Disney to enter cellphone market, with kids in mind
Disney to enter cellphone market, with kids in mind -- WSJ </B>
By JESSE DRUCKER and MERISSA MARR
Staff Reporters of THE WALL STREET JOURNAL
July 6, 2005
Is that your cellphone ringing -- or your 8-year-old's?
Walt Disney Co. announced early Wednesday that it is entering the cellular business, targeting families with a wireless service under its own brand that will seek to sell cellphones to children and their parents.
The service, to be called Disney Mobile, will travel over the wireless network of Sprint Corp., the country's third-largest cellphone operator in terms of subscribers. But the phones and service will carry the Disney brand and be sold by Disney.
The move is part of a bigger push by Disney into the cellphone industry. In December, ESPN, which is majority-owned by Disney, announced a similar deal with Sprint, targeting sports fans with sports content on their ESPN-branded wireless phones using Sprint's wireless network.
All the major wireless carriers offer family add-on plans that allow subscribers to add their children, in some cases, for as little as $10 a month extra. By contrast, Disney says its service will be solely aimed at the needs of the family. It therefore could be the first to appeal to children, potentially pressuring parents to pick a carrier based on the desires of their children.
Disney's newest plans are to tap into its loyal family audience and reputation for delivering children's entertainment to capture a big slice of what it sees as an underserved market for family-focused services. "There is a strong business opportunity here," said Steve Wadsworth, president of the Walt Disney Internet Group. "We bring a lot of unique understanding of this market."
Disney will target parents with a service that caters to their desire to ensure the safety of their kids and to keep in contact with them. Mr. Wadsworth said the service would offer features specifically designed for parents and their children, but wouldn't elaborate.
As U.S. cellular penetration rates increase, the move by Disney and Sprint indicates how the industry is increasingly relying on new customer segments for growth. Cellular operator Virgin Mobile USA LLC, partly owned by Sprint, already targets teenagers. But Disney Mobile could be targeting children as young as 8 years old, said John Garcia, Sprint's senior vice president of consumer sales and distribution.
"Disney is fully capable of focusing on that market and causing an acceleration" of growth, Mr. Garcia said.