Three Things (May 27th)

Thursday, May 27th 2021

Commentary

"Be smart, but never show it." - Louis B. Mayer, co-founder of MGM

1) In its second largest deal ever, Amazon will buy legendary Hollywood studio MGM

Amazon has agreed to purchase MGM for $8.45bn, a week after AT&T announced it was merging WarnerMedia with Discovery Inc. The consolidation of media assets towards streaming platforms signals the continued obsolescence of linear TV, and increases the potential for “hopping” behavior among price-sensitive consumers, who might begin to “hop” from one platform to another depending on which platform holds the moment’s most desirable content. We view this major acquisition as a determined move on Amazon’s part, substantively strengthening its ability to engage and hold its 200 million Prime members. The streaming wars are heating up, with subscriber loyalty and attention as its key battlegrounds.

2) Google lands healthcare partnership with HCA, will develop algorithms using patient records

Google continues its foray into the healthcare sector, as the company announced a multi-year deal to access patient records from HCA to develop healthcare algorithms. On the same day, England’s National Health Service announced plans to scrape and share medical histories of 55 million patients to third parties. We view the confluence of these events as further confirmation that the historically difficult-to-disrupt $3tn healthcare industry is increasing its adoption of digital technologies, likely bringing about new companies and business models in the coming years.

3) Apple expands fintech ambitions, with “Alternative Payments Manager” job listing

Apple posted an alternative payments job opening, looking for a negotiator to strike partnerships across its Wallet, Payments, and Commerce applications. While Apple could certainly generate substantial revenues from their payments business, we believe that, more broadly, Apple’s fintech ambitions will extend its ability to attract and retain users within its ecosystem, as payment functionality and data continue to be a huge driver of user stickiness across industries.

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