Cable Forum - View Single Post - Liberty Global 2015 Results

steveh · 17-02-2016, 20:06

Maybe there is no longer any business case for Liberty Global investing seriously in TV in the UK?

In Freeview this country has a free, high quality TV distribution system which some other territories do not, so you're not forced down the cable route here. The free-to-air channels from the BBC, ITV, Channel 4 and Five are still where the biggest audiences are and most people still prefer local programming. On-demand from them is also available free - and now comes on most TVs too.

In the pay TV market, Sky have caught Virgin in a pincer movement between a budget Now TV (which Virgin probably can't match on wholesale price from Sky) and the top-end Sky Q (which those who want to personally own the best hardware will always choose over cable, no matter how good any new TiVo is). The market for Virgin between them is shrinking too.

New entrants from the paid streaming services are going all out for market share by providing a premium quality experience at a budget price that is subsidised by venture capital funds or other parts of their business. Long term probably only Sky is capable of standing up to the US tech heavyweights. Finally, the most attractive content (sport, movies, quality drama) is already tied up in long term deals elsewhere so Virgin have no route by offering exclusives either.

Under those circumstances doing all except the minimum needed to milk the existing customer base while it's still viable could be seen as foolhardy. Much better to focus on broadband as the cash cow - especially as here only four companies now control over 90% of the market and one of them probably won't survive much longer.

17-02-2016, 20:06	#23
steveh Inactive Join Date: Aug 2004 Posts: 272	Re: Liberty Global 2015 Results - 16 Feb Maybe there is no longer any business case for Liberty Global investing seriously in TV in the UK? In Freeview this country has a free, high quality TV distribution system which some other territories do not, so you're not forced down the cable route here. The free-to-air channels from the BBC, ITV, Channel 4 and Five are still where the biggest audiences are and most people still prefer local programming. On-demand from them is also available free - and now comes on most TVs too. In the pay TV market, Sky have caught Virgin in a pincer movement between a budget Now TV (which Virgin probably can't match on wholesale price from Sky) and the top-end Sky Q (which those who want to personally own the best hardware will always choose over cable, no matter how good any new TiVo is). The market for Virgin between them is shrinking too. New entrants from the paid streaming services are going all out for market share by providing a premium quality experience at a budget price that is subsidised by venture capital funds or other parts of their business. Long term probably only Sky is capable of standing up to the US tech heavyweights. Finally, the most attractive content (sport, movies, quality drama) is already tied up in long term deals elsewhere so Virgin have no route by offering exclusives either. Under those circumstances doing all except the minimum needed to milk the existing customer base while it's still viable could be seen as foolhardy. Much better to focus on broadband as the cash cow - especially as here only four companies now control over 90% of the market and one of them probably won't survive much longer.