One major piece falls into place for online TV

Shomi is taking a bold step toward the future of television by making itself available as a stand-alone, Internet-based service.

As announced (subs only) this week, this joint product of Rogers and Shaw will become a true over-the-top entity at some point this summer by making itself available to any Canadian with a broadband Internet connection and $8.99 a month to spare. Up until now, you had to be a subscriber of TV or Internet services from Rogers or Shaw to get Shomi.

For those who like to get on-demand video directly to their television sets without any of that new age trickery, such as Google Chromecast, Rogers and Shaw are looking for other TV-service providers to strike deals with to carry Shomi in their subscription packages.

Amid the CRTC’s flurry of decisions this year, it proposed a new category for video-on-demand (VOD) services. It said providers of such products could avoid the usual regulatory burdens, such as not being allowed to provide exclusive content to any one TV-service provider (which often ends up being the VOD provider itself), on the condition that they make their product available online to anyone in the country willing to pay for it, regardless of what else they subscribe to.

This seemed to be an attempt by the regulator to push industry players further toward an Internet-based distribution model, perhaps sensing it might be the best bet for Canadian entities to compete against U.S. services like Netflix.

Bell, for the time-being, is sticking to its formula of making its video-streaming service, CraveTV, something you only get if you subscribe to a TV service offered by Bell or one of several other distributors it has reached agreements with. Bell says it’s trying to expand coverage through talks with other TV-service providers.

Price is a key difference between Shomi and CraveTV that makes it logical the former would be the first to fully jump into the OTT market. At $8.99 a month — the same price as Netflix — Shomi can be a successful business venture by its own right, according to 3Macs analyst Troy Crandall. CraveTV, on the other hand, is less than half the price at $4 month. It’s set up as something to lure people into TV subscriptions rather than something that generates profits all by itself. Former Bell Media president Kevin Crull said as much earlier this year.

I’ve brought up in this space before the technological practicality of having television and Internet combined as one unified service. I realize there are economic impracticalities for the companies involved to make this transition overnight. There are regulatory matters involved, though the CRTC seems willing to help move things along in this regard. There’s also the fact that much of the population, particularly older people, like the TV system as it is and are intimidated by too much technology getting between them and their shows.

Younger people, on the other hand, are increasingly shunning TV subscriptions because they can get what they want over the Internet and they know how to use the technology.

Still, it seems that either way it’s about plugging something into something else and being able to pick up your favourite shows. It’s just a matter of making those connections simple enough that people don’t mind the difference.

Shomi has taken a first step toward an industry-wide, Internet-based delivery system for television, which former Rogers regulatory vice-president Ken Engelhart said last year was inevitable; it was just a question of whether it would take two years or two decades for full implementation.

Rogers has shown further signs that it’s into this online-TV thing. For example, it decided to provide limited-time subscriptions to Shomi and NHL GameCentre Live at no extra charge to those opting for its new Ignite Internet packages. These include options for unlimited data, which makes sense if you’re watching a lot of online video. If Rogers can eventually make local-market hockey games available on GameCentre for those without TV subscriptions, then they’ll really have something special.

When you consider that TV subscriptions are in decline along with the fact that next year the CRTC will start requiring skinny basic TV packages to be offered at no more than $25 a month, and that customers will have the option of picking all discretionary channels one-by-one, you have to wonder if maintaining a whole broadcast-distribution business separately from Internet service will be worth the effort much longer.

Derek Abma is editor of The Wire Report. He can be reached at dabma@thewirereport.ca.

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