Mobile ESPN's Problem: Its Ego Was Bigger Than Its Brand
from the it-could-go-all-the-wait-no-it-didn't dept
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.