Shomi – the poster child of Canadian streaming services – has had a rather short life of just two years as its parent companies have decided to shutter it down.
Pegged as a major competitor of Netflix and more than a competitor it was seen as a major roadblock for the latter. Started with the intention of appealing to Canadian consumers who decided to cut the cord as well as provide incentives to loyal customers, Shomi was a collaborative effort by Rogers Communications Inc. and Shaw Communications Inc. The streaming service featured popular shows like The Americans and Mr. Robot.
David Asch, Senior Vice President and General Manager for Shomi, admitted that “the business is more challenging to operate than we expected.”
The service was being offered under two different options – one as a standalone subscription to cord-cutting viewers and the other as an add-on to Rogers and Shaw cable and Internet subscribers.
Shomi started its operations in August 2014 and was initially being offered as an add-on to loyal customers. Shomi intended to keep Netflix growth in check and so kept its prices a dollar cheaper. While the price difference wasn’t huge, it did create a dent in Netflix proliferation. Another service – Crave – was soon started by BCE Inc., Canada’s largest media and telecom company.
Solutions Research Group said Crave and Shomi had fewer than 700,000 subscribes combined, though that number may not include users who got the services free as part of their cable packages.
Netflix on the other hand continued to grow despite being a foreign offering. Rogers started offering a full year’s worth of Netflix to customers who signed up for a two-year contract for its new 4K TV offering. Research firm Solutions Research Group said in June that 5.2 million Canadian households subscribe to the American service. This effectively put brakes on Shomi to a certain extent.
Shomi cost Rogers C$100 million to C$140 million, a loss it will book in the quarter ending September 30, the Toronto-based company said in a statement. Shaw wrote down its part of the joint venture in July, incurring a C$51 million accounting charge.
“We’re really grateful to Canadians who enthusiastically invited us into their living rooms and took us with them on their phones, tablets and laptops,” said Asch. “We’re proud of the great service we created and the role we played in the evolution of Canada’s video landscape.”