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ESPN evolves with new media
ESPN360 still is available only to subscribers of certain Internet providers, and Macintosh computer users have been unable to take advantage of all the service’s features.
Mobile ESPN, meanwhile, has failed to catch on with consumers.
The company this summer made sweeping changes to its marketing strategy of Mobile ESPN, introducing more targeted advertising and slashing the price of the phones to $99 from $399.
Merrill Lynch analysts Jessica Reif Cohen and Michael Kopelman in July predicted that 30,000 will subscribe to the service this year, well below original estimates of 240,000. (ESPN declined to comment on those numbers or issue its own projections.)
The analysts said the product, when combined with losses from a similar Disney-branded service, would lose about $135 million after an upfront investment of $150 million.
Disney President and CEO Bob Iger last month acknowledged a “disappointing” response from consumers but said the company would continue the service as a way to expand the ESPN brand.
“We think there is a great opportunity to extend ESPN-branded content to mobile platforms as a way of connecting with our consumers whenever and wherever they are,” Mr. Iger said. “… ESPN’s presence in mobile platforms is a given into the future.”
ESPN officials said the willingness to stick with Mobile ESPN and ESPN360 services is indicative of a risk-reward culture formed in the network’s early days.
“When they first hired people who ran the company, they did an unbelievable job,” Mr. Walsh said, “because they hired people who had an entrepreneurial spirit, who were great thinkers, who loved sports and who were creative and observant. They’ve created a culture where people think about what’s next.”
Exposure vs. control
With size comes power, and leagues and teams can feel ESPN’s power in ways good and bad.
ESPN can deliver a vast audience, for example, to a college basketball program that otherwise would get little exposure. But those teams also are, in some ways, at the network’s mercy.
Consider the case of college athletics’ Mountain West Conference. Mountain West schools until last year received solid exposure on ESPN but only on times and days the network chose.
That meant that many football games were held on Thursday nights rather than the traditional Saturdays. Basketball games occasionally tipped off in the morning or late at night during the week.
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