The Walt Disney Company announced during its earnings report last night that it’s buying a controlling stake in BAMTech, the company that powers streaming video for organizations like Major League Baseball, HBO, and the WWE. It needs BAMTech’s deep experience in this area to support the launch of a new ESPN-branded streaming service next year and a Disney-branded streaming service that will launch in 2019 and go head-to-head with big names like Netflix, Amazon, and Hulu.
BAMTech is a unique company. It began as the in-house IT division for Major League Baseball, owned in equal part by each of the 30 teams. This group was called MLB Advanced Media, or MLBAM for short. It was a pioneer in streaming video, broadcasting a live game to the web back in 2002. It was also early to the mobile web and one of the first third-party apps on the iPhone.
Over time, other companies began to hire MLBAM when they wanted to launch streaming products. It earned a reputation as a cutting-edge organization that could help with both the front and back end — everything from designing a mobile app to ensuring a global launch streamed smooth, HD video.
In August 2015, the league owners voted to spin an independent entity out of MLBAM. That unit was named BAMTech. That is what Disney now owns the majority of.
BAMTech will provide the bedrock for the tech underpinning Disney’s new streaming services, but Disney may also be getting access to some important sports rights. Its standalone ESPN streaming service won’t have programming from the NBA or NFL. Instead, it leads with MLB and NHL, two organizations already deeply tied into BAMTech. Disney has also purchased an option on e-sports, as BAMTech purchased the rights to stream Riot’s League of Legends last year.
“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 Bob Iger, chairman and CEO of The Walt Disney Company. “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.”