August 07, 2008

Virgin announces Q2 2008 results

Virgin Media this morning has posted its second quarter's results. Churn is down again, overall TV subs are up by 24,800 (in what is normally the weakest quarter for pay TV) but ARPU (the revenue per customer, not the guy who runs the Kwik-E-Mart) is down. The full press release can be found here, and here's the piece from the press release specific to TV services:
Total TV net additions were 24,800 in the quarter (Q1-08: 36,800; Q2-07: 2,200). Net additions were up compared to the same quarter last year which was negatively affected by BSkyB’s removal of its basic TV channels from our platform.
During the quarter, we launched the BBC’s iPlayer service on our VOD platform offering hundreds of hours of BBC “catch-up” content. Virgin Media is the first TV platform to make BBC iPlayer available in full screen picture quality directly to its 3.4m digital TV subscribers. Developments like this give VOD a new impetus and help establish on-demand as a genuinely mainstream TV service.
Customers are increasingly using our VOD services. On a monthly basis, 1.6m of our TV customers are now using VOD, representing a reach of 48%. Average views per user per month in the quarter were 24 compared to 14 a year ago. Average monthly views were 38m in the quarter, up 5% on the previous quarter and up 92% on the same quarter last year.
During the quarter, we added 60,700 V+ DVR subscribers to reach an installed base of 424,900. This represents a penetration level of just 13% of our digital subscribers and so the growth opportunity remains strong.
The last piece is perhaps the most interesting to readers of this blog; Virgin added almost twice as many customers to the world of HD this month than Sky, and now has an HD-capable 425k homes compared to Sky's 490k . But there ain't a single mention of HD services in the press release which means anyone hopeful of more channels in 2008 is heading for disappointment. What's more, the success of the VOD service will reinforce VM's belief that strategically it's onto a winner investing solely in On Demand services when it comes to TV, especially as the take up of Sky's HD premium package has slowed with just 33k new subscribers this quarter. Whilst I'm not convinced that there's sufficient demand for 50mb connectivity at home unless it's coupled with some fabulous new content stream that needs that speed, Berkett and co are unlikely to change their thinking based on these results or Sky's this quarter.
Go on Virgin, prove me wrong and give us at least C4HD before Christmas...


dazza124 said...

Vm must realise the potential to expand even further and trouncing SKY with their HD STB.
More revenue,more customers on top tier packages which could lead to more services taken up in bundle packages.
But what will be the leading factor to attract new or existing customers to take up the V+ pvr.
I'm biased as I have the V+ box so for me more HD but not just linear but as mentioned on this blog many times OnDemand HD thats not static.
Of course the figures might not bear out my wishes but with figures it always possible to use them in many number of ways depending on the point of view.Also it what the figures don't say thats important aswell.Another 3 million subs on standard STB's maybe because their waiting for something bigger than 1 HD channel to attract them to spending more in these tough fiancial conditions.What about pinching some of sky customer base.Vm wins hands down in the areas of Broadband/telephone, On Demand so its only the fact that they have more channels and more HD.I would admit that some of their channels most people wouldn't bother looking at and how much true HD is broadcast(not upscaled) but they have it as a marketting tool.

demented said...

Very positive results, however I came across something I've been trying to get hold of for a couple of years, an analysis of the virgin bandwidth. I was gobsmacked (well only slightly) reading the report what a smambles the cable network is in and how such a tiny proportion of the network is used for the current broadband service. The table on page 12 shows that we're all screwed and the tv platform can't really improve until 2011. Pretty much all the rumours people have repeated about docsis 3 and analogue seem to be completely true and now make sense :-(.

Sirius said...

The writer of this blog comments here that Virgin have added far more people this month to the "world of HD" than Sky. Unfortunately, it's still primarily for it's PVR functions that people are signing up to V+. How many of the new V+ subscribers, I wonder, will even have a HD Ready TV set?
I think this is the approach that Virgin are taking. Given the credit crunch, I can't see them offering any more non-subscription HD content because there is little guarantee of any return on the investment.
For Virgin, HD remains a luxury item.

Nialli said...

I think you're right: the V+ is primarily marketed at a PVR and that's what most sign up for - HD is a bonus.
Sky believe the future is HD, whereas Virgin believe it's On Demand and high speed broadband. What Berkett says makes sense to me (from the business logic) but frustrates me (as a customer)