3Vision Insight - Virgin Media TiVo
28 Feb 2012
As part of our ongoing series of 3Vision Insights we thought we would take a look at last year's launch of Virgin Media's TiVo box which is now in over 435,000 homes (Q4 2011).
Virgin are trying to take the lead in terms of providing the ultimate TV service meeting the needs of the modern viewer. Taking on the dominance of it’s satellite competitor Sky and their Sky+ HD box, and positioning themselves for the challenge from connected TVs. In a slick campaign last year a number of videos pushed the key benefits of the service - see them at http://tivo.virginmedia.com - and since launch the 500GB box has become free to activate (1TB box is £49.95). The monthly ongoing cost for both was £3, but has now been increased to £5 (existing subs keep the original price for 12 months). Virgin are careful to focus on the benefits it brings users, with features selectively pushed - with up to eight appearing to be their key promotable benefits; Storage Capacity, Three Tuners, Catch-up, Wish- lists, Search, Suggestions, Remote Record and Web Applications.
Many of the benefits are a combination of improvements on old PVRs and new functionality but there are two promoted features that we feel highlight some of the challenges for Pay TV operators who are introducing sophisticated new set-top-boxes with connectivity.
There are a growing number of apps (see later), and whilst it is early days how can Virgin live up to their tag line “The best of the web on your telly”?
Walled gardens are fundamental to Pay TV strategy, but they have a poor history in terms of customer appeal when it comes to offering online content.
TiVo will need more Apps, but who will develop and provide these for a relatively small base, and how satisfying will that be?
As operators look to the challenge from connected TV, providing a strong App offering will be a key challenge.
This is a new way to access Catch-up VOD that allows users to reverse seven days in the programme guide. Content is also in the VOD menus - which is important as Scroll Back may not come naturally to all.
A weakness in VOD navigation is that BBC Catch-up is treated differently to other channels. BBC rules make operators offer catch-up through the iPlayer App, a challenge familiar to European operators as they work with free-to-air channels looking to control the presentation of their content on Pay TV services.
In this case we feel it harms the consumer navigation experience. Although Scroll Back, VOD lists and searches return BBC content, when users progress they get removed to the iPlayer application (slowly) and with no ability to simply go back to where they were.
TiVo is a specific way of moving towards offering a fully connected experience. There will be challenges with what is a difficult business case (with expensive hardware) whilst the incremental value to subscribers of some of the more innovative features is to be determined. However, in line with the general market response we feel it has some great strengths. There are some early issues with slow navigation, the exterior box design is underwhelming in today’s market, and we’ve seen operational glitches reported (most notably the BBC iPlayer), but some of the features are really great improvements on old. It is with the key fundamentals where we feel challenges lie. BBC iPlayer offers great content, but the UI/App interchange is frustrating (and could get worse if other broadcasters push for the same). And how the contradiction between offering a walled garden of services and delivering a wide variety of web content to the TV is resolved will ultimately determine appeal of this area.
Q4 2012 Numbers
Virgin Media have 3.8 million TV subs
435,000 (12%) now have TiVO
38% are new Virgin Media Pay TV subs
77% of gross additions take TiVo
55% of TiVo new additions were from Sky
Source: Virgin Media Q4 results
For a full copy of this Insight and to be included in our distribution list for the 3Vision Insight series, please contact us. 3Vision Insights is a series of profiles documenting and providing comments on interesting and significant developments in our industry - recent editions include Netflix, Hulu, Sky Anytime+, Samsung Smart TV & US TV Everywhere.