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Shomi finally going to war with Netflix

Market watchers say there is more than enough room for two streaming services.

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Amazon’s Transparent: one of Shomi’s marquee shows.

War With Netflix:

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The war with Netflix is officially on in Canada with the news that Shomi, the streaming joint venture from Rogers and Shaw, will be opening to all Canadians this summer.

The streaming service launched in November, but has only available since then to internet or TV subscribers of the two companies.

David Asch, Shomi senior vice-president and general manager, said that will soon change in a statement:

“We know more Canadians want the bleary-eyed but oh-so-satisfying experience of an epic entertainment binge, and that they want the freedom to choose how they access the service. This exciting next step gives them that  opportunity and we’re excited to share Shomi with everyone.”

But what exactly does “everyone” mean? Consumer advocates at the Public Interest Advocacy Centre, who have complained to the Canadian Radio-television and Telecommunications Commission about the service being closed off, are wondering whether there will still be any loopholes.

“It is unclear on the wording of the … press release that there will be no eligibility requirements for ‘all’ Canadians to subscribe to Shomi – such as a requirement to subscribe to a paid TV service from at least one Canadian [provider],” PIAC said in a letter filed with the CRTC on Wednesday.

PIAC also says this is the third time in recent memory that Rogers has changed an offering after a CRTC complaint has been lodged. Last year, the company discontinued its “Next” smartphone upgrade offer, then axed free data usage on mobile television, both of which PIAC took issue with.

The consumer watchdog still wants the CRTC to rule on its complaint against Shomi, which charges that the exclusive service has been giving Rogers and Shaw an unfair advantage over other ISPs. Shomi and other interested parties have until Monday to respond to PIAC’s complaint.

“If the file is dropped, this would be just another example of companies playing ‘catch me if you can’ before the regulator,” said PIAC counsel Geoffrey White.

Marni Shulman, Shomi’s head of content and programming, on Wednesday definitively said there won’t be any requirements to sign up. “Shomi will be available to any Canadian regardless of ISP,” she said in a Twitter message.

Netflix, which will now have to compete against Shomi for content and subscribers, is playing down the news of its rival opening up.

“We don’t see other internet TV service as competition,” Netflix spokesman Cliff Edwards said. “Typically, because the services are relatively cheap, consumers sign up for two or three services. As more and more entertainment companies embrace internet TV, it helps legitimize the market.”

Market observers agree, pointing out that the United States has three such services in the form of Netflix, Amazon Video and Hulu. Shomi likely won’t be able to price itself at more than $8.99 a month, which is what Netflix charges new subscribers.

“I’d say there is enough content to go around, but yes some attractive titles may go to Shomi,” said Kaan Yigit, president of Toronto-based tracking firm Solutions Research Group.

“Streaming services have a lot of headroom, something like nine million households don’t use any paid streaming services in Canada… about five million do, all in. So more promotion of the category will help both Netflix and Shomi.”

Crave TV, Bell Canada’s streaming service, is likely going to face more pressure to also open up. So far, Bell and its partners require subscribers to have a TV account.

The company has refused to comment directly on whether it has the content rights to offer Crave TV to all Canadians. It is believed the company and its partners are unable to sell access that isn’t tethered to a TV subscription.

Additional streaming options for all Canadians are also likely to further lower video piracy rates. Netflix chief executive Reed Hastings in 2013 said usage of popular file sharing service BitTorrent had declined by 50 per cent in Canada since the company entered the market, in 2010.

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