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Kerschbaumer: Can you give me a sense of the big picture? How did this change in strategy come about? Jha: During the past few months, and especially over the past several weeks, we’ve been thinking a lot about our mission. And it’s basically to serve fans and have the right risk/reward for Mobile ESPN. And in order to serve fans we clearly need to make our content available more broadly. So by working through multiple carriers, and not asking fans to switch cellular phone providers, we can serve more fans. We learned a lot from operating as an MVNO for the past seven or eight months. And we came to the conclusion that it’s appropriate for someone other than ESPN to take the risk because the rewards are just not sufficient with respect to the reward. Q: What have you learned? A: A lot about content and marketing. First, we’ve won numerous awards and were recognized in the marketplace for creating an innovative experience on the cellphone. And we’re proud of that. But customers in the cellular marketplace, by and large, are making decisions based on handset prices or form factor. Content is just not a driver of the wireless service purchase for a significant portion of the population: it’s in the single digits. So we looked at the investment levels, the competitive landscape, some of the challenges, and the upside opportunities and came to the conclusion to make our content available much more broadly. Q: You were also competing with cellular providers, even Sprint, who you were also working with. A: At a basic level we were competing with anyone else trying to sign up wireless subscribers. Does Sprint or Cingular offer the content experience we offer? No. But content just isn’t a big driver in making a wireless purchasing decision. Q: So will you work with one cellular provider or multiple? A: Right now we have not ruled out any possibilities. For the right strategic relationship we would be willing to consider exclusivity. Otherwise we’ll be doing a much broader deal. Q: Are you currently in talks with anyone? A: We’re in discussions with the usual suspects. Q: Mobile ESPN had some pretty great graphics and features. Will you be able to bring that over to another cellular service? A: The operators are open to working with us. We were doing some software on Sprint devices and a certain level of customization and using Java extensions. But we can ride on handsets by deploying software stacks and still be able to do a lot of the things we wanted to accomplish. Q: Two new mobile video services, Modeo and MediaFlo, are on the horizon and due to debut later this year. Are you looking at them? A: Yes. Both of those are multicasting technologies that facilitate one-to-many distribution of live or realtime video content. For sports that can be pretty exciting and we’re in discussions. We really view those as a complement to the cellular services. Q: So basically this decision was based on the reality that when people buy a cellphone content doesn’t drive a purchase. Could that change? A: Yes. But there are lots and lots of complications in doing an MVNO. And while we solved many of them the fundamental question at the end of the day is what business is ESPN in? Q: Can you talk about how this will impact the people who worked on Mobile ESPN? A: That’s the hard part. We’re north of 100 people and once we transition the existing subscriber base we’ll probably end up with roughly one-third of the group left. Q: Do you think that number could climb again? A: It could, as the market evolves and we see what type of resources we need to grow and evolve the business. Q: And when do you hope to have new deals with cellular providers in place? A: We don’t have a timetable but it’s weeks or months, not years. © Copyright 2006-2007 sportsvideogroup |
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