Disney ups BAMTech stake in strategic SVOD move

Disney will pay US$1.58 billion (€1.34 billion) to up its stake in video streaming technology firm BAMTech, is it prepares to make a major push into the SVOD market and cut ties with Netflix.

Disney will acquire an additional 42% in BAMTech, as part of an accelerated move to take a controlling ownership of the direct-to-consumer streaming tech company.

The deal comes after Disney paid US$1 billion for a 33% stake in BAMTech last August – an agreement that had included the option for Disney to up its ownership to a majority stake over several years.

With the new deal, Disney said it plans to launch its ESPN-branded multi-sport video streaming service in early 2018, followed by a new Disney-branded direct-to-consumer streaming service in 2019.

The company described these plans as a “strategic shift” that will see Disney end its distribution agreement with Netflix for subscription streaming of new releases, beginning with the 2019 calendar year theatrical slate.

“The media landscape is increasingly defined by direct relationships between content creators and consumers, and our control of BAMTech’s full array of innovative technology will give us the power to forge those connections, along with the flexibility to quickly adapt to shifts in the market,” said Disney chairman and CEO, Bob Iger.

“This acquisition and the launch of our direct-to-consumer services mark an entirely new growth strategy for the company, one that takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands.”

Disney said its new branded service will become its exclusive home for SVOD viewing in the US and will show the latest Disney and Pixar films – beginning in 2019 with titles like Toy Story 4, the sequel to Frozen, and a live-action version of The Lion King.

Michael Paull

The service will also show Disney’s library content and the company said it plans to make a “significant investment” in an annual slate of original movies, TV shows, short-form content and other Disney-branded exclusives for the SVOD offering.

The ESPN-branded multi-sport service will feature approximately 10,000 live regional, national, and international games and events a year, including Major League Baseball, National Hockey League, Major League Soccer, Grand Slam tennis, and college sports.

“This is an exciting validation of our team, its achievements and the customer-centric platform it’s built,” said BAMTech CEO, Michael Paull.

“We’ve merely scratched the surface of what can be accomplished in a future where we combine Disney and ESPN’s world-class IP and our proprietary direct-to-consumer ecosystem.”

BAMTech grew out of Major League Baseball’s interactive media and Internet company, MLB Advanced Media (MBLAM), and was founded in 2000. Its proprietary technology provides cross-device, direct-to-consumer video solutions – particularly geared around live events with high viewership.