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Philo Enters the Crowded OTT TV Fray

The latest over-the-top tv provider to target cord-cutters and younger audiences isn’t in much of a sporting mood. In fact, sports is pretty much off its menu.

Taking a different tangent on the virtual multichannel video programming distributor model, Philo last week launched a nationally available, entertainment-focused, sports-free OTT TV service. It features channels from programmers (and financial partners) including A+E Networks, AMC Networks, Discovery Communications, Scripps Networks Interactive and Viacom.

Philo’s service, which will tack on a mix of social features early next year, starts at $16 per month for a lineup of more than 35 channels and an add-on package that costs an additional $4 per month for an additional nine channels.

Philo allows for up to three simultaneous streams per account and the ability for users to set up individual profiles.

Missing from Philo’s lineup are the major local broadcast-TV stations. Philo believes customers who want them will get antennas, and will flesh out their video options with Netflix and other complementary OTT services.

“That gives you a lot of options to create a TV package that makes sense for you,” Philo CEO Andrew McCollum said.

Philo’s service also includes a cloud DVR that stores unlimited shows and movies for up to 30 days (with some ad-skipping restrictions to make its programming partners happy), along with a VOD library and a “Lookback” component that provides access to shows that have aired within the past three days.

A Friction-Less Focus

Philo, which cut its teeth on multiscreen services for college and university campuses, is also looking to remove all hurdles from the signup process. Consumers who want to join need only to supply a mobile phone number. Philo will text a code that would-be subscribers can enter to start using the product right away, without requiring a billing address or credit-card number.

Though Philo’s skinny-bundle approach appears to target a subsection of consumers who don’t watch (or don’t want to pay for) live sports, it will face off with traditional pay TV providers and a growing array of virtual MVPDs including Sling TV, PS Vue, YouTube TV, Hulu and fuboTV, which has developed a package that uses sports programming as its centerpiece.

Philo and its partners realized there’s an opportunity to create an entertainment- focused package at an affordable price that cuts out sports networks, McCollum said.

Additionally, Philo’s agreements with programmers are more “open” and flexible with respect to data, he said, noting that Philo will be sharing that information with those partners in a way that, they hope, will provide more guidance on shows and other programming that resonate with consumers that fall into Philo’s category.

Colin Dixon, founder and chief analyst at nScreenMedia, said Philo presents “a reasonable deal for consumers who don’t want sports.” It also makes sense for Philo to target that market, he said, given that hasn’t been a focus for other OTT TV providers.

But the virtual MVPD sector is becoming increasingly crowded with options, he said, so this “mishmash” is making it a challenge for consumers to know what’s right for them.

The challenge for all of them, Dixon said, is to tell consumers their story and their approach in order to create demand for skinnier bundles that do a good job matching up with the channels they desire most.

“That’s the win with virtual MVPDs,” he said.

Bruce Leichtman, president and principal analyst with Leichtman Research Group, noted that all OTT TV providers offer low barrier to entry, but also a low barrier to exit.

“That’s the challenge for all of them,” he said. “What is the glue? What’s going to keep people there?”

But Philo offers a solid strategy for its programming partners as consumers seek out different pay TV options, he said. It also operates under a tough business model, he added.

Going Social

“We want to build the first social television product,” explained McCollum, an executive who was on the founding team at Facebook.

TV, he said, is one of the most social mediums in existence, but most of those products don’t emphasize how television is integrated into the social media fabric.

Early next year, Philo will add opt-in features that focus on social interaction between subscribers that, for example, will allow them to share what they are watching and discover which shows are popular with the other people in their social circle. The system will also let subscribers control what TV viewing is visible to others in their social networks.

“The social network is the most powerful recommendation engine in existence,” McCollum said.

To facilitate conversations about a show, Philo will also provide a way for people within a social network to synchronize viewing.

San Francisco-based Philo has raised about $51 million, with backers that include A+E Networks, AMC Networks, Discovery, Scripps and Viacom, New Enterprise Associates, Rho Ventures, XFund, HBO, CBC New Media Group and Mark Cuban’s Radical Investments.

The new direct-to-consumer OTT TV service expands Philo’s business, which previously had been centered on the delivery of live TV, VOD and cloud DVR services to college students in partnership with several universities, including Auburn, Duke, Harvard, Stanford, Michigan, and Alabama. Philo expects to be teamed up with more than 75 schools by the end of the year. McCollum said Philo intends to focus some of its efforts on consumers who are just getting out of college, adding that 90%-plus of Philo’s subs on college campuses said they’d want to keep the service after they left school.

The emergence of Philo’s sports-free skinny TV bundle has been hinted at for months by programming execs such as Viacom CEO Bob Bakish and Discovery Communications CEO David Zaslav.

Philo’s OTT service is initially supported on web browsers, Roku players, iOS devices, and via Chrome on Android devices. It expects to add more TV-connected platforms as well as a dedicated app for Android.