To everyone saying it is "the same cost either way" or "the cost is hidden in the contract," yes, this may be true for the past few years, but it wasn't before.
We have a family of 4 on an old 700 minute plan (we don't use many minutes with free mobile to mobile.) This of course was before they introduced these joke new plans. We pay $59.99 for the base plan, $9.99 x3 for the 3 additional phones and 3x $30 for unlimited data. So we pay a little over $200 a month. Even with their Next Family plan scam, we might be able to break even on the monthly plan (albeit without unlimited data) but there goes the $450 savings every 2 years off new phones. So yeah, it makes sense for newer customers. These changes are targeting older customers.
Bottom line is, they save money by not having to subsidize the phone for $450 up front. Period. This helps them MUCH more than it could ever help the customer. Even if you do save on service in the end, it is service that is run on pre built infrastructure which costs these cell phone providers next to nothing. Yet another example of a company screwing the customer while trying to spin it as better.