Mipcom: ESPN Digital Doing Well – Just Skip The Sections About Profit, Pesky MVNO


ESPN is “very bullish” about its new media operations, said ESPN president George Bodenheimer, despite refusing to admit that ESPN’s new media services don’t actually make any money.
– Bodenheimer gave a cheery recap of ESPN’s development starting with its first few days in full seventies TV glory just before Bodenheimer joined the mail room in 1981. Sports fans expect to see ongoing innovation in video, he said, and the channel learned not to fear branching out into new networks and new media. ESPN has put considerable investment into its 11,000 square-metre digital centre in Bristol, Connecticut, and invested in services like the acquisition of UK’s soccernet site which will expand into French, German, Italian and Spanish-language services by the end of 2006. By the end of the year, ESPN will be distributing mobile content in five continents and Bodenhemier said international expansion is key to ESPN’s strategy, being both “universal and local”. “Technology is re-ordering the business world – media bosses have to talk tech.” He said he doesn’t know which way things will go – a favourite answer from pretty much all key speakers here – but said ESPN’s employees almost tell management what the goal is because they all understand their mission of “serving sports fans in a profitable manner”.
He then broached the MVNO subject, saying sales were slower than expected partly due to the fact that this is cutting edge technology. Instead, ESPN wants to focus on expanding its existing licensing business on mobile and has accelerated its development of various applications. “What our guys built is not under dispute – our guys built one of the best applications in the business,” he said. The interest from carriers looking to licence that application is a further endorsement of its viability, but it sales of around 30,000 were “significantly below where we had planned.”
– ESPN’s websites use a business model that’s a combination of advertising, repeat subscription fees and direct merchandising. Freelance journalist Mark Halper did an excellent job interviewing Bodenheimer and pushed him to the point of discomfort on whether all these wonderful sounding services are actually making money. Bodenheimer eventually said: “We’re feeling pretty good about where we are in media and we’re very bullish about the internet. To think that digital media and the internet is not core to growth is a big mistake. I’m very pleased at where we are.” I get frustrated with this farcical corporate convention of not admitting that something doesn’t make money. Everybody in the room knew that if it was making money, he would’ve said that, so clearly it’s not. But why not just say that it’s not making money but that’s not the point – it’s a long-term investment and a long-term strategy, and if they don’t do it, they die.

This article originally appeared in MediaGuardian.

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