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Media via cell phone - optimistic investors


By Scott Bradner


If the US were like the rest of the world this would be the ideal time to be selling some of specialty cell phone services that so far seem to be just eating investors money.  It's hard to imagine a better time than during the World Cup to get people to buy something like Mobile ESPN's Total Sports Package (for "only" $24.99 per month) or at least the ESPN Text and Video Alerts (for just $6.99 per month) but according to a June 20th Wall Street Journal article such services are struggling, to say the least.  What I do not understand is why investors would have thought these services, and the many other services promising information or video to cell phones, would ever make back the money being invested.


According to the Journal close to two billion dollars has been or is being invested in cell phone services for people that want to do more than talk on the phone.  For example, Qualcomm and Crown Castle International are each trying to create an infrastructure to support live broadcast TV on cell phones and, between them, are investing well over a billion dollars to get systems up and running.  It's going to take a lot of people with too much money, very good eyesight and a strong hankering for American Idol to make back that investment assuming that the systems do not actually compete with each other, if they do all bets are off. 


Disney is spending $150 million to launch ESPN Mobile and another cell phone service.  After about 4 months only about 10,000 people signed up for one of the ESPN Mobile packages.  This is about the same number of subscribers to the youth-oriented Amp'd Mobile got after 5 months and $250 million in investments.


Actually, I'm not sure I want the video on cell phone services to succeed - if you thought that talking on cell phones while driving is a safety risk just imagine the issues that come up when people are watching Desperate Housewives close enough to differentiate the characters on the small screen.


I'm constantly amazed at the optimism in the face of all logic of the Internet-boom investors and at the ability for the same investors to toss money at a new generation of technology-related service ideas that have no more chance of making it big than buying dog food over the web did.  Who in their right mind would ever think there are enough people wanting to add $30 or more per month to their phone bill for these types of services to pay back the huge investments.


The Journal reports that only 1% of the 215 million cell phones in the US are used regularly to watch videos.  I expect that information like that was available to Qualcomm before it decided to invest $800 million in their video network - maybe they were blinded by the vision of El Dorado. (see  


I fully expect that there is a pony around here somewhere but I expect itŐs a small pony - and that small pony might just be Internet data connectivity, which in ESPN Mobile costs $9.99 per month and gets you the whole Internet including hundreds of sites on which you can get much more than the just sports headlines.  That is unless ESPN tries to block access to specific sites (see "Mossberg Not Too Enthusiastic About Mobile ESPN" in which case ESPN is lying when they say they offer "wireless Internet" (


disclaimer:  Harvard Business School has classes in marketing (see but none on lying that I could find in any case the above are my own observations.