Can Shomi Kill Netflix (NFLX)?

It has a shot -- at least in Canada

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Can Shomi Kill Netflix (NFLX)?

Netflix (NFLX) is the big name when it comes to streaming video service, with more than 50 million subscribers in over 40 countries, apps for virtually every connected device imaginable and a huge content library.

Shomi Can Shomi Kill Netflix (NFLX)?
Source: Shomi

Competitors like Hulu and Amazon (AMZN) Prime have failed to derail the NFLX train, but there’s a new video streaming service on the prowl named Shomi that could steamroll Netflix.

At least in Canada.

What is Shomi?

Shomi is a video streaming service designed specifically to be a NFLX killer in Canada. It’s a joint venture between Rogers Communications (RCI) and Shaw Communications (SJR) and leverages the two telecommunications giants’ positions as broadcasters, content creators and ISPs.

Shomi launches in November at $8.99 per month — exactly the same price NFLX will be charging for new subscribers.

Netflix will hold the initial advantage in terms of sheer numbers: 3.5 million Canadian subscribers, and more than 4,000 TV shows and movies available. Shomi will provide 340 TV series and 1,200 movies to a yet-unknown number of Canadians.

However, Shomi leverages the position of RCI and SJR as broadcasters, with exclusive Canadian rights to popular American TV series not available on NFLX. The CBC lists a number of shows, including Modern Family, The Strain and American Horror Story that will be available to Shomi customers but not Canadian NFLX subscribers.

Shomi also is pushing content recommendation as an advantage. Instead of using an algorithm to come up with suggestions like NFLX does, Shomi will use a team of human curators who offer up picks — a throwback to the video store days when clerks would offer their favorites to customers.  The curators also are expected to include the occasional celebrity.

Rogers and Shaw

Rogers is the country’s largest wireless provider with 9.5 million subscribers (in a country with a population of 35.4 million), 2 million broadband Internet subscribers and 5.2 million cable subscribers (out of roughly 12 million for all of Canada). Rogers owns Canadian broadcast rights to many popular TV shows, and the Canadian Press reports the company went on a buying spree, spending $100 million on content for Shomi.

Shaw is not a wireless carrier, but SJR counts 1.98 million cable subscribers and another 1.92 million Internet subscribers making it a big player, especially in western Canada.

Together, these Canadian behemoths can pull a lot of weight.

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Article printed from InvestorPlace Media, http://investorplace.com/2014/08/can-shomi-kill-netflix-nflx/.

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