Virgin Media commits future to TiVo
Virgin Media, the UK cable-TV provider with 4.2 million subscribers, has hinted that it will migrate all pay-TV services, not just Internet TV, to its custom TiVo box while outlining plans to extend coverage beyond its current hybrid fiber coax (HFC) footprint. The TiVo box dedicated to Virgin Media’s platform, unveiled in November, injects content discovery into the service and introduces Internet video content including YouTube, initially just to invited existing customers. This phase is now nearly over with 65,000 customers registered for the TiVo service. Virgin Media will launch an advertising campaign later in 2011 to ramp up the rollout. The TiVo service will then be pitched to Virgin’s existing customer base as well as subscribers of the two major pay-TV rivals, satellite operator BSkyB and hybrid IPTV/DTT service provider BT Vision.
So far, Virgin Media has been constrained by the time taken to show customers how to use the TiVo content discovery features, which takes on average at least an hour on-site. By training existing engineers and fine-tuning the process, Virgin Media has been able to ramp up TiVo box deployment to 1000 a day, which means it is heading for about 300,000 subscribers by the end of 2011. At that rate, it would take a decade for the TiVo box to make it through even the existing customer base, but Virgin Media plans to ramp up deployment further as its network continues to be upgraded and expanded in the move toward “through the middle” delivery to all customers. Through the middle is a term adopted to describe a kind of hybrid IPTV/Internet TV service that delivers pay-TV content through a dedicated portion of the operator’s broadband spectrum. In the case of cable TV, this is over DOCSIS and ensures that the TV service is independent of broadband Internet activity, making it easier to ensure high QoS. In effect, this makes it a walled-garden IPTV service, but it also brings genuine over-the-top (OTT) Internet content to subscribers. In the latter case, QoS is largely beyond the control of the operator at present and is dependent both on the wider Internet and on the third-party content providers themselves.
For the Virgin Media TiVo subscribers, all content is delivered via the TiVo box, including scheduled services. TiVo has therefore had to adapt the box to integrate with both Internet content and Virgin Media’s own catch-up service with the normal linear broadcast schedule. This was a challenge for TiVo because it has not so far had to integrate catch-up services to the same extent for its existing U.S. customers.
Virgin Media’s next challenge, in common with many consolidated cable TV companies around the world that have already gobbled up their immediate cable competitors, is to expand its service beyond its largely urban heartland. Currently, Virgin Media’s network passes 13 million homes, which provides plenty of scope for seizing customers from BSkyB, but is still less than 50 percent of the UK’s 26 million homes. BT, the incumbent telecommunications operator, has ambitious plans to upgrade its core network and push fiber to the cabinet so it can deliver a full HD IPTV service to 90 percent of UK homes within a few years.
Virgin Media’s plan was to make use of BT’s infrastructure as well to deliver services beyond its footprint. On Oct. 7, UK regulator Ofcom ordered BT to open up its fiber-optic network to competing broadband providers to promote rollout of competitive high-speed internet services in the UK. Most significantly, Ofcom has also ordered BT to free up access to network infrastructure, including all telegraph poles and underground ducts, for the deployment of broadband to areas BT itself may not intend to reach with a high-speed service. This latter move is of greater interest to Virgin Media, which prefers not to be dependent on its rival’s actual network for either TV or broadband services.
Indeed, it looks like an alternative fiber network will now be built in the UK by Japanese hardware and IT services giant Fujitsu, taking advantage of the Ofcom ruling over access to BT’s ducts. Virgin Media has been quick to seize this opportunity, planning to align its off-footprint expansion with Fujitsu, which on April 13 surprised the UK telecoms industry by announcing it was investing £2 billion ($3.2 billion), topped up by a £550 million UK government subsidy, to built an FTTH network reaching 5 million UK homes. Virgin Media has announced it will be a guaranteed customer, alongside UK broadband provider TalkTalk, to provide Fujitsu with the commitment it needed to justify the investment. This will enable Virgin Media to compete across a further 20 percent of UK homes initially, with the help of its TiVo box, in effect as a hybrid IPTV/OTT provider outside its footprint.
But in the shorter term, at least Virgin Media will continue delivering its existing cable/OTT hybrid over the planned Fujitsu network, because it will be using radio frequency over glass to emulate HFC delivery over fiber. In the longer term, Virgin Media plans to migrate all services to broadband.
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