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Shaw Communications

Shaw rolls out Internet video service Add to ...

"TV Everywhere" will now be almost everywhere in Canada, as more television distributors have launched services offering online TV episodes limited to their paying cable and satellite subscribers.

On Wednesday, Vidéotron Ltée announced that it would offer 32 TV channels and dozens more music channels through its new online service, Illico Web. And on Thursday, western cable giant Shaw Communications Inc. announced its new service to allow customers to watch video on the Internet.

The trend is also seen in the U.S., where distributors like Comcast Corp. first began pushing the concept of "TV Everywhere" - providing content on multiple platforms like the Web and mobile phones, but restricted to paying subscribers. In Canada, Bell TV and Rogers Communications Inc. also launched online television offerings last fall.

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Shaw Video on Demand's new website allows customers to watch TV episodes and movies on-demand. Like other services, it requires viewers to prove they've paid by logging in using their Shaw account. However, because it is all on-demand, it differs slightly from Vidéotron's service, which offers a mix of VOD content as well as live channels on the Web.

Shaw's service also differs in that it offers much more content for which viewers have to pay: those who subscribe to Movie Central through their Shaw TV package can watch for free online, but those who don't have to pay the same way they do with the on-demand service on their television sets. Television shows such as 30 Rock are listed at 99 cents per episode, and movies cost roughly $6 to $8 to watch. Specialty TV content such as HBO series and selected movies are not available at all unless customers have the more pricey TV package.

Shaw reached agreements with Universal Studios, Maple Pictures and Metro-Goldwyn-Mayer Studios Inc. (MGM) to offer movies on its Web VOD service, but television content remains sparse - for now. Shaw agreed in May to buy all of the TV assets of CanWest Global Communications Corp. As soon as that deal is finalized and Shaw has control of the CanWest assets, it will also have control over the digital rights to a wealth of specialty TV content. At the time of the deal, chief executive officer Jim Shaw said the company was preparing to offer more content on-demand and on other devices.

"Technology continues to evolve with the ability to watch content on multi-platforms," Shaw president Peter Bissonnette said in a statement on Thursday. "That's why Shaw is investing in bringing exceptional content delivered in various ways."

For cable and satellite companies, the benefit of offering the service is to prevent subscribers from giving up pay cable TV as more video becomes available for free (often illegally) online. Pierre Karl Péladeau, the president and chief executive officer of Vidéotron parent company Quebecor Inc. said on Wednesday that its restricted Web TV service would offer "an alternative to piracy."

However, the market for legitimate online content in Canada is still small: on average, 16 per cent of the viewing audience watched one or two full episodes on sites run by channels or their distributors in 2009, according to research by Convergence Consulting Group Ltd.

Viewers who do watch online are mostly young. Alternative viewing is on the rise: according to Solutions Research Group, Canadians' online TV viewing has doubled in the past three years. As mobile phones evolve, there are more opportunities to watch TV beyond the living room.

"The evolution of television is toward an on-demand model, and whether it's going to come through your TV or through your computer," said Brahm Eiley, principal at Convergence. Because many cable and satellite companies also offer Internet service, he added, they still benefit from controlling the delivery of content online. Vidéotron's service pushes its Internet business by requiring that customers subscribe to both television and an Internet connection through the company. Those who subscribe to only one service cannot access Illico Web.

"Audiences are being distracted to other platforms," said Iain Grant, an analyst with Seaboard Group in Montreal. "To make that cable subscription more valuable is a glue to bind you … the television availability will drive business to those other business units."

Usually, Web TV platforms require the partnership of content providers, such as Astral Media Inc., which owns channels such as Teletoon and French-language women's network Canal Vie. Astral has agreed to provide content for Bell and Vidéotron's online platforms, and is in talks with all major distributors across the country, said John Riley, president of Astral Television Networks. He pointed out that online TV that serves paying customers is good for media companies as well as distributors.

"As technology advances you have opportunities beyond your living room to watch content," Mr. Riley said. "We think it's important to make sure we have a presence."

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