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Updated: Disney Mobile Closing; Second Disney MVNO To Shutter; WDIG Will Explore Licensing A La ESPN

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imageUpdated below: Later this morning, sources close to the situation tell, the Walt Disney (NYSE: DIS) Company will announce that it is closing its second MVNO in as many years rather than continue to invest in the expensive service. The decision was based on a recommendation by the Walt Disney Internet Group to corporate that Disney Mobile be close and that, instead, a focus will be placed on licensing its Family Center suite. Disney was happy with the product overall, with those sources saying that subscribers were using its data services actively, but the costs of distribution and the inability to gain traction in big-box stores were insurmountable. Also, the company learned that selling the message on data services — despite its massive promotional ability with Disney ABC, the theme parks, etc. — was a tougher message in the marketplace than the carriers’ message of “buy one handset, get three free.”
Unlike Mobile ESPN, Disney subsidized its handsets and, overall, took a more pragmatic approach. In the end, it wasn’t enough. We’ll have more throughout the day.

— WDIG is working to place members of the 120-person group – which is learning now of the decision — in other areas of Disney.

Updated: The official release came out. The focus will be on its Family Center suite, as we mentioned above: “The Family Center suite allows users the ability to display the location of a child

6 Responses to “Updated: Disney Mobile Closing; Second Disney MVNO To Shutter; WDIG Will Explore Licensing A La ESPN”

  1. Marvin M.

    My company was an Authorized Dealer dealer for Disney Mobile through Brightpoint North America.

    After Disney Mobile announced they were going out of business, it is FACT that the past earned commissions owed to dealers through Brightpoint North America STOPPED BEING PAID & still commissions are yet to be paid.

    Additionally, the $50 per phone rebates customers we promised we ALL DENIED, leaving the dealers that sold the product in a VERY tight spot with the FAMILY MEMBERS & CUSTOMERS that dealers sold this product to.

    Disney Mobile wireless handsets that were purchased at a cost of $130 each ARE NOT being honored for return, which widens the dealers exposure.

    If anyone has found resolution to this please contact me at [email protected]

  2. I could not help but repost my comment from earlier in the month…………….
    I am amazed that more of the MVNO’s and investors did not look at the CLEC track record of the mid 90’s before proceeding. In essesence it was the same play but with a wireless front end. Sure the mobile operators made some money with all the MVNO’s that have recently launched but probably not enough to overcome the disctraction to their core businesses. Disney’s MVNO management team lacked the experience to understand the lessons of the CLEC market. They also did not truly comprehend that parents are NOT going to switch out their phones so that their child can have a Mermaid themed phone. Disney is the most amazing marketing company in the world as evident when I go to Orlando. Great marketing though cannot overcome an MVNO’s challenges when trying to acquire a mobile user. I suggest that Disney work with Motorola or some other handset vendor and launch a Disney phone with each operator. In addition they can develop an application and bundle Disney content that can be installed on any phone via over the air activation for those folks that do not want to switch handsets or operators………..I truly am sorry that this did not work out for Disney but the market taught lots of CLEC's in the 90's a similar lesson.

  3. So let's dissect your interview with Steve Wadsworth from Oct 2006 shall we…

    1. "Steve Wadsworth, president, Walt Disney Interactive, about Disney’s MVNO plans…he stressed a long-term commitment. "

    – Ya I guess 12 months is a pretty long commitment…if you're a sock.

    2. On reassuring partners and consumers post-Mobile ESPN: “. … We’re not honestly hearing that kind of feedback of concern from those partners."

    "but I honestly can't tell you that I'm being honest about that"

    3. "…From a marketing perspective, we’re reaching totally different people. … “

    Steve, your target audience is freaking 9 year olds who want Hanna Montana on their phone but alas don't call the shots or pay the bills in the household, nevermind having parents who will see hell freeze over before giving your target audience a phone.

    4 When I asked if Mobile ESPN would still be up and running if Disney’s fiscal year wasn’t ending, Wadsworth replied: “I don’t think so. I was not the guy making any decisions around that…"

    Translation: " I was too busy making stupid decisions at Disney Mobile to have time to make stupid decisions at ESPN Mobile"

    On Disney Mobile: "… It’s a building thing right now and what we’re seeing is building excitement through these retailers."
    "That is, of course, until the sh*t hits the fan at which point we'll use those 'buildings' for the devices that are sent back from the retailers"

    On commitment: Wadsworth: “I think there remains the same level of commitment and the time horizon is the same. As I said back then … the best gauge of success is going to be a few years out and I think we all feel that way. Obviously, along the way there are milestones … We will know in three years the level and extent of that success.” He said it could be sooner.

    You're right about that Steve….it could be much much much sooner.

    On Disney CEO Bob Iger’s support: Wadsworth replied: “He’s bullish about this. He’s said to investors he’s bullish about Disney Mobile.”
    Bullish? You mean as opposed to telling the investors that this thing is a sinkhole destined for failure and oh by the way do you want to invest?

    Thanks for playing Disney Mobile…now can we have our next contenstant on "An MVNO isn't as Easy as You Think".