Shomi hadn't much hope with Netflix already in the living room
It's tough to compete with Netflix's original shows that everyone talks about
Streaming services have been touted as the future, the top option for the growing number of disgruntled cable customers who have cut the cord and seek alternatives.
So at first glance it may come as a surprise that Canadian streaming service Shomi has already bit the dust. It's shutting down in late November after a lifespan of just two years.
- Web streaming service Shomi to shut down as of Nov. 30
- Netflix now has more than 5.2 million customers in Canada
It appears you can't just offer a standard streaming service and expect customers will scramble to sign up. It must offer a lineup of shows good enough to compete with that juggernaut that has already made its way into so many Canadian living rooms — Netflix.
That global streaming service spends billions of dollars on programming and keeps churning out original content.
Shomi — with its much meeker content library — just couldn't cut it, says industry analyst Mario Mota.
"For any smaller player, in any domestic market, to compete with Netflix now, given the head start that they've had, is going to be extremely difficult," says Mota, of Ottawa-based media research firm Boon Dog Professional Services.
"You really have to have premium-quality content that people are talking about."
'Don't find their content interesting'
Amy Leaman has never signed up for cable. For the past four years, Netflix has been her main source of TV viewing. The streaming service first arrived in Canada in 2010.
She enjoys its original programming such as Orange is the New Black, House of Cards, and BoJack Horseman, an animated comedy about a has-been TV star who's half-horse, half-man.
"They find really great creators, people who really want to do interesting stuff, and then they make amazing shows," says Leaman.
She says she's happy to fork over $9.99 a month for Netflix but never considered shelling out $8.99 a month for Shomi, which is co-owned by cable companies Rogers and Shaw.
Shomi offers some Canadian exclusives, such as the critically acclaimed series Transparent, about a transgender woman and her family. But the service never offered any original content, and many of its shows are older programs that have already aired on TV networks in Canada.
"I don't find their content interesting," says Leaman. She believes that Rogers and Shaw tried to copy Netflix's success but that they didn't understand they had to do more than just create a streaming service.
"They expect that if they put a website up, that people are going to use it. They don't understand really what the real appeal of Netflix is."
The numbers tell all
One of Netflix's big selling points is that it offers popular shows that people can't find anywhere else.
"They're the [shows] that have got the water-cooler-type discussion — you know, all the hot series people talk about," says Mota.
And the service has also captured the Canadian audience. According to Toronto's Solutions Research Group, roughly 5.2 million Canadian households currently pay for a Netflix subscription.
Shomi claims it has about 900,000 subscribers. And some of them, like Andrew Hiscock, are cable customers who get the service free with their TV package.
"We used it a bit, but nothing substantial," says the Mount Pearl, N.L., resident. "I don't think we would have bought it if we didn't get it for free. Not really going to miss it," he says about the service's demise.
On why it's closing up shop, Shomi said in a statement that the marketplace has shifted over the years and that "the business is more challenging to operate than we expected."
But the business never really got off to a promising start, according to Greg O'Brien, publisher of Cartt.ca, which covers cable industry news.
He says Shomi was originally supposed to be a partnership between all the big players: Bell, Rogers, Shaw and Cineplex Entertainment.
"It would be four companies all contributing their digital rights to one big Canadian portal that would have a really good chance of competing with Netflix," he says.
But that partnership never materialized, O'Brien says, leaving Shomi with only a fraction of the content it could have offered to win over viewers.
What about CraveTV?
It appears Shomi couldn't compete with Netflix, but what about CraveTV? Bell Media's streaming service only became available to all Canadians at the start of 2016.
CraveTV has the added advantage of being able to offer popular HBO series because Bell Media owns the rights to HBO content in Canada. The service is also adding some original shows.
Bell Media is optimistic about the future of its product, telling CBC News that CraveTV's membership is growing and it will continue to invest in new programs and partnerships with other networks.
But we don't truly know how the streaming service is faring in a Netflix-dominated world: Bell Media won't make public its subscriber numbers.
Netflix customer Leaman says she's also not interested in CraveTV because it doesn't include the only HBO show she wants to watch — Game of Thrones.
"Why would you offer a streaming service and then remove the main reason anyone would subscribe?" she says.
As for Rogers, it looks like the cable company has already accepted defeat. It's currently offering customers with certain packages a free Netflix subscription for 12 months.