Two Canadian cable giants – Rogers Communications (RCI-B.TO) and Shaw Communications (SJR-B.TO) – are closing down Shomi, the video streaming service launched as a joint venture less than two years ago. The service has struggled since its creation and will go dark on November 30. “We tried something new, and customers who used Shomi loved it. It’s like a great cult favourite with a fantastic core audience that unfortunately just isn’t big enough to be renewed for another season,” said Melani Griffith, Senior Vice President, Content, Rogers.
Rogers expects to take a loss of between $100 million and $140 million on its investment for the fiscal third quarter. Since it launched in November 2014, Shomi had been in a battle for subscribers with rival streaming services like Netflix and CraveTV, which is owned by BCE (BCE.TO). “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,” said David Asch, Shomi’s general manager. Analysts say the shutdown will not be material to either Rogers or Shaw.
The stock increased 0.52% or $0.29 on September 27, hitting $56.08. About 542,823 shares traded hands. Rogers Communications Inc. (TSE:RCI.B) has risen 12.14% since February 23, 2016 and is uptrending. It has outperformed by 0.44% the S&P500.
Rogers Communications Inc. is a communications and media company. The company has a market cap of $28.88 billion. The Firm provides wireless communications services, and cable television, Internet and telephony services to clients and businesses. It has a 20.64 P/E ratio. The Firm operates through four divisions: Wireless, Cable, Business Solutions and Media.
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