Insert Your Own Sports Metaphor Here, Mobile ESPN Folds

Update 2: Mobile ESPN has confirmed it will shut down at the end of the year, and Deadspin has the internal e-mail. Unsurprisingly, ESPN plans to try to license the content to other operators. You know, if they would have asked last fall, somebody probably could have pointed this out and saved them the trouble, and the $150 million.

It’s the bottom of the ninth, we’re at the two-minute warning, it’s the final set — or perhaps it’s 4-nil and we’re about to get relegated: various industry sources have told me that Mobile ESPN, one of a handful of high-profile content-based MVNOs to launch in the US this year, is essentially at the end of the road, and will be shut down or sold this week — before parent company Disney’s fiscal year ends on Friday. It’s not yet clear exactly what will happen, but as usual, MocoNews has more info, speculating that a sale could fetch $300 to $400 million — but that seems awfully high for a service that’s managed to attract just a rumored 30,000 subscribers.

Ever since ESPN launched by trying to sell its phone for $500, its future didn’t seem particularly bright. While the content on the device was actually pretty cool, the number of people willing to switch to another operator with such high prices just to get it — and give up any other content or services that weren’t sports-related or ESPN-provided — was pretty slim. You have to imagine that ESPN has far more to gain by selling the content to any user that wants it, instead of demanding they pick up sticks, get a new phone and switch operators, and then pay through the nose on top of it. This approach could prove much better for other content brands — like Disney — that looked to virtual operators with dollar signs in their eyes as well.

While MocoNews has a source saying ESPN problems will cause a backlash against content-based MVNOs, that’s not completely clear. Before CTIA, Amp’d was hyping some fairly staggering subscriber figures, and has secured distribution deals with Best Buy, and more recently, Circuit City. But perhaps a little more impressive are rumors of $100+ ARPU from Helio, with 75% of its subs apparently choosing one of its “All-in” packages with unlimited data and messaging. Those ARPU figures are impressive, and the percentage of users going after data and services impressive, but only tell half the picture without knowing just how many users in total the operator has attracted in the muga fencing. However, just because Mobile ESPN appears to have failed, it may be a little early to call time on the content MVNOs just yet.

Update: The WSJ has the story too, saying Mobile ESPN is “hoping to reinvent itself as a content partner of bigger wireless carriers…Now, the company is expected to shift its strategy significantly, getting out of the phone business and focusing on leveraging its greatest asset: its content. The most likely option is for the company to license its mobile sports programming to bigger carriers to sell, people familiar with the matter say… Even as it addressed initial launch problems, the company couldn’t address a fundamental flaw in its model — that consumers didn’t want to buy an ESPN-branded cellphone to get access to ESPN content.”

[tags]mobile, espn, mobile espn, helio, amp’d, mvno[/tags]

—–>Follow us on Twitter too: @russellbuckley and @caaarlo