Mobile ESPN service is nixed

ESPN yesterday said it will shut down its heavily promoted Mobile ESPN wireless service by the end of this year, in favor of a new strategy to license ESPN content to other providers.

The sports network, which formally introduced the Mobile ESPN service in February, said it will stop accepting new subscribers immediately and cut off all active customers on Dec. 31.

The Mobile ESPN service generally was viewed as a technological success, but never caught on with consumers, who were apparently unwilling to pay a $10 to $50 premium to get highlights, fantasy sports alerts and even live games on an ESPN-branded phone.

The licensing plan will allow sports fans to download similar ESPN content onto their existing phones using their current wireless provider, instead of purchasing a wireless plan from ESPN. Executives yesterday said they are committed to spreading the ESPN brand into the wireless arena, and have garnered strong interest from other wireless providers seeking sports content.

Mobile ESPN “created a tremendous wireless asset widely recognized for quality and innovation, and as a result we have been approached by well-entrenched carriers about a licensing model,” said Salil Mehta, executive vice president of ESPN Enterprises. “With a redefined approach, we have a greater opportunity to reach millions of fans while achieving our strategic and financial goals.”

ESPN promoted the mobile service heavily throughout this year both in commercials and during airings of “SportsCenter” and other programs. But financial observers grew skeptical of the service over the summer, with one Merrill Lynch analyst calling for parent company Disney to “pull the plug” on the service. ESPN has declined to release subscription figures, but analysts predicted Mobile ESPN would land about 30,000 users, well below estimates of more than 200,000. Analysts also predicted Disney could lose $135 million on the service.

Customers who bought Mobile ESPN phones will receive a full refund of the purchase price, and existing customers can terminate their contract with ESPN now without penalty. ESPN expects to release details of its licensing arrangements by year’s end.