I've just returned from a fortnight's break so the Q2 results for Virgin and Sky were published with no comment from me at the time, so let me quickly address that now.
As we've now grown to expect, it was another great set of numbers from Sky and a mixed, somewhat disappointing performance announced by Virgin CEO Neil Berkett. Whilst revenues were up thanks to increased revenue per customer (that recent price hike) Virgin's customers dropped, 21k down on the TV side and 36k down in total. It's always a weak quarter for Virgin (last year in Q2 they added 9k customers but the previous year lost 26k in Q2).
Meanwhile Sky turned in more exceptional numbers - TV up by 40k, HD penetration up 30% on the previous year's stella performance.
Even with broadband, supposedly Virgin Media's main strength, VM lost 18k customers whilst BT added 141k and Sky added 174k. Sure, Virgin has stronger take up of triple play and higher speed broadband customers, but those are worrying numbers if they're not just a seasonal blip.
So where does VM go from here? We shouldn't really read too much into a single quarter, especially Q2, but Virgin really does have to hope TiVo takes off and brings new customers to the cable platform. The TiVo product has had generally strong reviews (although this month's CNet review is more critical and is perhaps a little more honest than some) and the marketing is now kicking in. Whilst it makes a few headlines with every announced speed hike, the demand for even higher broadband speeds seems to be at best small.
The day before I went on holiday a colleague and I presented to my company's senior management on the future of TV and included an extended piece on TiVo's capabilities. It got everyone pretty excited and even a few were talking about moving to Virgin...until they realised that it meant losing Sky Atlantic, which dampened their enthusiasm completely. Funny that...