Philo is a litmus test for the future of sports-free TV

Rethink Technology Research

By Kendra Chamberlain
Published 
The elusive sports-free skinny bundle has finally made its debut. Philo, a small company known for its college dorm streaming service Tivli, has stepped out with a new – yet not so new – alternative to cable TV.
The skinny streaming bundle is grabbing headlines because it doesn’t include any sports channels. It’s also offered at a surprisingly low monthly price, just $16 a month for 36 TV channels, but there’s a good reason for that: it doesn’t have any broadcast channels, and it’s missing some of the bigger pay TV networks.
So what does Philo offer? Nothing more than another ad-hoc collection of streaming linear TV channels. There are quite a few of these products now available in markets across the country, and those not backed by huge media firms have all been destined for a painfully predictable lifecycle: a brief period of headline attention, a slow fade to obscurity, and a final death at shuttering.
While we may all remember Go90, does anyone remember LayerTV? Philo actually does have some backing from big media, to the tune of $25 million, coming from its programming partners. Those partners include Viacom, A&E Networks, AMC, Scripps Networks Interactive and Discovery Communications. And the company has a few other advantages: early investments have come from HBO, Mark Cuban and Facebook co-founder Andrew McCollum. McCollum has since been appointed CEO of Philo, under the promise of raising more funding for the service, and ultimately expanding the college TV service to new, national markets.
Objectively, the Philo bundle is actually quite different from its competitors, most of whom have bought in to the idea that sports channels are needed in any live TV offering, and so, too, are the national broadcast networks. Philo’s bundle doesn’t actually have any of those programmers: no Disney or ABC or ESPN. There is no NBCUniversal, no Fox, and no CBS. Wall Street, for one, isn’t impressed. We’re just a few days after its launch, and Philo has already acquired the nickname “loser bundle” – based on the long-held assumption that everyone wants ESPN, and Disney, and NBC, and FX, and the rest.
Instead, the company is offering 37 channels for $16 a month, or 46 channels for $20 a month. Those channels include A&E and History, AMC and IFC, Discovery Channel, ID, Animal Planet, Food Network, HGTV, TLC and Travel Channel, AXS TV, BBC America, Cheddar, Comedy Central, MTV, Nickelodeon, and others.
It’s available on mobile, desktop, iOS and Android devices, and Roku connected TVs. The service is a month-to-month offering that viewers can sign up to on their mobile devices. It includes a cloud DVR that holds (at least for now) an unlimited amount of recordings for 30 days, and viewers can watch TV on up to three devices simultaneously; and most importantly for the cable-phobic crowd, it offers subscribers access to all on-demand and TV Everywhere platforms associated with its networks, which means virtually anywhere, anytime access to TV shows.
Philo’s streaming TV rivals, including now Hulu, YouTube, Dish, AT&T, Sony and others, are all much bigger offerings, with larger price tags, and more content. But Philo’s unique programming lineup, along with its lowest-yet-to-market pricing, is in a position to act as a litmus test for the future of sports-free TV entertainment packages.
According to a study released by TiVo in September, Philo is offering five out of the 10 most popular TV channels, based on a survey of over 3,000 pay TV subscribers. The other five popular channels Philo is missing? They include ABC, CBS, Fox and NBC. Note that ESPN – or any other sports channel – doesn’t make the list.
According to TiVo’s data, DirecTV’s “just right” package – offering 80 channels total for $50 per month, scores the highest on this metric. It includes eight out of the 10 top channels. Hulu’s $40 a month service offers seven out of ten, but only in select markets; YouTube’s $35 a month service offers five of the ten, but four of those are only available in select markets; and Dish Network’s Sling TV offers seven of the top 10 channels for $40 a month.
If the Philo bundle is able to gain traction in the marketplace, especially among the demographics that advertisers want, the media industry at large will be forced to re-evaluate the value of sports programming as a must-have for any and all entertainment packages.
It could also force media firms to revisit how well broadcast TV’s lowest common denominator programming strategy fits with viewers’ evolving entertainment expectations. Let’s not forget the media world was quick to condemn Netflix’s data-driven content production strategy five years ago; while today, many networks are desperately trying to replicate the company’s success with niche viewer demos across fragmented platforms.