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T-Mobile is about to grant free Netflix subscriptions to customers with unlimited family plans — opening a new content-fueled front in the wireless wars.
With the Netflix promo, the price of the T-Mobile One unlimited plans remains the same: $40 per line monthly for four lines ($47 per line for three and $60 for two). Customers with two or more voice lines are eligible to receive Netflix’s standard HD plan with two simultaneous streams (normally $9.99 per month) at no additional charge.
Moreover, T-Mobile will extend the free-Netflix offer to customers who already subscribe to the video service. The Netflix offer kicks off Sept. 12. More info is available at t-mobile.com/netflix.
“Netflix has totally disrupted entertainment, and T-Mobile has totally disrupted wireless — and the world is about to find out what happens when you bring two disruptors together,” T-Mobile president and CEO John Legere said on a call with reporters Wednesday.
Terms of T-Mobile’s deal with Netflix are not being disclosed. The companies have signed an “exclusive, long-term relationship and partnership,” said Legere (pictured above).
Netflix CEO Reed Hastings called the deal “the right move at the right time — for all the right reasons.”
“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,” Hastings said in a statement.
The carrier is receiving a wholesale discount off Netflix’s $10-monthly retail price, though T-Mobile COO Mike Sievert said it’s not a big discount. Whatever the actual cost is for T-Mobile, the promotion obviously will eat into margins on the 4G unlimited mobile service.
“Yeah, it’s a big investment on our part,” Sievert said. He said the Netflix deal is “a cost of doing business” that will pay back in two ways: by helping reinforce the brand positioning that it’s very different from AT&T and Verizon (T-Mobile calls itself the “Un-carrier”) and by boosting subscriber retention.
For Netflix, the T-Mobile pact will add thousands — or perhaps millions — of new subs to its U.S. rolls. Netflix trounced second-quarter 2017 expectations for U.S. streaming net adds, to stand at 52 million. Still, some investors have worried about cooling domestic growth, and the T-Mobile promotion promises to provide a lift going forward.
But T-Mobile does not break out the number of unlimited family-plan subs it has, so how big a deal this is for Netflix isn’t clear. The majority of T-Mobile’s unlimited postpaid subs have at least two lines, according to the company, with an average of 2.91 lines per account.
T-Mobile is looking to harness mobile video to stand out from its two major rivals, AT&T and Verizon, as the wireless sector has been nearing saturation and competitive pressures have kicked into overdrive. For Q2, T-Mobile reported a record $7.4 billion in service revenue, up 8% year over year, with 1.3 million total net subscriber additions. It had 69.6 million total customers as of the end of June.
AT&T launched a similar promo with HBO earlier this year, offering credits for the premium cable service to all Unlimited Plus wireless subscribers. The telco’s free HBO offer is available to users with wireless-only service; DirecTV Now; DirecTV satellite service; or U-verse TV. AT&T is in the midst of acquiring Time Warner, HBO’s parent company.
Legere drew a distinction between T-Mobile’s strategy of teaming with Netflix and the content positions of its two main competitors. He alluded to AT&T’s deal for DirecTV and pending acquisition of Time Warner, while he called out Verizon’s acquisition of AOL and Yahoo.
AT&T and Verizon have bought “faded ’90s dot-coms and satellite and cable companies — creating carrier-content-cable mashups — so they can build bigger bundles,” Legere said.
T-Mobile has teamed with Netflix in the past: Netflix was one of the flagship partners for the 2015 launch of Binge On, the carrier’s program giving users on data-capped plans unlimited streaming for select video and music services without incurring overage charges.
On Thursday, T-Mobile will kick off a Netflix “Meme-a-Thon” sweepstakes starting at 9 a.m. PT on Twitter and running until 5 p.m. PT. Winners will be eligible to receive various prizes — including two all-expenses-paid trips to the “Stranger Things” season 2 premiere in L.A.
T-Mobile One family-plan customers also can receive Netflix’s premium $11.99 per month service, which includes four simultaneous streams and access to Ultra HD video, but will have to pay the $2 difference. T-Mobile customers on the Unlimited 55+ plan or have two lines for $100 can get the “Netflix On Us” offer by switching to the latest T-Mobile One plan.
