Canadian cable TV behemoths
Rogers Communications Inc.
Shaw Communications Inc.
) have decided to form a joint venture to introduce an innovative
subscription-based video-on-demand (VOD) service in the country.
The new service will be called "Shomi" and function as a separate
entity with an independent management structure.
Cable MSOs (multi service operators) in the U.S. and Canada are
facing severe competitive threat from low-cost online video
streaming operators such as Netflix Inc. (
Cord cutting has become a major concern for cable TV operators.
Video offering, the core business area of the cable TV operators,
seems to be slipping out of their hands. In order to counter the
over-the-top service providers, cable MSOs are increasing relying
on the TVEverywhere technology, popularly known as VOD.
The Shomi service will launch on Nov. 2014 for a subscription of
C$8.99 per month. The service will offer more than 11,000 hours of
TV episodes and 1,200 movies based on personalized video
Subscribers will be able to access video content on TV through
set-tops and the Xbox 360, as well as on tablets and smartphones
via the Internet. Technically, Shomi will use the software user
interface of YOUi Labs Inc. to be installed in every iOS or
Android-based mobile devices.
Even in the U.S., several pay-TV operators (cable MSOs,
satellite TV and telecom operators) are gradually turning to the
VOD service. Comcast Corp. (
) launched Xfinity Streampix, a subscription based on-demand video
streaming service for $4.99 per month offering instantmovie viewing
both in and outside homes on multiple platforms.
Likewise, Verizon Communications is offering Redbox Instant
service at $8 per month to provide on-demand movies and video
games. AT&T is associated with The Chernin Group for the
development of online video services. Additionally, DISH Network
has decided to launch Internet TV service in 2014.
Notably, this is not the first collaboration between Rogers and
Shaw. On Jan 2013, Rogers entered into an agreement with Shaw to
acquire the latter's cable system in Hamilton, Ontario and secure
an option to purchase its Advanced Wireless Services (AWS) spectrum
holdings in 2014.
Rogers will sell its one-third interest in specialty channel,
TVtropolis, to Shaw and has also entered into negotiations with
Shaw for the provision of certain services in Western Canada. Total
investment of Rogers will be C$700 million to complete the
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