Virgin Media Announces Second Quarter Results, Says Nice Things About TiVo

Last week Virgin Media announced their second quarter results, as covered in their press release. While the overall results were positive, I’m particularly interested in what they had to say about their newly launched TiVo service. They have a little to say in the official press release:

During the quarter, we have seen an encouraging early take-up of Virgin Media TiVo, our new game-changing entertainment platform, and we have recently unveiled a high impact advertising campaign which will see this compelling service marketed to new customers for the first time.

And:

We have now started to sell and market our new TiVo service to new customers. This is the UK’s first next generation TV service, seamlessly bringing together the best of TV, on demand and the web through an intuitive graphical interface. This enables us to launch exciting new entertainment experiences, such as we developed with Warner Bros Pictures to complement the launch of ‘Harry Potter and the Deathly Hallows – Part 2’. We introduced a dedicated TV app that brought together live film premiere coverage with extra online content. We have also introduced a mobile app allowing customers to set their TiVo service to record shows remotely. The strong early demand for this service has matched our high expectations and, as of 26th July, we had approximately 50,000 installed TiVo customers.

But the real interesting comments are from the call itself, fortunately captured via transcript:

Neil Berkett – CEO: Thanks very much everybody. I think TiVo will do to our video business what DOCSIS 3.0 to our broadband business. I think it will significantly change our brand, our perception and our ongoing delivery, but more about that later.

And so, later:

Testimony, 75,000 TiVo sales, 50,000 in store (the gap) we’ve only being selling for two weeks. Testimony, 50% of our broadband ads at 30 meg and above. Testimony, two price increases in the last six months and you can see the trend.

This is about a business that is targeted to consumers and business customers that need data. They need data and may want data, but the most important thing is they need data. So our drivers are broadly going well. We continue to move with price and there will be periods when that is not available to us. We just launched TiVo at a GBP3 delta in terms of its price over of V+ Box.

But the real interesting part is the following:

On to application. So, you saw we have journey, it’s reasonably predictable around connectivity. You upgrade speeds; you run tiers within your huge pipe; you manage across that, and periodically you upgrade everybody. Tried, proven, you’ll see us do it again and again. The top tier speed at the moment a 100 meg starts out very quietly as did 50, and then accelerates. You tested the market on price, it accelerates again.

Application is different. Application starts to create the glue beyond the raw horsepower of connectivity. Applications is nothing without connectivity, and connectivity is nothing without application, and TiVo is the best connected TV certainly in the U.K., and I would argue in the world because it’s produced by connected TV experts. It’s all they do. That’s why we partnered with them. That’s why it’s actually launched on time, because a lot of our peers decided that they would build their own. It has a net promoter score, major of advocacy (over detraction) of plus 30%. If I had a customer base that had a level of advocacy of plus 30%, I wouldn’t be standing here today talking to you, I would have retired.

It is a massive, massive driver of advocacy. Our customers absolutely love us. Every single review of TiVo puts it as the best way to watch TV bam bam and I’m obviously deliberately using that phrase and I may not use that but that’s what they are saying and that’s what you’re seeing on the billboards at the moment.

It is an amazing product and it allows us to create the glue between the social strength, the TV, the personal screen your PC or laptop and the remote screen, your smartphone and tablet somewhere in between, because you will be able to access. Just think about October, the second drop. The access your hard drive from another device. Your connected TV would by then know you. It will be recording things the things you’ve forgot to record.

It will allow you to go backwards and see that somebody has deleted something that you didn’t want deleted and you can undelete it; just lucky can on a PC. It will have applications like the Harry Potter app where we created an application around the launch of the first series where we had little clips and customers can go into Harry Potter and in they can go in and view and purchase Harry Potter. They can look at that video on demand library. It’s got the intelligence to look at how (linear open garden), a linear walled-garden in video-on-demand are now selected over the top. It will do for us in the TV space what DOCSIS 3.0 has done for us in connectivity

Mobile; so we saw for the first quarter the impact of mobile bonus. We drove a record 83,000 net contract ads in the quarter and some 47,000 – I think it was actually 50,000 contract ads into the home. That’s a 48% increase over Q2, 2010. So, you are starting to see now the acceleration of mobile into the home and that will continue as TiVo as an application is more powerful either by price or by feature on a Virgin Mobile as opposed to Voda or Orange or anything else. So that our customers will see the glue between their remote device and their fixed devices, and that would allow us to accelerate their quad-play and it will allow us to accelerate the very strong economics.

Those are some very strong, and positive, words. It really reinforces the importance Virgin Media is placing on TiVo as the focus for their TV efforts. Which also bodes well for their TiVo customers.

Oh, and did you catch this?“Just think about October, the second drop. The access your hard drive from another device.” It sounds like October is when they’ll be enabling streaming between units. And perhaps also when they’ll have the TiVo software load for their non-DVR platforms? It’ll be interesting to see.

Transcript spotted via The Virgin Media TiVo Blog.