Philo, the $20 per month OTT-TV service, and Discovery+, the new subscription VoD service from Discovery Networks starting at $4.99 per month, are both streaming services focused on entertainment and lifestyle programming that largely steer clear from sports.

Despite the similarities in content focus, Philo CEO Andrew McCollum isn't overly worried that Discovery's new SVoD offering will somehow undercut Philo, arguing that Discovery+, with its exclusive original fare and access to a deeper library of content, presents a fitting complement.

"Overall it's great to provide options for consumers" as they piece together services and self-bundle, McCollum said Tuesday at a CES 2021 session titled, "The Great Unbundling in Video." Discovery+, he added, "can be a great complement to what [consumers] are getting through Philo."

At the same time, it would probably behoove Discovery to see Philo to flourish alongside Discovery+. After all, Discovery is one of Philo's financial backers.

McCollum believes that Philo, which crossed 750,000 subscribers at last check, can be complemented by a wide range of SVoD services, including Netflix and Hulu. But he also wonders where the limit will be as consumers continue to tack on more services that require different logins, billing and user interfaces and make it difficult for some consumers to track their favorite shows.

"It really becomes a little overwhelming," McCollum said, noting that he hears complaints from Philo users about having to use and access multiple video apps to get their content. "I don't know when we'll reach that breaking point. I do think that over time we believe that things will become a lot more consolidated in a lot of ways."

That's already happening to a degree. Major pay-TV providers such as Comcast and Comcast, for example, are integrating streaming services with legacy pay-TV services, as are both large, small and midsized pay-TV providers that have developed new IP-based services that rely on Android TV or have been built in partnership with companies such as TiVo.

Free streaming gets a grip on the market

While services such as Philo have been making steady progress amid cord-cutting of traditional pay-TV services and luring in customers who have never had a pay-TV service, several free, ad-supported streaming offerings are also gaining traction.

Representing that piece of the puzzle in the session was Pluto TV, a service now part of ViacomCBS that ended Q3 2020 with 28.4 million domestic monthly active users.

Scott Reich, SVP of programming at Pluto TV, said the service has provided a good fit in the market and at ViacomCBS. While Pluto TV is the priority there for free streaming, Showtime and CBS All Access (soon to be expanded and rechristened as Paramount+) are the priorities on the subscription streaming side.

"It's about creating a complementary ecosystem between all of it," Reich said. Among recent examples, he pointed to Showtime Selects, a recently launched free, ad-based streaming channel on Pluto TV that provides a taste of Showtime content with the hope that some viewers will upgrade to the paid subscription version of Showtime.

Pluto TV, he said, is constantly playing around with the best way to upsell viewers to premium services offered behind a paywall.

"This is not a winner-take-all marketplace," Reich said. "I think you'll see more experimentation … Ultimately, the consumer will decide what the new bundle is going to be based on your budget, based on your habits, based on what's important to you."

McCollum noted that many Philo subscribers are also Pluto TV viewers. "There's a huge overlap," he said.

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— Jeff Baumgartner, Senior Editor, Light Reading