Anthem Sports & Entertainment has agreed to allow wallet-conscious streamer Philo to continue offering two of its general entertainment channels that were scheduled to be pulled in late July, The Desk has learned.
The agreement allows Philo to distribute AXS and HDNet Movies to its streaming subscribers on a temporary basis, while both sides continue to work toward a new carriage deal that would allow the streamer to offer the channels over a longer period of time.
Both channels were set to depart Philo on July 31 after the company’s contract with Anthem ended. The service sent a note to subscribers earlier in the month warning that any programs recorded from the channels would be removed from their cloud DVRs at the end of the month.
“We strive to give our customers the best possible experience, and will keep you in the loop on any upcoming changes to our channel lineup,” a spokesperson for Philo wrote in the email, according to a copy of the note reviewed by The Desk.
Surprisingly, the channels didn’t disappear as expected — and nailing down the precise reason why has been unusually difficult.
In a statement to The Desk on August 1, a spokesperson for Philo suggested AXS and HDNet Movies were still available due to an unspecified technical issue.
“Details are still being worked out with our backend and content teams in terms of timing and status, but for the time being, they will stay up,” the spokesperson said, without providing any additional details.
The company was a bit more open on social media, telling subscribers that it was “continuing to work with AXS TV and HDNet Movies on an agreement to keep the channels on Philo” and affirming that the channels will remain on the service for a while longer.
In a follow-up email, a spokesperson for Philo declined to say whether the information provided on social media by its official account was accurate. The company also would not confirm a separate news report that claimed a member of Philo’s support team affirmed the channels would stay online as discussions continued.
“The channels remain live for the time being, but we cannot provide any additional information beyond that at this point,” the spokesperson said on Monday.
Current discussions center around whether Philo is willing to offer two other Anthem-owned channels, Pursuit and Fight Network, as well as how much the streamer is willing to pay for the programming, according to a source familiar with the matter.
Anthem acquired a controlling stake in AXS and HDNet Movies in 2019. Since then, Anthem has increased the fee cable and satellite providers pay in exchange for the right to distribute its programming, though the price is still far below what top-tier cable network owners charge.
Both channels complement Philo’s strategy of providing general entertainment, lifestyle and knowledge channels to streamers who are willing to sacrifice broadcast, sports and cable news programming in order to watch live TV at a low price.
Philo has increased its core programming price just twice over the last few years. In 2019, the company eliminated a budget tier that cost $16 a month, pushing new subscribers toward its all-inclusive $20 a month plan (existing subscribers were allowed to keep the $16 per month plan, as long as they did not cancel their service). Two years later, Philo raised the cost of its base tier by $5, a price that has held ever since.
In a blog post, Philo CEO Andrew McCollum said the company tried to avoid raising the price of its service as long as it could, but the cost of delivering live channels and related programming to streamers was getting more expensive.
“We can’t offset these rising costs indefinitely, and this change reflects that reality,” McCollum said. As a concession, Philo upgraded its cloud DVR feature, so streamers would have their recorded programs available for at least a year after they aired on TV (previously, the cloud DVR feature guaranteed recordings would be available for at least 30 days).
The lower cost makes Philo an attractive option to TV fans who are looking to escape the high cost of traditional cable and satellite television. But the service is still dependent on programming from third parties, including Anthem, and associated costs continue to rise.
To offset these costs, Philo has started inking deals with companies that offer free, ad-supported streaming channels, including Cineverse, Vevo and Insight TV. The agreements allow Philo to deliver more content channels to its subscribers, while also tapping into new sources of revenue.