Disney just made a big $1 billion investment in BAM Tech, the hugely successful streaming technology business that powers services from HBO, MLB, NHL, PGA, WWE, and others. The deal allows Disney to eventually acquire majority ownership of BAM Tech in the coming years if it wishes to do so. “Our goal is to ensure that our brands, notably ESPN, remain strong, vital, and relevant in a totally changed media landscape,” Disney CEO Bob Iger said on the company’s investor call this afternoon. “What they’ve got is really robust,” he said of BAM Tech’s business and expertise. “We obviously need this capability to take ESPN, Disney, and other Disney IP onto similar platforms.” BAM Tech started as part of MLBAdvanced Media, but is being spun off into its own company as part of this transaction. Recode reported on Disney’s interest in MLBAM’s streaming unit back in April.
Alongside the investment, Disney confirmed that it’s working with BAM Tech to build an ESPN-branded streaming package that broadcasts coverage of numerous sports. Iger said the company hopes to launch this product by the end of 2016, but didn’t get more specific than that. Here’s what’s sure to disappoint some people, though: the streaming service will not include popular ESPN programming (SportsCenter, etc.) that you’d get from the linear channels on cable or by paying for subscription services like Sling TV and PlayStation Vue. If it’s one of ESPN’s signature shows, it won’t be part of this package.
“The goal is not to take product off ESPN’s current channels, but to use sports and product that ESPN has already licensed that’s not appearing on the channels,” Iger said. So you can expect to see a fairly random mix of content from MLB, NHL, and a ton of college sports. The reason behind this strategy is simple: Disney and ESPN still make an enormous amount of money from traditional cable / satellite providers. And now you can add companies like Sony and Dish to that list, because streaming services like Sling and Vue still follow the multichannel model that Disney strictly adheres to. There’s no getting ESPN by itself. you’ve also got to toss in a few other ESPN, Disney, and ABC networks along with it. And barring a sea change in the way people are getting their TV, Disney’s got no reason to rework that approach.