NCTA Cable Show 2010 – Los Angeles. Two major European operators, Virgin Media and Liberty Global, are planning their ‘next generation’ cable box which will unlock the online world. Speaking during a session on European cable, Liberty’s Mike Fries (left) and Virgin’s Neil Berkett explained their game plans.
“IP home gateways are the future,” according to Liberty Global President Mike Fries, talking about the new devices UPC plans to roll out from April 2011. The gateway will serve to offer viewers a TV 2.0 experience is the plan.
“What has online taught us? About 26% of all people watch internet TV more than once a week, but it is still a struggling business with tiny revenues. People spend about four minutes watching a video and there are no clear aggregators. The videos are often of poor quality. At the same time we fell back in love with our large flat screen television and it is our plan to build on this love affair with television.”
“People still want their linear TV and 40% say they want on demand. The good news is that 76% want that from their cable company. What we want to offer them is ease of use and simplicity. Remember, our digital TV platform is vintage 2004. This was the time before the iPhone, the iPad and YouTube. We will be there next year with a 3D rendered user interface, easy search and navigation. And it is all-IP based. Home networking is our future, whether we like it or not.”
“We have new approach to the product. The gateway will be serving IP clients in the home. We put all the smarts in the box that will serve as the hub for the house. It will deliver content to all these clients, set-tops, PCs, iPads, and so on. The solution is very elegant and makes totally sense. And the good thing is, these are all existing products, everything is off the shelf. We are the first to bring it together.”
The new gateway will be rolled out incrementally and of its goals is to achieve ARPU stability. “Every time we put a device in the home we double our ARPU. At the moment, 60 to 70 % of our new digital customers take a PVR.” For UPC, the killer apps are PVR, HD and VOD. No less than 60% of all digital homes use catch-up TV.
Virgin Media in the UK is taking a slightly different approach by choosing the TiVo box. Berkett: “We are wholesaling TiVo inside our media box and we are the first operator to do so. It is the best product on the market, it is available and proven. It is the basis for product we deliver before Christmas and will give us first mover advantage in TV 2.0. After taking broadband further with DOCSIS 3.0 and being the first with catch-up TV. We are not just a platform, we are the core for multi-screen entertainment.”
“Virgin took the BBC iPlayer into the VOD environment, so people are used to see internet like content on their TV. At the moment 78% of our top tier customers now use VOD.”
Virgin will soft launch TiVo before the end of the year and will roll it out aggressively in 2011. “This is the way to get real traction into the market. Our TiVo world plus HD is a superior product.”