Mobile ESPN's Problem: Its Ego Was Bigger Than Its Brand

from the it-could-go-all-the-wait-no-it-didn't dept

Wed, Oct 4th 2006 1:24pm — Carlo Longino

There's been a fair amount of dissection of Mobile ESPN in the aftermath of Disney's decision to shut it down, when the simple explanation is simply that the business model was screwed from the outset. Take a service that's attractive to a small group of people, then slap a high price on it and do nothing to eliminate the barriers to consumers switching from another carrier -- now there's a recipe for success. The fundamental problem seems to be that ESPN wildly overestimated the standalone attraction of its brand. There's little doubt that ESPN is a strong brand when it comes to sports, but much of that strength is derived from its widespread availability as part of cable packages. Put ESPN out on its own, and it doesn't quite have the pull its execs might think -- at least according to a 2004 Deutsche Bank study on how many people would buy ESPN on cable if it were offered a la carte. While nearly two thirds of those surveyed said ESPN was either very or somewhat important to them, 77 percent said that if ESPN got removed from their cable lineup, they wouldn't do anything -- switch to another provider, or pay for it a la carte. When asked how much they'd pay for ESPN if it were offered on an a la carte basis, 72 percent said they'd pay nothing; 9 percent said they'd pay $2 per month and 8 percent said $5 per month, and response rates dropped from there as prices went up. People like ESPN, sure -- but many don't have much interest in paying for it on its own on television, let alone for an even more superfluous mobile service. Ridiculous pricing certainly didn't help Mobile ESPN reach its target audience, but that target audience was so small, that it really didn't matter. Disney's saying it will spend $30 million to shut the service down, but remains bullish on the prospects for its other MVNO venture, Disney Mobile, but it could have the same problem as Mobile ESPN: while it offers the perfect service for a slice of the market, that slice may just be too narrow: it's not marketing simply to parents, but to parents paranoid enough to feel a need to track their kids' location, lock down their phone and control who they call, and who are willing to give up everything offered by a traditional phone carrier to focus on that particular aspect of their lives -- and who are willing to pay premium prices to boot. ESPN seems to have figured out (about $150 million too late) that they're better off just selling their content to whoever wants it, rather than only letting people access their content if they also pay it for phone service. It doesn't sell its cable channels that way, and mobile phone content probably won't work much differently.

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14 Comments

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Lay Person, 4 Oct 2006 @ 1:33pm

Wow!
Who did this study?

I would love for someone to do this typr of study on my entire cable package lineup!

If it were conducted, I'm sure it would get rid of all the crap channels period, leaving me with the 5 channels I enjoy watching but not paying $30.00 a month for:)
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Anonymous Coward, 4 Oct 2006 @ 1:43pm

So does this mean I won't be getting my Lifetime Mobile plan?
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NSMike, 4 Oct 2006 @ 1:45pm

What are they thinking?
What is it with these big businesses who put out absolute CRAP, expect us to swallow it, and then act surprised, disappointed, and sometimes even angry when they fail, as though it's the consumer's fault? "You didn't buy our product, even though it's more expensive, a pain to setup, poor service and catered to an extreme niche market! It's all your fault!"

...Huh?
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- Anonymous Coward, 4 Oct 2006 @ 2:06pm
  
  Re: What are they thinking?
  Funny, but I just didn't take it that personally.
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Solo, 4 Oct 2006 @ 2:24pm

I'll take a price cut with that.
I would consider paying less on my satellite bill if I could cut ESPN (and the 12 variants that I always skip over) But I'd say the same thing about the outdoor channel, the 5 religious channels and another handfull of special interest channels that are no interest to me.
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- just ®idiculous, 4 Oct 2006 @ 2:59pm
  
  Re: I'll take a price cut with that.
  There's a reason that satellite or cable providers don't allow customers to "de-select" channels for -$1 per month. Because all of the channels together might be worth $30, but individually they aren't worth $1 apiece, even if there are 100 of them...
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Stymie, 4 Oct 2006 @ 3:01pm

They did a poor job marketing the product.
I'm a huge fan of ESPN, and I would pay $2 and maybe even $5 to have it as part of my cable line-up. Sill, I need other services on my mobile phone and things like email and 3g wireless are just more important.

So, there's no way I would pay a premium price to get an ESPN affiliated phone, but a huge problem with their service is that I didn't even realize it was an entirely separate service with different phones & calling plans, etc. until recently. I just assumed that it was something you could pay to get on any mobile phone. As I said before, I wouldn't pay for it anyways, get for someone like me that keeps abrest of new gadgets and stuff and watches ESPN all the time, it's just plain poor marketing that they couldn't even show me what they were selling.
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- just ®idiculous, 4 Oct 2006 @ 3:16pm
  
  Re: They did a poor job marketing the product.
  Well yes, they did a poor job marketing it, but they did quite a bit of on-air promotions around March Madness. But the real problem was the cost. I'm a technophile and a sports nut and I saw the product in action at CES in January 2006, and was excited. But I was a little concerned that no costs were available from people at the show... and sure enough when I went online to get some more details and decide if it made sense to switch, I was shocked (shocked!) to find out that it would have been several times as expensive as my current provider. Not worth it. And who wants to put up with the growing pains of a startup cell?
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SamIam, 4 Oct 2006 @ 3:12pm

to bad :(
ESPN mobile is a great service that you cant get through any of the other carriers. I know people that have this and get real time updates on every player of thier fantasy team. Not to mention the ability to watch real PTI video clips and live game footage before the rest of us poor saps are able to drive home and watch it after work. Or being able to go shopping with the wife AND catch the game live at the same time! Yes this may be a small chunk of the market they're targeting but for that chunk its the best thing since sliced bread. Im sure some would be willing to pay more to keep it around. There simply isnt another company out there that offers this kind of service. At least sell the content to cingular or verizon ESPN! And what about these guys with another year or two left on thier contract? Why dont you give them each a $200 early cancellation fee and apologize for showing them a glimpse of heaven and then tearing it from thier grips.
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chris (profile), 4 Oct 2006 @ 3:23pm

it goes deeper than that
the problem isn't arrogance or hubris on the part of disney/ESPN. sure, their buisness model sounds ridiculous when you put it in those terms, but the truth is that consumers are moving towards on-demand/ala carte/customized services. the day is quickly arriving when providing content, and providing access to content are different businesses.

right now network television, news papers, and mobile phone companies are in the business of acquiring content for us to consume via their distribution systems. as on demand services gain momentum, media companies may get out of the broadcast business, and cable and TV networks may get out of the content business.
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hit me up, 4 Oct 2006 @ 5:55pm

constant ringing
I thought about getting the espn mobile, but how many times do you get annoyed with people calling you, imagine having a phone that beeps every 5 seconds telling you what a-rod told his therapist. I would have no interest in constant updates. but that is just me...
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DJ N., 4 Oct 2006 @ 6:34pm

Never.
No. No. No.
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dj, 3 Jan 2009 @ 11:56am

well sports will take a long time to be really visible on the mobile. The best thing one can do with the molies as far as sportscan do is, it can only give you scores -and that also for a very high fee.
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sprearson81 (profile), 8 Jun 2012 @ 6:11pm

This was just crazy
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