Do cord cutters really want to recreate the cable bundle online? I don’t think so

“Get ready to un-cable, everybody,” T-Mobile CEO Mike Sievert says in a video announcing the carrier’s newest “Uncarrier” deal dubbed TVision.

America is pretty ready. The rate of cord-cutting has been accelerating throughout the pandemic and, depending on whose stats you use, one-quarter to one-third of households don’t pay for cable (or satellite) TV anymore.

The TVision service, which will be offered first to T-Mobile customers starting next month, is yet another cable replacement plan packaging a lot of the channels you know and making them available via the Internet. That’s not unlike Google’s YouTube TV, AT&T’s AT&T TV, DirecTV’s Sling TV, Disney’s Hulu Live TV, or the dearly departed Playstation Vue from Sony. But unlike the current offerings from most of those rivals, TVision is starting life with low prices and a bit more choice–three bundles ranging from $40 to $60 per month plus a $10 option with even more channels. The channels come wrapped in an appealing if simple app that can record shows DVR-style and run on mobile phones, tablets, or your TV via most online set-top boxes (though not Roku).

Some of the earlier rivals started with much the same approach. Remember way back in 2016 when AT&T debuted DirecTV Now with 100 cable channels for $35 a month? It quickly became various packages for up to $60, started losing customers in droves, and most recently morphed into AT&T TV starting at $60 and going up to $130 plus $8 a month extra for local sports. Hulu’s package once started at $40 but now costs $55 plus another $10 if you want DVR functionality. YouTube TV has also raised prices and now starts at $65.

The reason for the price hikes? Cable channel owners like Disney, ViacomCBS, and Fox are charging more for their programming. AT&T and Comcast got so sick of paying more that they spent billions to acquire Time Warner and NBCUniversal, respectively.

T-Mobile won’t have much control over programming prices; until it gains millions of subscribers it will eat some of those price hikes itself. T-Mobile execs were at pains to say TVision was more of an enticement to its current wireless customers than a new business opportunity. “Our strategy is not to make a ton of money in the TV space through TV profits,” chief marketing officer Matt Staneff told me yesterday. “Our strategy is to continue to use our scale and leverage to keep prices down for consumers.”

With the debut of TVision, there’s now a clear separation among the big three remaining wireless carriers. AT&T owns a lot of TV channels and content producers after buying Time Warner. T-Mobile made deals with producers (including AT&T) to create its package but doesn’t own any content. And Verizon stayed even further above the fray, simply offering YouTube TV to any of its customers looking for a cable replacement package at the usual $65 a month price.

Of course, if consumers keep moving away from cable—not just the cable cord but the whole concept of paying for bundles of channels—all three deals will look increasingly less appealing. Then it will be the carriers seeking to cut the cord, an easy move for T-Mobile and Verizon but a $109 billion entanglement for AT&T.

Aaron Pressman


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