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Music Freedom to The Netherlands, says T-Mobile

by User Not Found | Oct 11, 2016

On October 10, T-Mobile Netherlands (NL) launched a zero-rated music streaming service Datavrije Muziek (“data-free music”), largely a carbon copy of its Music Freedom offering in the US market, which has recently been superseded by its T-Mobile One program.

Partners at launch include Deezer (which T-Mobile NL already has a standing partnership with), Spotify, Napster, Tidal, Nederland.FM, and HitsNL. The list may appear short to compare with Music Freedom, which had over 40 partners by the time T-Mobile One replaced it, but, similar to Music Freedom, other music services can sign on to the program if they choose to do so. And, the only high profile missing players are Apple Music and YouTube, both of which have entered into partnerships with T-Mobile’s zero-rated programs in the US, Apple Music on Music Freedom and YouTube on Binge On. Given there is also no cost for music providers to joining Datavrije Muziek we see no insurmountable barriers for these high-profile services to sign on if the program proves successful.

To qualify for the benefit of zero-rated data, users need to already subscribe to or upgrade to 6GB data package and above. Suppose a user is currently on the next tier package (3GB), she will need to spend 5EUR more per month to qualify for Datavrije Muziek. Another “catch” is the bitrate which will be capped at 384kbps.

Consumers have truly embraced streaming as the preferred mode of listening to music on the go. In Western Europe, in 2015 more than 80% of consumer spending on mobile music was already made on streaming, and globally 95% of the market value will be generated from streaming, according to the latest Strategy Analytics’ research. By removing consumers’ worry about data overage, Datavrije Muziek will further stimulate true music streaming on the go, instead of users having to download the playlists over Wi-Fi and listening offline. Mobile music is therefore being used by T-Mobile NL, the 3rd largest operator in the country with 17.5% market share, as an arena to deploy a disruptive tariff to attract customers from the market leaders KPN and Vodafone (54% and 24% respectively). Meanwhile, the program also gives T-Mobile a good opportunity to up-sell its data packages.

If T-Mobile US’ Binge On is something to refer to, we are confident that the majority of qualified consumers will opt in after they receive the notice on their phones today (11th October) and they will more likely be happy with the experience. Even the bitrate limit is less of an issue for the majority of the users: Spotify’s “extreme quality on mobile” and Tidal’s “high quality”, both at 320kbps, can be handled unscathed, while the latter’s “HiFi” quality at 1411 kbps would be the only tier to be “optimised”.

All these may be music to the ears of the streaming aficionados (pun intended), but it may run afoul with the net neutrality regulations in The Netherlands. Ay, there’s the rub: by encouraging other music streaming services to sign on to the platform T-Mobile is not actively discriminating against competitors in the music streaming space, while consumers are also given the choice to opt-out of zero-rating and music bitrate optimization, T-Mobile NL is not violating the net neutrality guidelines published by the EU. However, zero-rating is banned by the local net neutrality law in The Netherlands. The parliament there will vote on the EU guideline soon, and we wouldn’t be surprised with a tussle between consumer groups, music streaming services, telecom operators and the EU institutions, if the motion is voted down. To look at this case from a broader perspective, the fact that T-Mobile NL is prepared to take on local regulators might provoke some other challenger operators in Europe to make similar moves. At the end of the day, EU guidelines need to become laws before they can supersede national laws. Provided there is not a “Nexit” or other “exits”, that is.

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