ESPN’s mobile efforts had a stand-out year in 2009. Its ESPN (NYSE: DIS) ScoreCenter was downloaded more than 4.5 million times and was ranked as the top free sports App in iTunes; ESPN was the 8th most-trafficked mobile website, according to Nielsen; and total minutes spent viewing ESPN Mobile TV increased 186 percent over 2008.
John Zehr, the SVP and GM of mobile, also told mocoNews at CES that the mobile division, which consists of 50-or-so employees, is bringing in steady revenues and is profitable. The accomplishments mark a significant amount of progress, considering that the company officially pulled the plug on its MVNO service three years ago. “I don’t think we’d be as strong today without the MVNO. The premise was that people will use mobile data, and that still holds true,” he said.
While ESPN’s mobile efforts today have included the mobile web, mobile TV (via FLO TV and MobiTV) and applications on the iPhone, Zehr says they have not started building apps for other smartphone platforms, such as the BlackBerry and Android. Expect BlackBerry applications in the next couple of months. Zehr: “40 percent of our mobile web traffic is coming from BlackBerry.” As for Android, he’s not jumping on the bandwagon too quickly. He said you search “ESPN” in the Android Market, and you get six to seven copycats. Zehr: “We’ve complained, but it’s a lot like whack-a-mole. They [Google] are not as responsive as I’ve liked. If they won’t police it, it makes the playing field tough.” (Today, only one app is using the ESPN brand in its title.)
As far as making money, that’s changed a lot too since the MVNO days. Historically, one of ESPN’s biggest revenues streams came from the carriers, which paid ESPN to be on its deck because it encouraged consumers to sign-up for data plans. But now that data plans are required with most smartphones, the carriers aren’t paying as much, he said. Instead, ESPN is mostly relying on revenues from mobile TV partners, app sales and advertising.
When it comes to advertising, ESPN has avoided working with any of the major mobile ad networks, like AdMob, Quattro or Millennial Media. He said they believe that if they tap into mobile ad networks, the ESPN brand will be a commodity. “Part of the value is being associated with us,” he added. Often times advertisers come from their web properties, but increasingly brands are coming directly to mobile. Without mobile ad networks, however, the ad inventory does not sell out.
In the near future, he says they will experiment with other types of advertising, and will increasingly target them based on a person’s location or behavior. He said in particular, movies have done well to a sports-oriented audience. If it’s Thursday or Friday night, and people are checking scores from a bar, perhaps they’d like to see a movie next? He also said that push notifications are free today, but that could change. Zehr said recently his responsibilites changed slightly. Previously, he was also in charge of product development. By taking that away, he said that signals that ESPN is serious the business opportunity. “In my role as GM, it’s incumbent on me to make money and invest…Not too far in the future, mobile will be bigger than the web.”