Those Guys Have All the Fun - James Andrew Miller [337]
SALIL MEHTA, Executive Vice President of ESPN Enterprises:
I was working at Disney’s Corporate Strategic Planning group and we developed the first business plans for the branded Disney cell phone and ESPN cell phone. We made the first feasibility assessments, then started advocating the concept to a handful of ESPN executives. Yes, there were concerns: for example, would subscriber frustration at an ESPN phone’s call quality boomerang to become resentment for ESPN? But for the most part, ESPN executives, especially John Skipper, aggressively supported the concept, using the mission of ESPN—“to serve sports fans”—as a key rationale. “If fans were going to get their sports on cell phones, ESPN has to be there,” he would argue. It evoked a long line of successful new-product introductions at ESPN. Skipper himself argued several years prior that if fans were reading about sports in a magazine, ESPN had to be there. Others had argued that if fans were going to try to get scores on the Internet, ESPN had to be there.
JOHN SKIPPER:
Sports Illustrated was a magazine; they ended up getting flanked by cable television and Internet, any number of things. We decided we were never going to get flanked by anything. Where fans get sports news and information, we’re going to be there.
We completely miscalculated two things—primarily, in my opinion, with two major outside factors. We had made the calculation that approximately 5 percent of people change carriers in any given month. Gee, well, when you make it possible to take your phone number, that percentage is going to 6, 7, and 8, right? But what happened is, all the phone companies did massive retention efforts—Verizon, T-Mobile, and Sprint, who was our partner but also a competitor. Everybody went, “No way we’re letting people move,” so they did lots and lots of plans—“Stay with Us,” Verizon Family Plan, they did all these things to keep people, so it actually went from 5 to, like, 3. Our pool to get customers from is only the people who are switching, and that pool went down.
By the way, this all happened under me. I was in charge of the mobile phone. It was Skipper’s Debacle. It was the company’s. We’ve moved on, and we’ve done well, and by the way, under George, yes, it was livable, there didn’t have to be a scapegoat. A lot of companies might have made me a scapegoat, right? “He fucked up, he’s out of here.” Not here.
SALIL MEHTA:
The decision to approve the project went all the way to Michael Eisner, and to tell the truth, this was actually one of the easier projects to get funded in my experience at Disney. The combination of the enormous passion that ESPN brought out in its fans, along with the unique ability for an ESPN phone to give you one-click access to the world of ESPN convinced Disney’s senior team that an ESPN service was close to a slam dunk.
We could not have been more confident in our eventual success. But almost immediately after it went on sale, the phone ran into problems: (1) We underestimated the stickiness of the big carrier networks and their newly introduced “free in-plan calling” offers; (2) the ESPN bulky handset was no match for the slender appeal of the Motorola RAZR; (3) the first price was far too high; (4) we were only available at Best Buy; (5) in truth, consumers simply did not pick phone service for even the best possible content experience. We began cutting the price and flooding the ESPN airwaves with our marketing message, but to no avail. Within six months of the launch, it became clear that we were not going to make it. The phone experience really did show the limits of ESPN. Market research backed up our intuition that if the mobile phone’s screen could really showcase ESPN, consumers would sign up. But in reality, mobile phone service is an extremely complicated selection decision for consumers, and not even the best content experience, nor the best marketing from ESPN, could really impact that.
That said, we surmised that the ESPN content experience would be extremely attractive