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OTT Gets More Northern Exposure

The U.S. market is flush with subscription over-the-top video services, but Netflix has pretty much ruled the online video realm in Canada since it launched service there in the fall of 2010.

Canada’s OTT picture changed dramatically on Aug. 20 when shomi, the multiscreen service backed by two cable TV operators — Rogers Communications and Shaw Communications — launched the service nationwide for CA$8.99 per month, following a beta period for Shaw and Rogers subscribers only that started in November 2014.

Leading the way now is David Asch, the video-industry veteran late of Redbox, Frontier Communications and In Demand. He was named senior vice president and general manager of shomi in May.

Next TV editor Jeff Baumgartner caught up with Asch to discuss shomi’s post-launch plans and where it will focus as it seeks to differentiate itself in an increasingly competitive market. (Also on the horizon in Canada is CraveTV, Bell Media’s premium-TV streaming service, set to launch nationally on Jan. 1, 2016.)

Asch also discussed how originals and exclusives factor into shomi’s plan. An edited transcript follows.

NTV:You took a big step recently when shomi launched across Canada. What are your top priorities now? What are your next steps?

David Asch: We are now five days into national launch. The numbers have been really good so far, but in terms of priorities, I’d say there are three really big ones.

First of all, we need to grow our sub base. Obviously, we’re going to be competing very aggressively. There are a couple of competitors here that we have in our sights.

We’re also going to expand our reach. Now that we’re available to all Canadians, we’re going to launch on more devices over the course of the next 12 months as well. [Shomi runs on Web browsers, Xbox 360, Apple TV, Google Chromecast and iOS and Android mobile devices, and Rogers and Shaw set-tops.]

When it comes down to SVOD services, it’s all about content. We really like our offering … but we need to keep being very aggressive about acquiring content and making sure that we can offer our customers the best content there is.

NTV:What’s the size of shomi’s library now?

DA: We have more than 15,000 programs, and we [offer] both TV series and movies. We do occasional specials here and there, like concerts and events like that. That’s where we differ a little bit from CraveTV, which announced up here [that] they’re going national in January. But they don’t have movies. We do. And we know our customers like to watch them, and that was part of the learning we gathered in our beta phase.

A lot of [our] content is what you might find on broadcast television, on cable or online. For instance, a lot of shows you might find on Amazon [Prime Instant Video] we have exclusively on shomi, as well. (Amazon does not offer streaming services in Canada, but shomi has secured digital rights to Amazon originals such as Transparent.) The other part of our content offering is that we have a great offering for kids and families.

NTV:Since growing subscribers is a big priority, can you talk about the strategy a bit there? What are some of the tactics and strategies you have in mind to tackle that one?

DA: I was shocked by how much interest there was [when shomi launched nationwide], even just from the outset. Obviously, being national and being available to all Canadians is a huge first step. We have some significant marketing plans that are going to kick in, particularly in the fall.

We wanted to be available to all Canadians by the end of the summer, so that way when the fall [TV] season kicks in, we’re fully available and anyone can subscribe. That [promotion activity] will be a combination of traditional mass media and then digital marketing as well.

Our content often helps market itself. We just premiered [Fox hip hop drama series] Empire and that’s exclusively for us, but it has a huge following. We were able to leverage that as part of our marketing. We did a special promotion that was a countdown to when we premiered Empire that first season.

NTV:I realize that you took the helm of shomi in May, but what are some of the biggest lessons shomi has learned since the service debuted in beta form late last year?

DA: I’ll talk about what we learned in our beta phase … People watch movies. We have 1,000-plus movies, in addition to a whole range of TV series. We’re available on the set-top box in addition to all of the online channels. We had a lot of success in our beta phase [and found] that movies are still very popular and we have a lot of the Hollywood hits. But people do watch movies, and that’s been really good for us.

In addition, everyone knows about binge-watching. Some [of our shows] are available day-and-date, meaning they are day-and-date with the broadcast premiere. One of the big findings we had is that people watch both ways. Some of our biggest hits happen to be day-and-date — Jane the Virgin, for example, will premiere right when it airs on the broadcast feed. Similarly, a show like Sons of Anarchy, which is one of our most popular shows, we’ll put [them all up] and people will watch that. Both [options] are equally popular, but people do use both.

Some might say [binge-watching] is the best way, some would say doing weekly releases, or something akin to that, is the best way. We like both, and we know that our customers do both.

The last piece of learning is that people still use the set-top box. We found that a good amount of usage actually happens on the set-top box.

NTV:Has the set-top been the most popular platform for subscribers to access the service in the early days, or has it been some of these over-the-top platforms?

DA: Before we went national, we were offered through Rogers and Shaw subscribers, so [the set-top] was the most popular way. Obviously, we’ve gone over-the-top, so we expect a large amount of that new traffic to be online. But the set-top is an enormously popular device. People like their content big; they like to watch it on TVs. But they may watch it on a phone or a tablet if they’re traveling.

The other benefit of the set-top is that there are no usage requirements. Depending on your Internet connection … you’re going to get some data requirements.

You don’t have that with the set-top box. You can watch as much as you want without any fees.

NTV:What’s the profile of your typical customer? Are you seeing a lot of broadband-only customers sign up, or are you seeing existing pay TV customers sign up to sort of complement what’s on their video menu?

DA: I can give you more of a demographic answer. We’ve been literally launched [nationally] for five days, so it’s hard to know, because beforehand you had to be a Rogers or Shaw subscriber, so by definition you had a pay TV subscription.

Demographically speaking, we’re a general-entertainment service, and our customers represent that. It’s male and female, generally, 18-49. That’s very evident in the shows that are popular on our service. You’ll have shows like Jane the Virgin or iZombie that will be popular with adult women, and we’ll have shows like Sons of Anarchy or American Horror Story that are more popular with adult males. And we have a great kids and family offering, too.

NTV:Shomi’s an on-demand service today. Is there any interest in offering live, linear TV on your platform?

DA: With live streaming, I’ve seen what some of the folks are doing in the U.S., and that’s something that’s not in our sweet spot right now.

NTV:Do you expect shomi to remain a subscription-only service, or have you looked at more of a hybrid ad/subscription model, like Hulu’s?

DA: We always look at new models, but for now, we’re really happy with the subscription service. We think there’s a lot of value [at $9] and that’s very much our plan going forward.

NTV:Can you shed some light on how many subscribers shomi has or how that number has matched up with expectations?

DA: We haven’t released those and we really don’t have plans to at this point. But I can say that up until we launched, our subscribers were ahead of where we expected them to be in our business plan. And the direct-to-consumer launch was far better in terms of subscriber numbers, even though it was our first weekend. I’m happy to say that … what we measure now against our budget we’re in good shape.

NTV:In the U.S., Hulu has been busy striking distribution deals with multichannel video programming distributors (MVPDs) and Internet-service providers. Shomi obviously has Rogers and Shaw in its corner, but are you having other conversations with MVPDs about doing deals that more tightly integrate shomi to their platforms?

DA: We’re in those discussions, and we have the same discussions that Hulu would have. Even though we’re carried by Rogers and Shaw, our partners in the venture, we always intended to offer it to other MVPDs.

ISPs could offer [shomi] just as well to their subscribers. We talk to all of them.

NTV:I also wanted to talk about the competition there, too. You mentioned content, but how else do you expect shomi to differentiate in the market?

DA: The landscape here is very different than it is in the U.S. There are a lot more services in the SVOD landscape there than there are here, so it’s very early days. That’s actually really attractive to me.

But, yes, there is a company called Netflix, you may have heard of them. They launched [in Canada] five years ago and they’ve had a long head start and they have good content. But I’m really confident in our content that it stands up. Depending on what you want to watch, you’re going to find something on our service.

I do think we have a couple of advantages over Netflix. First of all, we have exclusive content that they don’t have. Seventy percent of our non-family content is exclusive to our service. So if you go to see Transparent or you want to see NCIS, you have to come to our service to watch that.

The other is, as we’ve talked about, is the set-top box. People watch on their TV and we have a really easy avenue to do that through the set-top box. That’s something Netflix doesn’t have and I think it’s going to be a real competitive advantage for us.

Another area where we’re differentiating is our human element. One of the things we launched nationally with is two curated collections from our head of content [Marni Shulman]. One is called the “Super Series Sampler,” where we are introducing our best series and programs to a brand new audience. We also have a curated collection, “From My Family to Yours,” which was literally her and her two sons ... that [features] some of their favorites.

That’s different because most of what you see is algorithmic or model-based in terms of curation. We’ve made a real passion and a real emphasis of curating from a human standpoint here.

NTV:Netflix also tries to set its self apart with originals. Is that something you’ll be taking a look at, or will you remain more license-focused?

DA: We are always evaluating that. We’re doing some exclusives and what I’d call originals in that fashion. We’ve done a series called Between, which is, to some degree, akin to what you just talked about. It’s an original production.

I also look for things that are premiering here before they’re premiering anywhere else. For a show called Catastrophe, when we saw a pilot of this, we immediately went to the producer directly and acquired the North American rights. It only has six episodes, but it’s gotten a lot of buzz and … it’s very popular in the U.S. But when we saw that series, we knew we had to have it, and we had the North American premiere before it went anywhere else, including the U.S.

I don’t feel the pressure to go and develop something or product something right away. But if we find the right thing, we’ll do it.

NTV:We’re also keeping tabs on 4K. Is 4K on shomi’s roadmap? Is there enough consumer traction there yet to warrant that kind of investment or attention?

DA: I think the point you raise at the end is the more operative point — what is the consumer traction? I was at In Demand when the advent of hi-def came about and we ran a network called Mojo at that point. This is very akin to the advent of high-definition becoming a mainstream service and a mainstream technology.

4K is in its very early days and I’m following it. People will buy 4K-ready TVs but the other half of the equation is content, and there’s not a lot of content in 4K right now. Today we have hi-def content, and it looks great. We’re certainly paying attention to [4K], but I’m not worried about offering it right away.