⚾ How MLB built Disney+


July 16, 2021

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The Hustle

We’ve got a jam-packed issue today, so to help out, here’s a good ol’ table of contents:

  • Origin story. How baseball led to Disney+
  • AI for sales reps. ZoomInfo’s $575m software push
  • VR boom. Virtual reality is the new reality
  • Arcade lawsuit. Why Sega just got sued for $5m

As always, enjoy some mind-bending shower thoughts at the bottom and have yourself a well-deserved weekend.

The big idea
MLB and Disney + gif

How MLB created the Disney+ streaming service

Major League Baseball (MLB) held its annual All-Star Game on Tuesday.

That isn’t the only extravaganza the league can take credit for this month.

Last weekend, Disney’s film “Black Widow” set a record COVID-era box office take of $80m. It also added $60m to the steaming service Disney+…

… which is actually a descendent of the MLB

How? The story starts in 2000. It’s the height of the dot-com bubble and MLB commissioner Bud Selig wants to take part, per The Verge.

He asks each of the 30 MLB teams to chip in $4m — $120m total — to launch a venture called Major League Baseball Advanced Media (BAM).

BAM’s initial task is to create a website for each team but it soon takes up new projects, including launching a video streaming service.

The 1st streaming MLB game…

… is between the New York Yankees and Texas Rangers on August 26, 2002.

Years before both YouTube (2005) and Netflix (2007), BAM is mastering:

  • Delivering online video at scale
  • Multi-device sync (so games can be watched on laptop, PCs, mobile)
  • Data centers and broadband infrastructure

BAM commercializes the industry-leading tech

In the mid-2010s, it creates streaming products for WWE, PGA, NHL, and HBO.

Due to its success, MLB decides to spin the business out, creating BAMTech. By 2017, Disney — which is transitioning to streaming — acquires a 75% stake for $2.6B (over 2 transactions).

Shortly after, Disney announces it will launch a streaming product for its outrageously good IP catalog (i.e., Pixar, Marvel, Star Wars, Classic Films).

Disney+ goes live in November 2019

The global pandemic hits a few months later and digital content explodes as people are stuck at home.

By March 2021 — only 16 months after launch — Disney+ hits 100m+ subscribers. The technology underpinning all of the streaming content is none other than BAMTech (now called Disney Streaming Services).

So yeah, that’s how MLB helped create Disney+. Not a bad few days.

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SNIPPETS

From conversations to commerce: Shopify just launched Inbox to help merchants turn browsers into buyers. #ecommerce-retail

Alexa Junior: Internal documents reveal Amazon considered building an Alexa-powered wearable for 4-to-12-year-olds. #privacy

Harvard under Fire: Its $42B endowment is under pressure to divest from fossil fuels. #clean-energy

SPAC to the Max: ServiceMax is eyeing an IPO in a $1.4B SPAC deal. #big-tech

Tesla Giveaway: Amazon sellers are in such high demand that 1 roll-up is giving away Teslas for intros. #emerging-tech

PayPal is bullish: The firm increased its weekly cryptocurrency purchase limit to $100k. #fintech-cryptocurrency

Tech Acquisitions
ZoomInfo logo and app

ZoomInfo wants to become every sales rep’s best friend

Ever get an email from a sales rep and wonder how they found you? ZoomInfo has been helping reps reach inboxes for years. Now, they want to help them hone their craft.

The firm announced it’ll spend $575m to acquire Chorus.ai, a conversational intelligence tool, per TechCrunch.

WTF is ZoomInfo?

It’s a B2B contact database that helps reps with top-of-the-funnel prospecting by identifying the right point of contact at target companies.

Enter Chorus.ai, which uses AI to listen to sales conversations and identify trends to help teams close more deals.

For example: the software can record how often reps say filler words such as “uh,” “like,” and “umm.” Managers can use the tech to coach reps through the sales process, cut bad habits, and identify top performers.

Conversational intelligence is a new market but growing fast

  • Chorus.ai raised $45m last July after doubling headcount and tripling revenue between 2019 and 2020
  • SalesLoft raised $100m in January at a $1.1B valuation
  • Gong.io, widely considered the market leader, raised $250m at a $7.25B valuation last month

Chorus.ai complements ZoomInfo’s offering in a meaningful way, but it’s hard to see a clear path to integration. Neither company offers a CRM, the natural home for sales intelligence data.

The real winners here are ZoomInfo’s sales reps, who will likely see an uptick in average deal size… and less usage of the word “um.”

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Virtual Insanity
VR

VR is still a small market but it’s growing

It turns out being unable to escape our homes was good for escapism.

PwC’s annual Global Entertainment and Media (E&M) Outlook 2021-2025 report found that virtual reality was 2020’s fastest growing E&M segment.

To be sure: 2020 was a pretty weird year

With many sectors shut down for months, global E&M revenue dropped 3.8%, accounting for a loss of $81B. That’s the biggest drop since PwC started doing its report 22 years ago.

Segments impacted by the pandemic, like live music and cinema, took hits of 70%+, but at-home entertainment grew.

VR content revenue reached $1.8B, a 31.7% YoY increase, and got a big boost from 2 releases:

  • VR video game “Half-Life: Alyx,” which saw 1.9m sales in its 1st 6 months
  • The Oculus Quest 2 headset, which quickly outpaced previous Oculus sales

But will it last?

PwC predicts that VR revenue will continue to increase by 30% each year, hitting $6.9B by 2025 — way short of video games’ predicted $194B, but not bad.

Still, The Information predicts VR needs to diversify content beyond games — including fitness and live entertainment apps — to maintain steady growth.

BTW, we’re still over here meditating and “tripping” in VR.

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You Lose
arcade game

Here’s why Sega was sued for $5m over an arcade game

The “Key Master” arcade game is the one that your parents probably warned you “only has those nice prizes because you’ll never win.”

Well, it seems a California man filed a class-action lawsuit this week against Sega for that very reason. Is he right — *cough* (yes) *cough* — who knows?

Here’s the claim

The lawsuit states “Key Master” is marketed as a game of skill, but in reality is programmed to award someone with a win after a predetermined number of losses.

It’s not the first time “Key Master” drama has gone down in court. Previously, the state of Arizona reached a $1m settlement with Jonathan Sanborn who licensed and set “Key Master” machines to win following 2.2k losses.

If you’re interested, this week’s court filing is one of the more entertaining class-action lawsuits we’ve read in a while.

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Disney meme of the day
Lion King meme

Too accurate (Source: Bored Panda)

Shower Thoughts

  1. “Dogs probably wonder why we constantly steal their shit.”
  2. “We use a rake to rake, and a hoe to hoe and a mop to mop and a vacuum to vacuum, but a broom to sweep.”
  3. “If 24 hour clocks started at 23:59 and counted down till 00:01, people might try getting more done.”
  4. “Weird how the sun makes people darker but fades everything else.”
  5. “Once we have self-driving cars, wipers will no longer be essential, because the car doesn’t need a clean windshield to drive. Only humans do.”
via Reddit
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