November 07, 2007

Virgin Media announce Q3 results

Details and comment from Digital Spy here. Essentially it's good news, but there's a sting in the tail: check out the comments to investors (slide 15 of the 7/11/07 presentation here) and you'll see no mention of expanding HD services whatsoever. In fact, quite the reverse; "Premium TV" is conceded as being a market dominated by Sky, low growth opportunity, heavy investment and poor content economics. Uh oh: "limited opportunity" to Virgin Media.
Bad news? Not necessarily. Here are my first thoughts...
Thinking about it, Acting CEO Berkett is probably right. If it was my business, I'd look for what differentiates my product from the opposition, and as he says, that's higher speed, reliabe broadband services and the excellent Video On Demand. The former they're promoting heavily but the latter remains a well-kept secret that knocks the socks off the opposition from Sky, Tiscali and BT. It's not perfect (the menu system's a nightmare and inconsistent) but it works great on the V+ and Samsung boxes, and those who don't see it as a viable delivery method of delivery HD content are living in the twentieth century. Especially when you consider how ill-suited the V+ is when recording HD broadcasts - limited disc space and rocky when handling more than a single HD channel. And don't think the Sky box is any better - there are Digital Spy threads reporting hardware failures when recording two HD channels simultaneously. VoD is the way in our new, when-I-want-it world.
I'm still hopeful that VM will add more 'linear' HD channels, but I expect they'll be the free ones from the BBC, C4 and ITV in the short/medium term, the same stuff that'll be on offer on FreeSat. But more VoD HD is essential and I've come round to the opinion that Virgin is right to prioritise that over, say, the linear Nat Geo or History Channel in HD. 99p for an episode of Brothers & Sisters in HD? Only if it's the latest episode. Virgin need to sort out their pricing as well as the all-over-the-place menus. Also, I won't pay £4 for a film in HD when it's going to be on DVD discounted for £5 in a few months and the difference ain't that great on my 32in LCD, so they need to price that more competitively.
But the good news is they're getting their priorities right at VM and the thinking's straight, even if it's not immediately attractive to those wanting more HD. Berkett's offering Sky an olive branch - expect the return of the Sky basics soon as both sides step down from the head-on confrontation earlier this year - and a stronger VM is good for everyone, and more HD will follow, albeit perhaps in a different form from that offered by Sky.

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