T-Mobile thought TV programmers loved TVision. They don’t
T-Mobile‘s TVision was pitched as “TV done right” when the mobile carrier unveiled its revamped service last week. To CEO Mike Sievert, that meant offering bundles of channels that weren’t carbon copies of competitors like YouTube TV, Sling TV or . It also meant being an “ally” to the programmers supplying with those all-important channels, he said.
“Of course, obviously, everything we’re announcing today is fully vetted through our programmers,” Sievert said in an interview last week, the same day the carrier announced TVision’sof channels that stream live over the internet.
For two major programmers, however, that vetting never happened. T-Mobile didn’t share details of TVision’s channel bundles with Discovery or ViacomCBS, two people familiar with the matter said Thursday. Beyond the failure to brief the new partners as claimed, T-Mobile isn’t abiding by the obligations of their deals, the people said, marring the new service’s first week with carriage disputes.
T-Mobile didn’t comment on Sievert’s statements that contradicted programmer claims. Late Thursday, Sievert said T-Mobile was compliant with its deals and downplayed conflict with its programmers during the company’s conference call to discuss earnings.
T-Mobile has long pitched itself as thea mobile company that relishes casting its services as big shifts from the status quo of its rivals to benefit consumers. With TVision, the company directed that same rebel yell at the cable- and satellite-TV market, an industry that consistently ranks among the worst in customer satisfaction in the US. TVision’s unconventional packaging of some channels, however, appears to run afoul of standard terms programmers strike almost uniformly across streaming-TV services.
The dustup between the partners raises questions about what channels you might get if you sign up for TVision — and how much TVision may charge you.
On different wavelengths
“We have a clear agreement,” Zaslav said about its deal with T-Mobile during a conference call about the company’s earnings. “We don’t believe they have a right to do what they’re doing right now.”
Typically, programmers set rules in their distribution deals to get the greatest number of their channels delivered to the greatest number of a service’s customers. That’s why packages tend to carry the whole lineup of a company’s channels or none at all. These rules are also why bundles tend to start with a basic tier and then pile more networks on top as the price goes up, rather than breaking apart different genres of programming into independent packages you can pick and choose.
But TVision’s packages appear to violate those norms.
For example, TVision’s cheapest tier — $10-a-month Vibe — includes Discovery networks like its namesake channel, Food Network, HGTV and others. This kind of group of limited channels is called a “skinny bundle.” But TVision removes Discovery channels from its higher-priced tiers, seeming to breach the typical obligation for basic-tier channels to be included in pricier levels too.
TVision doles out the same treatment to channels from ViacomCBS, Hallmark and AMC Networks, which operates its eponymous channel as well as IFC, BBC America and others. ViacomCBS, AMC and Hallmark channels are all included in $10-a-month Vibe tiers, but they’re missing from TVision’s so-called Live packages, which range from $40 to $60 a month.
That could cause a bigger headache for T-Mobile’s programming partners than just dealing with one rogue distributor. TV distribution deals also tend to have clauses known as “request for negotiation,” or RFNs, which end up limiting how flexible a new distributor can be in its channel bundling. If a new distributor comes in and strikes a deal for bundles that meaningfully differ from the industry norm, that could trigger those RFNs — and send a parade of big distributors knocking on the programmer’s door, seeking to renegotiate their own terms.
But in advance of launch, Sievert characterized T-Mobile as a “natural ally” of the programmers. In addition to saying T-Mobile vetted its TVision plans with programmers before launch, Sievert touted how enthusiastic those partners were about the new service.
Every streaming service strikes different arrangements to satisfy both its customers and its programmers, Sievert said in the interview on Oct. 27. “We’ve struck a great balance here, and we’ve got a lineup of partners that are really, really excited about what we’re doing,” he said.
Late Thursday, during his own earnings call, Sievert doubled down. “We are complying with all of our media contracts,” he said, despite Zaslav‘s statements to the contrary.
“At the same time, we’re working with them because we’re open minded,” he said. “Some would like to see changes.”
What it means for you
Carriage disputes between programmers and distributors are nothing new. They’re a routine annoyance for customers of traditional cable and satellite TV. When they can’t be resolved, channels can go dark on a service you’re already paying for, or they disappear from your service completely. And even when these disputes are resolved, they often result in your cable bill eventually creeping higher.
TVision’s packages dramaticallyof its streaming competitors. If T-Mobile resolves the objections of its programmers by agreeing to stick more channels in TVision’s upper tiers, those pricier packages may become more expensive. T-Mobile could be faced with the decision of eating the greater expenses itself or passing them onto customers by raising prices.
And that’s may be another way TVision starts to resemble the cable and satellite companies it meant to disrupt.