Virgin Media CEO Says TiVo Roadmap Includes Move to Cloud
The roadmap for Virgin Media’s partnership with TiVo includes moving elements of the set-top box to the cloud, Virgin Media CEO Neil Berkett said during the company’s Q3 earnings teleconference Tuesday. The user interface will be the first element of the box to migrate into the network, he said. Eventually, DVR storage and the “whole set-top box” will be cloud-based as the company rolls out DOCSIS 3.1 broadband technology, he said. “I'm quite comfortable that the pace we are looking at is consistent with our peers’, if not ahead,” he said. “That’s why we chose the partner we chose,” he said, meaning TiVo. Virgin Media customers account for more than half of TiVo’s new gross customer additions, he said.
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Beyond giving Virgin the ability to attract and retain pay-TV customers with high-end services, Virgin’s partnership with TiVo is also helping the U.K. cable operator stave off competition at the low end of the market, Berkett said. With YouView, a low-cost digital TV and “catch up” TV service having recently been introduced, Virgin sees the ability to offer its broadband customers a TiVo box without a pay-TV subscription as a hedge against that new competition, Berkett said.
"We see the connected TV market as a natural extension from our superior connectivity,” Berkett said. “We're seeing evidence both in the actual customer movements and also in research that supports our hypothesis and there will be a blurring in what we call the ‘pay-TV market,'” as “hybrid” over-the-air and over-the-top services gain popularity with customers, he said. “We see ourselves as a broad player and absolutely competing with YouView at the bottom, all the way up through the premiums at the top,” he said.
Virgin is preparing to introduce a “TV Anywhere” service before the end of the year that will let customers watch shows on PCs and other devices, Berkett said. The company has licensed the PC rights for nearly all the programming it carries, but it has been more limited in its ability to license smartphone and tablet rights to some shows, he said. “We don’t have quite that number of rights to the tablet,” he said. “We are in conversation with Sky with respect to premiums,” he said.
Q3 sales at Virgin Media were about $1.6 billion, an increase of 2.7 percent from a year earlier. Profit was $123.9 million compared to a net loss of $117.6 million a year earlier. The boost in profit was due to a one-time gain on the value of the company’s conversion hedges, it said.