T-Mobile will partner with Viacom for its pending streaming service, the two firms said on Wednesday, intensifying the looming battle for customers as several top companies prepare to launch their own online video platforms.
The deal will give subscribers of T-Mobile’s new content service both live and on-demand access to Viacom channels including MTV, Nickelodeon and Comedy Central.
"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,” CEO John Legere said, in a clear swipe at Apple.
The Bellevue, Washington-based company is awaiting federal approval for its $26.5 billion merger with Sprint that the firms say is necessary in order to compete against AT&T and Verizon on fifth-generation wireless technology.
The looming launch of 5G, which promises to offer broadband speeds without a hard-wired connection, is underscoring a race within the media industry to capitalize on the cable cord-cutting trend and offer consumers access to online content platforms for a flat monthly fee – a space that has long been dominated by Netflix but will soon include a rush of new offerings.
“We believe the media sector is on the precipice of a new phase of competition driven by secular shifts including, evolving media consumption patterns and growing consumer preference for on-demand viewing,” research company Fitch Group Inc. said in a report on Tuesday.
Bolstered by a $71.3 billion deal for key 21st Century Fox assets, Disney is preparing to launch its own streaming service. AT&T is also working on an online video platform after its $85.4 billion merger with Time Warner, as is Comcast through its ownership of NBCUniversal.
Meanwhile, Apple recently outlined its own plans for a streaming site that includes original content from Hollywood superstars like Steven Spielberg, Oprah, Reese Witherspoon, Jennifer Aniston and others. Amazon also continues to spend billions to launch its own programming available on the “Prime Video” platform.
Of the slew of companies seeking to compete in the streaming industry, Disney’s nearly $23 billion investment in 2018 is the largest, according to Fitch. The sector-leading amount will give the Burbank, California-based entertainment giant an edge against rivals, analysts say.
Disney “is the only one that has the aggregate clout in film and TV libraries, simplicity of offerings and brand strength to scale in the mid-term,” MoffettNathanson’s Michael Nathanson wrote in a recent research report, adding that the service could top 7.1 million subscribers in the first year.
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Comcast spent $20 billion on content last year and Amazon spent $5 billion, according to Fitch.
Netflix, seen as the pioneer in online streaming services, invested roughly $14 billion. Ahead of the new competition, however, the Los Gatos, California-based company is raising monthly prices for its 139 million global customers.
It remains unclear how many offerings consumers are willing to subscribe to and companies are taking different approaches to how they will compete in the new landscape.
Apple, for example, is offering customers the option of accessing different platforms from its Apple TV+ application. Meanwhile, Disney is pulling its content offerings from Netflix to entice users to subscribe to its pending service.
Consumers rank content offerings and the ease of use of the respective platforms as the most important attributes of a video streaming site, according to MoffettNathanson.