Service’s failure could pave the way for Amazon’s entry – or lead to a big resurgence in piracy.
Shomi Shuts Down:
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Rogers and Shaw’s announcement on Monday that Shomi will shut down at the end of November comes as either a surprise or an inevitability, depending on your opinion of the joint streaming service. Either way, the news raises a number of questions about the future of streaming in Canada.
“We tried something new, and customers who used shomi loved it. It’s like a great cult favourite with a fantastic core audience that unfortunately just isn’t big enough to be renewed for another season,” said Melani Griffith, senior vice-president of content for Rogers in a news release.
“We will be reaching out to eligible customers in the coming days as we have a wide range of premium experiences available for people to enjoy.”
Rogers says it will take a $100-140 million write-down in its third quarter as a result of the failed investment.
Neither Rogers nor Shaw have disclosed a subscriber count, but Toronto-based tracking firm Solutions Research Group pegs Shomi at less than 4 per cent of Canadian households. Shomi and CraveTV, Bell’s streaming service, together account for fewer than a seventh of Netflix’s subscribers in Canada, which number about five million households.
The most poignant question now for consumers is what happens to all the shows that were on Shomi. The service held Canadian exclusive rights to many hit series, including Modern Family, Mr. Robot and The Americans.
In an interview last year, Shomi’s head of content and programming Marni Shulman said the service typically negotiated two-year deals with content providers. With Shomi originally launching in November 2014, many of those deals will soon be expiring, which may be the impetus for the service’s shutdown.
Industry news site CARTT.ca also reported in August that Shaw was looking to exit the Shomi partnership, which would have left Rogers managing the service on its own. The company may have decided against bearing the cost on its own, which could be another reason for winding down operations. The real reasons will likely come out as time passes.
Meanwhile, it’s likely that Rogers and/or Shaw will retain the streaming rights to a number of shows beyond November. Shomi did sign additional deals after its initial launch with Amazon to stream its shows, such as Transparent, as well as with Fox.
It’s also possible the companies renewed streaming rights on most or even all of the content that Shomi had, if only to keep it away from Netflix and other potential competitors.
A spokesperson for the service could not say what will happen with shows whose rights are retained.
“Those details are still being figured out, so unfortunately I don’t have a comment at the moment,” she said.
A few scenarios are possible:
- Rogers and/or Shaw decide to hoard streaming rights, in which case there will be no legal way for Canadians to stream the likes of Modern Family and the rest, save for a pay-per-play situation on iTunes. If so, piracy is likely to make a big comeback.
- The cable companies sub-license shows to another streaming service, possibly CraveTV or Netflix. This way, they at least get a return from their expenditures, but retain rights control. It would be a good solution for consumers, since they could get access to Shomi’s many shows.
- The cable companies independently launch their own streaming services, dressed up a little differently. Rogers, for one, is planning to launch a full IPTV service by the end of the year – on-demand streaming could be tied into it somehow.
- Amazon Prime Video finally comes to Canada, potentially as a sub-licensee. Consumers would probably welcome such a move, but it’s unlikely to happen. The last thing the cable companies want is for another foreign giant to set up shop in one of their traditional business areas. They’re not liable to invite one in voluntarily,
How this shakes out will be interesting to watch. One other prediction, though: Bell also folds CraveTV soon. Not only does the service have fewer subscribers, the company also tends to follow rather than lead, as it did with both launching CraveTV and opening it up to non-TV subscribers.