Disney on Tuesday disclosed scooping up full ownership of video streaming tech company BAMTech, purchasing a remaining 15% stake from Major League Baseball earlier this month.
Disney already held 85% and acquired the rest of BAMTech from MLB in November for $900 million, the company said in an SEC filing. The media company started its acquisition of BAMTech back in 2016 when it purchased a 33% stake. In 2017 Disney shelled out around $1.5 billion for an additional 42% stake.
Disney has used the video streaming tech company to serve as the backbone and framework for what is now the ESPN+ direct-to-consumer streaming service, as well as Disney+.
As Disney builds out its streaming ambitions the company is also planning to take full ownership of Hulu from Comcast. Disney already has operational control and currently owns 67%, with Comcast’s NBCUniversal holding 33%.
In a surprise move last week, former long-time Disney CEO Bob Iger returned as chief executive, replacing Bob Chapek. On Monday Iger said the company needed to focus on making its streaming business profitable rather than just growing subscriber counts. In its fiscal fourth quarter Disney recorded nearly $1.5 billion in DTC losses, though executives expect losses to narrow in the coming quarters.
In terms of what Disney should do with Hulu, TVREV co-founder and analyst Alan Wolk thinks Hulu presents an opportunity as a free ad-supported streaming service, noting Disney is the only major broadcast network company that doesn’t have a FAST. In a column for NextTV, he said the main purpose of launching a FAST would be to help Disney win market share internationally in emerging markets where people have less disposable income for TV services.
“Whether it’s a bolt-on for Hulu + Live TV or a standalone product, a Hul[u] FAST would be a win for Disney. It gives them a way to increase the overall amount of ad inventory the conglomerate has on offer, which then lets it limit the amount of ads it runs against their original series,” wrote Wolk.
Disney could also use a Hulu FAST for a flywheel effect, as others – like Paramount with Pluto TV – have done by promoting shows for its subscription Disney+ and ESPN+ services, Wolk said, particularly for those that are churning from paid subscriptions.
“By giving them a free option, Disney can make sure they stay in the promotional loop,” he continued.