Shomi’s open access doesn’t equal white flag for TV services: expert

As of Thursday, any Canadian with Internet was able subscribe to Shomi without being a customer of other services from its owners, Rogers Communications Inc. and Shaw Communications Inc., though one industry observer said this does not mean these companies have given up on their TV services. Shomi announced Thursday in a press release that it is now available to all Canadians over the Internet. It's something that Shomi had already announced would happen some time this summer. Access to the service was previously restricted to those who subscribed to either TV or Internet service from Rogers or Shaw. "Today is an epic day for Canadian entertainment lovers as we deliver on the promise we made to them back in May," Shomi general manager David Asch said in the release. Shomi said the price for the over-the-top (OTT) service would remain $8.99 a month and new customers are being offered a one-month free trial. Independent broadcasting consultant and lawyer Peter Miller said Shomi's transition to being available as a standalone Internet service, like plans by BCE Inc. to do the same with CraveTV, is largely the result of the CRTC's decision to create a regulatory exemption for video-on-demand (VOD) services that are available as a value-added feature of TV subscriptions and also to any Canadian over the Internet. He said when Shomi and CraveTV launched last year, both seemed design to attract or retain customers to their parent companies' TV services. " certainly gave an incentive for Rogers and Shaw, and Bell, to really look at their business models and to open it up, because then they would have the certainty that there were would be no regulatory obligations," Miller said in a phone interview Thursday. "So it looks like both Bell and Rogers-Shaw have decided to take advantage of that." He said Shomi's new availability to non-subscribers of Rogers' and Shaw's cable services is not an indication that these companies have given up on their broadcast-distribution businesses, despite an ongoing erosion on TV-service subscribers. TV service is still a lucrative business, bringing in an average of about $65 a month per subscriber compared to $9 for a service like Shomi, Miller noted. As well, he said most people interested in a service like Shomi will remain TV subscribers. "The vast majority of subscribers to cable are going to stay with it," he said. "Why? Because they're either sports watchers that can't get NHL anywhere else, or they're just high-volume watchers of TV for whom there simply isn't enough content on OTT services to satisfy their needs." He said about 20 per cent of TV subscribers are light TV viewers who are likely to get rid of their TV subscriptions at some point, and instead of inevitably losing them, they are now potential subscribers to Shomi or CraveTV. CraveTV, which is currently restricted to TV customers of Bell or those of partner broadcast distributors such as Telus Corp. and Eastlink, is slated to become available to all Canadians online on Jan. 1. Bell Media spokeswoman Eleni Tenuta said in an email Thursday there was no further news about this launch, including whether the current price of $4 a month will change. Miller said the four-month head-start for Shomi in having open availability online will not likely hurt CraveTV. He said non-TV subscribers in the market for OTT video services are not necessarily limiting themselves to one option, so there will be many who end up subscribing to both Shomi and CraveTV. "Someone who likes Shomi may be quite happy to get Crave as well," he said. "I think the world we're evolving into is a world where people have multiple OTT ," Miller added. "In the U.S., that's the way it's evolving. You can buy a bunch of the OTT platforms and almost re-aggregate your cable subscription." Miller said it will be interesting to see what happens to CraveTV's price, which is less than half the rate of Shomi and U.S. streaming giant Netflix Inc. Miller said it is plausible that Bell will raise the price to something closer to its rivals for those not subscribing to certain TV services, while maintaining the existing rate for subscribers. Former Bell Media president Kevin Crull said during an event in Ottawa in March that “$4 is not a stand-alone, make-money value proposition for sure, but it had to do with our decision to marry it to the ecosystem, that we wanted it to be a value enhancement to that.” Crull was replaced in April by Mary Ann Turcke in the wake of Crull's reported interference in the coverage of the CRTC by CTV journalists. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Shruti Shekar at sshekar@thewirereport.ca

Shomi’s open access doesn’t equal white flag for TV services: expert

Broadcast | August 20, 2015

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