Update: Legere staying on at T-Mobile until end of April

Thank goodness for T-Mobile employees, customers, and shareholders, Legere is staying put until his contract expires at the end of April.  Although I think more time at the helm would have been better, Mike Sievert, current President, COO, and Board Member at T-Mobile is the natural succession choice.

Legere Needs to Stay at T-Mobile

In other news this week, WeWorks, controlled by SoftBank, was rumored to be courting T-Mobile’s CEO, John Legere, to be its new CEO.  SoftBank currently is the majority shareholder in Sprint, the company merging with T-Mobile in early 2020, if a settlement with 15 states trying to block the merger is reached.  In the twists and turns of the T-Mobile-Sprint merger, Marcelo Claure, who is the executive chairman of Sprint, is also the COO of SoftBank.

 

The attractiveness of Legere to be the savior of WeWorks makes sense.  His success in elevating T-Mobile to the 3^rd largest wireless carrier in the U.S. with his eccentric and “make it happen approach” is undisputable.  But, if T-Mobile is going to get through the court case with the states AND live up to all its promises to the federal and state agencies, it needs Legere at the helm.  No ands, ifs, or buts.

What a Week It Was For Disney

Last week, Disney introduced Disney+, its new streaming service.  The price is $6.99/month as a standalone product or $12.99/month when bundled with Hulu and ESPN+.  The bundle price is the same as what Netflix charges for its most popular offering.  Within the first day, 10 million households had subscribed. 

With full operational control of Hulu since the spring, Disney also announced that effective December 18, the price of its Hulu+Live service will go from $45/month to $55/month, a 22% increase.  The price increase comes 6-months after a 12.5% increase in January (from $40 to $45). 

If you had any doubt, the two announcements “define” what market power looks like!  While Netflix had the first mover advantage and has grown to over 150 million global subscribers in a dozen years of streaming , Disney’s huge brand identity and intellectual property assets (which it no longer licenses to Netflix), makes its “late” entry into the market a huge concern for Netflix.  

For now, Disney can enjoy the fanfare and the excitement around the launch.  But, in 2020, the market is going to get more crowded with other media giants (e.g. NBC Peacock and AT&T’s HBO Max) entering with their own direct-to-consumer entertainment choices that will be priced to attract and retain subscribers.  While it is not a zero-sum game or an "everyone will be a winner” situation, expect that, when all is said and done, Disney will be one of the major players in this space.