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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

#181

Post by huitzitziltzin »

360walk wrote: post #149
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…

As an economist, what do you think of the Amazon Antitrust Paradox? https://www.yalelawjournal.org/note/amazons-antitrust-parado... > The current framework in antitrust fails to register certain forms of anticompetitive harm and therefore is unequipped to promote real competition—a shortcoming that is illuminated and amplified in the context of online platforms and data-driven markets. This failure stems both from as…

So: - I have read it. - It was a while ago (several years?). - I should probably read it again.

But... I didn’t think much of it the first time. I don’t think the claims are well motivated. I think she assumes “Amazon bad” from the beginning and contorts some not-very-strong arguments in favor of that conclusion.

I do remember the claim in the first quoted paragraph that there was something unique about the threat (I guess that’s how she sees it?) posed by Amazon. That had the potential to be an interesting claim, but I really didn’t see any evidence to back it up in the article.

The second quoted paragraph contains one suggestion which is just completely false: that consumer product variety is limited by Amazon. I mean, have you ever tried to wade through pages of junk to find the thing you searched for? I have. There is an absolute profusion of goods on the site. That claim does not stand up to the slightest scrutiny.

If the idea is instead that the fact that most consumers choose amazon instead of some other retailer is the channel by which variety is harmed, well... that also does not stand up to scrutiny in a world with Walmart and target and Etsy and a million other online retailers.

The thing in the same paragraph about the “legislative history” of antitrust is Khan’s idea to try to reorient antitrust law with (from my recollection) a specific desire to punish or break up Amazon in particular in mind. The claim that Amazon does not compete in a competitive market which is supposed to justify this does not stand up to scrutiny either.

I don’t agree (in the third paragraph) that antitrust should be reoriented away from a consumer welfare standard, but even if I did, I think Amazon does compete in competitive markets already! (Why would we orient away from consumer welfare anyway? Would we like (e.g.) all consumers to pay higher prices (lowering welfare) but have the “product variety” provided by hypothetical, post-break-up Amazons 1, 2 and 3? What would be the point of that?)

My overall impression was that the entire article was written with the conclusion “Amazon is bad” in mind.

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

#182

Post by efficax »

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…

datacenters for all 4 are a huge capital investment. Perhaps less so for Apple, but Amazon, Google and Facebook all run their own datacenters and all of them will have to continue expanding their datacenter footprint if they continue to grow.

That being said, it does seem like equity markets are in a bubble. Tesla at least is absurdly overvalued. If i had signifcant stake in TSLA I would be getting out asap and let someone else hold on to shares that are probably 300% overvalued.

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

#183

Post by Red_Leaves_Flyy »

sangnoir wrote: post #172
Red_Leaves_Flyy wrote: post #164

Earlier quoted context omitted.

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 "

I have no idea, but am curious to know as well...

Nice catch!

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

#184

Post by com2kid »

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…

FWIW I know multiple people with a $200 a month cable TV bill. Per box rental, multiple TVs, and a sports or premium channel package, the bill is easily at $200.

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

#185

Post by dehrmann »

bhupy wrote: post #180
dehrmann wrote: post #163

Earlier quoted context omitted.

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 havin…

> On the one hand, monopolies are bad, but on the other, having 5+ platforms is bad. Which is it?

The problem isn't that there are 5 platforms; it's that they don't have the same content.

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

#186

Post by UncleOxidant »

tablespoon wrote: post #152
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.

This. Apple should be looking into buying a semiconductor company and building more fabs. Preferably US based. Maybe Micron or TI. Micron's market cap is ~90B. TI's is about ~170B, so probably Micron.

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

#188

Post by huitzitziltzin »

NeuNeurosis wrote: post #130
huitzitziltzin wrote: post #67

Earlier 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…

But it's not just about 'consumers' is it? I mean its great and all that you are playing devils advocate and using your education to argue on behalf of a Trillion dollar corporation but this isn't just about what an economist thinks, especially since economists get it wrong all the time. This entire discussion is about peoples natural reaction to a super large entity, that as one of your supporters put it "single-han…

Sorry to disappoint you, but this is what I actually believe. I am not playing devils advocate.

Economists do get it wrong. If you think this will reduce consumer welfare (which is one of the standards used to judge mergers), tell me how.

I see no reason to block the merger on the grounds that Amazon is a trillion dollar company, rather than a 900 or 800 or whatever billion dollar company.

Amazon is not 4% of the US economy, btw.

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

#189

Post by bhupy »

dehrmann wrote: post #185
bhupy wrote: post #180

Earlier quoted context omitted.

> 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 havin…

> On the one hand, monopolies are bad, but on the other, having 5+ platforms is bad. Which is it? The problem isn't that there are 5 platforms; it's that they don't have the same content.

Right, and that's exactly the point. No one ever consumes the set-union of all content at the same time.

Having multiple platforms have different content is not all that different from having multiple TV channels have different content, except now I'm not forced to subscribe to a giant bundle of channels when I only realistically use 2-3 at any given time.

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

#190

Post by tenebrisalietum »

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?

Intellectual property is not real property.

The idea that media is "consumed" is an artifice. When you consume a media product, it actually still exists and nothing is meaningfully physically depleted.

Intellectual property is an artificial law construct meant to "promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries" according to the Constitution.

Sitting on your ass and collecting rent every time someone watches a movie from the 1940's for the next 150+ years--which is an action on a copy of a work and not really equivalent to anything involving real property--is not promoting the progress of anything but the wealth and power of media conglomerates. Combine this with the ability of money to buy laws and you are looking at establishment of permanent legacies through copyright.

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