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‘I’m a Believer in Bundling,’ Philo CEO on Future of Streaming

Matt Tamanini

Few people have been at the cutting edge of technological advancements like Andrew McCollum has. As a college student, he helped co-found “The” Facebook and since 2014, he has been the CEO of live TV streaming skinny bundle Philo.

Last week, McCollum visited Michael Timmermann’s “Michael Saves” YouTube page to discuss the future of not only his service, but the streaming industry as a whole.

First and foremost, McCollum does not believe that the rush for every company and content owner to launch their own, independent streamer is sustainable. The CEO said that there needed to be more options for consumers in order for them to have the full range of choices that they are looking for.

“I am a believer in bundling,” he said. When discussing potential bundling partnerships with subscription video-on-demand (SVOD) services, McCollum said, “For sure, it’s something we would love to do.”

Watch the entire interview here:

McCollum noted that one of the hangups to bundling with other streaming services is that there is a significant overlap between the content on potential SVOD bundling partners and what Philo already offers, and — true to the mission of his service — McCollum wants to make sure that customers aren’t charged double for that content.

“We would really love to find a way that if you’re a Philo subscriber, you can get those services at a much lower cost than you would have to pay if you’re just signing up individually because it makes sense, you shouldn’t have to pay for things twice,” he said. “But that creates all kinds of complications in terms of how they’re offering it in their partnerships with others. I’m hopeful that we’ll be able to [reach a bundling deal with an SVOD service]. But it is tricky to figure out exactly … how it works economically, and figure out how to get the deals done.”

Philo has built its entire brand on being the low cost (live TV streaming service) and it has been able to do that because it keeps its licensing costs down by not offering the sports and news channels that come with higher carriage fees. However, in always trying to find ways to satisfy customers, McCollum does acknowledge that there might be a future in which Philo makes packages with that higher-priced content available.

“We have no problem with sports, per se, sports are great,” he said. “The issue is … how can you offer [it] in a way that doesn’t force everyone to pay for it if they don’t want it? So, for example, does that in the future look like a non-sports package, like maybe we have today, and then a sports package for people who want that content? And it includes those channels that bring a lot of cost, but — also for the people that want them — provide a lot of value … I think that it’d be great to be able to give both of those groups the choice they want.”

The CEO also believes that as streaming continues to eat away at linear viewers, channel owners will need to loosen up their requirements for group licensing their networks. Those licenses drive up the cost that services like Philo have to pay to carry channels and often come with content that is of little interest to many consumers.

Channel owners will often force streamers and cable providers to pay for a number of lesser watched channels in exchange for the ability to carry their most popular channels as well. This, in turn, forces customers to pay more for the channels they want and the channels that they don’t want. When it comes to cord-cutting, oftentimes customers just decide to do without.

“If your choice is you can offer something to those customers and have them be really happy and pay for your content,” he said, “or you basically shut them out [and] … they’re just going to cancel and watch stuff on SVOD services and YouTube and Pluto, maybe you sort of start to realize [that] the benefit of giving people the flexibility is actually better than trying to force everyone into this one-size-fits-all solution. I think that that realization will come. And we await that day with bated breath. But, you know, it’s hard to say how far into the future it will be.”

In the conversation, Timmermann said that he had recently noticed that on the Philo website the service’s channel listings were not only grouped by content, but also included listings of the most popular shows available on those channels. He asked McCollum if that was done in an effort to highlight the most popular content on the service, giving consumers a shorthand for the type of programming that the streamer provides.

McCollum admitted that it was done to market the content that their individual linear channels provides, but also to showcase what is available on the platform’s more under-the-radar on-demand service as well.

“We were finding that people were not realizing really the breadth of content that’s on Philo,” McCollum said. “Because if you’re only watching the linear networks, or only know about the linear networks, maybe you don’t realize that we have over 40,000 shows you can watch on on-demand on Philo … So people realized, yes, you get the live linear experience. And that’s definitely what a lot of people come to Philo for, and where they see a lot of value, but there’s also a really deep library of on-demand content as well. So we wanted to try to surface both of those things.”

McCollum noted that while Philo has been able to keep prices low because of how lean the company’s team is, that has led to some problems, most notably in the development of apps for various streaming platforms. While there is the additional fees that platforms like Samsung require to allow apps to appear on their devices, McCollum said that the development of new apps is time and labor-intensive, making it difficult for his relatively small staff to invest in their creation. However, it is Philo’s goal to eventually be on every platform that customers could potentially stream content from.

“We do recognize that there are other big platforms that we’re not on that people would love to be able to use Philo on; Samsung’s definitely, probably the biggest one,” he admitted. “And it’s something we’re starting to work on. I can’t announce yet when Philo will be on Samsung, but it’s something we’re looking at pretty carefully.”

Philo

Philo is a live TV streaming service designed for entertainment lovers which includes 60+ channels for $25 per month.

They have a single $25 plan with major channels from A&E Networks, AMC Networks, Discovery, Hallmark, and ViacomCBS. These include A&E, AMC, BET, Comedy Central, Discovery, HGTV, MTV, Nickelodeon, and Paramount Network. The service also has a Unlimited DVR, which now keeps your recordings for up to a year.

You’ll also get channels like Cooking Channel, Destination America, Discovery Family, Discovery Life, LOGO, and Nicktoons.

While it doesn’t include any local or sports channels like ESPN, FS1 (Fox Sports 1) or NBC Sports Network, it is the cheapest option for live entertainment-only TV.