With more than 100 million subscribers, Disney+ has turned into one of the largest streaming platforms in the world. How was Disney able to accomplish this in under three years?
Through technology and infrastructure set up by Major League Baseball and is older than YouTube, owned by Alphabet Inc GOOGGOOGL, and Netflix Inc NFLX.
Early Streaming Days: In 2000, Major League Baseball wanted to consolidate digital rights and websites for its 30 teams, which led to the creation of MLB Advanced Media, according to a Twitter thread from Trung Phan.
There were some early setbacks for the digital media platform but a 2002 event led to the value proposition of MLB Advanced Media, also known as BAM Tech.
The August 26, 2002 game between the New York Yankees and Texas Rangers was streamed by BAM Tech to 30,000 viewers. The game was shown at a slow speed to 280kb per second but fans loved it. The stream came three years before YouTube was created.
More than 100,000 MLB fans paid $80 for streams of games in the 2003 seasons, four years before Netflix was created.
The success of BAM Tech led to Major League Baseball investing in the infrastructure of the platform and building streaming platforms for others.
BAM Tech created streaming platforms for World Wrestling Entertainment Inc WWE in 2014, the National Hockey League in 2015, PGA Tour in 2015, Sony Group Corp SONY and its PlayStation in 2015, and HBO in 2015.
Related Link: 2 Catalysts That Could Boost Disney Subscribers
Disney Enters the Picture: Major League Baseball spun out BAM Tech in 2015 when the platform had $900 million in sales.
Walt Disney Co DIS bought one-third of BAM Tech in 2016 for $1 billion with an option to purchase a larger stake in the future. The investment from Disney was criticized by some in the industry.
“We didn’t buy BAM Tech for a zillion dollars. We (built streaming) internally,” former CBS CEO Les Moonves said. CBS is now owned by ViacomCBS Inc VIAC.
In 2017, Disney increased its ownership with an additional $1.6 billion investment to own 75% of BAM Tech. With the investment, Disney announced the rebrand of the company to Disney Streaming Services with plans to launch ESPN and Disney content on the streaming platform.
Years later, Disney+ was launched using the original BAM Tech platform and infrastructure.
With its theme parks closed during the COVID-19 pandemic, Disney turned into a stay-at-home winner thanks to the success of Disney+ and its renewed company focus on the direct-to-consumer business.
In one and a half years, Disney+ passed the 100 million subscriber mark, faster than top streaming platforms like Netflix and Amazon.com AMZN unit, Amazon Prime.
Benzinga's Take: With 104 million subscribers, Disney+ remains one of the largest streaming platforms and could be the focal point of the company’s growth in the future. Disney+ is part of the company’s overall brand but could be valued at $119 billion as a stand-alone business based on the same valuation Netflix receives.
DIS Price Action: Shares of Disney are up 58% over the last year.
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