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Is Disney (DIS) Interested in MLB's Streaming Video Company?

Image via www.thedisneyblog.com

The Walt Disney Company (DIS) is in discussions with Major League Baseball Advanced Media (MLBAM) to become investors in the streaming media company. This may very well be a sign that The Mouse wants to own the technology to assist its direct-to-consumer video services.

According to a Re/Code report, “Sources say Disney is in advanced talks to take an equity stake in BAM Tech, the video technology business MLB Advanced Media has been looking to spin off into a separate company for some time.” The article also states, “Industry sources speculate that a Disney investment in BAM Tech would include an option to eventually buy a controlling stake in the company.”

MLBAM, which is jointly owned by the 30 teams in the league, runs MLB’s streaming video subscription service, MLB.TV. The company also handles video streaming for many large clients, including WatchESPN, the streaming service operated by Disney’s most notable subsidiary ESPN.

(Also read, “Your Complete Guide To All the Things Owned by Disney”)

“People familiar with the proposed transaction say talks are in advanced stages, but could still fall apart. Sources say Disney is one of multiple bidders who want to invest in MLBAM,” per Re/Code.

An ownership stake in an Internet-based streaming company could help Disney launch and operate new digital services targeted at those pesky cord cutters who are not watching television traditionally via a cable subscription; Disney would like to make up those revenue losses somehow.

(Also read, "The Revolution Will Not Be Televised: The Death of Cable in America" and "Comcast, Hulu, Netflix, & Ways to Attract Cord-Cutters")

 

Disney CEO Bob Iger, according the cited report, “has also floated the notion that ESPN may eventually sell its core service directly to consumers, over the Web, as HBO has started doing, with help from MLBAM. But ESPN President John Skipper has said the company won’t sell a direct service anytime soon.”

Disney itself launched a consumer subscription service in the U.K. last year, and plans to expand its operations in Europe this year.

The way global society is shifting towards streaming services to consume content is slowing becoming the norm. Disney should be looking for different ways to adapt with the times. Potentially investing capital into sports-related content is most likely Disney’s easiest way to get into the industry through its ESPN subsidiary.

ESPN and Disney are already missing out on potential revenues in the Amazon (AMZN), Netflix (NFLX), Hulu, and HBO GO markets. Trying to develop a sports streaming service similar to these platforms is something Disney needs to strongly consider.

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