Streaming service to discontinue $16-a-month tier for new customers

San Francisco virtual MVPD startup Philo has told its customers that it will stop offering its bottom-end, $16-a-month, 40-channel package to new customers.

Starting May 6, new signups will only have access to Philo’s higher 58-channel, $20-a-month package. The company will maintain the $16-a-month package for existing customers.

“We didn’t want to do that,” Philo CEO Andrew McCollum said in a note to customers.

He added, “When we looked at all of the costs of operating Philo—which increase over time—consolidating into a single $20 package was the best way for us to maintain the same offering we have today without raising prices for everyone, or having to cut back in places we strive to excel, like our customer support.”

Related: Philo Touts FreeWheel, Xandr, SpotX Among Advanced Ad Partners

Philo includes no live sports or news, and its channels primarily include the networks of its four media company investors—A+E Networks, AMC Networks, Discovery and Viacom.

The move basically constitutes a price increase for what is still the cheapest live-streamed virtual pay TV service. The move follows recent price bumps by DirecTV Now, Sling TV, YouTube TV and fuboTV.

All of these streaming skinny-bundled services are coming to terms with fast-rising programming costs. In addition to raising prices, these services are investing in advanced advertising to try to improve margins.

It was just last week that Philo announced a roster of its advanced advertising technology vendors, a list that included FreeWheel, Premion, Roku, SpotX, Telaria, Xandr and Verizon Media.

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