Streaming television service Philo has rolled out a slight price increase to its base package of more than 60 live television channels.
The service is now charging new customers $25 a month for access to its lineup, which includes channels from ViacomCBS (Comedy Central, MTV, Nickelodeon), Discovery (Animal Planet, Discovery Channel, HGTV), AMC Networks, A&E Networks and others.
As part of the fee increase, Philo is expanding the amount of time customers have to watch shows saved to its cloud DVR. The DVR feature allows users to record as many shows and movies as they want from Philo’s channels, with shows and movies saved in the DVR for 12 months. Previously, the unlimited cloud DVR feature allowed users to watch recorded shows and movies for 30 days.
Former Philo customers who want to re-start their service in the future will be required to sign up for the $25 a month package. Customers who signed up for Philo prior to Tuesday and who maintained an active subscription will be allowed to keep the unlimited, 30-day DVR feature for $20 a month if they want, or they can upgrade to the new unlimited, 12-month DVR perk by switching to the $25 a month plan. (Philo warns customers that if they cancel their service or they switch to the upgraded plan, they won’t be able to get the $20 a month plan again.)
Customers of T-Mobile’s wireless phone service will still get a discount on Philo with an eligible line of service. That discount is $10 a month, and it applies equally to Philo’s legacy $20 a month plan (bringing it down to $10 a month) and the new plan with upgraded DVR (which lowers the price to $15 a month).
In a blog post late last month, Philo’s chief executive Andrew McCollum said the service remained committed to providing customers with a low-cost, feature-packed streaming service experience, but that it could not escape the rising cost of television programming that has forced similar price increases at competing cable, satellite and streaming services.
“We can’t offset these rising costs indefinitely, and this change reflects that reality,” McCollum wrote. “Still, 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.”
The move is the first time Philo has raised its base subscription price on customers since it was introduced in 2017. Two years ago, the service eliminated a $16 a month package that contained a core group of channels after noticing most customers opted for the $20 a month package with an expanded assortment of networks, the latter of which became Philo’s standard package across the board.
Philo has managed to keep prices low by skipping out on partnerships with companies like Comcast (NBC, NBC Sports, MSNBC), Fox Corporation (Fox News, Fox Sports) and the Walt Disney Company (ABC, ESPN, Disney Channel), which offer top-tier cable networks bundled with expensive sports and news channels. Instead, Philo focuses on programmers who offer cheaper general entertainment, lifestyle and knowledge channels; some of its program partners, including ViacomCBS and Discovery, are also investor-owners of the service.
That strategy has been somewhat complicated over the last few years by a trend of media consolidation impacting some of Philo’s content partners. In 2019, Viacom and CBS Corporation merged their businesses and portfolio of media brands; the newly-formed ViacomCBS soon required programmers like YouTube TV, Disney’s Hulu with Live TV and Dish Network’s Sling TV to carry Viacom’s MTV Networks and the CBS broadcast and cable channels instead of carrying one over the other. The demand has triggered price increases at those two services.
Last year, McCollum told The Desk that Philo’s long-term carriage agreement insulated the service from the effects of the ViacomCBS merger for a little while. In other words, Philo did not have to immediately consider adding the CBS lineup of channels — which, to date, it has not — because its contract with ViacomCBS pre-dated the merger.
Eventually, it will. And soon, it will have another media mega-merger to contend with.
In May, AT&T shocked the media industry when it announced plans to spin off its WarnerMedia content division into a separate company, one that will eventually merge with Discovery. Though WarnerMedia’s premium movie network HBO is among Philo’s minority investors, the streaming service does not offer HBO as a subscription option (Epix and Starz are available as add-ons through the service), and the streamer has never forged a programming agreement with WarnerMedia.
That might have to change once AT&T and Discovery consummate the WarnerMedia merger, which is expected to happen next year. It is not clear if Discovery will force post-merger programming agreements, similar to the strategy ViacomCBS has employed over the last year. AT&T and Discovery executives have been relatively quiet on their post-merger plans, though they’ve affirmed their willingness to continue operating Discovery Plus and HBO Max as separate streaming services, which compete for subscription dollars against linear-based services like Philo.
In news interviews, McCollum has been hesitant to promise that Philo would never raise its subscription price on its users, as it has done this month. But the company does seem focused on beating back those programming costs with subtle increases where appropriate while at the same time offering users new features, channels and other perks to convince them to stay: Over the last year, the company has focused on adding channels from independent programmers like AccuWeather, Revry and Sony’s Get TV while expanding a customer’s ability to access TV Everywhere apps distributed by networks (most notably, Starz and Epix).
Their strategy appears to be resonating: At a time when streaming customers complain about the slightest price increases, Philo’s hardcore users largely shrugged off being asked to pay $5 a month more for a service they like, with some asking in social media groups for information on how to upgrade in order to get access to the expanded DVR perk.
“$25 is still cheap for what you get, compared to others,” customer Dustin Bell wrote in a popular Facebook group for Philo users.
