Note to ESPN: It's a phone

[Charlie] Yesterday Disney called it quits for Mobile ESPN, the Mobile Virtual Network Operator (MVNO) launched barely eight months ago but fell at least one order of magnitude short of their subscriber targets. Certainly Mobile ESPN made many missteps, from their unsubsidized $499 price for their first (and only, at the time) phone to their marketing that failed to clearly establish the offering as a service and not just a phone. I draw two key lessons from their demise:

• MVNOs require a well-defined and targetable audience. ESPN has a powerful brand but it is extremely broad and appeals to everyone from casual fans who just enjoy the entertainment of Sportscenter to the maniacs at whom they were aiming, who devour heapin' helpings of minutiae. The questions that MVNOs like Helio and AMP'd have to answer are whether they have a unique appeal to a specific audience, whether that audience is willing to spend what they are charging, and whether they are able to successfully reach that audience.

• A phone's primary purpose is communication. This was the greater failing -- ESPN crafted a mobile service offering based on the assumption that their content was the primary experience. But even the most devout sports nut (ok, except for a couple of tens of thousands) still cares more about using their phone for voice and messaging than for ESPN's content. This is the same lesson Apple learned with their iPod Photo misstep -- devices have to be targeted at their primary function and do it well; other features are all secondary.

Disney has got it right on the second point in their other MVNO (Disney Mobile) -- they're offering families better control over their communications and tools for parents to feel comfortable with giving their kids a mobile phone at a young age. I'm not sure about the first point, though -- especially as kids grow to an age where the last brand they want to show their friends is Disney. But then again, Virgin and Boost have the same problem.

Think differently? Let me know.

Comments

[R.A.B Gandhi]

i agree with the 2 points those you conclude about ESPN failure at certain degree, plus, i think those two is quite general in many mobile business. What i want to ask your opinion is about the second lesson. If mobile is about communication (phone, text message, e-mail), how about Helio? from what i've read, Helio doing quite well (although they don't expose their number of customers). Their commercial said that "it is not a phone".

[Charles Golvin]

I too have heard positive comments from Helio regarding their progress, though I always take a slightly jaundiced view when such pronouncements don't include numbers. But let's assume they're successful. Despite the "don't call it a phone" slogan, some of the more compelling features -- like access to MySpace -- have an underlying communications function, though they may be more social communication than one-to-one.

I think there is plenty of opportunity to grow ARPU using content, as Helio aims to do, but I stand by my view that even consumers compelled by such content still use their handset foremost for communications.