Virgin to Spread TiVo Across All Products, Services

Virgin Media will spread TiVo across all its products and services, preferring the higher margins it delivers to those generated by over-the-top providers like Netflix, Virgin CEO Neil Berkett said in a conference call. Virgin began last week connecting the 65,000 customers that pre-registered for TiVo and so far has installed in the “single digit” thousands of units, a company spokesman told us. Virgin is charging new customers $279 for the 1 terabyte DVR, $246 for existing subscribers plus $66 for installation. TiVo carries $4.95 premium for the XL TV package.

"TiVo will ultimately reside on every one of our subscribers’ products” including TVs, PCs and mobile phones, Berkett said. “We have no intention of adding Netflix or some of the other over-the-top services because we can make more margin on connectivity. We will increase TiVo functionality over the year and the service will continue to evolve and improve."

While Netflix is an “interesting case” it might struggle given News Corp.’s Sky TV’s “buying power” for programming and the importance of free-to-air content in the U.K., the Virgin spokesman said. Virgin will increase marketing of the TiVo service in the second half as it ramps up the roll out of the service, Berkett said. Virgin has a trial in East London with a broadband service offering maximum 1.5 Gbps/150 Mbps download/upload speeds. The initial test is with companies working with video for online and mobile streaming and producing interactive applications for the Internet, the spokesman said.

Virgin’s broadband currently tops out with a 100 Mbps download speed, a service that so far is available to 2 million of Virgin’s cable households. Virgin charges mobile customers a $57.84 monthly fee for the 100 Mbps service, $76 for those not getting mobile. Virgin also has 150,000 subscribers to its 50 Mbps service and about 850,000 customers are getting 20 Mbps or higher service, company officials said. Virgin, upgrading its entry-level 20 Mbps service to 30 Mbps, encountered some “teething problems” at its hubs as the speed increased, Berkett said. The problems, since resolved, were “device related” and had “nothing to do with the network,” he said. Virgin had 4 million subscribers on its cable broadband service March 31, up from 3.91 million a year earlier, the company said. Virgin’s cable revenue rose to $1.1 billion from $1.05 billion a year earlier as the number of subscribers rose to 4.82 million from 4.76 million. Virgin’s average revenue per user (ARPU) for cable increased to $76.27 from $74.37. More than 2.4 million subscribers are “regularly using” Virgin’s VoD service, including a new 3D service that includes programming from Paramount and Disney, the company said.

Virgin had 2.9 million mobile customers March 31, including 1.26 million on 12-month contracts, up from 1.03 million a year earlier. The mobile ARPU rose to $24.29 from $22.63 a year ago as total sales grew to $226.1 million from $217.9 million. About 756,000 mobile contracts were with households already subscribing to Virgin’s cable service, the company said. About 12 percent of Virgin customers subscribe to Quad play services -- cable, telephony, mobile and broadband -- at the end of Q1, up from 11 percent a year earlier. Overall, Virgin’s Q1 operating income improved to $182.8 million from $115 million a year ago as sales improved to $1.62 billion from $1.53 billion.