Tag conent

Mouse No Longer Roars

by mobileman (10/01/2007 - 05:10)

The big news that nearly got lost last week was Disney closing up its remaining MVNO. Now, both ESPN and Disney mobile have failed in the MVNO game.

Despite the MVNO failures, Disney will profit from wireless in a huge way.

What should we as an industry learn from these two expensive attempts?

On the surface, both companies have the consensus prerequisites for a successful MVNO.

They have immense name recognition, strong brands, loyal and large clientele, and enough money to fill the Superbowl, or Cinderella’s castle for that matter. Both ultimately failed for similar reason.

Reason number 1:

Disney is not in the wireless services business.

This may seem institutively backwards. After all, what MVNO is in the wireless business before it starts? Answer: Virgin. Which MVNO is successful? See answer to previous question. The challenges of the wireless MVNO business, with thin margins, are unique to big brands. Disney is the premier storytelling and content king.

Reason number 2:

A key to a successful MVNO is retail distribution and promotion.

Disney never seemed to be able to ramp up a critical mass of retailers for its mobile services. This is a curious failure since Disney products are found in many of the largest retail superstores. My assumption is that the toy and apparel buyers at Wal-Mart and Target have little in common with the buyers of telecommunications equipment. The MVNO sale in retail establishments is tough on any level. The retailers are likely to prefer the big post-pay brands that give them a residual on the service contract to a onetime prepaid sale. I cannot remember seeing a single ESPN or Disney phone anywhere I've shopped.

Reason number 3:

Exactly who is going to buy a Disney phone anyway?

Being a father of grade school-aged children, I get opportunities to conduct informal “focus groups” with my kids' friends when they are over at my house.

They all seem to be getting mobile phones around 5th or

6th grade. The trend is clearly getting younger. I would ask them who would want a Disney phone? The looks of horror I received was uniform. A Disney phone? “That’s for kids!" echoed one 9-year-old, “I want a Krazr!” If this crowd was rejecting the Disney, then who was left? 6-year-olds? The purchasers of these phones were parents. Parents do respond to constant badgering from their kids. (Gee, I hope my kids are not reading this!) Preteens want what teens have – the mainline phones from the big carriers. Not a Mickey Mouse phone.

Reason number 4:

Family plans rule.

This was a huge miss on the part of both ESPN and Disney. In the case of ESPN, Dad is getting on the same phone plan as the rest of the family. For Disney, junior is getting the $10/month family plan deal. You might make a case for single men getting a cool ESPN phone, if ESPN and sports content was not available on every other phone! For Disney, there are very few financially independent 6-year-olds with purchasing power. The whole family was expected to convert to Disney. (Not.)

Reason Number 5

Be careful with premium pricing

Both plans were post-paid and premium-priced compared to the big guys. With ESPN content available everywhere and the major carriers quickly catching up with kid-friendly phones and plans, there was no room for a premium-priced Disney alternative.

And now, why Disney can be huge in wireless.

Disney is a content monster. No company has the breadth of “Monday Night Football” to “High School Musical.” The wireless medium is another cash machine for Disney, just like DVD, theater, toys, clothing, theme parks, cable channels and the Internet. They attract and retain audiences in all genres. The mobile audience is, and will continue to be, a lucrative venue for the Disney Kingdom of Content.

Category: Mobile