The End Of Traditional Pay-TV?


BMI View : Innovation is required to truly take on the growing popularity of Netflix, the company that has given the staid pay-TV market a huge shake-up. Rogers' and Shaw's 'shomi' has little to differentiate it from the streaming giant but does highlight the need for traditional pay-TV providers to develop new business models .

In November 2014, leading pay-TV operators Rogers Cable and Shaw Communications will jointly launch 'shomi', an on-demand pay-TV service, for CAD8.99 (USD8.3) a month. The new service aims to compete directly with Netflix, offering 11,000 hours of TV shows from 340 series and 1,200 films directly to consumers. Netflix offers around 4,000 titles. By partnering, the companies share the cost of developing the new service that can be consumed through set-top boxes (STBs), smartphones, tablets, Xbox consoles and web browsers.

Although the companies emphasise that 30% of content will be Canadian, we believe shomi will still struggle to take custom away from Netflix, which has a large content catalogue and is building a strong reputation in producing its own content. We feel the move is inevitable as operators face the decline in pay-TV subscriptions. Of the top four players in the market, only market leader Bell Canada has reported real growth, taking the top spot from Rogers in Q213. Shomi is an attempt to claw back some of these 'lost' subscribers.

Fighting A Losing Battle
Pay-TV Operator Net Additions (000)

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Geography: Canada