, it had the cheapest pay-TV bundle on the market in the US. For $16 per month, people could buy a smattering of 45 entertainment TV channels like AMC, HGTV, Food Network, MTV, and Comedy Central, and add on a small collection of other networks for an extra $4 per month.
"We were really trying to figure out, how can we avoid having to raise our price?" Andrew McCollum, CEO of Philo, told Business Insider in an interview in New York on Tuesday."We're subject to some of the same forces that some of our competitors are. Our costs do go up. That's a challenge we had to figure it out."— has had to make since joining Philo in 2014.
Like other pay-TV services, Philo licenses channels, including those from its investors, usually for a fee. Pay-TV companies typically renegotiate those fees with the networks every year or so, and pass the costs onto customers in the form of higher monthly bills. There are other trade offs, too. When Philo began selling its subscriptions through Roku's and Amazon Fire TV's billing platforms, for example, it was only able to offer the $20 subscription because there were costs associated with billing through those external platforms, McCollum said. It's similar to how Apple takes cuts of apps and subscriptions sold through its App Store.
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