For a sports-media business project that cost $150 million and just folded, a little Thursday-morning quarterbacking isn't so inappropriate. And I'm a little obsessed with the intersection of sports and business. So let me dust off my Harvard MBA hat...
And I'm a little obsessed with the intersection of sports and business. So let me dust off my Harvard MBA hat...
Why did ESPN Mobile's original strategy fail?
I've got a very simple way of explaining it, which I've been peddling since the day the product was announced:
ESPN *ON* a phone is hot.
ESPN *AS* a phone is not.
ESPN has always been about the content; the day it decided it wanted to get into the handset and phone service business, it veered away from that zone.
The vast majority of consumers were never going to switch handsets; they were never going to switch carriers. Not simply for ESPN.
ESPN is a huge part of fans' lives, but it's as content. A person's phone (and service) is a person's infrastructure.
It's as apples-oranges different as the clothes you wear versus the veins in your body. Put in media terms, it's like ESPN laying cable to be wired to your TV and asking to be your cable provider, instead of simply concentrating on the content and having an independent cable provider pipe it through.
So the bad news is that ESPN spent $150 million to find this out. (Why didn't I pitch my expert-MBA consulting services way back when?!)
But the good news is that the new direction -- to simply license the content to any wireless carrier that wants to pay for it -- isn't just better than the old one; it's been the optimal strategy all along.
ESPN gets to go back to what they do best: Creating content. They license it to as many carriers as they can. They reach as many fans as possible.
The remaining question is how much they'll charge the carriers to have the ESPN content -- and what kind of cost will be passed along to the consumer?
Will consumers be asked to pay some monthly nominal fee, HBO-style, for ESPN content? Will it be more than nominal?
Will carriers offer it for free, in an effort to entice consumers to switch carriers? (Know what? That's not ESPN's problem anymore, which is the entire point.)
Some of us saw it coming, and it's also too easy to say in hindsight that "they never should have been in this business in the first place."
But if there's a silver lining to the execution of this project, it's how fast they recognized the mistake and the willingness to sharply pivot back to a strategy right in their wheelhouse.
At business school, the entire curriculum was based around case studies. This is a pretty fascinating case: About business failure, yes, but also about trying to recover from that failure.