No fairytale ending for Disney Mobile

The Walt Disney Internet Group on Thursday pulled the plug on its Disney Mobile venture, two weeks after broadly hinting [1] at the MVNO's imminent demise and almost a year to the day after shutting down its Mobile ESPN initiative [2]. WDIG said it will shutter Disney Mobile later this year to explore a new business model for its content and services, presumably reinventing its Family Center service suite as a wireless carrier application (similar to its resurrection of Mobile ESPN services as ESPN MVP, the application now available via Verizon Wireless).

Disney Mobile's demise follows two months after MVNO Amp'd Mobile announced [3] its suspension of operations. Earlier this week, Korean operator SK Telecom said it would invest [4] another $270 million in Helio, the struggling U.S. MVNO it launched in conjunction with Internet service provider EarthLink.

"Our feedback from customers and critics from the beginning has been that we exceeded the mark in that respect," said Steve Wadsworth, Walt Disney Internet Group president. "However, the MVNO model has proven, as we've seen with other companies this past year, to be a difficult proposition in the hyper-competitive U.S. mobile phone market. In assessing our business model, we decided that changing strategies was a better alternative to pursue profitable growth in the mobile services area."

Disney Mobile launched in June 2006 over the Sprint network. The service will remain live through Dec. 31--Disney has offered to reimburse subscribers who purchased handsets, accessories and content through the company. The fate of Disney Mobile's 120 employees is presently under discussion.

For more on the Disney Mobile shutdown:
- read this release [5]

Related article:
SPOTLIGHT: On the Hot Seat with Disney's [6] Larry Shapiro