Friday, July 21, 2006

ESPN Pulling the Plug on its Mobile Phone...

There have been some interesting articles over the last few days regarding ESPN and its mobile phone. An article from Friday's MediaWeek titled, "Merill Lynch: Time to Pull Plug on Mobile ESPN," noted:

Merrill added that while Disney significantly reduced the cost of the handset in April, dropping the price of its Samsung model to $99 after the original Sanyo handset launched at $399, “the model does not appear to be a particularly attractive use of capital,” as the reseller business traditionally offers a low return on investment. (Incidentally, the bulkier Sanyo is now available free-of-charge after a $29 mail-in rebate.)

Cohen and Kopelman now estimate that ESPN Mobile will lure a mere 30,000 subscribers over the course of this financial year, well below their original estimate of 240,000. Along with the losses generated by a second Disney-branded phone service, ML expects that the Mouse will lose $135 million on its experiment in FY06.

From the PR I did around Motorola iDEN phones, people in the U.S. use cell phones for the following:

* Call someone
* Walkie Talkie
* Text Messaging
* Download music

Consumers are just not interested with Web access on their phones. The main reason is because it's easier for consumers to use the Internet via their computer. I have read that it is easier for people in the Far East to use a phone to access the Internet.

It is absolutely baffling that "ESPN Mobile will lure a mere 30,000 subscribers" this year. For the amount of money ESPN spent with those Super Bowl commercials, which were created by Hill Holiday in Boston or those cheesy Trey Wingo ads on ESPN, one would believe they would have more subscribers.

Other than gamblers, who really needs this type of phone. Don't get me wrong, when my phone subscription is up, I am definitely looking into purchasing one of these phones. Then again, I may have a problem.

It will be interesting to see how long they keep selling this phone. I wonder why they didn't give the phone to Simmons and have him review it online. A positive review from Simmons could have brought in thousands of subscribes. I wonder what type of guerilla marketing campaign they are using? Did they ever come to Fenway before a game to promote the product? What about at college campuses before a big sporting event?

Overall, I think the phone has potential, but ESPN needs to figure out how to market it correctly to its core audience.


At 1:04 PM, Blogger Bob said...

This business model is retarded. Anyone inclined to access the Internet on his phone already pays a nominal fee to do so. For this fee, he has access to the entire public (free) Internet, which I'm pretty sure includes news about sports. Why would he subscribe to a separate service that gives him access only to ESPN? Only if that service provides valuable content that cannot be obtained elsewhere. I'm not sure that's the case.

There is another problem with this model: ESPN Mobile is a web service; there is no reason to tie it to a particular phone. It will be interesting to compare the success of ESPN Mobile to and other services that aren't tied to hardware.

At 3:45 PM, Blogger Milne said...

Funky -- great points indeed. That's why this phone service is going nowhere.


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