ASX:IOV - What if Series - The Walt Disney Company

ION Video x The Walt Disney Company

We have received a significant number of questions from shareholders about how ION's patents work in practice, and how they apply to the kinds of organisations we are in discussions with.

We want to address those questions directly. As we have indicated in previous announcements, ION is currently engaged in preliminary discussions with a number of organisations. We will continue to provide updates on those discussions in accordance with our ASX continuous disclosure obligations as material developments occur.

To give shareholders a clearer picture of the commercial opportunity our technology represents, we are launching the What If? series. Each episode takes a specific organisation operating in our target markets and illustrates in detail how ION's patented infrastructure would apply if the two companies were to work together.

These use cases are prepared by ION's commercial team based on ION's own internal modelling and analysis. They are indicative in nature and intended to illustrate the potential application of our technology. They do not represent any current or agreed commercial arrangement.

Episode 1 is The Walt Disney Company.

Why Disney

The Walt Disney Company is one of the most diversified and deeply capitalised media enterprises in the world. In fiscal year 2024, its Entertainment segment generated USD 41.2 billion in revenue, its Sports segment (comprising ESPN and related properties) contributed USD 17.6 billion, and its Experiences division added USD 34.2 billion. Its direct-to-consumer business achieved positive operating income for the first time in FY2024, recording USD 143 million against a prior-year loss of USD 2.5 billion.

Disney operates 157 million monthly active users across its ad-supported streaming tiers globally, spanning Disney+, Hulu and ESPN+. Its content library encompasses one of the most extensive catalogues in media history, spanning Walt Disney Pictures, Pixar, Marvel, Lucasfilm, National Geographic and ESPN.

Disney has invested significantly in artificial intelligence through its proprietary data platform Disney Compass, its programmatic advertising exchange DRAX, and a USD 1.5 billion equity stake in Epic Games. The intelligence infrastructure exists. What does not yet exist is the video delivery infrastructure to act on it at scale. That gap is precisely where ION's patents sit.

The Core Problem ION Solves

The world's leading AI systems can now analyse video with remarkable precision. They can identify key moments, understand narrative context, and recognise which scenes will resonate with which audiences.

But turning that intelligence into a personalised, assembled, delivered video experience requires rendering a file. That architectural constraint has governed video distribution for over 50 years and it has not changed. Every personalised experience requires a brand new file. Every new file multiplies storage, compute and delivery cost. At Disney's scale, that multiplication is the defining constraint on what is commercially viable.

ION removes that constraint entirely.

How ION Works — Three Steps

Step 1: Virtualisation. ION reads a rendered video file and produces a lightweight Virtual Video File, a reference map containing the precise internal structure of every moment at the sample level. The master media asset stays in place. What moves is the reference map, not the content.
Step 2: AI Identifies What Matters. An AI system identifies which moments are relevant for a given viewer, advertiser or context. ION provides the structured data layer these systems need to operate precisely at the moment level.
Step 3: ION Assembles and Delivers. ION assembles the identified moments as a virtual programme unique to each viewer and delivers it in real time. No new file is created. No rendering takes place. If 10 million Disney subscribers each receive a personalised experience simultaneously, ION produces 10 million unique virtual assemblies from a single source, without rendering, without duplication, without lag.

Watch Finbar explain how ION's technology works and why it matters for the future of AI-driven video content.

The Six Use Cases

Use Case 1: Disney+ Frame-Aware Ad Personalisation

Disney's ad-supported streaming tier launched in Australia in April 2026 and is part of a global ad strategy reaching 157 million monthly active users across Disney+, Hulu and ESPN+. A persistent structural gap exists between streaming CPMs and linear television CPMs of between 10 and 40 per cent. Disney's programmatic exchange DRAX is one of the most sophisticated ad platforms in media, but it operates at the break level, not the frame level. The contextual richness of Disney's content is entirely invisible to the system choosing which ad to insert.

ION could integrate with DRAX at the frame level. Every moment of Disney content would carry rich contextual metadata at the point of stream assembly, enabling ad placement that is contextually integrated with the content around it. Disney's canonical content never moves. Rights remain sovereign. Based on ION's own commercial modelling, the base-case revenue uplift for the Australian ad-supported tier alone is estimated at AUD 230.4 million annually, with direct applicability to Disney's 157 million global ad-supported users.

Key value drivers:

Closes the persistent CPM gap between streaming and linear television without increasing ad load
Transforms Disney Compass from a targeting input into a real-time assembly instruction
Enables cryptographically verifiable ad delivery, addressing identity fragmentation that depresses streaming CPMs
Disney's advertising product as architecturally superior to Netflix and Amazon equivalents

Use Case 2: Library Versioning Cost Elimination

Every market requires a localised version of Disney's content. Every platform requires a different format. Every promotional window requires a new edit. The cumulative cost of this versioning operation is estimated by ION's analysis at USD 80 to USD 150 million annually, spent producing files that are structurally identical to files that already exist, differentiated only by metadata and editorial instructions. The storage burden compounds the production cost as Disney expands into new markets.

Under ION, all versioning requirements are encoded as governed assembly instructions, not as separate rendered files. A dubbed version in Germany, a territorial cut for Japan, a platform-specific aspect ratio are each assembled on demand from the same canonical master. The file factory stops. One master becomes infinite outputs.

Key value drivers:

Estimated USD 80 to 150 million in annual versioning and localisation cost elimination (ION internal estimate)
Collapses storage infrastructure required to maintain thousands of territorial and format variants
Enables instant global distribution, a new market becomes an assembly instruction, not a production job
Every title virtualised reduces versioning costs for that title in perpetuity

Use Case 3: Long-Tail Library Activation

ION's analysis estimates that approximately 35 per cent of Disney's content library is currently dormant, generating near-zero revenue. This is not a demand problem. It is an economics problem: the cost of activating long-tail content under a render-based infrastructure model is not recoverable from the marginal revenue that dormant titles can generate. ION's analysis estimates USD 10 to USD 150 million in annually unlockable value from dormant content through incremental advertising revenue and micro-licensing.

ION treats dormant library content as a programmable surface. Once virtualised, dormant titles become composable building blocks for personalised FAST channels and themed programming blocks, created autonomously by AI agents at near-zero marginal cost. Specific moments can also be licensed for brand partnerships, editorial productions or AI training datasets via ION's token-governed access layer, without any file ever leaving Disney's infrastructure.

Key value drivers:

Estimated USD 10 to 150 million annually from currently dormant content at near-zero marginal production cost (ION internal estimate)
Enables FAST channel launch at near-zero cost, each channel is an assembly instruction, not a production project
B2B micro-licensing of specific moments for brand partnerships and AI training datasets without file transfer
Generates first-party audience data on dormant content demand to inform future content investment decisions

Use Case 4: Agentic Franchise Channels

Disney's franchise universe, Marvel, Star Wars, Pixar and National Geographic, is the most commercially valuable intellectual property portfolio in media history. Yet the viewing experience is structurally identical for every subscriber regardless of franchise depth. A hardcore Star Wars fan who has watched every property multiple times receives the same interface and the same algorithm as a casual viewer. Super-fans represent disproportionate lifetime value: higher renewal rates, higher merchandise spend, higher theme park visitation.

ION makes it economically trivial to programme a personalised franchise channel for any individual viewer, drawing on viewing history, franchise engagement patterns and real-world franchise events, without human editorial input and without producing a single new file. Each channel is unique, continuously updated, and assembled at near-zero marginal cost.

Key value drivers:

Near-infinite franchise channel variety from existing content at near-zero marginal cost
Converts franchise super-fans from passive subscribers into deeply engaged recipients, increasing renewal rates and lifetime value
Enables new premium subscription tiers for franchise super-fans with experiences impossible under any other infrastructure
A USD 1.00 ARPU uplift for 10 per cent of Disney's subscriber base represents an estimated USD 180 million annually (ION internal modelling)
Directly supports Disney's USD 1.5 billion Epic Games investment by providing the video infrastructure layer beneath an expanded franchise universe

Use Case 5: Token-Governed Content Licensing

When Disney licences content, it transfers a file. Once that file leaves Disney's infrastructure, commercial and legal controls are contractual, not architectural. In an environment where every major AI company, including Google, Meta, OpenAI and Anthropic, is actively seeking to licence premium video content for foundation model training, the structural risk from file-based licensing is significant and growing rapidly.

Following Google's launch of Gemini Omni at Google I/O, the demand for governed access to premium video content for AI training has never been higher. Disney's content library is among the most commercially desirable training datasets in the world. ION's token-governed architecture enables Disney to monetise that demand without surrendering any file, any rights, or any control.

Under ION's architecture, a licensee never receives a file. They receive access to a governed reference object specifying what content can be assembled, by whom, under what conditions, in which territories, and for what duration. When the licence term expires, the access token expires. Disney's content never moves. This is not digital rights management applied after the fact. It is rights governance embedded in the fundamental structure of how video is composed and delivered.

Key value drivers:

Eliminates structural risk of content leakage, Disney's canonical media never leaves its infrastructure
Opens a new revenue stream in AI training data licensing without surrendering any files or control
Enables granular licensing at previously impossible resolution: per-moment, per-territory, per-use-type, time-limited
Provides a defensible, auditable record of every content access event, addressing emerging AI training consent regulations
Positions Disney as the preferred partner for AI companies seeking governed access to premium IP

Use Case 6: Dynamic Promotional Content Assembly

Disney's content machine generates continuous promotional output: trailers, teasers, seasonal campaigns, franchise anniversary pieces and platform-specific marketing assets. The lag between a promotional insight and the delivery of content reflecting that insight is typically measured in days to weeks. In the streaming environment, where competitor content surfaces in real time and cultural moments shift viewer intent within hours, that lag is costly.

Once Disney's promotional source material is virtualised, any promotional variant can be assembled on demand in real time without a render job. A campaign brief becomes a set of assembly instructions. Fifteen territorial variants, platform-specific aspect ratios and language-specific subtitle tracks are each assembled from the same virtualised source without a single additional render job. The time between a real-world event and the deployment of responsive promotional content is reduced from days to minutes.

Key value drivers:

Promotional content production time reduced from days or weeks to minutes
Real-time promotional responsiveness to streaming performance signals, competitor movements and social trends
Scales across any number of territories, languages and platforms without proportional cost increase
Rapid creative iteration, underperforming creative replaced in minutes rather than re-queued for production
Based on ION's modelling, projected AUD 1.62 million in incremental Disney+ subscriber acquisition conversion value from the Australian market alone

Why This Matters

Across these six use cases, ION's patents address constraints that are embedded in every part of Disney's commercial operation. Library versioning. Dormant content. Advertising yield. Franchise engagement. IP protection. Promotional production. Each represents a significant commercial opportunity. Each is made possible by the same architectural shift: treating video as a programmable instruction set rather than as a file that must be made, stored and sent.

The intelligence Disney has already built, Compass, DRAX, its AI research, its franchise data, gets the execution infrastructure it currently lacks. Every asset in Disney's portfolio becomes composable, AI-accessible and rights-sovereign.

ION holds the only granted patent portfolio in the world covering the virtualisation of video into reference-based containers and the dynamic assembly of those containers at runtime without rendering. The priority date is August 2007. The portfolio has been subject to three independent assessments, each confirming validity and breadth.

Download and read the full use case document covering all six applications of ION's patented infrastructure within The Walt Disney Company.

What Comes Next

We will continue the What If? series with Episode 2 and beyond, covering additional organisations operating in our target markets. Our aim is to give shareholders a progressively clearer picture of the commercial landscape ION's patents address and the scale of the opportunities within it.

Shareholders are reminded that these use cases are illustrative and do not represent any current or agreed commercial arrangement. All financial estimates are based on ION's own internal modelling. ION will update the market in accordance with its ASX continuous disclosure obligations as material developments occur.

We appreciate your continued support and look forward to bringing you Episode 2 shortly.

Yours sincerely,

Anthony Baker

Chief Executive Officer and Director

ION Video Limited (ASX: IOV)

These use cases are prepared by ION's commercial team based on internal modelling and analysis. They are indicative in nature, do not represent independently verified figures, and do not constitute any current or agreed commercial arrangement. Actual results may differ materially. This communication has been prepared in compliance with ASX continuous disclosure obligations.