It’s been four months since Rogers and Shaw, Canada’s two biggest cable companies, officially launched Shomi, a Netflix-like streaming service that delivers on-demand TV shows and movies.
It’s not exactly a Netflix competitor because it requires subscribers to also have Internet or TV service with Rogers or Shaw, but Shomi does stream content over its website and through apps on various devices. It’s as close to a Canadian version of Netflix as there is at this point.
I found Shomi promising when I tried it at launch, with a good selection and interface, but relatively few devices on which to watch. My biggest gripe was that the service was (and still is) closed off to just Rogers and Shaw subscribers.
I had a chance to chat with Marni Shulman, Shomi’s head of content and programming, about the service’s first few months and where it’s going in the future. Here’s an edited version of that conversation.
How is Shomi doing? Are there any metrics of success that you can share?
We’re not sharing any specific metrics. The service is doing great though, we’re very, very pleased with the response. We’re seeing demand from across the country, which is very encouraging. The feedback from our members has been positive. It’s going exactly in the direction we hoped and in fact has exceeded all of our targets to date.
So you can’t talk about profitability or projections of profitability?
No, we’re not going to talk about that yet. We’re still in beta. We’re barely four-and-a-half months old.
What does “beta” mean to you? Why label the service that way?
It was really important to us that we got it right and that we had an opportunity to have a dialog with our users to make sure that we were providing a service that was the service they wanted. That was in respect not only to the content that we licensed, but also the devices that we’re rolling out on and the way we serve up our curation.
What do you anticipate the difference will be in the non-beta service to what it is now?
It’s homing in on the type of content that seems to be working and what people are asking for. It’s making sure we’re on the most-used devices and the ones that members are asking for. We don’t want to be in a position where we were rolling out outside of beta without being on some of those key devices. It’s features that we’ve always wanted on the service that weren’t necessarily completed or tested at launch. It’s also honing our content acquisition and curation strategies.
Speaking of devices, there are some big ones missing like Apple TV, Roku and Chromecast, plus the newer game consoles. What’s going on there?
All of those are on our roadmap and are being developed as we speak. Chromecast, for example, will be rolling out very soon. Our intention always was to be on the most-utilized devices so you’ll start to see some interesting announcements that will make you happy.
What is the holdup, though? Some seem easy to do. You’re on Xbox 360, but not Xbox One. Can you talk about what the challenges are?
The reality is we use other services in the marketplace that are more established as a benchmark, and rightfully so. Those services took five, six, seven, eight, 10 years to roll out onto the devices they’re currently on. It’s quite remarkable that we rolled out on the number of devices that we did in a couple of months. If you put it in that perspective, we’re actually moving quite quickly. I’m not saying this is our timetable, but to roll out a new platform every quarter is actually quite remarkable.
Are customers showing a preference to viewing with set-top boxes or so-called over-the-top devices via the Internet?
We’re seeing a cross-section. Certainly people are using the set-top box, but it’s a different user experience. We’re seeing a lot of customers who want the over-the-top or Internet/IP-enabled [interface]. They want the deeper curation and deeper collection. They want a lot of the features and functionality, like when you finish a series, the next episode in that series is immediately available for you to hit play. Those kinds of things don’t necessarily exist on the set-top box because, outside of branding and some merchandising, you’re limited by whatever the technology of the box is. You’re governed by it.
Bell was quick to respond to recent consumer group complaints about how Crave TV isn’t available to all Canadians, only its own customers. Shomi hasn’t responded yet to a similar complaint. Why is that?
If I’m not mistaken, it was paused [the CRTC confirms this]. Having said that, we obviously respect the regulatory process, but the bottom line is that for us truthfully, we’ve been quite clear from day one that our intention has always been to make this service available to all Canadians. Some of the other services are speaking with other BDUs [broadcasting distribution undertakings, otherwise known as TV providers]. We’ve been doing the same. We’ve always been quite adamant that was our intention.
Update: The CRTC proposed new rules today that owners of video services like Shomi and CraveTV offer video services to all Canadians either over the Internet or through a TV subscription.
When acquiring content, have you generally been getting full over-the-top rights for it?
Yes, we’ve been getting cross-platform national [subscription video on demand] rights.
When you first started up, you said beta would last a year. Is that still the time frame?
That’s a good question. I don’t ever recall having put a time frame around it. The beta will last until such time as we feel we’ve gotten it right and that we’ve answered the questions that we need to answer and we are providing the service that our customers want.
This may be a crazy question, but it seems Shomi is the first major service that Rogers or Shaw could theoretically offer outside of Canada. Is this a possibility you’ve considered?
We’re barely five months old. I’d venture to say that anything is possible and we’d explore any and all opportunities that make sense for our business, but right now it’s really important we get it right in our own backyard first.
Everything else the two companies sell is dependent on massive infrastructure investment and build-out. But Netflix has obviously shown that going over the top, while not easy, is relatively less difficult than setting up a wireless network, for example.
That’s fair, but again, we’re proudly Canadian. I’m not saying this for the sake of saying it, but because we want to support the ecosystem here, to encourage Canadians. We want to be good Canadian citizens so let’s get it right here first.
To shift gears, what content is proving to be popular on Shomi?
It’s probably not a huge surprise. Boundary-pushing, serialized, binge-worthy content is up there, and content that is exclusive to us has done quite well. Things like Transparent, Mozart in the Jungle and Jane the Virgin, The Originals have all done very well for us. We’re going to be launching iZombie, another series that’s exclusive to Shomi, probably next week actually. Prior seasons to some of the major hit shows, like Modern Family or Two Broke Girls, also do extraordinarily well. So does Parenthood and NCIS. The common thread is interesting, deep characters who are in relatable situations and stories that are told in ways that you can invest emotionally in them and you get something out of it at the end of the day.
Is there something that you thought would do well but didn’t so far?
Yeah, there are a couple of shows I was surprised about on both sides. Obviously I wouldn’t buy it if I didn’t think it was going to perform, but some of these shows did better than I expected and some shows I had high hopes for that didn’t really do anything. The beauty of an subscription video-on-demand service is that we can continue to test different types of content and because of the direct connection we have with our end user—it’s a dialog that continues. Because one of Shomi’s differentiators is human curation, we have the opportunity to take that content and test whether it was an anomaly or are people really digging it, or is it just not fitting our brand our audience?
Can you think of something specific that didn’t work?
I don’t want to talk about stuff that didn’t work because I’m not convinced that it won’t work—it just hasn’t worked yet. But some of the young adult shows like One Tree Hill are doing gangbusters and I’m surprised by that. So is The Secret Life of the American Teenager.
What’s the general length of your content licenses? How much time do you have to experiment with a show?
Each deal is different, but on average we try to get a two-year license.
What about movies — you were light on those at the start, focusing instead on TV shows. Has there been a change in that thinking?
You’re right, our strategy was to focus on series first. We’re working on our movie strategy now, but I have to tell you, the movies are doing really well. I get the data every day on the night before and I can see a correlation between what’s in the carousel on the home page, what we have in “Collections” and what we’re recommending and what content, both movies and television, are being played and used. The whole point of Collections was to lift content and offer people the opportunity to discover a new title, rediscover titles they loved, and I think that’s what’s happening.
Somebody who used to work here was telling me he was going through with his young son and they couldn’t decide on what they wanted to watch and they came across one of our Collections, the “Comic-Con Hangover Collection,” and all of a sudden he came across the original Christopher Reeve Superman movie. Something in him clicked. He never would have thought to go back and watch something he enjoyed as a child himself and share it with his son. It ended up being one of their favourite movies to watch together.
Any specific examples of movies that did well that you didn’t expect?
Yes. You Will Meet a Tall Dark Stranger surprised me. But again, it’s not surprising what’s at the top of the list. The Simpsons Movie does great. A lot of family fare does really well. That’s what you’re always hoping for — you’re hoping you can provide an opportunity for the whole family to find something to watch together.
I have two young kids and I can’t tell you how many times I’ve wanted to put hot pokers in my eyes because of the shows that they want to watch. So it’s really nice to have content that grown-ups can look at in one light and be entertained by and kids can look at in a different light and be entertained by it. Cloudy With a Chance of Meatballs is a good example.
Any thoughts on Bell’s Crave TV — what are they doing well and not so well?
I don’t like to get into that game. We all have very particular brands and strategies that we’re trying to grow and meet. I’d much rather talk about Shomi and what we’re doing well. I think we’re on our way and we’re getting it right.
Do you think Shomi has had any impact on Netflix? Many observers say Shomi and Crave TV are local answers to Netflix.
Again, we all have different brands and strategies and a particular user experience or voice that we put out there. It would be naïve to say that we don’t each have an impact on each other. You’re going from a single-service market to a triple-service market, so by default that has to have an impact. But I’m not sure a little competition isn’t healthy for everyone. What we do see from our brethren in the U.S. is that people do tend to stack their services. You see people in the U.S. with two if not more SVOD services and I think we’ll see a similar pattern here in Canada.
In the U.S., there are quite a few people who subscribe to both Netflix and Hulu, but are they also subscribing to cable? Do you have any insight on that?
Not yet, but I think that’s going to start to bear out. You’re going to start to see all kinds of content packages, if you will. The bottom line is that content is king and people are consuming it in different ways. If the pattern continues as it is right now where each of the services has a very unique exclusive offering, it would make sense that you would go to the one that provides you with what you’re looking for. Maybe that includes a cable package. I don’t know, but it’s going to bear out one way or the other.
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