Verizon Wireless Resurrects Mobile ESPN With New Service
NEW YORK -(Dow Jones)- Verizon Wireless launched its Mobile ESPN service late Tuesday, reviving a brand ravaged by the competitive nature of the wireless industry.
Subscribers of the carrier's VCast VPak - a bundle of data services that costs $15 on top of the phone bill - will have access to a mobile ESPN application that features video highlights from programs "SportsCenter" and "Pardon the Interruption" and content from ESPN Insider. The program also allows customers to get news updates through a sports ticker and manage their fantasy teams.
"For customers on the go who are out and about as consumers often are, being able to connect to the sports world is a critical driver of the adoption of data usage," said Ryan Hughes, who manages digital media programming for Verizon Wireless.
The shutdown of Mobile ESPN in September illustrates the precariousness of niche companies operating a wireless business. But Verizon Wireless's willingness to revive the brand through its VCast service shows the value of content as consumers do more than just talk on their phones. In a bid to stay competitive, carriers are signing exclusive deals with content providers as they lay the foundation for the broader embrace of video services.
"ESPN has a better chance of getting people to use this service if it's launched on a mobile phone they already have," said Rory Altman, a director at consulting firm Altman Vilandrie & Co. With Verizon Wireless, "You're going to get a lot of people who have access to that."
Verizon Wireless, jointly owned by Verizon Communications and Vodafone Group, is the No. 2 carrier in the U.S. by customers, but is seen as having the most attractive subscriber base.
The program, now known as ESPN MVP, provides essentially the same experience that customers had when they signed up for service through Mobile ESPN, since ESPN licensed out the application for use on Verizon Wireless's phones.
"On day one (of Mobile ESPN), we bought the phone and played with it, and we were very impressed," Hughes said. "You noticed it was a unanimously praised and highly regarded application."
The service will initially be available on two Motorola and three LG Electronics phones. The carrier is working on allowing other phones that use the evolution-data optimized network to access ESPN MVP.
ESPN's mobile Web site, which features short video clips of highlights, game updates and breaking news, will remain available to all other carriers.
Content Is King
With intense competition making calling plans cheaper, the carriers are looking to data services as another means for growth. Text messaging and ringtone downloads provide the majority of the revenue, with other features such as music and video downloads still slow to attract consumers.
"The stuff is fun, but we're not just sitting there with 45 minutes to kill every day," Altman said.
Still, the industry is banking on video as a potential catalyst, and there is a mad dash to sign up partners.
"Do we think it'll drive additional subscribers? You bet," Hughes said, adding that he believes the industry is nearing a stage when it will realize that video services are a "smash hit."
Verizon Wireless isn't the only one adding brand names and celebrities to its line-up. Sprint Nextel and Walt Disney's ABC Television Group unveiled a partnership that allows Sprint subscribers to download full-length episodes of network programs such as "Grey's Anatomy" and "Lost."
AT&T, meanwhile, has a deal to carry exclusive content from Time Warner's HBO onto its wireless handsets.
MVNO Challenges
Mobile ESPN remains the most high-profile bust in the burgeoning business of leasing wireless capacity from carriers to create a new service provider - also known as a mobile virtual network operator. ESPN parent company Disney took a $30 million charge to shut down the service.
Mobile ESPN, which uses Sprint Nextel's network backbone, was unveiled with much fanfare at the mobile industry's annual trade show in 2005 and launched later that year. But the service failed to attract the legion of ESPN fans, many of whom couldn't justify spending more on their wireless service despite the premium sports features.
A number of new MVNOs have sprouted up but face similar challenges as the industry gets more crowded.
"The market's saturated," said Tole Hart, an analyst for Gartner Inc. "Is there opportunity? Yes. But there has to have a well-thought-out plan."
Because MVNOs buy wireless minutes from the larger carriers, they need to sell their service at a premium to increase their profits. In addition, many of the customers the MVNOs are going after are already locked into long-term contracts, and are unwilling to make the switch.
Hart estimates that half of the MVNOs will likely fail.
Disney remains undeterred by the failure. It continues to promote another wireless service, Disney Mobile, which focuses on family-related features and services.
Others include Virgin Mobile USA, among the more successful, which targets the youth market with an inexpensive prepaid service. Upstarts Amp'd Mobile and Helio target the same age group but with higher-end entertainment-centric offerings. TuYo Mobile and Movida each offer a prepaid service targeting the Hispanic market.
-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 16th May 2007
