When Amazon acquired MGM for $8.45 billion in 2021, the idea was straightforward.
They can access a rich content library could make Prime Video great again and give Amazon a serious hold in entertainment.
Three years on, the picture is more complex.
Amazon’s 2024 operating profits, $68.6 billion, up 86% from 2023, come almost entirely from its cloud business and e-commerce.
Entertainment, for all its sparkle, hasn’t contributed much to the bottom line. Prime Video spends over $10 billion annually on content, matching Netflix, but without comparable returns.
Netflix recently posted $11.08 billion in sales and $3.13 billion in net earnings in a single quarter, highlighting the gap.
So why keep MGM under the same umbrella?
Partly strategy: a testing ground, a library of IP, a tool in the streaming wars. But it’s also an expensive experiment. Amazon can afford it, yet prolonged spending without clear profit raises questions. Would splitting Prime Video and MGM into separate entities help focus the business, or simply complicate matters further?
The Friedlander hire signals that Amazon is taking a more disciplined approach. The real challenge lies in transforming MGM from a prestige asset into a financially sustainable part of the empire, while still delivering content audiences love.
Prime Video may not be a profit engine today, but how Amazon steers it could define its cultural and commercial influence for years to come.