R.I.P Shomi
On September 26th, Rogers announced that on Nov 30, 2016 they will shut down their Shomi streaming service. It was in existence for just over two years and today marks the final day of the service.
Its been a turbulent two years for Shomi since it launched November 4th, 2014.
When it first launched
‘the service was not available as a standalone product and could only be purchased by internet and television subscribers of Rogers and Shaw’
After its launch the Public Interest Advocacy Centre (PIAC) filed a complaint with the CRTC in both Feb and April 2015
http://www.iphoneincanada.ca/carriers/piac-complaint-shomi/
Essentially Netflix was a standalone product and anyone In Canada could subscribe to it on any device without having to subscribe to any specific internet or any other sister business.
Rogers launched a product that was only available if you subscribed to another Rogers product.
In March 2015 the CRTC ruled that both Rogers (Shomi) and Bell (Crave TV) would need to open up the services to all consumers.
9 months after its initial launch and 5 months after the CRTC order, Shomi was opened up and made available to all Canadian consumers to subscribe to.
This was one the first big problems with Shomi.
You can’t launch a product to compete with Netflix and then limit the platforms it’s available on and limit its availability to people who only buy another one of your products.
That was pure greed and arrogance on the behalf of Rogers from the get go.
The second major issue with Shomi was that most people might not be aware of is that it was used as a tool to simply block Netflix from growth and gaining even more market share in Canada.
Rogers was aware that after 5 years after launch in Canada Netflix was making significant inroads with Canadian consumers.
First off people loved the price point for the amount of content they got with Netflix. It was available on every platform imaginable and it introduced many people to the idea of being able to binge watch content without commercial interruption.
Rogers knew that services like this would slowly start to eat away at their customer base as more and more people would slowly start to realise that they could live without live TV and all of its trappings. Rogers also knew that if they didn’t do anything Netflix with its international reach and deep pockets would soon secure the rights to a large majority of popular content in Canada.
This was a direct threat to Rogers cable and other business divisions so they decided to play the same game and partnered with Shaw and reached into their own deep pockets and went on a spending spree and out bid Netflix and rival Bell in securing the streaming rights for as much content as they could while they rushed to build a copy cat platform like Netflix.
By buying the right to content they could keep it away from Netflix Canada and hopefully stem the tide of its popularity.
Unfortunately this approach backfired for Rogers. First Netflix had a platform they had invested millions of dollars in with some of the best technology. They we’re specialists in this world since launching streaming in 2007 so they had a major head start. As a result Netflix was well on their way of becoming their own TV and Movie studio instead of just being a place to watch other people's content. They were now in the game of producing much of their own content.
Second, Rogers was late to the game. Netflix had been in Canada for 5 years already and built up a large loyal customer base already. Don’t kid yourself the folks at Rogers knew about Netflix long before they launched in Canada and could have saved themselves a lot of time and money if they had been first to market and launched Shomi before Netflix came to Canada or even within that first year Netflix launched here.
Lastly Rogers had a PR problem. No matter how many commercials and print ads they deploy to try and bolster their image consumers do not look at Rogers favourably for the most part. Consumers want competition and choice and Rogers was essentially copying Netflix’s model but didn’t have the same brand likability that Netflix had already built up.
Rogers rushed to get a product to market and as such it showed. Most people were upset about how a lot of the content they knew was available on Netflix in other regions like the US wasn’t available in Canada especially when it was Rogers and Shaw that held the rights to that content and didn't make it available on their own streaming service. Rather than try and truly distinguish themselves from Netflix, Rogers made a half ass effort because of the fear of cannibalisation of their own cable business.
So Rogers made the choice to close down the service outright. It ended up costing Rogers CEO Guy Laurence his position with the company and it has been reported that Rogers lost between $100-$140 million on the investment of Shomi while Shaw disclosed equity losses of $108 million relating to Shomi in fiscal 2015 according to the Financial Post
It's sad state for Canadians who actually want to embrace streaming because now there is one less option and it seems that Rogers hasn't really learned their lesson. Since the launch of Shomi they have also launched a Sportsnet streaming service that is $25 (CDN) per month.
That is a very extreme price for one streaming service that only offers one channel with no actual on demand content. As an example for $20 (US) per month you can get the basic SlingTV package that comes with 44 channels live including ESPN.
Perhaps Rogers should start making better choices and offer consumers some actual content they want at an affordable rate before its to late and they get left behind completely. The world of streaming is growing and changing with each passing day and Canadians are ready to subscribe to services that offer value at an affordable rate they just have very little in terms of options.