Walt Disney CEO Bob Iger addresses investors April 11, 2019.
Disney Re-Names BAMTech ‘Disney Streaming Services,’ Outlines Direct-to-Consumer Strategy
April 11, 2019
Disney April 11 announced it has renamed its BAMTech backend technical company “Disney Streaming Services” as part of the 96-year-old media giant’s expansion into direct-to-consumer business.
Acquired for $2.5 billion in 2017 from Major League Baseball Advanced Media, BAMTech has powered numerous OTT services, including HBO Now, MLB.tv, PGA Tour Live, ESPN+, and NHL.tv, among others.
“This is an exciting day for the entire Disney family. It is also a challenging time,” CEO Bob Iger told attendees at the start of a three-hour investor day presentation in Los Angeles.
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The executive reiterated that Disney is entering the DTC ecosystem from a “position of strength, confidence and unbridled optimism.”
Iger said Disney is banking its future in part on digital distribution, including a new corporate segment — Direct-to-Consumer & International — featuring the pending Disney+ SVOD service, ESPN+, Hulu, Hulu with Live TV and Asia’s Hotstar ad-supported VOD platform with 300 million actively monthly users.
Kevin Mayer, chairman of DTC & International, said Disney’s foray into digital is based in part of a projected 1.1 billion high-speed Internet households worldwide by 2020 compared to 700 million in 2015.
Mayer said there will be 810 million DTC paid subscribers globally by the end of 2020 — growing 30% annually. With 1.2 billion hours of video streamed daily projected by 2020 compared to 260 million hours in 2015 — up 50% annually over a 10-year period.
[DTC] is becoming a crowded marketplace, in which brands matter more than ever,” Mayer said. “We have the brands that matter most when it comes to great entertainment.”
Mayer said Disney three domestic DTC products — Disney+, ESPN+ and Hulu — would target different market segments as standalone services and “likely be bundled to create even more value to consumers.”
Disney is eyeing a Latin America launch for ESPN+ as well.
Launching in November, Disney+ will feature catalog, current and original content from Disney, Marvel, Pixar, Lucasfilm and National Geographic — the latter due to Disney’s $71.3 billion acquisition of 20th Century Fox.
Mayer said Hulu, which Disney assumed majority ownership stake following the Fox acquisition, represents Disney’s most-established DTC product.
“We’re actively evaluating international rollout strategies for [Hulu],” he said.
Disney said Hulu was the fast-growing domestic SVOD service in 2018, ending the year with 25 million subscribers since launching in 2008. Online TV service — Hulu with Live TV — launched in 2018. Viewing increased by 75%.
“Hulu is going to give consumers the right product at the right price,” said Hulu CEO Randy Freer.