Things are getting heated globally:
(From Canada's Globe and Mail newspaper, Aug. 27 edition.)
By James Bradshaw and Christine Dobby
Of THE GLOBE AND MAIL
Two of the most powerful distributors in Canadian television have joined forces to launch a video-streaming platform, hoping to gain a foothold in the same online TV market that's threatening their business models.
The long-rumoured streaming service for television shows and movies, dubbed Shomi, was unveiled Tuesday by Rogers Communications Inc.(RCIAF) and Shaw Communications Inc.(SJRWF), which jointly built the new venture to take on competitors like U.S.- based Netflix Inc.(NFLX)
When it launches in November, Shomi will cost C$8.99 a month -- the same price Netflix(NFLX) charges new customers -- and will include 11,000 hours of television from 340 series, as well as 1,200 movies.
For now, it will be available only to Rogers and Shaw Internet or television customers for use on tablets, smartphones, Web browsers, Xbox consoles and cable boxes. But the friendly rivals are in talks with other distributors to make the service more widely available.
Television distributors and cable broadcasters have faced intense pressure from new competitors, with Netflix(NFLX) and its massive content catalogue attracting an estimated four million-plus subscribers in Canada since launching in 2010. Another major Canadian player, BCE Inc., wrote in a recent regulatory submission: "The system is threatened like never before."
But Shomi executives are pitching the service less as a Netflix(NFLX) killer than as a parallel service that leverages the companies' large combined stable of television rights to give viewers the more personalized experience they increasingly crave.
"We knew that we had to get [a streaming] offering out there that was an option for people," said Barbara Williams, senior vice-president of content at Shaw Media. "And I think we will see lots of different people use this in lots of different ways."
At launch, Shomi will feature back catalogues of popular shows such as Modern Family, New Girl and American Horror Story. Rogers and Shaw will continue to offer new episodes of current seasons through their existing on-demand services. Thirty per cent of the content will be Canadian, and creating original programming is also "definitely on our road map," Rogers Media president Keith Pelley said.
Even so, observers on social media were quick to say the service appeared to offer little that would lead them to abandon Netflix(NFLX). Mr. Pelley countered that Shomi will give users curated, expert recommendations with a human touch and a dash of "attitude," and expects many households will add the service alongside other streaming subscriptions.
"Our research show that, undeniably, consumers can support two, three, even four [subscription video-on-demand] services," Mr. Pelley said.
Even as many Canadians complain about the high cost of traditional TV service, Kaan Yigit, president of Solutions Research Group, says there is ample room in Canada's streaming marketplace.
"As much as there's some element of competition with Netflix(NFLX), I think broadly speaking we're seeing a multiple- subscription world evolving here," Mr. Yigit said.
BCE's Bell Media participated in initial discussions about joining the Shomi project but elected not to. A Bell spokesman declined to comment on rumours that the company will launch its own streaming service in the coming months. (BCE owns 15 per cent of The Globe and Mail).
Shomi is also an attempt to stem the growing rate of cord cutting -- cancelling television subscriptions, often in favour of online alternatives -- in Canada. According to regulatory figures, total cable and satellite subscribers declined for the first time in the year ending Aug. 31, 2013.
Toronto-based Rogers and Western cable giant Shaw have both been steadily losing television subscribers in recent quarters while making modest gains on the Internet front.
The American broadcasting landscape is also under pressure, owing to falling ratings and advertising revenues. On Tuesday, Turner Broadcasting System Inc., which owns U.S. television networks such as CNN, announced it is offering buyouts to some 600 employees, with layoffs and other cost cutting to follow.
In the face of such challenges, observers have questioned why a Canadian-made competitor to Netflix(NFLX) didn't emerge sooner and why, even after more than a year in development, Shomi is launching in a "beta" test phase expected to last six to 12 months.
Both companies said they felt they had to get into the streaming game before it was too late: "There comes a point where you just have to get at it," Ms. Williams said
Market Chatter: Verizon May Launch Digital Video Service by Mid-2015, CEO Says
09:02 AM EDT, 09/12/2014 (MT Newswires) -- Verizon Communications(VZ) is readying technology and negotiating deals with content providers to launch a digital video service over the Internet by mid-2015, CEO Lowell McAdam said at the Goldman Sachs Communacopia conference, the WSJ reported.
McAdam noted that the company already has much of the technology in place to launch the service and that content providers have become more open to discussions on delivering content over the web.
The company envisions a service similar to those offered by Netflix(NFLX) , Amazon(AMZN) and Hulu with the addition of live channel streaming.
McAdam also said he is willing to expand Verizon's(VZ) FiOS broadband Internet service to new markets.
BUSINESS 9/04/2014 @ 6:28PM 2,957 views
CBS' Showtime Could Offer An Online-Only Subscription
CBS CBS -0.38% COO Joseph Ianniello dropped a potential bombshell on the crowd at the Nomura Digital Media Conference in New York Thursday when he pointed out that nothing in Showtime’s contracts with cable and satellite providers prevents it from offering the channel direct-to-consumers. In other words, there’s nothing stopping CBS from offering an online standalone Showtime service that cord cutters could subscribe to without a cable or satellite subscription.
Ianiello didn’t say that anything like this is in the works but still, it’s a big deal. Networks like Showtime are cable’s bulwark against cord cutters abandoning the service in droves. The cable companies are quickly making it easier than ever to watch content online through apps like HBO Go, FXNow and WatchESPN but there’s a catch. In order to use them you have to authenticate that you have a cable or satellite subscription.
S&P Capital IQ Equity Research
Jon, I think in the -- one of your earlier answers on Alibaba, just a quick clarification, I think you were suggesting that the subscriptions, online channel model is kind of where you see the future. And I'm wondering if this deal with Alibaba is something that you might think about expanding into other markets? Or is this something that's unique and specific to China because of the unique nature of that market and perhaps the partner that you have. And if you do plan to expand that, does that kind of -- I'm wondering how your relationship with Netflix might kind of vein in that, given Netflix is international expansion. I'm just kind of trying to clarify how you see that partnership evolve and then the scope of the arrangement.
Jon Feltheimer - Chief Executive Officer and Non-Independent Director
Yes. I think that's a good question. I do believe, as I said earlier, that these online subscription channels are a wave of the future. I believe, for us, mostly, we'll look at them on a more branded basis. I think obviously, Netflix is a huge general entertainment channel. I think they would describe it the same way. It's got something for everybody, including -- they've expanded significantly their children and family presence lately. I think that we see, if we are doing these, more specific to our brands and more focused at specific demos or genres, perhaps doing them with interesting branded partners. I think you will perhaps see us announce 1 or 2 of -- others of these in the not-so-distant future. And I don't believe in any way, shape or form this will impact our tremendous relationship with Netflix or Amazon or any of our online partners.