The service will not, however, include any of the content that appears on ESPN’s TV networks, Disney said.
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BAMTech provides direct-to-consumer streaming services and related analytics and e-commerce management; Disney said BAMTech will be providing delivery and support of streaming video for Disney|ABC Television Group and ESPN, as well as for future efforts at the company.
Disney is officially entering the streaming business, with the company having purchased a $1 billion stake in streaming company BAM Tech, with plans to eventually launch a subscription service similar to Netflix.
Iger said that the ESPN OTT service will include content that BAMTech has licensed for Major League Baseball and the National Hockey League and will add ESPN-licensed content like college sports, football and basketball, tennis, rugby and cricket. “No cannibalization, just content you haven’t seen on ESPN that could be additive to earnings on the key media networks line”.
Disney will pay $1 billion in two installments to complete the deal; one now and one in January 2017.
BAMTech was formed by Major League Baseball (MLB), but has now separated from MLB’s broader digital business, MLB Advanced Media (MLBAM). BAMTech has nearly 7.5 million paid subscribers and “will provide capital to accelerate growth of its proprietary video-delivery platform, deliver greater flexibility to clients and develop new technologies and capabilities”, Disney said.
BAMTech, now reportedly valued at around $3bn, is known for powering streaming services including MLB.tv, Time Warner’s HBO Now, WWE Network, among others.
Walt Disney Co (NYSE:DIS) on August 09, 2016 reported quarterly earnings of $2.6 billion for its third fiscal quarter ended July 2, 2016, an increase of $114 million over the prior-year quarter.
J.P. Morgan analysts believe Disney has “positioned itself very well” with the BAMTech investment, putting the deal in context with the company’s traditional cable deals. Higher equity losses from Hulu reflected increased programming, marketing and labor costs, partially offset by higher subscription and advertising revenues. Broadcast revenue rose 5 per cent to $1.71 billion. The movie division increased 39.6 percent to $2.85 billion in the quarter. Sales at the world’s largest entertainment company increased 9 percent to $14.3 billion in the quarter, compared with estimates of $14.2 billion.
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Over the last twelve months The Walt Disney Company’s stock price has decreased by -11.72% from 109.5 to 96.67. The Consumer Products segment engages with licensees, publishers and retailers to design and sell a range of products based on the Company’s property through its licensing, publishing and retail businesses.
