Two years ago, when Twitter was fielding acquisition offers, Disney (DIS) considered buying it, Disney CEO Bob Iger revealed this past October. “We thought Twitter had global reach, a pretty interesting user interface and a compelling way that we might be able to present and sell the content that our company makes to the consumer,” Iger said at a Vanity Fair summit. “But we decided ultimately not to go in that direction.”
Iger should reconsider.
Instead of buying Twitter (TWTR), last August Disney acquired the rest of BAM Tech, the spun-off video streaming business of Major League Baseball, which Disney had bought a 33% stake in one year earlier.
The deal is already bearing fruit: BAM Tech powers the video behind ESPN’s first ever direct-to-consumer streaming service, ESPN Plus. Iger has already said that next up is a Disney streaming service for content from Disney Studios, Pixar, Marvel and Lucasfilm, coming in 2019.
But all of this activity doesn’t mean it doesn’t need Twitter, which would provide a pivotal discovery platform to highlight Disney’s extensive intellectual property.
The move is a no-brainer: Twitter is the first place where conversations are happening during live sports, and it is contributing at least somewhat to the decline in live cable viewership; fans feel less of a need to watch a game on TV if they can follow along on Twitter. So Disney is wisely taking ESPN’s flagship news and highlights program to Twitter (and already brought it to Snapchat). The process would be even more seamless if it also owned the distribution platform.
Twitter will become even more appealing for Disney if and when its acquisition of most of 21st Century Fox’s assets goes through, since Disney will have a lot more content to promote and distribute. And in addition to all of the compelling reasons based around sports, Twitter has remarkably strong communities around “Star Wars” and Marvel superhero franchises like “The Avengers” and “Black Panther.” Bringing Twitter into the Mouse House just makes sense.
Of course, that doesn’t mean it will happen: Twitter is at last turning a profit ($91 million in Q4 2017 and $61 million in Q1 2018) and would likely be expensive, and Disney does not have a glut of cash right now. But the company has a stunning track record of acquisitions like Pixar, Marvel, and Lucasfilm, and could find a lot of use cases for Twitter if it can make the financials work.