Balancing Vertical and Horizontal Integration in Business

59sec Snip

00:00

Play full episode

Summary

Comments

Transcript

Episode notes

Organizations aiming to be platforms should initially focus on resolving a specific problem before exploring additional services to offer. It is crucial to avoid confusion between vertical and horizontal integration while acting as both a service provider and staying true to one's core business that relies on those services. The relationship between a service provider and an early customer showcases the importance of prioritizing needs; in this case, BAMTech benefitted from addressing Major League Baseball's requirements without restricting its capability to serve other clients. This strategic approach helps maintain balance and fosters growth without compromising the core mission.

Ben and David continue Acquired’s “tech and sports” mini-series with Disney’s 2016 acquisition of a minority stake (with the right to purchase a majority stake at a later date) in BAMTech, the internet streaming company originally founded as part of Major League Baseball in the early 2000’s. However the importance of this story goes deeper than just sports, with major ramifications for nearly every major technology company from Amazon to YouTube. Even if you’re not not sure if baseball’s played on a diamond or a gridiron, tune in as we swing for the fences in predicting the future of TV!

Sponsors:
ServiceNow: https://bit.ly/acquiredsn
Vanta: https://bit.ly/acquiredvanta
Modern Treasury: https://bit.ly/acqtransfer

Topics covered include:

What is BAMTech, and why is it, according to The Verge, "the future of television”?
BAMTech’s origins as part of Major League Baseball's Advanced Media division ("MLBAM)”)
MLBAM’s founding CEO Bob Bowman’s decidedly “non-tech” background, and growth into one of the most important tech leaders of the past 15 years
Initial technology struggles and learnings from early streaming efforts (including a botched audio package of Ichiro Suzuki’s games with the Mariners for fans in Japan)
Landing on a streaming model that works with the launch of MLB.tv in 2002/2003—three years before YouTube is founded!
Improvement of the MLB.tv service and MLBAM’s streaming expertise over the next ten years through the rise of mobile, and simultaneous growth of MLBAM’s revenues to over $1B annually
MLBAM’s initial deals to expand its streaming services beyond baseball, starting with ESPN in 2010, then WWE, the PGA, HBO and the NHL
The importance of media rights, and MLBAM’s transition from a simple tech/infrastructure provider to a full-fledged media company
The decision to initiate a spin-off process for BAMTech from MLB in August 2015, and Disney’s $1B investment into the newly created spin-out company in August 2016
Disney’s subsequent announcement that they’ll be working with BAMTech to create a direct-to-consumer ESPN streaming service
BAMTech’s $300M deal with Riot Games in December 2016 for the media rights to League of Legends eSports content
Bob Bowman’s announcement in February 2017 that he’ll be stepping back to from a day to day role, and hiring of former Amazon VP of Video Michael Paull as BAMTech’s new CEO