ESPN Hangs Up on Mobile Venture

ESPN is closing down its much-advertised, sports-themed MVNO, it announced today.

The Walt Disney Co. subsidiary said it would instead pursue licensing deals for its content with other cellular operators.

The MVNO launched less than a year ago to much fanfare, but failed to sign up the numbers of subscribers needed to achieve ROI no more than a few tens of thousands. Disney has spent $150 million combined to develop and launch ESPN Mobile and Disney Mobile.

According to the Associated Press, ESPN will provide service until the end of the year, refund handset purchases and help customers transfer to a new provider.

“The big question on everyone’s mind: is this a problem with MVNO in general or just ESPN’s offering?” said Jeff Kagan in an analyst bulletin today. “ESPN failed to connect with their customers. The MVNO idea still makes a lot of sense. If a company has a customer base they could market to, then it should just be a matter of giving them something special from your organization, at the right price. Until something changes my mind, I still believe the MVNO idea will work. But the operator cannot just assume putting their name on the phone is enough. They have to give the customer a real reason to switch to them and to stay with them. I still think ESPN could have been successful with a different offering and at different price points.”

Disney says the Disney Mobile venture remains unaffected by ESPN’s pullout from the market.


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