Rogers, Shaw Give Up On Shomi

(RTTNews) - Rogers Communications Inc. (RCI.TO, RCI) and Shaw Communications Inc. (SJR_B.TO, SJR) are shutting down Shomi, the subscription video-on-demand service run by the two Canadian companies.

Shomi said it will shut down operations on November 30, 2016, just two years since its launch. Shomi was viewed as a Canadian competitor to Netflix. The service was launched in November 2014.

At that time, it was not available as a stand-alone product and could only be purchased by internet and television subscribers of Rogers and Shaw. It became available stand-alone since May 2015.

The service competes directly with other subscription-based over-the-top streaming services, such as Bell Media's CraveTV.

David Asch, senior vice president and general manager of Shomi said, "The business climate and online video marketplace have changed markedly in the last few years. Combined with the fact that the business is more challenging to operate than we expected, we've decided to wind down our operations."

Current Shomi members can keep streaming and binge-watching their favorite shows and movies online, via their Shaw or Rogers set-top box, on select tablets, mobile devices, Xbox 360 and Xbox One, Apple TV, Chromecast, and PS4 until November 30, 2016.

Rogers said that as a result of the Shomi wind down, it expects to incur a loss on investment of about C$100 million to C$140 million in its third quarter ending September 30, 2016.

The loss on investment relates to the carrying value of its investment and a provision related to future liabilities in Shomi.

Shaw Communications wrote down its part of the joint venture in July, recording an accounting charge of C$51 million.