Disney Following The Content-Based MVNO Model: Hype, Slash Prices, Fail

from the it's-in-the-book dept

Our Spidey senses detect a pattern here: MVNO launches and announces a bunch of exciting new non-voice services that it says justify its premium prices, and it gets a whole lot of hype but few actual subscribers. Then, a few months later, it cuts its prices in a desperate attempt to gain users, before later going out of business or retooling its business model. Amp'd? Launch hype, check. price cuts, check. New business model? Check. Mobile ESPN: high-priced launch, then the price cuts, then, of course, failure. It's not clear if Disney learned anything from that debacle, having surged full speed ahead with its Disney Mobile MVNO for paranoid parents, even when the writing was on the wall for Mobile ESPN. Given the pattern, it's hardly surprising to see Disney cutting its handset prices to try and attract more users. The company says it's part of a holiday-season promotion -- perhaps calling it a final-throw-of-the-dice promotion wasn't too attractive. It's getting increasingly difficult to understand why these sorts of companies think that they'll be able to lure users to their dedicated mobile services, and why that's a better idea than doing what they've always done -- be content providers and sell their content to whoever wants it.


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  1.  
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    Sanguine Dream, Nov 1st, 2006 @ 1:18pm

    It's not too diffucult...


    It's getting increasingly difficult to understand why these sorts of companies think that they'll be able to lure users to their dedicated mobile services, and why that's a better idea than doing what they've always done -- be content providers and sell their content to whoever wants it.


    There is one simple answer to that...greed. Disney, ESPN and the others want their hands in every cookie jar they can reach. It was calculated that by offering their own service they could make more money. Why share the profit with (insert name of cell service provider) when they can keep it all to themsleves.

     

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  2.  
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    2 cents, Nov 1st, 2006 @ 2:46pm

    Duhh

    Interesting considering Disney owns ESPN. . . . fool me once. . . .

     

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  3.  
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    MadJo (profile), Nov 1st, 2006 @ 3:08pm

    funny

    What kind of Mickey Mouse organization is that? Oh wait... :)

    I guess they followed the Slashdot way, but forgot about what to replace the ??? with:
    1) Release an expensive service
    2) Cut prices
    3) ???
    4) Profit?

     

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  4.  
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    Paul Jardine, Nov 1st, 2006 @ 7:03pm

    Conventional Wisdom

    The problem is that they (MVNOs) always see themselves as a telco, and think they are going to make money by charging a premium on the telco services. What they need to do is forget voice, just get a good deal on minutes and pass on the saving to the consumer, then use the fact that they have control of the channel to deliver services that people want in a way that they actually want to use. The business model should assume zero margin for voice & traditional telco services. The only successful MVNOs will be the ones that swallow that pill. It also means that MVNOs will be small operations, not thousands of employees.

     

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  5.  
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    Solo, Nov 1st, 2006 @ 11:17pm

    Unatractive princing scheme? check
    Piggy backing on a major carrier on a first place? check
    "premium" content that only means premium price? check
    Forced content through orifice? check

    Maybe they are all looking at Korea, but I'm willing to wager that in the US, for most people, most of the time, a cell phone is just a cell phone: place and receive calls. Preferably loudly in the next cube, in restaurants, movie theatres, while driving.

    Let me pay more for extra 10fps clips to be watched on a 96x96 pixel color screen? check

    Yep, that's a real winner.

     

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  6.  
    identicon
    NoMorePoints.com, Nov 2nd, 2006 @ 6:15pm

    Now try to get them to cut the ticket prices to the theme park.......good luck!

    NoMorePoints.com

     

    reply to this | link to this | view in thread ]


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