T-Mobile, bundles and the future of entertainment


T-Mobile chief executive John Legere introduces Music Freedom during the T-Mobile "Uncarrier" event  Wednesday in Seattle. (Stephen Brashear/AP Images for T-Mobile)

T-Mobile threw another one of its flashy "Uncarrier" events again Wednesday night, announcing that it will not charge its customers for data they use when listening to streaming music from some of  the industry's top services.

The news came just hours after Amazon.com announced that its first smartphone, the Fire phone, would offer free integration with Amazon's own Prime Music service and Prime Video. Both add more fuel to a trend we've seen coming for a while: The future of entertainment is in the bundle.

Smartphone users have long used their phones more for data consumption than for actual phone calls. And music streaming over mobile phones is on the rise, up 32 percent in the last year across all devices Ericsson reported that, by traffic volume, music services rank about in line with e-mail on most smartphones.

Since Apple first paired its iTunes service with its music players and phones, device makers have been looking at ways to use entertainment services to sell devices (or vice versa, in Amazon's case). Music industry analyst Mark Mulligan wrote Thursday that he believes the bundling model is the best strategy for Apple as the company evaluates what to do with its recent acquisition of Beats Music. But Amazon is now the company to watch, Mulligan said, to see how well the model works in today's streaming landscape.

"[All] eyes will be on Amazon to see if the model is finally ready for prime time (pun sort of intended) now that it has been sneaked in through the back door," he wrote.

With its latest announcement, T-Mobile has gone even further, by making music essentially a part of its data plan. Under the new program, any data charges customers would have picked up by streaming Pandora, Spotify, Rhapsody, iHeartRadio, iTunes Radio, Slacker, Samsung's Milk streaming services are  excused. T-Mobile will also extend the same deal to the upcoming Beatport app. The company said that, between those eight services, it believes it has covered over 80 percent of the streaming music market. But it's  taking suggestions from its customers on other services to add to its list.

In an interview with The Washington Post, Gabriel Torres, T-Mobile's vice president for the southeast region, said that the carrier may be open to adding other kinds of services in the future. Video, for example, makes up around 30 percent of all traffic on mobile phones, and subsidizing that data would save customers a lot of money. But the company has no definite plans at this time, Torres said.

As all of this entertainment comes to the smartphone -- and data consumption rises as a result --  it's not hard to imagine that more firms will follow T-Mobile's lead to lure customers. But the carrier is already fielding questions about whether its deal violates the principles of net neutrality -- the idea that there should be no preferential treatment in the flow of data on the Internet -- because this deal could be interpreted as a way to unfairly prop up those particular music services.

The company has soundly rejected that argument. "With all of these companies that we are working with, we don’t have specific arrangements with them," said Torres. "We’re taking those streaming feeds and excluding them from the high-speed data bucket for customers. We’re not paying for the subscription."

 

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Hayley Tsukayama covers consumer technology for The Washington Post.
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Hayley Tsukayama · June 19