Rogers and Shaw close the curtain on Shomi

Updated September 26, 2016 @ 7:50PM

Streaming video service Shomi is shutting down on Nov. 30 after just two years.

In a release issued Monday, Shomi’s senior vice-president and general manager David Asch said the business climate and online video marketplace have changed “markedly” in recent years, and the business proved “more challenging” to operate than initially expected.

“We’re proud of the great service we created and the role we played in the evolution of Canada’s video landscape,” said Asch.

Co-owned by Rogers Communications and Shaw, Shomi launched in 2014 as a Canadian alternative to the U.S. streaming service Netflix. At first available only to Rogers and Shaw cable and internet customers, it was made available nationally in 2015.

While the service never disclosed subscriber numbers, in August it disclosed a series of stats relating to its first year in business, noting it had nearly 18,000 episodes available to stream and 118 series that were exclusive to Canada.

According to a press release, “Rogers expects to incur a loss on investment of approximately $100-140 million in its third quarter ending September 30, 2016 relating to the carrying value of its investment and a provision related to future liabilities in Shomi.”

Research firm Media Technology Monitor (MTM) reports 80% of Anglophone Canadians currently watch some form of online video on a monthly basis, with Netflix playing a key role in increased consumer adoption.

Kaan Yigit, founder and president of Toronto-based research company Solutions Research Group (SRG) said the Canadian market is too small to support Netflix and two local streaming services [Bell Media introduced its streaming service, CraveTV, only one month after Shomi’s debut] .

“Netflix has U.S. and global scale and Shomi had none,” said Yigit, noting that even in the much larger U.S. market, Netflix’s two major U.S. competitors – Amazon Prime and Hulu – are “not anywhere near where Netflix is.”

In a June report, SRG estimated only 4% of Canada’s 11.6 million online households were active users of Shomi, compared with about 46% – or 5.3 million households – for Netflix.

In a statement to Marketing, Bell Media said: “CraveTV has grown quickly since its launch in 2014, including our expansion of the service to all Canadians with an internet account earlier this year. We’ll continue to invest in new CraveTV programming and technology innovation, commissioning more original Canadian productions (like Letterkenny, and Russell Peters in the Indian Detective), and building upon our partnerships with HBO, Showtime, and other premium content brands.”

Marketing and MarketingMag.ca are also owned by Rogers.