Definition: MVNO – A Mobile Virtual Network Operator (MVNO) is a company that provides mobile (sometimes called wireless or cellular) telephone service but does not have its own allocation of the radio frequency spectrum nor all of the infrastructure required to provide mobile telephone service. Source: Wikipedia
Disclaimer: In the past 18 months, I have been working with one of the MVNO's and built most of their customer interfaces for third party content. It doesn't matter which one, but it should be noted that they're still around.
When I saw the launch of Disney Mobile, I was shocked. They were getting into an incredibly tough space, with thin margins, and trying to fight the battle themselves. The oddest aspect about the venture was the timing.
April 2006: They announced the intent to build and launch Disney Mobile. That aspect of it made sense, Helio was about to get off the ground, Amp'd still existed, Disney's other MVNO (ESPN) was just off the ground and things were looking possible. Not likely, but possible.
June 2006: They launch operations with a strong start, a huge marketing push, and some compelling features for adults. You could setup wallpaper budgets, call times, minutes, location tracking, etc.
September 2006: Uh oh, the ESPN MVNO is going down. Apparently their demographic already has service and despite some compelling content, their potential customers are not willing to completely upset their lives by changing providers. Yeah, you forgot about that didn't you? Even with number portability – one of the greatest – it's usually a pain switching phones.
September 2007: Disney MVNO announces their shutdown.
At first glance, the features offered to parens made quite a bit of sense. After a few well-televised strategies and a missed after school pickup or three, most parents want a way for their kids to reach out and contact them. Unfortunately, the crazy bills are often too much. But here's the thing, although the features are compelling, they're not compelling enough to upset your life for signing with a new company. You'd have to break your existing contract, port your number, and get a new phone. it's too much work and easier by far to add the kid via a Family Share Plan and ground them if the bill is high.
If mobile was their goal, the strategy should have been – and can still be – completely different. Let's take stock of what they have:
- Kid-friendly (aka parent-wallet-friendly) features based on technical and service aspects of the network;
- One of the most established brands in the business;
- A marketing and sales force highly tuned to motivating kids and their parents to go out and buy things;
- A content library of songs, images, videos, etc extending back 70+ years across a set of properties that can appeal to people from 2 to 82.
Isn't the solution obvious? Instead of offering the service themselves, they approach the carriers and offer a cross promotion for a "Disney Kids' Package" option on Family Share Plans. Designate a phone as a "kid" phone and you get to manage it according to those rules. Disney and the carrier then split the revenue from the addon package.
The carriers get to look like responsible protectors of children. They could appeal to parents using the high bills as a counterpoint. They could charge And they would likely get an exclusive partnership for N years. And they get a partner with distribution channels and a marketing budget larger than the GDP of many nations. Their risk is minimal and mostly revolves around reduced revenue from cell-crazy kids.
But Disney gets the better deal. They get to look like responsible protectors of children. They get another avenue to sell their content libraries. And most importantly, they don't have to learn how to run a cell company. Their risk is even smaller and would come entirely out of their marketing budget… and they have one for every movie, television show, event, etc.
The possibilities are endless…