If it felt a little like 2014 during T-Mobile’s press conference this morning announcing its purchase of pay TV service Layer3 TV, that’s probably because T-Mobile CEO John Legere was, admittedly, citing statistics from that year.
Cable and satellite service providers are the most reviled companies in America, Legere said, locking customers into long-term contracts for bloated bundles of channels they don’t need, constraining them from the viewing devices they want to use, and overall, delivering them crappy, over-priced service.
They’re drilling satellite dishes into customer homes, delivering 1990's-style program guides that lack the ability to “know you and what you like.”
Complete T-Mobile/Layer3 coverage:
T-Mobile to acquire Layer3 TV, launch 'disruptive' video service next year
T-Mobile not planning on buying original content for its pay-TV service
Editor's Corner—TV is now clearly the wireless industry’s new battleground
Editor's Corner—T-Mobile’s Legere declares disruption for ‘arrogant’ pay-TV biz … that’s already plenty disrupted
It’s time for the self-proclaimed “uncarrier,” Legere said, to do what it has already done to the second most reviled industry, wireless. With an acquisition deal for Denver-based start-up Layer3, which isn’t even closed, T-Mobile will fix the “arrogant” pay TV industry’s “pain points.”
But in loudly touting the very broad but very unspecific strokes of an OTT video service that will launch in 2018, delivering millennials an untethered video service that will play across 5G mobile-based and terrestrial devices alike, it wasn’t until about the one-hour mark in the conference call that Legere or his team even acknowledged virtual pay TV service DirecTV Now—which is already doing all the disruptive things Legere talked about this morning.
Yes indeed, in the latter part of the year 2017, DirecTV just announced its 1 millionth customer, delivering content over the internet to almost any device they want to use, soon over a next-generation technology platform, monetized by both subscription fees and advanced addressable advertising.
Legere and his team, which now includes Layer3 TV CEO Jeff Binder, only mentioned Hulu and YouTube once during the entire event, as if these guys aren’t already disrupting pay TV with IP-based bundles of channels.
Likewise, Dish Network’s modular, a la carte-oriented Sling TV, has been in the market for three years and has nearly 2 million users.
You have to wonder, listening to Legere, just who is arrogant here. Again, T-Mobile was short of specifics as to what it plans to launch. But unless he’s got a serious rabbit to pull out of his hat, T-Mobile just consigned to join a vMVPD race that is already well underway.
Not that buying Layer3 TV is a dumb way to do it.
The so-called “concierge” cable service was founded by former cable executive Binder in 2013 and has been slowly rolling out a very traditional-looking pay TV service that emphasizes premium technology and customer service.
What Layer3 does seems very different from the kind of mobile video entertainment synergy T-Mobile wants to provide. But then again, AT&T wasn’t expecting to put satellite dishes on homes the rest of its life when it bought DirecTV.
Acquiring Layer3 will give T-Mobile immediate access to relationships with programmers. Layer3 has licensed HD programming for around 250 channels. During this morning’s call, Binder emphasized the ease of those relationships, and his ability to parlay them into more expansive, mobile-centric relationships.
So, T-Mobile didn’t get the kind of program licensing leverage AT&T received when it became the No. 1 U.S. operator with its DirecTV purchase. But T-Mobile is getting into the program licensing game at a tiny fraction of the price.
As for the legacy Layer3 TV service, which has a been deployed into five markets so far, Legere said the platform will be kept intact for now, its Denver-based staff remaining where they are. Binder will join the T-Mobile executive team, becoming the company’s top video entertainment operative.
With Layer3 TV, Binder has been known for innovation, delivering appointment services by having friendly techs show up in flashy Teslas, and deploying fancy set-tops. He’ll need to ply that panache to the quickly maturing virtual pay market if T-Mobile is to catch up. — Dan | @FierceCable