Virgin Media to ‘Pace’ U.K. Rollout of TiVo

Virgin Media will “pace” the U.K. rollout of its TiVo service in the first half of 2011 but turn it into a “major weapon” for attracting customers and generating revenue in the second half, CEO Neil Berkett said Friday at a New York analysts conference. The launch last week of a Motorola-built, TiVo-equipped HD/DVR generated “unparalleled” interest, but the demand is “unproven” in the U.K. and “we'll have to see how it lands,” Chief Operating Officer Andrew Barron said.

Of Virgin Media’s 5 million cable customers, 500,000 have TiVo-ready HD boxes that can use the interface but lack the hard drive for the DVR feature, Barron said. Virgin is replacing Liberate middleware and Seachange video-on-demand software with TiVo at no additional charge, Barron said. The TiVo XL box, with a 1 terabyte hard drive, is $313, with a $41 monthly service fee and $63 for installation.

The deployment of TiVo will be key for Virgin as it seeks to expand its base of 600,000 “Quad Play” subscribers to a package of mobile, broadband, fixed phone and cable services, Barron said. Virgin entered the Quad Play market in 2005 when it merged with NTL. The revenue per subscriber for Quad Play is about $126, compared with $72 for Virgin’s 4.8 million cable customers, 85 percent of whom don’t have Virgin Mobile subscriptions, Barron said. Virgin Mobile has 3.1 million subscribers. The annual churn for Quad Play customers is 7.8 percent versus 16.5, 18.5 and 33 percent for subscribers to three services, two or one, Barron said.

The TiVo interface was customized for Virgin’s 300-channel cable service, adding “catch up,” search and browse, applications, games and other features in addition to a grid interactive program guide (IPG). The IPG allows subscribers to go back in time to “catch up” with programs they have missed, Barron said. The new DVR arrives as Virgin moves to increase the number of HD channels it carries to 80 from 32 over the next several years, company officials said.

To accommodate TiVo, the HD/DVR was given a separate cable modem and connection, Berkett said. It also was allocated about 10 Mbps to avoid competing with a home’s broadband service for bandwidth, he said. Virgin partitioned portions of its 750 MHZ spectrum for TiVo using a method like the one that which allows its 50 Mbps broadband service have 44 Mbps average download speeds. Virgin starts broadband service at 10 Mbps and is expanding its top-end 100 Mbps service Thursday to four U.K. regions, with a goal making it available nationwide in 18 to 24 months. It also is in trials with 200 Mbps.

"Over time you will see us talk less about 50 Mbps or 100 Mbps and talk more about TiVo convergence across the screens” of smartphones, TVs and PCs, Berkett said. Virgin is adding about 50,000 to 70,000 mobile subscribers per quarter. The percentage of mobile subscribers also getting broadband and cable has grown to 70 percent from 20-30 percent several years ago, he said.