Disney CFO Tom Staggs said The Walt Disney Co. will swallow a $30 million loss from Mobile ESPN, during a conference call with analysts yesterday. Staggs said the termination costs will mostly appear on financial reports in 2007. As Lynnette mentioned in her editor's corner yesterday, we're not at all surprised by Disney's decision to close down the MVNO and fully expect others to fail within the year. Staggs, however, said Disney's other MVNO, Disney Mobile "is a very different customer proposition" that "was meeting a fundamental need of families."
I agree with Staggs and see the Disney Mobile service doing far better than Mobile ESPN, mostly because Disney Mobile isn't focused on its content offerings but rather, services like their Family Alerts messaging service. Some consumers may want to pay for content, but will wait for services to develop into offerings they need.
For more on Disney's financial hit:
- see this article from Australian IT