Beset with complaints from programmers for the way it’s organized channels across tiers for its new TVision virtual MVPD, T-Mobile has announced that all 33 channels available in its $10-a-month “Vibe” package will now also be available in its “Live” tiers, which start at $40 a month.
T-Mobile buried the announcement under a litany of holiday deals, but really this seemingly unsustainable scheme amounts to a quick fix.
Programmers including Discovery and ViacomCBS had complained in recent weeks that T-Mobile was violating their program licensing agreements, positioning their channels in the low-end Vibe tier, but not the three fatter Live packages.
“We’re in active discussion with them to quickly resolve that issue. We don’t believe they have the right to do what they’re doing right now,” Discovery CEO David Zaslav told investors earlier this month.
NBCUniversal, meanwhile, complained that its contract called for its local broadcast stations to be carried across TVision tiers.
T-Mobile introduced a radically revamped pay TV platform at the beginning of November, replacing the legacy TVision service that was based on its $325 million purchase of Layer3 TV in early 2018.
Under former CEO John Legere at the time, T-Mobile loudly declared that it was going to disrupt the U.S. TV distribution business in the same “Uncarrier” style that it used to affect the U.S. wireless industry.
But last week, T-Mobile announced the shuttering of the legacy TVision product Layer3 was based on, rendering the expensive acquisition essentially a write-down—and exposing T-Mobile as perhaps biting off a little more than it can chew in terms of trying to reinvent the video business.
What was particularly notable about the new TVision was the differentiation of the Vibe tier, which bundled 33 entertainment channels that weren’t available in other TVision tiers, at an unbeatable $10 price.
Now that T-Mobile has to pay the freight for these networks for more of its customers, it’s hard to know how sustainable the program licensing economics will be for the company, and whether it can continue to offer Vibe at $10 a month. (Guess: It's probably not sustainable at all.)
The Live packages, meanwhile, start at $40 a month for 30-plus channels, with the base including CNN, Fox News, MSNBC, Disney, ESPN, FS1, MSNBC, CNBC, Fox Business Network, TBS, TNT, as well as local ABC, Fox and NBC stations in many bigger markets. These Live bundles will now swell to a base of nearly 70 channels, also seemingly unsustainable at $40 a month.
Notably, vMVPD market leader Hulu just raised the price of its live-streamed bundle, which includes around 70 channels, to $64.99 a month, matching the price point of the No. 2 service YouTube TV.
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