Thanks to the latest Net Neutrality ruling by the FCC in May, the companies that control the digital pipes can that we all use now can begin to charge content providers for providing their customers with higher speed pipelines. AT&T’s new Sponsored Data Service is a good example, where content distributors pay for the privilege of their customers having no data restrictions so they’re able to consume more product without having their speed capped or charged extra. Of course, in the end this means that the end user will ultimately be penalized, since they’ll either have their data service throttled down by their provider if they breach their data limit, or charged a higher price by a music service to cover the cost of the sponsored service.
Last week T-Mobile launched their Music Freedom service that flies in the face of that idea though, as it provides no data limit for consumers accessing a number of major streaming services, including Pandora, iHeart Radio, iTunes Radio, Spotify, Slacker and Milk Music. This means that a T-Mobile subscriber can listen to an unlimited amount of music from these services without the fear of going over a monthly data limit.
Of interest is the fact that a number of music services weren’t included, at least in the initial announcement, the largest being Google Play All Access. This could ultimately be a distinct disadvantage for services not in the plan (especially smaller services without the deep pockets to make them competitive), but it’s not entirely clear if any of the services left out will be added as time goes on.
Studies have found that as much as 77% of all music streaming is done via smartphones, so it’s possible that whatever service provider offers the best mobile music deal will also get the most subscribers in the end. That’s why T-Mobile is out ahead of the curve with Music Freedom, while its competitors seem to look at the music part of their offerings as just another feature.
The real problem is that Music Freedom received some press on the day it was launched, and then it seemed to get lost in the next 24 hour news cycle. There hasn’t been much written on it since, and it seems as if many analysts either don’t care, or haven’t grasped how meaningful the announcement could be in the grand scheme of things.
We haven’t seen much in the way of increased charges for heavy music users yet as mobile service providers, ISPs and content distributors are still getting their arms around the FCC’s latest ruling. That said, you can be sure that there will be a great hue and cry the first month a group of consumers has their service slowed because their favorite service wouldn’t pay for the increased bandwidth. That’s the point where the advantage of Music Freedom becomes obvious, and subscribers tied to other mobile providers will consider jumping to a another provider strictly based on the music option available.
T-Mobile has been aggressive on other mobile fronts as well. Last year the company dropped the standard two-year contract, along with early termination fees, and now allows customers to text and connect to the Web in over 120 countries without extra charges. And according to a recent report by OpenSignal, it’s LTE network has been found to be faster than its US competitors as well.
These measures are having an impact, as T-Mobile grew at a greater rate than the other three major carriers in the first quarter of the year. Music Freedom may be just another step in the company’s program to escape last place in the mobile wars, and it certainly is a good one, but it won’t mean much if no one notices.
