RE: SIR- ESPNs hopes tied to new technology-----Yahoo finance article
Or we could just say what the article says...
"In October, ESPN had its worst month ever, losing 621,000 subscribers, according to Nielsen. ESPN disputes that number but has declined to provide data that refutes it. Nielsen is sticking by its figure. Disney said in its earnings press release that in addition to subscriber losses, ESPN saw “lower advertising and affiliate revenue and higher programming and production costs” in the quarter. It also had “fewer impressions.”
That all sounds bad, bad, bad. But there is a silver lining with ESPN right now, something still under-the-radar to the general public but now extremely important to ESPN: BAM Tech.
BAM Tech is the video streaming company spun out from Major League Baseball Advanced Media (MLBAM, or “BAM”) this summer, when Disney bought a third of the company for $1 billion.
BAM Tech was like a secret within a secret, hidden in a buzzing office above Manhattan’s Chelsea Market, but it’s a secret no longer. The company provides back-end streaming technology for everyone from HBO (for its standalone service, HBO Now) to WWE to the PGA Tour to the NHL to Glenn Beck’s digital network TheBlaze. Dan Rayburn, EVP of StreamingMedia.com, told The Verge, “Their technical chops are the best, bar none… They set the standard.”
BAM Tech powers the largest library of streaming video on demand (SVOD) in the world—bigger than Netflix’s, Hulu’s, and Amazon Prime’s, combined. And now Disney owns 33% of it.
The importance of BAM Tech to Disney and ESPN in the near future cannot be overstated.
CEO Bob Iger said so on Disney’s earnings call on Thursday. “The other thing that ESPN has, which we’ve talked about a lot, is the ability to take product out direct to consumer and that’s why we invested in BAM,” he said. “And we think that gives us a really interesting opportunity to create a new product, it gives us an interesting opportunity to create product that is more user-friendly and, therefore, is likely to gain more consumption.”
With its ownership stake in BAM Tech, Disney plans an over-the-top streaming product, built and powered by BAM Tech, it said in its third-quarter press release, calling it, “a new ESPN-branded multi-sport subscription streaming service.” Such a thing was long thought to be a pipe dream, since offering up its channels a la carte would effectively kill its cable business, people said. But ESPN has already begun to show its willingness to cater to cord-cutters in multiple ways: it signed on with Sling TV, from Dish Network (DISH); it signed on with Sony’s PlayStation Vue (SNE); it signed on with AT&T Direct (T); and it made an agreement with Hulu this month to let Hulu include ESPN channels on its planned “skinny bundle.”
Iger rattled off Sony, Sling, Hulu, and AT&T Direct in his list of digital efforts ESPN has made recently, and then he went back to BAM: “Our recent investment in BAMTech is also targeted at expanding our reach, and we’re excited about rolling out our first ESPN-branded content direct to consumers via this platform in 2017.”
And BAM Tech will be useful to Disney not just in the sports realm. BAM Tech can create streaming apps and services with Marvel content, the “Star Wars” franchise, the Disney Channel, or any of Disney’s film franchises.
The 30 ball clubs of Major League Baseball equally own 58% of BAM Tech, Disney owns 33%, and the NHL owns 9%. In four years, Disney has the option to buy another third from MLB. It will certainly do that, if it wants to bring ESPN into the necessary next phase of its life."
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