The Mobile ESPN wireless telephone service, launched with much fanfare during the Super Bowl, will shut down later this year after it was unable to attract very many subscribers, according to Reuters.
ESPN, owned by Walt Disney, said that instead it will pursue licensing the brand to existing mobile providers.
Reuters reported that owners of Mobile ESPN phones will receive a full refund when they settle their final Mobile ESPN bill, and customers who choose to stop Mobile ESPN service will be released from current contract obligations, the company said.
Mobile ESPN was a mobile virtual network, or MVNO. It bought wireless minutes wholesale from Sprint Nextel. Other MVNOs include services such as Amp'd Mobile and Helio. Walt Disney has another one called Disney Mobile, which markets to families who want to be able to control and monitor their children's movements and cell phone activities.
The announcement of ESPN Mobile's shut down brings into question the effectiveness of its business model.
Seamus McAteer, a senior analyst with Seattle-based M:Metrics, said this does not mean all MVNOs will fail. He said creating one based on a brand alone might be too much to ask, but leveraging an existing sales channel, like an Internet service provider, might work.
"It's important that we do not over-react to this as the end of MVNOs. In the end, asking consumers to view a brand with a connotation as purely a media company as a provider of telephony is too great of a conceptual leap," he said. "Brands like Virgin, a lifestyle brand, or brands that are already providers of communications services, such as a cable company or ISP, stand a much better chance as an MVNO, as do companies that are pure-play MVNOs."
In September last year, I got a chance to see the phone up close, and it was well executed. The user interface, which was built by Bellevue-based UIEvolution, was sleek and easy to use. It was easily modified to make your favorite teams accessible with one or two clicks. It seemed like it could be a potential winner.
I think one of the problems, however, is that the number of people who would be interested in a sports phone gets small fast. Let's face it, the phones we have today are often dictated by our employer, or what is available through a family plan. ESPN Mobile wouldn't have been accessible through either of those scenarios.