Virgin Media Innovates TV Offerings - Analyst Blog

Virgin Media Inc. (VMED), the second largest pay-TV service provider of the U.K. will start offering a next-generation Web TV platform to its subscribers from mid-December 2010.

This innovative converged digital TV platform will provide improved graphics, on-demand video content, catch-up TV service, web-based applications including games and personal video recorder. In a nutshell, Virgin Media's new product will integrate the Internet and live TV on one screen through fiber-optic cable.

Virgin Media is utilizing TiVo Inc.'s (TIVO) industry leading set-top boxes for this new offering. TIVo set-top box provides 1TB of storage (generating 500 hours of standard definition broadcasting), HD and 3D capability, and an Electronic Programming Guide.

With Internet TV, Virgin Media will now compete more powerfully with rival British Sky Broadcasting which offers Sky Anytime+ that lacks Internet search.

YouView has also become a major threat to Virgin Media. YouView is a joint collaboration between the BBC, ITV, Channel 4, BT Group Plc (BT), Talk Talk and Arqiva. This collaboration will provide Internet access and video on demand programming to digital TV boxes from mid-2011 using the ADSL link.

Virgin Media is systematically upgrading its content delivery network to support large-scale IP traffic. For that the company is desperately trying to introduce hybrid transport gateways that can manage RF and IP-based video content. The company has entered a strategic agreement with TiVo under which TiVo has developed a next-generation TV platform for Virgin Media that will support broadband video services and applications.

Virgin Media has recently revamped its business model as a pure-play service delivery and carrier company rather than a content provider. Last July, the company sold the Virgin Media TV business to British Sky Broadcasting for approximately $234 million. The company has also decided to offload its full 50% stake in UKTV. Virgin Media valued its 50% stake in UKTV at approximately $560 million.

 
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