T-Mobile USA has been highly disruptive in the mobile market, but has not had the same impact, so far, in the video space, despite its lofty ambitions. A distribution deal it signed last week with Viacom is a significant one – but still, the Uncarrier will have to do better than signing to distribute old hat TV channels, if it plans to unsettle the established players in the mobile-first video market.
The T-Mobile fascination is waning – could missing the boat and flopping into the sea of over-the-top (OTT) video corpses become a reality or will T-Mobile really pull something successful out of the bag?
The disillusionment started to set in with the operator’s disappointing change of strategy in mid-February, when it pulled back from launching its own serious video streaming service and instead decided to becoming a content aggregator. However, TMO still looked able to do a good job at competing with the major streaming services, given its reach and reputation. In particular, TMO would hope to become the country’s central mobile-first hub for all things video.
But it will not inject excitement in its offering by announcing Viacom-controlled channels like MTV, Nickelodeon, Comedy Central, Paramount and BET? Viacom has come a long way in embracing OTT, but these channels are past their sell-by date, especially for the younger audience who are most likely to use mobile video services in earnest.
The significance of the deal, therefore, lies not in T-Mobile distributing Viacom channels, but in Viacom channels appearing prominently outside of cable TV for the first time, as the media giant moves down its OTT and mobile-first paths. From the MNO’s viewpoint, the distribution deal evoked painful memories of go90 – Verizon’s now defunct ad-funded mobile-first offering pitched at millennials.
Few details have been provided about the final form of T-Mobile’s video aggregation platform. All we know for now is that the MNO wants to build a unique puzzle for each individual subscriber – piecing together a media subscription at a nuanced $5, $6, $7, $8 at a time.
T-Mobile’s main marketing ploy continues to be helping subscribers escape the clutches of pay-TV contracts – as the Uncarrier previously did with mobile contracts – with CEO John Legere regularly taunting AT&T, Comcast and Verizon on Twitter. TMO also still has plans in place to launch its home TV strategy in the first half of 2019 (pushed back from the end of 2018), using the Layer3 technology TV and brand it acquired, and it still wants to disrupt the mobile-first OTT video space in future.
The latter will require more than an undifferentiated skinny bundle, however theatrically Legere welcomed the Viacom partnership. He said: “Viacom represents the best of the best, most-popular brands on cable. TV programming has never been better, but consumers are fed up with rising costs, hidden fees, lousy customer service, non-stop BS. And Macgyvering together a bunch of subscriptions, apps and dongles isn’t much better. That’s why T-Mobile is on a mission to give consumers a better way to watch what they want, when they want.”
It’s worth noting that when Viacom completed its $340m acquisition of free OTT video platform Pluto TV a month ago, the mass media giant said the new unit would play a crucial role as a partner vehicle for mobile and OTT distributors. Had Pluto TV been part of the distribution deal signed between T-Mobile and Viacom this week, the industry might have reacted quite differently.