Executives at the wallet-friendly live streaming television service Philo have worked hard over the last few years to keep subscription prices as low as possible, but the rising cost of pay television programming has finally caught up with the service.
On Tuesday, Philo’s chief executive Andrew McCollum announced a rare price increase for the service, which will soon charge $25 a month for access to more than 60 cable networks and hundreds of on-demand TV shows and films.
The fee increase was attributed to rising programming costs by Philo’s content partners. No specific set of channels were blamed for the increase; Philo includes access to networks distributed by ViacomCBS, Discovery Communications, AMC Networks and A&E Networks, which are also investors in the service.
“We are relentless in our focus on keeping our price low, so we do everything we can to reduce our overhead while managing these increasing costs,” McCollum wrote in a blog post. “Even with those efforts, we can’t offset these rising costs indefinitely, and this change reflects that reality.”
The fee increase is only the second time Philo has hiked the cost of its base subscription plan. When the service launched three years ago, it charged customers $16 a month for access to around 40 live television channels and offered an expanded lineup of networks for an additional $4 a month.
In 2019, Philo discontinued its $16 a month plan in favor of its $20 a month package with the expanded lineup. Customers who continued to subscribe to the $16 a month plan were “grandfathered” in, with no price increase unless they canceled and restarted their service.
Philo will take the same approach when it raises its base subscription price to $25 a month on June 8. Current customers who have either the older $16 a month plan or the current $20 a month plan will continue to enjoy that rate as long as they maintain an active subscription.
But there is one big incentive for customers to switch from the cheaper plans to the newer one: As part of its price increase, Philo is also increasing the amount of time shows and movies remain in a customer’s cloud DVR from 30 days to one year.
“We have chosen to make this transition in a way that allows our existing subscribers to keep the package and pricing they currently enjoy, while new subscribers gain the added value of the newly extended DVR,” McCollum explained.
Philo’s price increase was not unexpected: Other services have raised their subscription fees as programmers begin to demand more money in exchange for certain rights to transmit their channels to the public.
McCollum has hinted over the last year that a price increase for Philo would likely be inevitable, especially after the blockbuster merger between Viacom and CBS Corporation in 2019.
In an interview with The Desk last year, McCollum said Philo was insulated from the effects of the ViacomCBS merger through at least this year, and that the company would weigh adding CBS channels once the time comes.
“To be perfectly honest, CBS is really just one channel — it’s not actually just one, there’s a couple of others — but if you look at any of the broadcasters, it’s the smallest delta,” McCollum remarked. “If we did add [CBS], I’m not sure it would be terrible.”
Asked on Tuesday if Philo was raising fees due to an impending agreement with a programmer like ViacomCBS concerning new channels, a spokesperson referred The Desk to McCollum’s blog post.
While customers usually complain about fee increases, Philo’s customers seemed more than happy to pay a few more dollars a month for a service they generally like.
“$25 is still cheap for what you get, compared to others,” customer Dustin Bell wrote in a popular Facebook group for Philo users.
“The fact that Philo went this long without a price increase is pretty impressive,” Tim Sweitzer, another Philo user, wrote in a comment.
That price is even cheaper for T-Mobile customers: On Tuesday, a Philo spokesperson said the company will continue honoring its discount of $10 a month for customers who maintain an eligible line of service with T-Mobile. That discount brings the price of Philo’s service down to $10 a month for customers who sign up before June 8 and $15 a month for customers who subscribe after that date.