T-Mobile became a major player in the wireless phone space because the incumbent market leaders -- AT&T and Verizon -- allowed it to happen. Those two companies enjoyed a near-monopoly for years and they fully acted the part.
Until former Chief Executive John Legere took over at T-Mobile (TMUS), customer-unfriendly practices were simply how the industry worked. Remember paying for data overages, having a certain amount of minutes, and only being able to send so many text messages a month?
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AT&T (T) and Verizon (VZ) built their businesses on policies that benefited themselves over their customers. Two-year contracts with heavy penalties to break the deals were a typical example of what the two companies did because consumers lacked a true alternative.
Under Legere, however, T-Mobile slowly made a series of "Un-carrier" moves that did away with those customer-unfriendly practices. Those forced AT&T and Verizon to do the same -- but being forced to treat people well isn't the same as opting to do so because it's how people should be treated.
In recent years, T-Mobile has pushed things further and has worked to give its customers more perks beyond just good service at a transparent price. This has included the company's very popular "Netflix on us," which gives customers a free Netflix (NFLX) subscription with their normal phone streaming plan.
Verizon has decided to copy that offer, but as you might expect, there's a catch.
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Here's How T-Mobile's 'Free' Netlifx Plans Work
T-Mobile makes it easy for customers to not only get access to a free Netflix account, but to see which offers they qualify for. The company lays it out in simple terms on its website:
"Stream your favorite movies and shows across any device -- TV, computer, tablet, or phone. A Netflix subscription is included with most Magenta and Magenta Max plans, at no extra cost."
Basically, single-line plans get a free one-screen Netflix Basic Plan while plans with multiple lines get access to Netflix HD, which allows streaming on two screens. You don't have to pay extra or buy anything else to get your Netflix plan for free.
In addition, while T-Mobile could, in theory, eventually end the deal, it does not currently have an expiration date. Many of the wireless carrier's customers have had their Netflix paid for by their phone company for years and likely will have it paid for for years to come.
Now, Here's How Verizon's Free Netflix Plan Works
Verizon could have simply copied what T-Mobile offers its customers and been the hero in this story. Instead, it's doing something similar that has a major catch. The company spells out the deal on its website and it sounds promising at first:
"Calling all content lovers! Starting March 12 and for a limited time, Verizon wireless, 5G Home and LTE Home customers can get one year of Netflix’s Premium plan on us through +play, Verizon’s subscription hub to shop, manage and save on your favorite content subscriptions. The Netflix offer gives customers $240 in annual savings and will only be available for a limited time, so get in fast."
That sounds great -- until you see the hoop the company makes you jump through to redeem the offer.
"To get the special offer for Netflix’s Premium Plan, customers must purchase an annual subscription from a selection of +play partners, including AMC+, Calm, MasterClass, Paramount+, the Peloton App, Starz, and Super Duolingo."
Essentially, +play is Verizon's app store and you have to buy another subscription, which Verizon likely gets a 30% cut from, in order to get Netflix for free. To make matters worse, Verizon gives you Netflix for free only for a single year, instead of T-Mobile's open-ended offer.
Prices vary for the various services that get you free Netflix, so if customers planned to pay for one of them and adding Netflix, they do save some money. But this is a deal aimed at driving Verizon subscription revenue. It's not about treating customers well. The company wants to drive users to +play, and to make that happen, it's offering a deal that's much worse than T-Mobile's.
A Verizon spokesperson shared the following statement with TheStreet after this article was published.
"Verizon's offer for one year of Netflix Premium is through +play, our newly launched subscription hub and marketplace for content and subscriptions. +play and Verizon's Netflix Buy One Get One offer are in addition to the content we're already giving away for free to our mobile customers, like the Disney Bundle, Apple Music and XBox Game Pass, which are included in select plans at no additional cost," the company shared. "With +play and our BOGO, we're giving customers more choice so that they can pick the services and offers that work for them within a marketplace of content - it’s not something any of our competitors offer."
