Virgin Media is set for video-on-demand push
Virgin Media is planning a major push to encourage the half of its customers who have yet to try its VoD services to do so.
The cable TV broadcaster also hopes to capitalise on its pay-TV rival Sky’s success with high definition services by launching more HD channels over the summer and increasing the amount of HD content available on VoD.
Virgin Media has already persuaded 53% of its customer base to use its VoD services and the recent introduction of ITV content to Virgin’s TV service boosted views to 55 million per month in Q1 2009.
Last year, the company also added content from the BBC’s iPlayer into the broadband service and, last week the two broadcasters agreed a deal that will allow Virgin Media subscribers to access the BBC’s HD content via the iPlayer (see BBC and Virgin sign new HD deal).
Neil Berkett, Virgin’s chief executive, said: “Video on demand is becoming the application to use. The number of avid users is just growing and growing and we are now concentrating on getting even greater reach.”
As part of the push, Virgin is also planning to revamp its EPG so that catch-up TV content is easier to find and has been testing putting adverts around VoD content in a bid to increase revenue streams.
“We are seeing catch-up programming driving things forward,” Berkett added. “But HD on demand is also becoming important and we are launching, in July or August, another half a dozen linear HD channels as well. We think it is time to start to join the evolution of HD viewing. Economically it is about the right time.”
The news of Virgin’s plans come just days after Sky announced that it has managed to add 80,000 new customers to its subscriber base and persuade 243,000 of its customers to take up its HD service (see BSkyB adds 80,000 new customers despite downturn).
The Murdoch-owned satellite broadcaster witnessed an impressive take-up of its HD services after it slashed the cost of a Sky+HD box to just £49 in a bid to counter the economic downturn.
Sky now has more than 1 million households with its HD television service.
Virgin is now expected to follow in Sky’s footsteps, although Berkett said its new HD channels will “be principally from external parties” rather than developed by its in-house content business.
Virgin Media is in a position to increase the amount of HD and VoD content available on its cable network, which covers roughly 50% of the UK’s households, because of a technical upgrade.
Yesterday, Virgin announced its results for the first quarter of the year – which saw the company gain 7,100 new subscribers but saw revenues fall below £936 million due to poor performance in its business communications division (see Virgin Media gains 7,100 customers in Q1).
The cable company persuaded 47,300 households to take up its broadband service, down from the 57,100 in the run-up to Christmas and 88,400 during the same period last year.
However, the new customers, many of who opted for its faster-speed services, bring Virgin up to nearly 4 million broadband users in total, including a million customers who are outside its cable network.
Virgin also added 30,600 new TV customers, although this figure was down from 44,500 in the last three months of 2008 and 36,800 in Q1 2008 – the company now has around 3.5 million digital TV users.
Virgin only managed to add 7,100 new customers in Q1 in total because many of these new broadband or TV customers already subscribed to other Virgin Media services.
The group’s total customer base now stands at 4.76 million.