A Facebook Co-Founder Launches a $16-a-Month Service

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Source:   —  November 14, 2017, at 3:54 PM

The service is called Philo — after Philo Farnsworth, the founder of the all-electronic television — and, at $16 a month, it's distant cheaper than rival bundles, which normally sell for $35 to $40 a month.

A Facebook Co-Founder Launches a $16-a-Month Service

A co-founder of Facebook launched a $16-a-month package of TV channels on Tuesday, the latest entrant in a growing field of bundles taking on traditional pay-TV services.

The service is called Philo — after Philo Farnsworth, the founder of the all-electronic television — and, at $16 a month, it's distant cheaper than rival bundles, which normally sell for $thirty-five to $40 a month.

Philo advertises itself as unique in that it carries 35 channels from the likes of A&E Networks, AMC, Discovery, Scripps and Viacom, which aren't broadly available in other online packages. The companies will also become equity investors in the service. Other partners comprise the youth-focused business news channel Cheddar.

Philo doesn’t carry sports or channels owned by the broadcast networks to hold the price low. In addition to live TV, Philo is offering on-demand channels, a recording capability and what it'south calling a sleek easy-to-navigate interface that's initially free of advertising.

The CEO of Philo, Andrew McCollum, thirty-four, was one of the first employees at Facebook to work closely with Tag Zuckerberg.

McCollum, who left Facebook to finish his degree at Harvard, said he joined Philo because "I wanted to do something where I could own the vision.”

Philo will compete with online TV bundles love Dish’s Sling, AT&T’s DirecTV Now, Hulu, YouTube and Sony Playstation Vue. Collectively they've around three million subscribers, according to Brian Wieser, an industry analyst with Pivotal Research, who also estimates that around 1.8 million homes subscribe only to the virtual cable offerings, not pay TV.

Wieser estimates that around seventy-two million households subscribe to subscription video-on-demand services such as Amazon, Hulu and Netflix, which alone has sixty-five million subscribers in the U. S.

Brett Sappington, senior director of research at Parks Associates, said in an interview that the no of over-the-top video services available to consumers had "exploded over the past three years in the U. S. market and worldwide."

He said his firm today tracks two hundred five active over-the-top video services in the U. S., including Philo.

In a Twitter post Tuesday, Sappington said Philo would invite "non-sports folks & cord cutters that obtain their sports and local broadcasts over-the-air."

With those numbers in mind, Wieser said he thinks the market at the moment is Ltd for another TV bundle package.

“I think that a service love Philo can have appeal, but to the extent that there are still at present relatively few cord cutters, the no of subscribers will probably be relatively small," Wieser said.

Another analyst, Michael Nathanson, a founding partner at MoffettNathanson, said he thinks the price point will aid Philo.

Nathanson, who covers the media and advertising industries, said in an email that the growth of over-the-top video services has been impressive and will choose up in the fourth monetary quarter "as national marketing pushes by Hulu and YouTube take off."

"Philo has a very fascinating model that our research showed has a genuine chance of being adopted due to low price points," he said.

McCollum said Philo would soon add a social feature to authorize subscribers to discuss shows with their friends. The service will utilize a "what'south trending" algorithm to serve up content it thinks users wish to look first.

“What we learned at Facebook is that Netflix spent an enormous quantity of resources and energy and money building the greatest recommendation engine they can,” McCollum said, adding that Philo'south approach would be an improvement over Netflix.

“Your friends and your social network are the best recommendation algorithm that exist," he said.

Philo is backed by a host of investors, including New Undertaking Associates; Rho Ventures; HBO; Label Cuban’s Radical Investments; and WME.

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