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Amazon is reportedly negotiating to acquire MGM for about $9B

businessinsider.com

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Re: Amazon is reportedly negotiating to acquire MGM for about $9B

#151

Post by jbullock35 »

bhupy wrote: post #93
paganel wrote: post #55

Earlier quoted context omitted.

> If your prediction is that this will result in a welfare loss to consumers I would ask that you offer some evidence. For what it's worth a company that is valued at between 1.5 and 2 trillion usd has to come with evidence of how it isn't a monopoly/abusing its monopoly position, we can't reasonably talk about a "free market" when those numbers are involved. I'm not an economist and I'm not good with remembering nam…

It feels like the aversion to the "trillion" market value is strictly psychological in response to an arbitrary order of magnitude. Keep in mind that the total value of all US companies combined as of March 2021 is $49 trillion ( https://siblisresearch.com/data/us-stock-market-value/); Amazon represents just 4% of that. If we were to try to define Amazon's market, there's no reasonable definition you could come up wi…

The linked article allows that Amazon has much more than a 40% share of certain "segments":

> Amazon has well over half of US book sales, and probably three quarters of ebook sales. So if we’re arguing about how Amazon runs its books business, it unquestionably has market dominance. You have to pull out a segment, not the whole company.

To speak more generally, my understanding is that arguments that Amazon is a monopolist are stronger when we focus on Amazon Marketplace than on (say) AWS, partly because there are many "segments" in which almost all products are sold through Amazon. But I wish that I had more data about this particular claim.

Re: Amazon is reportedly negotiating to acquire MGM for about $9B

#152

Post by tablespoon »

dalbasal wrote: post #66

There 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…

> That's not even a lot! Apple, Google & FB have $200bn, $140bn & $65bn respectively. Dividends don't seem to be a thing, and it's basically impossible to invest this much cash internally. These companies don't have factories to build, or any kind of hard capital investments to make.

Apple arguably does have factories to build, given how utterly dependent on China it is.

Re: Amazon is reportedly negotiating to acquire MGM for about $9B

#153

Post by xkjkls »

bryanrasmussen wrote: post #19
JohnJamesRambo wrote: post #15

Earlier quoted context omitted.

What sort of good stuff does MGM have? I use Prime Video a lot since it is basically free with my Prime and would love some new quality content. Edit: Posting this I found because my question was dumb. https://en.wikipedia.org/wiki/List_of_Metro-Goldwyn-Mayer_fi...

https://en.wikipedia.org/wiki/List_of_Metro-Goldwyn-Mayer_fi...

A better list ranked by relevancy: https://www.the-numbers.com/box-office-records/worldwide/all...

Re: Amazon is reportedly negotiating to acquire MGM for about $9B

#154

Post by hannasanarion »

kevin_thibedeau wrote: post #138
ncallaway wrote: post #36

Earlier quoted context omitted.

The vertical integration of the distribution of media and the production of media is extremely problematic because of the way copyright operates in this country. I think you have to examine vertical integration in copyright affected industries differently than you would in, say, the vertical integration of steel production with a company that consumes steel. The interaction with copyright invariably creates issues fo…

Why shouldn't they control the copyright on entertainment media they own? Can I help myself to your property any way I see fit?

The issue is owning copyright and distribution.

This isn't some kind of new idea, in the 1930s the US government forced movie studios to be separate companies from movie theaters on antitrust grounds.

Re: Amazon is reportedly negotiating to acquire MGM for about $9B

#155

Post by xkjkls »

nothis wrote: post #63
snarf21 wrote: post #6

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.

Thank god this is the top comment. I came in here thinking, "that can't possibly be legal". I understand there's advantages to larger acquisitions but the past decades have been ridiculous. The fact that "AOL Time Warner" was ever allowed to exist is ridiculous.

AOL Time Warner was the worst merger of all time. I don't know if it shouldn't have existed, but Time Warner shareholders basically got completely screwed.

Re: Amazon is reportedly negotiating to acquire MGM for about $9B

#157

Post by ncallaway »

bhupy wrote: post #144
ncallaway wrote: post #120

Earlier quoted context omitted.

> Vertical integration in steel production could as easily involve intellectual property as it does here. I didn't say Intellectual Property, I said Copyright. Copyright—much more than other forms of IP—has a significant impact on our shared culture and cultural transmission. Yes, there may be other factors with IP that we should consider when dealing with mergers, but end-users and everyday people are harmed much mu…

Based on this line of reasoning, literally any acquisition is bad. What's the limiting principle?

I disagree.

Based on this line of reasoning, literally any acquisition that increases the power of copyright holders has downsides.

I'm not saying acquisitions can't also have have upsides. I'm not saying that the net benefit can't be positive for the end-consumer.

I agree with huitzitziltzin that it's possible that this acquisition is net welfare-improving. I think we probably mostly disagree in:

- the extent of the downsides to increasing the power of copyright holders, AND

- the probability that this particular acquisition is net welfare-increasing

Re: Amazon is reportedly negotiating to acquire MGM for about $9B

#158

Post by ncallaway »

kevin_thibedeau wrote: post #138
ncallaway wrote: post #36

Earlier quoted context omitted.

The vertical integration of the distribution of media and the production of media is extremely problematic because of the way copyright operates in this country. I think you have to examine vertical integration in copyright affected industries differently than you would in, say, the vertical integration of steel production with a company that consumes steel. The interaction with copyright invariably creates issues fo…

Why shouldn't they control the copyright on entertainment media they own? Can I help myself to your property any way I see fit?

I didn't say they shouldn't control the copyright.

I said we shouldn't uncritically allow massive copyright holders to both produce and distribute their media.

Re: Amazon is reportedly negotiating to acquire MGM for about $9B

#159

Post by usrusr »

bhupy wrote: post #112
usrusr wrote: post #72

Earlier quoted context omitted.

Do you think consumers were better off back when cinemas and studios were one (MGM was Loew)? Was the United States vs Paramount of 1948 a mistake?

One glaring difference between 1948 and 2021 is that distribution is basically free now. Whereas in 1948, one's ability to consume media was dictated by their physical location, today there is close to zero marginal cost to deliver digital media and low barriers to entry for new entrants. Just consider how many streaming services there were 10 years ago vs today. No human consumes enough TV media to warrant subscribi…

The distribution argument would be true if pay per view was the dominant form, but subscriptions are. And in the studio days, how many people didn't have access to at least one theatre of each in range? I might be mistaken but I don't think that limited film choice in rural areas was the main concern back then.

Now we have subscriptions. It would be as crazy as it sounds, we are almost at the point where a preference of Picard over Kirk could have an effect on which toilet paper you end up buying.

But I agree in so far as that it is far from as bad as it could be if they tightened down on unsubscribe/resubscribe (which I think will inevitably happen one day). Still, I've been to that party that end with one room full of "Amazons", one room full of "Neflixers" and those left over wondering what they all talk about.

Re: Amazon is reportedly negotiating to acquire MGM for about $9B

#160

Post by ghaff »

bhupy wrote: post #112
usrusr wrote: post #72

Earlier quoted context omitted.

Do you think consumers were better off back when cinemas and studios were one (MGM was Loew)? Was the United States vs Paramount of 1948 a mistake?

One glaring difference between 1948 and 2021 is that distribution is basically free now. Whereas in 1948, one's ability to consume media was dictated by their physical location, today there is close to zero marginal cost to deliver digital media and low barriers to entry for new entrants. Just consider how many streaming services there were 10 years ago vs today. No human consumes enough TV media to warrant subscribi…

At one level, it would be nice if all the subscription streaming services, a la carte content, and live TV could be accessed from a single subscription portal. But I suspect that most people wouldn't be willing to pay the $200 (or whatever) per month that such a service would probably cost. (And that's not an outlandish number; that's only about 2x what cable costs in a lot of places in the US.)
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