"Don’t you love it when a plan comes together?" I wonder if T-Mobile’s John Legere uttered that immortal A-Team catchphrase on Tuesday when he launched the Binge On™ plan at its star-studded Un-Carrier X event. Legere always aims to make headlines at home and abroad – and this one certainly did not disappoint. Not only has Binge On got the media and analyst community talking, other mobile operators are standing up and taking notice. It was designed to disrupt and so far it has not disappointed!
In case you missed it, here’s what the fuss is all about. Soon the floodgates will open for subscribers to watch unlimited video streaming of shows like Breaking Bad and Game of Thrones via providers that include Netflix, Hulu, ESPN and HBO without this counting against their data-plan. According to T-Mobile, the streaming video is available to all Simple Choice customers and they can feast on those videos at any time. So, if you have 3GB of data or more – the swashbuckling adventures of Tyrion Lannister are just a click and swipe away!
DVD vs HD
So, how does it work? Put simply, Binge On is based on network optimization. This “secret sauce” as Legere called it on CNN happens within the mobile network, so there are said to be no device compatibility issues. T-Mobile subscribers forego HD video streaming – and in return, it won’t count against their data plans. Binge On services will deliver video at 480p instead of 720p or 1080p. For T-Mobile, this saves substantial data traffic. For a subscriber, the distinction between 720p and 480p of Piper Chapman on a service like Netflix is negligible. As Legere explained, subscribers will get “DVD quality” video. If they wish to do so, customers can turn off the optimization. That’s when it bites into the data plan.
Now for the million dollar or more aptly, the 59 million subscriber question. Will it work?
It can work. As we all know, video usage is going through the roof. A recent study from Pew found that three-quarters of consumers aged 18 to 29 watch video on their smartphones - in fact at the event Legere stated that 57 percent of millennials watch videos on a mobile device and don’t even watch TV. Despite the price hikes which also took place this week, and the absence of services like YouTube and Twitch, T-Mobile could be on to a winner with Binge On.
But Is it Binge On and Buffering Off?
But, here’s the caveat. At the Un-Carrier X event John Legere quite rightly declared "Customers want reliable video”. Absolutely. Our own research – conducted this Summer in America and in Europe - found that 59% of subscribers will abandon a mobile video if they have to wait longer than 15 seconds. Gone are the days when a dropped call incensed subscribers, today it is video buffering that enrages customers. T-Mobile will need to do everything in its power to make sure that subscribers can indeed splurge on streaming videos. Binge On’s success hinges on the Quality of Experience (QoE) it will deliver.
And as for T-Mobile’s competitors – it is certainly not doom and gloom. Our research also found that 39% of respondents came out in favor of paying extra for an improved mobile video service. The most demanding and high value subscribers were willing to pay the most for a buffer-free experience. So T-Mobile’s price increases may well be in line with consumer expectation and tolerance.
I’ve always believed that it was only a matter of time before video streaming went mainline mobile. After all, who wouldn’t want to gorge on their favorite sitcom or watch their beloved sports team in action when they are out and about? Like T-Mobile, forward looking mobile operators must innovate and monetize their mobile data. T-Mobile has certainly fired the first shot in the inter-operator data war. There’s all to play for. In the words of A-Team’s Col John 'Hannibal' Smith: “The best defense is a good offense”.