T-Mobile is known for trying to shake up the telecom industry with its aggressive business tactics. Its latest, known as Binge On, lets you watch as many as 24 streaming video services without ever hitting your monthly data cap.
The channel lineup is pretty comprehensive: You can choose from HBO, ESPN, Showtime, Starz and Movieplex, not to mention Netflix and Hulu. Others could be supported in the future. You still have to subscribe to each of these services separately if you want them all. But the collection is big enough to make Binge On look like a compelling new way to watch TV. And this is the whole point.
T-Mobile is trying to become cable faster than cable can become T-Mobile.
Binge On isn't just a way to stretch your data cap. It's effectively a skinny bundle of TV content, all offered to consumers in hopes of persuading them to abandon their traditional TV providers. This phenomenon, known as cord-cutting, puts intense pressure on cable companies. But cord-cutting also puts pressure on non-cable companies such as T-Mobile to snag a piece of the television pie — for themselves.
To understand how this works, we have to talk about mobile video.
Companies are increasingly realizing that mobile video is the way to make money in the digital age. Until this week, T-Mobile had the mobile piece figured out but lacked a video component. People could watch online video on T-Mobile's network, but T-Mobile wasn't giving them an incentive to do that. By exempting services like Netflix and HBO from data caps, T-Mobile is now offering a reason — critics might say a twisted one — to choose T-Mobile. If the gamble pays off, tons of people will start consuming boatloads of TV on a nationwide network owned and operated by a wireless company.
The cable industry has the opposite problem. It offers tons of lucrative video content that everyone wants to watch, but compared to the cellular guys, cable companies can't support mobile devices everywhere they might go. Cable companies operate thousands of public WiFi hotspots in fixed locations, but as soon as a user moves out of range, the mobile video they're watching will cut out. This is why we've seen cable firms flirting with the idea of offering cellular service: It would help fill in the gaps in coverage left by WiFi.
Binge On offers more evidence for this convergence. While T-Mobile is still a wireless carrier at its core, meaning its main business is to make money off of its network and service, the line between cable and wireless is blurring.