Virgin Media is dealing with a backlog of orders for its TiVo-powered service launched to existing customers in December that provides access from the TV to Web video content. The service, which combines web content with the operator’s existing catch-up, VOD and linear TV services, follows an exclusive UK wholesale deal between Virgin Media and DVR maker TiVo.
This is an important move both for Virgin Media, because it takes a lead over UK pay-TV rivals in bringing Web content to the TV, and for TiVo, because it creates a major wholesale outlet in the face of intensifying competition and price pressure in its traditional U.S. retail market. Virgin’s biggest competitor, satellite operator BSkyB, offers a DVR-based service called SkyPlus, but without Internet access from the TV. BT Vision, the UK’s main IPTV service, lacks the capacity to deliver multiple channels over the DSL connection, relying instead on digital terrestrial for broadcast content. With the TiVo-powered box, Virgin Media customers can watch one SD channel while recording up to two others over 10Mb/s of dedicated bandwidth, which avoids impact on broadband Internet services sharing the same physical connection to the cable network.
Virgin Media said it installed hundreds of Tivo boxes over Christmas and has been delighted by demand given that the service has been offered only to existing customers and promoted on its website. At this stage, Virgin Media is testing the waters for what is a high-cost sale at present, given that its engineers spend some time with customers at the point of installation to show them how to use all of the additional features, particularly accessing Web content and interacting with Facebook. Virgin Media provides VOD and catch-up services within its existing lineup, but the new service combines these with the additional Web access within a new EPG. The main EPG enhancement is a recommendation engine that monitors the viewer’s preferences, records the content automatically to the DVR and makes suggestions.
Virgin Media anticipates that the cost of sales will fall, and the TiVo functionality will be extended gradually across the rest of its services as customer familiarity grows. It will also be advertised more aggressively as Virgin chases customers from its rivals in an increasingly saturated UK pay-TV market.