Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

businessinsider.com

Post reply on HN
Print view View original

171–180 of 255 posts

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

#171

Post by fuzzer37 »

vmception wrote: post #92
e3bc54b2 wrote: post #74

Earlier quoted context omitted.

That means losing out exclusivity on endless remakes, reboots and sequels. Since that's the majority of Hollywood money, I sincerely doubt it will change.

Many legislative opportunities just require shining a light on it. Disney lobbied for copyright lengths and other protections because nobody else cared. And didn't ask for more over recent years because people cared. You can do the same thing. There are many neglected and unused regulations because markets never formed around them. Congress or a regulatory body thought they were doing something useful but werent.

Yeah, because any of us have the same power as Disney.

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

#172

Post by sangnoir »

Red_Leaves_Flyy wrote: post #164
huitzitziltzin wrote: post #27

Earlier quoted context omitted.

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 li…

> Disney is rounding their carriages.

Completely off-topic - is there a term for such 'approximate' idioms? I sometimes can't quite remember the exact words in a turn of phrase - my mind goes blank and I substitute words with similar meaning. The more familiar phrase to parent is "Disney is circling their wagons"

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

#173

Post by ghaff »

bhupy wrote: post #169
ghaff wrote: post #160

Earlier quoted context omitted.

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 on…

That's probably about the right dollar figure for most people depending upon how you count Amazon Prime and how much a la carte movie purchasing/renting they do. Though I'd add that, if they also have to pay for live TV (for example, if they can't get it over the air) for sports, etc., that brings the total to probably more than $100.

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

#174

Post by ncallaway »

huitzitziltzin wrote: post #125
ncallaway wrote: post #117

Earlier quoted context omitted.

To me, the problem with copyright law is that there are entities that have businesses that are built on copyright protection that are so powerful they can nearly dictate what the copyright laws are ( cough Disney cough ). So, from my perspective, any system that allows those powerful entities to continue to accumulate more power and wealth is always going to harm efforts to change copyright law. We need to weaken the…

> copyright law is that there are entities that have businesses that are built on copyright protection that are so powerful they can nearly dictate what the copyright laws are (cough Disney cough). I fully agree w/ this criticism of copyright law. I do not think that has a substantial intersection w/ the competitive effects of this proposed acquisition.

> I do not think that has a substantial intersection w/ the competitive effects of this proposed acquisition

My understanding is that MGM has a large holding of copyrighted media, and therefore substantial interests in protecting and extending the rights and terms afforded by copyright law. For example, they have led consortiums of large entertainment companies in the past to bring copyright lawsuits to the Supreme Court (MGM Studios, Inc. v. Grokster, Ltd).

My other understanding is that Amazon is a very powerful corporation, that has complex interactions with copyright law already (they are a distributor of both physical and electronic media through Amazon Video and Amazon Music; they are a content producer through Amazon Games studios and Amazon Original Series [also already built on the back of other acquisitions]). This acquisition gives another significant interest in copyright protection to an entity that is already extremely powerful.

We're going to M&A our way to another Mouse on the copyright front (which was also built largely on the back of "mostly-harmless-at-the-time-but-problematic-in-aggregate" acquisitions), until massive swaths of our cultural expression are owned by a very small handful of organizations.

I suppose maybe a disconnect we have is there is a non-financial "consumer welfare" question that I don't see being asked. Consumer welfare is generally only approached from the financial perspective of: "what will the financial cost to a consumer be to obtain the rights to consume media"; I don't see anyone attempting to defend consumer welfare from a _cultural_ perspective of: "Which entities do we have to ask permission from in order to interact with important elements of our culture and society?"

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

#175

Post by usrusr »

bhupy wrote: post #167
usrusr wrote: post #159

Earlier quoted context omitted.

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 s…

The truth is that "they" (sorry) will do everything they can to extract the highest fraction of consumer income they can. I'm in a market where before streaming it was basically all FTA which means that I have no idea what to expect. In a market where cable fees already meant a subscription to otherwise unavailable content, I'd expect that number to end up a lower bound of typical spending.

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

#176

Post by nerdponx »

huitzitziltzin wrote: post #111
nerdponx wrote: post #49

Earlier quoted context omitted.

> Indeed, this is why vertical mergers are harder to regulate than horizontal mergers. The welfare effects are not obvious ex ante. This has a decent chance to be pro-consumer. I don’t see any reason for the FTC to object to this on antitrust grounds. I'm curious how this could possibly turn out to be anything but anti-consumer. I'm sure that in general and in the past there can be and have been welfare-improving ver…

> I'm curious how this could possibly turn out to be anything but anti-consumer. ... this particular one seems questionable. Again... why? The easiest vertical merger cases I teach to undergrads are welfare-improving. I don't see any reason to think that this one is anti-consumer. What do you think will go wrong here? > I would like them to carefully and thoroughly evaluate the welfare effects of this merger, They wi…

It's been a while since I studied industrial organization, but isn't the basic idea behind the "textbook" vertical merger that some of the reduced marginal costs of production get passed on to the consumer in the form of higher quantity and lower price?

That probably would happen, by way of more MGM properties becoming available and costing less on the Amazon streaming platform. My concern is that "welfare of consumers who use Amazon to stream MGM movies" is not a useful proxy for "overall effect on society".

Moreover, Amazon is already vertically integrated. They are already a movie and TV studio. They already own and produce a lot of their own content.

What is the broader effect on the market? Will this snowball into further acquisitions that don't benefit consumers later? None of that is covered by the textbook model.

Unless there's serious research that corroborates the textbook outcome in a "realistic" (messy) scenario like this, I can't set my prior to anything but "extremely pessimistic."

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

#177

Post by JohnWhigham »

xwdv wrote: post #110
JohnWhigham wrote: post #89

Earlier quoted context omitted.

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 th…

>If you survive that you will either win or they will buy you.

That's the problem though. No one in the modern age has traditionally won against these companies, they just get happily bought. It's very arbitrary and sure, it's not breaking any laws, but it's also doing absolutely nothing for promoting a healthy industry. Is this the best "free" market we can muster?

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

#178

Post by orky56 »

scottyah wrote: post #115
vishnugupta wrote: post #108

Earlier quoted context omitted.

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/inorgani…

Eastern companies like yamaha and hyaundai. dirtbikes to pianos, cars to housing

Good point. The Korean Chaebol [1] is all about the conglomerate.

[1]https://en.wikipedia.org/wiki/Chaebol

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

#179

Post by vmception »

fuzzer37 wrote: post #171
vmception wrote: post #92

Earlier quoted context omitted.

Many legislative opportunities just require shining a light on it. Disney lobbied for copyright lengths and other protections because nobody else cared. And didn't ask for more over recent years because people cared. You can do the same thing. There are many neglected and unused regulations because markets never formed around them. Congress or a regulatory body thought they were doing something useful but werent.

Yeah, because any of us have the same power as Disney.

Right, you don't. I think people are overestimating the pushback they'll get from other lobbyists, and also overestimating the amounts that motivate elected officials.

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

#180

Post by bhupy »

dehrmann wrote: post #163
kevin_thibedeau wrote: post #138

Earlier quoted context omitted.

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 woul…

> 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.

I find this to be sort of self-contradictory. On the one hand, monopolies are bad, but on the other, having 5+ platforms is bad. Which is it?

My (perhaps unpopular) opinion is that having more and more streaming platforms ("balkanized", to use your term) is extremely good for consumers. The low barriers to entry and the near-zero marginal distribution costs make this the perfect industry for competition (and as a result, consumer welfare).

It's a common misconception that having N streaming platforms necessarily means that consumers spend N * subscription cost dollars per month, but that's not a sensible user pattern. Nobody consumes from every single streaming service at the same time. Instead, we have a sort of TDMA style consumption of media that allows us to constantly subscribe/unsubscribe/resubscribe from services as we chew threw our respective TV show backlogs. Savvy consumers have benefited the most from this reality, and it's only a matter of time until we see subscription management products that extend this benefit to un-savvy consumers in seamless ways.

One day, streaming services will look to consolidate so as to be able to extract monopoly rents. These are horizontal acquisitions that would be terrible for consumer welfare, and those are the kinds of acquisitions the US FTC would likely police.

Post reply on HN