Merill Lynch says its time to give up on Mobile ESPN


Merill Lynch issued a note to investors last week that Disney should give up on its Mobile ESPN project.  Even with the drastic reduction in price of the handsets, relatively few people have jumped on board.

"Cohen and Kopelman now estimate that ESPN Mobile will lure a mere 30,000 subscribers over the course of this financial year, well below their original estimate of 240,000. Along with the losses generated by a second Disney-branded phone service, ML expects that the Mouse will lose $135 million on its experiment in FY06."

The way I see it, the handset costs itself were not the issue.  The amount of people that will spend $80 dollars a month for a relatively small data/call plan is minimal already; then you have to consider how many people are going to give up their current plans, or current networks, just for the specialized plans.  Just like the discussion about Tivo, whether it should be a service or hardware, ESPN should consider finding a way to offer Mobile ESPN as a download or build into other company's phones, like Yahoo! Go.  Without having to make the choice to leave carriers or family plans, there might be an audience willing to pay for the premium service (which most sports fans would love).

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