Summary
1) It is best that the rumours of a Disney MVNO remain as rumours as there is far too much risk in a launch for them.
2) There are few examples of successful MVNOs, Virgin Mobile in the UK is the one that springs to mind but there are clear, sustainable consumer drivers for it.
3) Where Disney adds value is in producing a ‘safe and trusted’ service for children and could do this in partnership with an existing operator.
4) However, Disney has more chance of success at being a content provider across platforms and making that experience as seamless and consistent as possible.
Analysis
·Rumours of an imminent launch of a Disney mobile service have been circulating in Europe for over 3 years. It is best that they remain as rumours as there is far too much risk in a launch.
·There are few examples of successful MVNOs, Virgin Mobile in the UK is one that springs to mind. However, a closer look at it shows that it has a significant prepay and inactive base. However, what has driven its growth has been a simple product offering, low cost services (voice and text) and a good customer service experience – indeed the brand has also been a contributing factor. However, for the strength of Disney’s brand - a MVNO is not the best leverage of assets it has – a joint venture with an existing operator may be a better use of resource and certainly lower risk since Disney does not have the billing and operational assets required. In addition, a Disney phone has a certain lifespan amongst the young, very young demographic - and so, it would need to account for churn and replacement business. Clearly, the visual assets of Disney would help established operators to aid retention and boost ARPU from ongoing commoditisation.
·Where Disney adds value is in producing a ‘safe and trusted’ service for children and indeed for family talk-time packages with parental controls, etc. However, with a degree of growing public clamour against using mobile phones – this could also harm Disney’s brand. Disney would do well to learn the lessons from its Mobile ESPN – which at first glance had sound credentials – but it took the strength of Verizon to realise it. In summary, Disney has more chance of success at being a content provider across platforms and making that experience as seamless and consistent as possible.
