Entertainment and media group Walt Disney agreed on Tuesday to invest a further $1.58bn in portfolio company BamTech to take a majority stake in the US-based online video streaming technology provider.
Disney paid $1bn for a 33% stake in BamTech in August 2016 as part of a deal that granted it an option to acquire a majority stake. The latest investment will hike its share of the company to 75%.
BAMTech was originally created by MLB Advanced Media, the interactive media arm of sporting league Major League Baseball (MLB). It powers the online video offerings of MLB and several other major sporting organisations that together have attracted about 7.5 million paid subscribers.
The deal will give Disney the readymade means to put together its own streaming service. It plans to launch an offering focused on its ESPN sports media subsidiary which will be accessible through the existing ESPN app, while also offering specialised packages for individual leagues or sports.
Disney also intends to use the technology to create a paid subscription platform for the live action and animated films it and partner studio Pixar has produced. It said in a statement the service was expected to launch in 2019.
The platform will offer forthcoming titles including Toy Story 4, the live action Lion King adaptation and the sequel to Frozen, and Disney intends to produce new specialised content as well as making its past TV programming available through the service.
Robert A. Iger, Walt Disney Company’s chairman and CEO, said: “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.
“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.”
Disney will also pull its content from streaming service Netflix from the start of 2019, though it is unclear whether Disney-related content such as Marvel or Star Wars content will be affected.