Kate Bulkley, Media Analyst.

VM boss backs VoD and fibre

By Kate Bulkley

Broadcast News

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For Broadcast November 14, 2013

Virgin Media chief executive Tom Mockridge has restated that high-speed broadband is at the heart of the business and revealed plans to ramp up VoD services.

“We are going to stay unambiguously in front on broadband,” said Mockridge, speaking extensively for the first time since his appointment in May in the wake of Liberty Global’s $23.3bn (Ł15bn) takeover of the cable company. “Our HFC [hybrid fibre cable] network is the heart of the business.”

This week, Virgin announced that its top broadband speed will increase to 152Mbps from February 2014, allowing an HD movie to be downloaded in under four minutes.

But Mockridge wants to tweak VM’s marketing message, which has used Usain Bolt to focus on speed, to illustrate how its network can be used to full advantage by its customers. “People understand the speed thing but not the full rationale for having a fast broadband connection,” said Mockridge.

“We want to emphasise that two, three and more devices can be connected, and the more family friendly attributes of the network.”

In terms of programming and channels, the 58-year-old New Zealander believes that Virgin Media can “pick and choose” what it needs from third parties, rather than creating content itself.

He also hinted at tougher channel carriage negotiations for TV providers that want to be on the Virgin network, saying: “We are not going to be able to support every entrepreneurial venture.”

Mockridge is proud of VM’s pioneering deal to offer Netflix via its TiVo boxes, alongside Virgin’s other VoD offers. This is part of the content business that Mockridge is keen to develop further. “The Netflix deal is not transformative but it is another piece of having a comprehensive offer,” Mockridge explained.

“Once you get your head around the fact that Virgin is a reseller of linear and on-demand content, you say to the Netflixes of the world, why not?”

Mockridge is also willing to spend when necessary. One of his first big programming negotiations was for BT Sport, reaching a deal that is understood to be worth Ł70m over the next three years.

Mockridge refused to confirm the figure but said it was clear to him that Virgin needed BT Sport as part of its offer. “We had a rigorous debate about it but we have a customer base that expects it, and we have already seen a return in the reduction of churn, particularly when BT was doing all that marketing this summer.”

Virgin is also “contemplating” price rises of an average 6.7% in the new year for both standalone products and its TV-broad-band-telephone bundles.

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