Updated with details from conference call with reporters.
T-Mobile will provide free Netflix subscriptions to new and existing T-Mobile One family plan customers in what the company describes as an exclusive partnership with the popular streaming service.
The program, announced this morning will start Sept. 12. It’s the latest “Un-carrier” initiative from the Bellevue, Wash.-based wireless company, seeking to further differentiate T-Mobile from its larger rivals, AT&T and Verizon.
Under the new program, dubbed “Netflix On Us,” T-Mobile says it will provide a free Netflix Standard subscription to T-Mobile One customers who have two or more voice lines. The cost will remain $40/line. The company says it will cover the cost of Netflix for those who already subscribe to the streaming service.
T-Mobile is poking at its larger wireless competitors by describing the Netflix partnership as a smarter strategy than buying “faded 90s dotcoms and satellite and cable companies.” AT&T bought DirecTV for $48.5 billion in 2015 and Verizon acquired Yahoo for $4.48 billion in June to boost their content offerings.
Financial terms of the partnership with Netflix haven’t yet been disclosed. Asked about the details of the Netflix agreement, T-Mobile CEO hinted that it’s no small expense for the wireless company. “It’s a great deal for our customers, and it’s a great deal for Netflix,” Legere said.
Michael Sievert, the company’s chief operating officer, added, “This is a big investment on our part. Netflix is not providing us with a giant discount, and they don’t have to. They’re Netflix.”
The move reflects the rise of mobile video as an alternative to viewing on traditional television screens. T-Mobile cites Nielsen research showing that viewing on smartphones and digital devices now represents more than 50 percent of screen time vs. traditional TV, with mobile viewing projected to more than double by 2020.
The company previously stirred controversy with its “Binge On” mobile video initiative, which lets its customers stream video from services including Netflix and Sling TV over the mobile network without counting against their monthly data usage. Binge On reduces the quality of the video for mobile streaming.
Since last year, the company has been shifting customers away from metered Simple Choice data plans in favor of unlimited data through T-Mobile One. In addition, T-Mobile One includes taxes and fees as part of its subscription rates. The company has posted 17 straight quarters of more than 1 million net customer additions.
Update: Here is how it works, according to T-Mobile’s FAQ.
If you’re an existing customer, use the T-Mobile app, visit MyT-Mobile.com, a retail store, or call Customer Care to activate. If you are a new customer, simply visit a T-Mobile store, go to T-Mobile.com or call 1-800-TMobile. We’re covering the cost of one Netflix Standard subscription per T-Mobile ONE family account. You will be given a URL to link your T-Mobile account with your Netflix account. T-Mobile pays Netflix directly for you. For existing Netflix customers, it may take 1-2 Netflix billing cycles for your billing to transfer to T-Mobile.
Here’s more of the fine print.
Note: Reference to Nielsen screen time data corrected since original post.