Why Amazon-MGM deal is a sign of streaming competition: 'Some will go out of business'

Amazon (AMZN) is on the verge of purchasing Hollywood studio MGM Holdings in a deal valued at $9 billion, according to several published reports, in a sign of how the hot streaming industry is likely to see more big changes.

The move follows WarnerMedia's (T) merger with Discovery (DISCA) and, if consummated, would further solidify Amazon's place in the streaming wars against its biggest competitors: Netflix (NFLX), Disney (DIS), and Apple (AAPL).

"This is a sign of just how competitive this space is," Evercore ISI Senior Managing Director Mark Mahaney told Yahoo Finance in a recent interview.

"The cost of participation in this club is going to rise...and the table stakes are extremely high," he continued — echoing that "there is going to be more consolidation" as more platforms come to market.

“You have to be willing to spend probably $10 billion a year in order to be a global streaming company, and I think very few companies can afford to do that beyond the big five players," he added.