Disney said Tuesday that it has invested $1 billion in the BAMTech video streaming service, Major League Baseball’s direct-to-consumer broadcast company, as it positions itself in the fast-changing media industry.
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Revenue at Disney’s cable networks business rose 1.4 per cent to $4.20 billion in the third quarter ended July 2, but missed an analyst consensus of $4.31 billion. BAMTech and ESPN will work together to create a standalone streaming service. The offering will include live regional, national and worldwide sporting events – but it will not include content from ESPN’s TV channels.
Disney announced that it will launch an ESPN streaming service before the end of this year – but the network’s marquee live events will not be available through this platform.
The Jungle Book and Captain America: Civil War fueled gains at the movie studio, with revenue increasing 39.6% to US$2.85bil (RM11.38bil).
Disney came in slightly ahead of estimates for its fiscal third quarter, climbing 12 percent in the year-over-year to earnings of $1.62 per share on revenue of $14.28 billion, the company on Tuesday reported after the market’s close.
With the new offering, ESPN wants to target customers that may no longer subscribe to cable, but are willing to pay for a la carte sports programming.
Iger, who has been mulling retirement for years, was asked on CNBC about Disney’s much-discussed succession plan. Operating income rose 62% to US$766mil (RM3.06bil). That topped the $1.61 a share average of analysts’ estimates compiled by Bloomberg.
Excluding items, the company earned US$1.62 (RM6.47) per share.
Disney also said ESPN posted a decline in subscribers. Investors have been intently focused on the cable-TV business, home to ESPN and the Disney Channel, after Disney acknowledged subscriber losses past year. Ad revenue was boosted by game 7 of the National Basketball Association finals, but overall sales were up just a paltry 2% last quarter. And the cable division, which includes ESPN, recorded operating income of $2.09 billion, up 1% from a year ago.
Operating income at ESPN increased during the quarter because of growth in advertising revenue. Q3 saw Disney open its Shanghai theme park and has already seen a million guests since its opening on June 16.
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Revenue rose to US$14.28bil (RM57.03bil) from US$13.1bil (RM52.32bil).
