Why is Amazon, an ecommerce retailer, buying a film company like MGM?

When Sony of Japan paid $3.5 billion to buy Columbia Pictures in 1989, most people gasped at the move. However, over time that has become the trend with the entire world of consumer electronics, technology, internet, media and broadcasting converging. It is in this light that the latest acquisition of MGM by Amazon must be seen. For Amazon, it is a natural integration with the rich content offerings of MGM, which fits into its larger OTT plans.

Technology companies buying Hollywood studios is nothing new. Now Amazon buys Metro Goldwyn Meyers, or MGM for $8.45 billion. MGM created the iconic James Bond franchise. For Amazon, the idea is to enable a strong content flow in order to compete with likes of Netflix and Disney. AT&T also combine with Discovery recently to create a tech-media powerhouse. Amazon has its own studio but that is always a different ball-game.