Virgin Media’s Sale to Liberty Global Seen Expanding TiVo in Europe
Liberty Global’s proposed $23 billion acquisition of Virgin Media could provide an opening for TiVo to expand its reach across Europe, Brean Capital said in a research note. While TiVo has 1.3 million customers, with an installed base of about 35 percent of Virgin’s U.K. cable customers, its DVR service could gain a foothold in Europe, where Liberty Global launched Horizon TV with its Dutch cable operator UPC Netherlands. UPC customers can stream 80 live TV channels for a dedicated website and access 3,500 TV shows.
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Liberty also planned to roll out Horizon -- a mix of video, broadband and voice supplied from a single gateway device -- in Ireland, Germany and Switzerland in the first half. But Liberty Global is seeking an alternative to the gateway product Samsung is supplying that now could come in the form of TiVo, Brean said. TiVo’s strong ties with Virgin -- it added 896,900 customers with the cable operator in 2012 -- could well extend to Liberty, Brean said. NDS provides the middleware and user interface for the current Horizon box, Liberty has said. TiVo currently supplies to Ono in Spain and has a development agreement with Swedish cable operator Con Heim for a cloud-based service.
"TiVo should have the means for enhancing a relationship with Liberty if its able to further expand its business model” once it has resolved a pending lawsuit with Motorola, Brean said. TiVo has reached settlements of patent infringement suits with AT&T, Dish Network and Microsoft.
Virgin Q4 net income rose sharply to $4.2 billion, including a $4 billion non-cash income tax benefit, the company said. The tax benefit came from Virgin reducing its valuation allowance tied to its investing in building out its cable network in the U.K. Virgin’s Q4 revenue edged up to $1.61 billion as it added a net 42,700 cable customers in Q4 and cable average revenue per user increased to $76.76. Virgin also launched TV Anywhere during Q4, which allows customers to stream 45 live channels to smartphones and tablets. It also enables customers to connect smartphones and tablets to TiVo set-tops for playing back recorded content. Virgin added two Turner Broadcasting HD channels in Q4 to its increase its lineup to 39, the company said. In addition to video, Virgin ended 2012 with 2.17 million customers getting broadband speeds of more than 30 Mbps, having added 419,400 in Q4. About 40 percent of Virgin’s new broadband customers in Q4 chose speeds of 60 Mbps or more, the company said.