Editor’s Corner—Viacom’s entertainment-only bundle dream came true, but can it succeed?

The Philo home screen (Philo)
Ben Munson

After almost a year of promises from Viacom CEO Bob Bakish, a streaming bundle of entertainment-only cable networks is now a reality. Philo launched Tuesday, priced at $16/month and full of cable networks with no sports.

Philo enters a rapidly maturing SVOD and virtual MVPD market as somewhat of a hybrid model. It holds a large entertainment programming slate with shows from A+E, AMC, Discovery, Scripps Networks Interactive and Viacom but unlike Netflix and Amazon, it presents its content in linear format.

Like vMVPDs, Philo offers live TV but unlike most major vMVPDs like DirecTV Now, Sling TV or Hulu, it focuses solely on entertainment and lifestyle channels and excludes network television and live sports.

And Philo’s price tag sits squarely in between the average $10 per month cost of many SVODs and the typical $20-$35 range for vMVPDs.

With a decent amount of differentiation as it heads into market, all that’s left now is for Philo to compete for an audience.

Bakish and contemporaries like Discovery CEO David Zaslav have both on several occasions over the past year touted the benefits an affordable entertainment bundle. Such an offering could have success in the U.S. in terms of attracting cord cutters, shavers and nevers back to traditional linear content, and giving programmers another dual-revenue stream opportunity. While they discussed the service as a hypothetical, Viacom and others were busy working out the details for such a service that Philo would build on its platform.

“We’ve been working with Philo for several years through their college campus service, and we know that they’ve got great insight about their consumer and a distinct point of view about the platform. For the new product, we’ve worked closely with them to provide the best Viacom content portfolio, but they’ve built out the platform with their own expertise,” said Tom Gorke, executive vice president of content distribution for Viacom.

After that work, the product is here and it’s packing 35 channels plus features including an unlimited 30-day DVR, on-demand library, multiple simultaneous streams, a guide that lets you go back or forward up to two weeks, and a bunch of social sharing features that will be added some time next year.

From my limited experience with the platform, it seems to be a fairly seamless and smoothly running experience. For the programmers involved, it could solve two problems: it gives them a livestreaming option at a time when many vMVPDs are being choosy about which cable networks they’re including in their bundles, and it gives them an entertainment offering that’s priced near Netflix.

Zaslav has repeatedly said not having an entertainment option near that Netflix price range has been a missed opportunity for programmers.

“If there are 40 million broadband-only subscribers who want to buy something, they buy Netflix because there’s not anything meaningful that we’re offering them. We’re working to remediate that and so are some others and I think it will happen,” Zaslav said during Discovery’s most recent earnings call.

Since all the programmers involved in the Philo launch are also strategic investors, the service also provides them with some degree of distribution ownership, something that AMC Networks CEO Josh Sapan stressed would be important moving forward with streaming deals.

“So, we will continually evaluate, when a deal is up with an SVOD service that's not one that we're a participant in, whether it makes sense to continue to go forward with them or to deploy our content toward any one of those services that we are a participant in,” Sapan said during AMC’s most recent earnings call.

The benefits are clear for the programmers involved but the advantages of the service will need to be made clear to consumers. Philo has an attractive UI, fairly rich feature set and it brings together a reasonably priced bundle of channels previously only available through a cable or satellite provider.

And by only requiring a phone number to sign up for a free trial, Philo should be able to get more people through the doors where they can possibly turn them into paying subscribers.

It seems that—even though it’s going up against some strong competitors—Philo has assembled a strong product that fills a niche and made it easy to try. There doesn’t seem to be any reason Philo won’t have a material impact for all involved. - Ben | @fiercebrdcstng