple antitrust investigations in multiple countries and jurisdictions so it’s nuts for you to go all pikachu face on the comment that they may be guilty of such. The amount of power Amazon has over media, re…
> Amazon is closer to a level of government than traditional company.
I'm not sure what this could possibly mean.
> is a threat to a well regulated democracy
Ok - tell me how. Is Jeff Bezos going to... buy the Presidency? A Senate seat? Or... ? I really don't see what you have in mind.
> IMO Amazon should be split into a dozen companies.
You can do this if you want. You could split AWS from the retail operation, I guess. I wouldn't expect any outcome for consumers to be better. If you have a different idea, tell me what outcome and why you think it gets better.
And probably you don't want this, b just like w/ Standard Oil this would likely have the effect of making Jeff Bezos richer.
Re: Amazon is reportedly negotiating to acquire MGM for about $9B
#105Earlier quoted context omitted.
It can't be that obvious, because I don't see it. How does Amazon buying MGM create a negative outcome for consumers?
Exclusive content.
Netflix has exclusive content. ABC, NBC, Discovery, ... all have exclusive content.
Why does Amazon buying MGM and getting some exclusive MGM content harm consumers?
Re: Amazon is reportedly negotiating to acquire MGM for about $9B
#106Earlier quoted context omitted.
Yes, but at least in the case of Standard Oil, that was a monopoly which was definitively anti-consumer, because it was actually monopolizing an entire specific industry.
Right. But today when most people say "monopoly", they don't mean the Standard Oil kind. They mean the Google kind that has ~90% of the search market. That much market share is still pretty anti-consumer. With Standard Oil, there were no competitors. Today, you can start a Google competitor, but they will bully you every inch of the way, and probably end up buying you anyway. It's not as clear-cut as a Standard Oil/A…
Having market share does not automatically make you anti-consumer.
Google has 90% of the search market because they have the best product. This is the same reason Amazon is doing well – people just love what they're offering. It's not that you need oil and Amazon is the only player in town – it's that Amazon and Google offer the best gas station experience by a large margin.
Re: Amazon is reportedly negotiating to acquire MGM for about $9B
#107How many industries can a single company operate in and dominate?
If Walmart had done this in the 2000's, the DOJ would have stopped them.
Re: Amazon is reportedly negotiating to acquire MGM for about $9B
#108There reality of current equity valuations is such that, if sustained, there is some some pretty savage consolidation to come. The only limit is antitrust, or fear of. $9bn is 0.5% of AMZN's current market cap, so $9bn represents a daily price fluctuation. They also have $45bn in cash reserves, so amazon could buy 5 MGMs without borrowing or issuing stock. That's not even a lot! Apple, Google & FB have $200bn, $140bn…
Amazon always has and continues to invest internally to expand e.g., new AWS regions, warehouse automation through robotics most of which are extremely capital intensive. Though your observation is right that MGM acquisition does make sense for Amazon because they OK to pay a premium to fast-track expanding their media business.
The way I see it, Amazon, as a growth machine, keeps its growth options (organic/inorganic) open and when sees an opportunity for inorganic growth they will go for it. The most recent example being their acquisition of Whole Foods. They were anyway investing in growing their brick-and-mortar presence and opportunistically acquired Whole Foods to fast-track it.
Relatedly, Amazon has to be one of the most diverse corporations ever. From AWS to media studio. Which other corporations come close?
Re: Amazon is reportedly negotiating to acquire MGM for about $9B
#109Earlier quoted context omitted.
I agree that streaming is still cheaper, but some sort of mandatory licensing scheme for video content would be able to put a stop to the current balkanization of television content.
In any other industry, having companies compete against each other to create the best product in order to attract customers is the ideal situation... except television? People might not like balkanization of content, but it forces different services to compete against each other in a way that produces more and better content overall. More to the point, it's frankly no different to how TV channels used to work in the…
>it forces different services to compete against each other in a way that produces more and better content overall
It seems more like another avenue through which a small number of mega-corporations can control ever increasing shares of the media marketplace to me.
In my view, some sort of mandatory licensing scheme would force individually owned production companies to compete against each other to produce the best product.
Re: Amazon is reportedly negotiating to acquire MGM for about $9B
#110Earlier quoted context omitted.
Yes, but at least in the case of Standard Oil, that was a monopoly which was definitively anti-consumer, because it was actually monopolizing an entire specific industry.
Right. But today when most people say "monopoly", they don't mean the Standard Oil kind. They mean the Google kind that has ~90% of the search market. That much market share is still pretty anti-consumer. With Standard Oil, there were no competitors. Today, you can start a Google competitor, but they will bully you every inch of the way, and probably end up buying you anyway. It's not as clear-cut as a Standard Oil/A…
They will not "bully you every inch of the way". Go ahead, start a competitor. Here's how it will go: First they will ignore you. You are so small they will not even know you exist. Then when you start getting some noticeable but still insignificant volume of marketshare, they will laugh at you. Then when you actually start getting too much market share they will actually do something and fight you. If you survive that you will either win or they will buy you.