Quote:
Originally Posted by MutleyF
How on earth would Virgin make money out of this if they are not charging ?
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Upsell.
A VIP customer is giving them over a grand a year in subs.
The cost of the box is pretty insignificant if by offering them they can significantly raise ARPU.
You have to look at it from a business point of view, when you get an STB it doesn't actually cost VM anything, they don't "lose" money on it. When they buy in the boxes the cost of them goes from free cash flow into assets. If each box costs £400 they lose £400 of cash, but gain a £400 asset. That asset is then depreciated across the life expectancy of the box (which will be at least 10 years), so as long as they make more money from you than the box loses in value they can give it you for free and it's still good for the balance sheets.