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Philo & free equals good reception?

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Reading the coverage of the launch of Philo’s OTT service in about a half dozen articles, there were plenty of mentions of the lack of having broadcast networks on the service. But none mentioned that – at least on a TV set – it should be quite easy enough to receive those networks in almost any home in the US using an over-the-air antenna. This means Philo subscribers with a TV should be able to replicate most of a basic cable package, with four broadcast nets, PBS, and up to 36 cable networks.

Part of the reason Philo doesn’t carry broadcast is the cost to license those channels on a “live” basis, and also that the media conglomerates that control the broadcast nets also want to package up their various cable networks in the deal. But if subscribers can receive the broadcast nets over-the-air, what are they really missing?

Disney – Freeform and the Disney Kids channels. Presumably ESPN isn’t of interest since the subscriber is choosing a non-sports service. Philo offers Nick for kids’ content, and there is a fair amount of Disney Kids content available to stream without authentication.
CBS – only Showtime (which has an SVOD service of its own)
FOX – The FX networks, Fox News Channel, and the National Geographic networks. FS1, FS2 are sports so don’t matter.
NBC – has the largest stable of cable networks among the broadcast net owners, so this is the biggest loss in terms of number of channels (on the other hand, can you name one series on its highest-rated network, USA?).

Of course over-the-air reception of broadcast networks won’t help if someone is buying this package to predominantly watch via streaming on a non-TV device – a phone, tablet, or laptop. And they’d have to buy a stand-alone DVR to enable time-shifted viewing for broadcast. But it’s not a terrible solution for people who by getting Philo are already signaling they only want a limited number of TV options at a low price point.

Nielsen recently reported that 90 percent of OTT viewing is on a TV set. And TV sets are still found in almost all homes (98% of US homes overall, even in about 85% of cord-never homes), so a streaming-broadcast TV solution should not unreasonable for many homes.

The Long Term Play?

There are the seeds of Philo being a viable player in the OTT space using a combination of streaming and broadcast. But when the benchmark for this type of skinny-bundle service is getting maybe half a percent of homes as subscribers, it’s less a recipe for long term success but more of positioning for the wave of consolidations and roll-ups to come.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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