Netflix (Nasdaq: NFLX) is so popular with Canadians that it's being cited as a reason why other Canadian companies need to up the ante for their own online video products. Bell Canada (NYSE: BCE) says it should be permitted to purchase Astral Media to improve its content portfolio, and Shaw Communications (NYSE: SJR) wants to launch its own digital on-demand service, Shaw Go.
According to Shaw, Shaw Go will be the place where subscribers can access newly released movies and premium television programs from pay TV channels like Movie Central and HBO Canada. Not coincidentally, the premium networks are owned by Corus Entertainment, a company in which the Shaw family holds a controlling interest. To start, Shaw Go will be available on the Movie Central app for mobile devices.
After its initial start-up phase, Shaw hopes to expand Shaw Go to include live streaming TV, children's programming from Corus' back catalog and content from Shaw Media's own channels like HGTV and the Global network.
This isn't the first time that Canada's MVPDs have pushed online video services. Bell, Rogers Communications (NYSE: RCI) and Shaw have all tried before, but none had the success of Netflix, which has proven particularly popular in the Great White North. Part of the problem was that the Canadian broadcasters provided limited access to older TV series and films through their online services; Netflix does, and that feature helped push the service in Canada.
There is a big difference between what Shaw proposes and the way Netflix operates. Consumers will need a TV subscription to get Shaw's content online or via a mobile device, following the U.S. TV Everywhere model where "[t]he idea, at the end of the day, is to keep people in the linear TV mold," Brahm Eiley, principal at Toronto's Convergence Consulting Group, told The Financial Post.
Netflix opponents in Canada claim the service is successful because it is not required to follow rules that apply to them, including licensing fees and financial commitments for domestic production. That's one of the arguments BCE is pitching in its quest to spend $3.38 billion to acquire Astral.
While opposition to Netflix is on the rise, it's still very much disorganized, and there is no immediate clarity about whether the disparate parties will compete directly with each other. What is clear, the newspaper story concluded, is that "access to either [BCE or Shaw] won't come as cheaply as Netflix."
- see this story in The Financial Post
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