T-Mobile’s underwhelming Viacom deal disrupts nothing but itself

We have been long-term advocates of T-Mobile’s disruptive aptitudes in the mobile scene, all the while holding its video ambitions in similar stead, yet patience is fast running out among millions of US consumers. The distribution deal signed between T-Mobile and Viacom this week is definitely a significant one – but quite simply the uncarrier will have to do better than signing a distribution for 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 OTT video corpses become a reality or will T-Mobile really pull something successful out of the bag?

Even T-Mobile’s disappointing change of strategy in mid-February, from launching its own serious video streaming service to becoming a content aggregator, could not shift our stance that the US MNO was destined for disruption. We said at the time that T-Mobile could do a pretty good job at competing with the major streaming services, noting how becoming an aggregator of TV content suits it down to the ground given its reach and reputation. The strategy is much like that of pay TV operators eventually partnering with Netflix following a short-lived battle – with T-Mobile hoping to become the country’s central mobile-first hub of all things video.

But how exactly did T-Mobile expect to inject excitement into the marketplace by announcing channels like MTV, Nickelodeon, Comedy Central, Paramount and BET? Viacom has indeed come a long way and is embracing OTT, but no one can say these networks are anything but past their sell by date. The significance of the deal therefore lies not in T-Mobile distributing Viacom channels, but in Viacom channels appearing prominently outside of cable TV – which brings with it an element of disruption although Viacom’s transition to OTT and mobile-first video was a path already laid out for it.

We’re sure the eccentric Legere would be outraged by his company being compared to a “monster” like Verizon (going by his invective public outbursts), yet the Viacom distribution deal initially evoked painful memories of go90 – Verizon’s now defunct ad-funded mobile-first offering pitched at millennials. Let’s hope this message makes it to T-Mobile and it hits home enough that the uncarrier rediscovers its disruptive va-va-voom.

Still, few details have been provided about the final form of T-Mobile’s video aggregation platform. All we know for now is T-Mobile 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, with Legere regularly taunting AT&T, Comcast and Verizon on Twitter. Of course, T-Mobile US 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, and the operator still wants to disrupt the mobile-first OTT video space, just not with its own undifferentiated skinny bundle.

T-Mobile CEO John Legere said in one of his trademark theatrical statements, “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.”

Bob Bakish, Viacom President and CEO, added, “Today’s landmark announcement marks a major step forward in our strategy to accelerate the presence of our brands on mobile and other next-generation platforms, and we’re so excited to partner with T-Mobile to provide millions of subscribers with access to our networks and more choice in a new service that will be unlike any other in the market.”

It’s worth noting that when Viacom completed its $340 million acquisition of free OTT video platform Pluto TV a month ago, the mass media giant cited Pluto TV as playing a crucial role in serving 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.

With a mobile subscriber base of 80 million, it’s difficult to envisage T-Mobile messing this one up and certainly its aggregator approach is a less risky one – but someone has to play devil’s advocate.