No fairytale ending for Disney Mobile

I could not help but repost my comment from earlier in the month as it is even more applicable................
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.

The big news that nearly got lost last week was Disney closing up its remaining MVNO. Now, both ESPN and Disney (for kids) have failed in the MVNO game. Despite the MVNO failures Disney will profit from wireless in a he way.
What should we learn as an industry from these two expensive attempts?
On the surface both companies have the consensus prerequisites for a successful MVNO. They have immense name recognition, strong brands, loyal and large clientele and enough money to fill the Superbowl, or Cinderella’s castle. Both ultimately failed for similar reason.

Reason number 1:
Disney is not in the wireless service business.
This may seem institutively backwards. After all, what MVNO is in the wireless business before it starts? Answer: Virgin , which MVNO is successful – see answer to previous question. The challenges of the wireless MVNO business, with thin margins are unique to big brands. Disney is the premier storytelling and Content King

Reason number 2:
A key to MVNO successful is retail distribution and promotion.
Disney never seemed to be able to ramp up a critical mass of retailers for its mobile service. This is a curious failure since Disney products are found in many of the largest retail superstores. My assumption is that they toy and apparel buyers at Wal-Mart, Target, have little in common with the buyers of telecommunications equipment. The MVNO sale in retail establishments is tough any level. The retailers are likely to prefer the big post-pay brands that give them a residual on the service contract than a onetime pre-paid sale. I cannot remember seeing a single ESPN or Disney phone anywhere I shopped.

Reason number 3:
Exactly who is going to buy a Disney phone anyway?
Being a father of grade school age children I get opportunities to conduct informal “focus groups” with my kids friends when they are over at my house.
They all seem to be getting mobile phones around 5th or 6th grade. The trend is clearly getting younger.I would ask them who would want a Disney phone? The looks of horror I got were uniform. A Disney phone? “That’s for kids echoed”, one 9 year old! , “ I want a Krazr!”. If this crowd was rejecting the Disney, then who was left? 6 year olds? The purchasers of these phones were parents. Parents do respond to constant badgered from their kids (gee I hope my kids are not reading this!!). Pre-teens want what teens have – and that’s the mainline phones from the big carriers, not a Mickey Mouse phone.
Reason number 4:
Family plans rule.
This was a huge miss of both ESPN and Disney. In the case of ESPN, Dad is getting on the same phone plan as the rest of the family. For Disney, junior is getting the $10/month family plan deal. You might make a case for single Men getting a cool ESPN phone, if ESPN and sports content was not available on every other phone. For Disney, there are very few financially independent 6 year olds with purchasing power! The whole family was expected to convert to Disney (not).

Reason Number 5
Be careful with premium pricing
Both plans were post paid and premium priced compared to the big guys. With ESPN content available everywhere and the major carriers quickly catching up with kid friendly phones and plans, there was no room for a premium priced Disney alternative.

And now why Disney can be huge in wireless
Disney is a Content monster. No company was the breadth from “Monday night football”, to “High School Musical”. The wireless medium is another cash machine for Disney, just like DVD, Theater, Toys, clothing, Theme Parks and the Internet. They attract and retain audiences in all genres. The mobile audience is , and will continue to be lucrative venue for Disney Kingdom

steve spencer CEO upocnetworks
ceospeaks.blog.dada.net

Steve, very smart and in depth comment, i agree with 99% of what was written. What would be your estimate of importance of promotion and distribution (percentage wise). How important is it? 20, 40, 60%? Can I give you a call to discuss this shortly (yes, I have a similar project on the way shortly) :) Stjepan; stjepan.udovicic@gmail.com, Europe

i think it's cool finaly a cell phone for everyone