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Disney Announces Plans for Direct-to-Consumer Services

BURBANK, CALIF.—Disney is ready to fly solo with a pair of planned streaming services for both ESPN and its Disney-Brand content. With the acquisition of majority ownership in BAMTech, LLC, a direct-to-consumer streaming technology and marketing service, Disney will launch an ESPN-branded multi-sport video streaming service in early 2018 and a Disney-branded direct-to-consumer service in 2019.

Credit: Disney Channel

Disney had previously acquired a 33 percent stake in BAMTech with an option to acquire a majority stake over several years. The company has accelerated that process by reportedly agreeing to pay $1.58 billion for an additional 42 percent from MLBAM, Major League Baseball’s interactive media and internet company. The acquisition is still subject to regulatory approval.

Upon closing of the deal, Disney Chairman and CEO Bob Iger will serve as chairman of the BAMTech board. MLBAM and NHL will continue as minority stakeholders in BAMTech.

The planned ESPN-branded multi-sport service will offer games and events from MLB, NHL, Major League Soccer, Grand Slam tennis and college sports. Individual sport packages will be available for purchase from MLB.TV, NHL.TV and MLS Live. The new service will be available through an upgraded version of the ESPN app; pay-TV subscribers will be able to access the ESPN television networks in the same app on an authenticated basis.

The launch of this ESPN service comes as the sports network has seen declines in subscribers in recent years due to trends like cord-cutting and other factors in the decline of pay-TV subscribers.

The Disney-branded service will serve as the exclusive home in the U.S. for subscription-video-on-demand viewing of live action and animated movies from Disney and Pixar. Disney also plans to make an investment in an annual slate of original movies, TV shows, short-form content and other Disney-branded exclusives for the service. Past Disney movies and TV programming from Disney Channel, Disney Junior and Disney XD will also be included on the service. When the service officially launches in 2019, Disney will pull its content from Netflix as it will end its distribution agreement for streaming of new releases.

Both the ESPN and Disney streaming services will be available for purchase directly from Disney and ESPN, in app stores and from authorized MVPDs.

“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 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 bands.”