Amazon has struck a deal to purchase MGM for $8.45 billion. It’s a big investment for the e-commerce behemoth, and it means it’ll have access to a collection of media that includes 4,000 films and 17,000 hours of TV, according to reports. As Amazon’s Prime Video service competes with Netflix and Disney Plus, the purchase is expected to help them recruit even more high-spending Prime subscribers.

Amazon spent $11 billion on content last year, up from $7.8 billion in 2019, as it spends more in attracting members to its Prime subscription program. Last year, Netflix spent about $17 billion. Amazon is competing with Netflix, which has more than 200 million members, and Disney+, which debuted 18 months ago and has quickly risen to more than 100 million customers.

The transaction is Amazon’s second-largest in history, behind only the $13.7 billion purchase of Whole Foods in 2017.

MGM (formerly known as Metro-Goldwyn-Mayer) was founded in 1924 and had enormous success during the Hollywood Golden Age with films ranging from The Wizard of Oz and Ben Hur through Raging Bull, Basic Instinct, and The Silence of the Lambs. Previous owners have included the beverages mogul Edgar Bronfman, the Las Vegas casino tycoon Kirk Kerkorian, and CNN’s founder, Ted Turner.

Amazon admitted in a statement that the catalog was a major factor in the transaction.

“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,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios. “It’s very exciting and provides so many opportunities for high-quality storytelling.”

MGM Chairman Kevin Ulrich said in a statement, “The opportunity to align MGM’s storied history with Amazon is an inspiring combination.”

Amazon’s media division has thus far been a tiny portion of its broader empire, despite spending billions on content each year. A sizable proportion of Prime members take advantage of the free Prime Video streaming that is provided. Over 175 million of the 200 million-plus individuals globally who are now subscribing to Amazon Prime streamed video last year. Adding thousands more films and television programs may be beneficial to both numbers.

After the coronavirus epidemic shuttered theaters for most of the previous year, MGM considered releasing the next film in the 59-year-old James Bond series via a digital streaming service.  It will now be released in theaters in September and is expected to be the year’s greatest international box office success.

According to the New York Times, the purchase price was about 40% more than those offered by other potential buyers.

The possibility of Amazon acquiring MGM initially surfaced in mid-May. Hopkins was said to be negotiating the contract, according to Variety. On May 24th, the Wall Street Journal claimed that Amazon was close to completing a deal to acquire MGM.

Amazon has had successes in film and television programming, including “The Big Sick” and “Manchester By The Sea,” which won the 2017 Academy Award for best original screenplay, as well as the shows “The Marvelous Mrs. Maisel” and “Transparent.”

Traditional media firms and Silicon Valley behemoths are also competing for customers as consumers move away from traditional TV and toward streaming services.

This comes as Discovery completes its acquisition of WarnerMedia, which includes the Warner Bros. studios.