Amazon is reportedly negotiating to acquire MGM for about $9B • Hacker News Board

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

#161

Post by bhupy » Tue, May 18, 2021, 4:40 PM UTC

jbullock35 wrote: post #151

bhupy wrote: post #93

Earlier quoted context omitted.

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 mono…

Thanks for the correction, you're absolutely right about the ebook market share.

Notwithstanding that, I think the general point is that this is a vertical acquisition completely unrelated to that market, in which Amazon has nowhere close to that kind of market share.

Keep in mind that nobody here is arguing that we ought to have a free-for-all in acquisitions and do away with the FTC entirely. It's just that the FTC doesn't operate off of knee-jerk reactions to absolute dollar amount market valuations. Instead, the level of analysis is one that's more in line with what the GP commenter has been arguing.

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

#162

Post by tastyfreeze » Tue, May 18, 2021, 4:40 PM UTC

echelon wrote: post #107

How 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.

How is this different than corporate conglomerates formed by previous generations?

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

#163

Post by dehrmann » Tue, May 18, 2021, 4:41 PM UTC

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 have mixed feelings about this one because rightsholders essentially have a monopoly on their content. 5+ video streaming platforms is bad for consumers, and this exists because rightsholders are allowed to control their content. It doesn't happen in the music space because Spotify was there first, had everything, record labels had a stake, and record labels were desperate post-Napster, so the Warner Music App would be a joke. Hulu was the industry's chance to get it right and have a viable Netflix competitor, but content owners weren't desperate enough, so the landscape became balkanized.

On the other hand, it is their content.

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

#164

Post by Red_Leaves_Flyy » Tue, May 18, 2021, 4:43 PM UTC

huitzitziltzin wrote: post #27

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.

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…

MGM controls a massive library of shows and movies. Many are or have been on Amazon videos competitors. These will, likely, all disappear from competitors in the same way Disney is rounding their carriages.

The root of the problem is that all of these platforms users are harmed by the siloed nature of the industry, in more or less the same ways. A better solution for the customer would be something akin to the way licensing works in the music industry. Let everyone host everything, charge what they will, and pay fixed royalties out of their income.

I'm not an economist, lawyer, musician or whatever. I'm just a very disgruntled consumer that's seen the potential of the streaming industry get destroyed by greed and overpaid lawyers. There are many shows and movies that are, for no good reasons, only available on aftermarket listings for old vhs, and sometimes dvd. Finding these alternatively is even difficult.

Companies could be working on UX, social functions, or recommendation algorithms but instead they're lighting money on fire to license a revolving pile of meh that'll juice their subscribers enough to hit their quarterly metrics. I'm entirely disinterested in googling where to stream every show and movie and pay between mandatory ads, and North of $5/episode to watch a show on whichever provider has the rights to stream it. It's such a poor experience that I've returned to a personal media library and have opted out of the streaming industry entirely.

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

#165

Post by gojomo » Tue, May 18, 2021, 4:43 PM UTC

Kye wrote: post #84

slumdev wrote: post #48

Earlier quoted context omitted.

Do you really want that? When a streaming service reboots a classic, you end up with: 1. The plot is pretty thin and always involves a twist. That the twist happens is predictable, and so the contents of the twist become more and more ridiculous to try to reclaim unpredictability. 2. Every episode is a cliff hanger in service of the twist from #1. 3. Unnecessary lewdness means you can't enjoy it with your kids. 4. It…

Who said anything about a reboot? A new series is fine. Universe got better with age and perspective. Atlantis was already solid when it was new. I wouldn't even mind a The Expanse/Stargate crossover where they turn out to be parallel universes. Stargate Universe already hinted at a new Big Bad that could be the one they're hinting at in The Expanse.

I'd love to see a reboot - in fact, I think it'd be the best way to repurpose & extend the premise & lore & themes.

The setup for SG1 was pure scifi gold, delivering all the frills fans could want:

• 'relatable 20thC/21stC person' space adventures-in-wonderland

• planets-of-the-week plus long arcs of discovery & tech-advancement

• galactic space opera & epic space wars that only sometimes risk Earth itself

• worldly intrigue referencing current politics/culture: evil Senators! human & alien conspiracies! Wormhole X-Treme!

But, eventually accumulated 'canon debt' & the frift of decades of real history makes new consistent stories that are equally relatable to the 2020s nearly impossible. Our heroes got pretty overpowered at times late in SG1 and SGA.

So, clean reboot! It worked great for BSG. Treat the whole past as a mythology to mine & remix, with winking fanservice rather than strained consistency & retcons. Give us some more Aschen & Tollan, Hebridans & Serrakin. Put some more vaguely-interesting unfolding pseudoscience behind the magic woo that dominated later storylines. Add some new mysteries to the gates, the gate network, & the gate-builders.

What's now possible with streaming prestige-series money, improved digital effects, & a smart full-universe paced master plan could be incredible.

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

#166

Post by omgwtfbbq » Tue, May 18, 2021, 4:43 PM UTC

The Monopoly grows...

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

#167

Post by bhupy » Tue, May 18, 2021, 4:44 PM UTC

usrusr wrote: post #159

bhupy wrote: post #112

Earlier quoted context omitted.

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…

> 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.

I really like what you said here. A familiar analogy that I like to use is cable TV: Netflix and Amazon are just "channels", each with different shows. When one half of the room is full of "Amazons", that's just the half of the room that's interested in some subset of shows not too dissimilar from what it might have been like to be a regular viewer of a serial television series in the days of yore.

However, whereas before, you had to subscribe to all of the channels in bulk. Today, you have the option to pick and choose the "channels" you want to pay for on any given month given the TV shows you care about. I think we agree that the experience to do this can be improved, but I think we also agree that it will inevitably happen one day.

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

#168

Post by omgwtfbbq » Tue, May 18, 2021, 4:46 PM UTC

xwdv wrote: post #103

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.

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?

>What is the else?

Happiness, human flourishing, societal improvement, literally all of life. Is this a real question?

>significant risk of loss

Lol?

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

#169

Post by bhupy » Tue, May 18, 2021, 4:47 PM UTC

ghaff wrote: post #160

bhupy wrote: post #112

Earlier quoted context omitted.

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.)

That's not the point that I'm making. You're absolutely right that nobody would ever pay $200 or whatever per month for such a service, but that's because nobody would ever consumer $200 worth of TV series on any given month. It's just not humanly feasible.

The average human being consumes 2-3 TV shows at most on any given month. In the absolute worst case, that extends to 2-3 separate streaming subscriptions. The only thing that changes over the course of the year is which 3 TV shows one is watching (and therefore which underlying streaming service they care about).

The future isn't a $200 bundle of every streaming service available on-demand; the future is an LRU cache that automatically unsubscribes you from a streaming service if you haven't watched a show on it in the last month, and then re-subscribes you the moment you do. Given the current price of streaming services, it probably works out closer to (at most) $45/month, on average.

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

#170

Post by sangnoir » Tue, May 18, 2021, 4:49 PM UTC

vmception wrote: post #88

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…

What’s the provocative part? I like the insight. What you are saying is that liquidity needs to get much deeper to account for all the currency made available and consolidated.

The idea of Tesla buying and discontinuing GM for the sake of reducing competition is pretty provocative.