Amazon's entertainment empire is about to get a massive boost.

The company announced on Wednesday that it's signed an agreement to acquire MGM Studios for a purchase price of $8.45 billion. It's a blockbuster deal that will further bolster Amazon's already-potent entertainment division, the Emmy- and Academy Award-winning Amazon Studios.

The acquisition turbocharges Amazon's efforts to make noise in Hollywood, giving the company a massive roster of beloved entertainment properties to support and mine for new ideas. And that's in addition to an upcoming MGM slate that includes new movies for James Bond and The Addams Family, as well as House of Gucci, and the Aretha Franklin biopic Respect.

MGM also brings a potent TV library that includes some of the biggest ongoing hits, including The Handmaid's Tale and Fargo. The deal announcement touts, in all, more than 4,000 films and 17,000 TV shows that will soon become the property of Amazon, including: Legally Blonde, Rocky, Silence of the Lambs, Stargate, The Pink Panther, and Thelma & Louise.

 
It sounds like the MGM brand — which is short for Metro-Goldwyn Mayer, a nod to the studio's historic origins — isn't going away. The announcement notes: "Amazon will help preserve MGM's heritage and catalog of films, and provide customers with greater access to these existing works."

In practical terms, Amazon Prime customers can probably expect a fresh infusion of choices into the Amazon Prime Video library in the coming months and years, once the deal goes through. Don't expect The Handmaid's Tale to suddenly disappear from Hulu, but Amazon will certainly find other ways to leverage MGM's library in a way that strengthens Prime Video as a go-to streaming destination.

That's likely a big driver for this deal, make no mistake. While Amazon's production work will certainly benefit from the sudden arrival of a fully functional and long-operating studio system, the MGM catalog brings boatloads of value too. The announcement even spells this out pretty explicitly.

"The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team. It’s very exciting and provides so many opportunities for high-quality storytelling." That's a statement from Mike Hopkins, SVP of Prime Video and Amazon Studios.

As legacy entertainment interests like Disney and WarnerMedia launch their own streaming services, filling them with familiar classics that people love, newer arrivals like Amazon and Netflix have had to find ways to differentiate themselves.

Netflix has invested heavily in original programming, and while there are still plenty of older films and TV shows available there, the library of so-called "catalog" titles has slimmed down significantly in recent years as competing interests have clawed back their streaming rights. Amazon has also invested in original programming — and it's even got a blockbuster Lord of the Rings series on the way — but Netflix had a five-year head start on streaming.

This MGM acquisition, then, positions the future of Prime Video as more of a dual threat, a la HBO Max or Disney+. There's a robust library of original content, including streaming faves like The Marvelous Mrs. Maisel, The Man in the High Castle, The Boys, and Invincible, as well as films like Coming 2 America and Donald Glover's Guava Island. And now there's also this massive legacy library that features the likes of James Bond and Elle Woods.

It's a big move, and one that may draw some antitrust scrutiny as the deal moves through the regulatory approvals process. Especially given all the attention the federal government has focused on Big Tech's far-reaching influence. But Amazon clearly has a plan in mind for rocketing Prime Video subscriptions to a new level.