T-Mobile US adds Netflix to its unlimited family plans
As AT&T inches toward finalizing its purchase of Time Warner and Verizon busies itself with its new Oath digital media operations from the purchase of Yahoo, T-Mobile US is taking a partnership tack when it comes to content, rather than an acquisition approach.
T-Mobile US is offering Netflix streaming at no additional charge to customers who have two or more voice-included unlimited family plan lines with the carrier. This covers Netflix’ standard-definition, two-screen service up to $9.99 per month for T-Mobile ONE plan subscribers with at least two lines. Customers who qualify can contact the carrier to get the service activated, starting Sept. 12.
What's better than @Netflix? #NetflixOnUs! That's right, T-Mobile ONE Family Plans now come w/ Netflix. Did we say Netflix? NETFLIX!!! pic.twitter.com/wy9Z7FqjRQ
— T-Mobile (@TMobile) September 6, 2017
Content is becoming more central to service provider offerings, as they seek to monetize the fact that video traffic is dominating their networks — often from over-the-top providers such as YouTube, Netflix and Amazon. Video accounts for 60% of total mobile data traffic, according to Cisco’s most recent Visual Networking Index for global mobile data traffic. T-Mobile US also noted that mobile viewing is increasingly the option of choice for video watchers and smartphones and tablets are expected to take up more and more of watchers’ screen time.
T-Mobile US CEO John Legere, never one to miss an opportunity for colorful criticism of competitors, declared that “the future of mobile entertainment is not about bolting a satellite dish to the side of your house or resuscitating faded 90s dotcoms. The future is mobile, over-the-top and unlimited.” He derided approaches like those of AT&T and Verizon “franken-strategies to cobble together carrier–cable–content mashups” and touted the superiority of T-Mobile US’s strategy to “give you something you want together with something else you want”, as the carrier put it in announcing the new offering.
“This is the right move at the right time — for all the right reasons,” said Reed Hastings, co-founder and CEO of Netflix, in a statement. “More and more fans are bingeing on mobile, so we’re bringing together Netflix’s award-winning TV shows and movies with T-Mobile’s award-winning, unlimited network.”
In a Cowen research note, analysts Colby Synesael, Gregory Williams and Jonathan Charbonneau wrote that they “believe the move 1) reflects confidence in the network, 2) appears financially sound, and 3) comes from a position of strength. … We believe T-Mobile is coming from an offensive position and not a defensive/reactionary position as we arguably have seen from other carriers in the past year.”
The Cowen analysts went on to say that in its livestream announcement of the Netflix deal, “T-Mobile reiterated the idea that ‘content is moving to the internet, and the internet is going mobile’, a mantra embraced by the industry and driving the ongoing cable/mobile/content M&A narrative. However, unlike Verizon (building its own media and content platforms) and AT&T (acquiring DirecTV/subscriber base and Time Warner/content), T-Mobile’s strategy continues to be the ‘dumb pipe’/partnerships, a strategy that [management] has messaged in the past and clearly coming to fruition today. The company noted that ‘this is just the start’ to its content strategy/partnerships. Some may view the move as the ‘poor man’s’ strategy to marry content with distribution, but it may in fact serendipitously be the correct strategy, as time will tell.”
