Canvassing Video Delivery in the U.K.

At a recent Cable Show session focusing on international service providers, panel moderator Jim Chiddix referred to the broadband marketplace in Britain as "a wild, rough-and-tumble market."

As a cable operator, Virgin Media competes with British Telecom (BT) and BSkyB, the satellite operator. But aside from the usual broadcasting and satellite competitors, there’s also the British Broadcasting Corp (BBC).

"The roll of the BBC you cannot underestimate," said panelist Neil Berkett, CEO of Virgin Media, pointing out that BBC content is free, and the BBC Trust is a non-profit.

Today, led by the BBC, the competitive landscape in the U.K. is shifting. In an effort to connect TVs to the Internet, a joint venture between the BBC and five other partners called "Project Canvas" is working to develop a common standard that would allow viewers who have a broadband connection to watch such on-demand services as the BBC iPlayer and other Internet content on their TVs. This would be accomplished via a device like a set–top box connected to the Internet. There would be no additional subscription fee for that content.

Project Canvas partners include the BBC, BT, iTV, Channels 4 and 5, broadband service provider TalkTalk, and broadcast infrastructure company Arqiva.

"(Project) Canvas is a distribution play, not a content play," said Berkett. "The logic of the (BBC) Trust is they’re doing good for the consumer. Providing they don’t have Canvas as a closed system, it’s a good thing. God forbid you put it inside your Sky box."

According to Berkett, Virgin Media will support Project Canvas as long as the company is allowed to insert the resulting interactive capability inside its TiVo boxes. "If we can’t do that, we’ll certainly have a very strong objection," he said.

In late 2009, Virgin Media and TiVo announced a strategic partnership whereby TiVo would develop a converged TV and broadband interactive interface to power Virgin’s next-gen, high-definition (HD) set-top boxes. (For more, click here). "We’ll be the first operator in the world to wholesale TiVo," said Berkett. "We will have a soft launch of TiVo by the end of year and roll out aggressively through 2011."

Although Virgin Media is somewhat leery of Project Canvas, innovations from the BBC have proved valuable in the past. The BBC’s iPlayer, which Virgin ported onto its VOD system, has had the effect of encouraging and increasing on-demand usage.

Berkett said that, thanks to the iPlayer and its role in on-demand TV, "there is rapidly growing digital usage in the U.K., moving slightly faster than some other markets." (For more on the iPlayer, click here).

Currently, Virgin is boosting its on-demand advertising capabilities. (For more, click here). And, Berkett said, VOD is helping Virgin compete with the other TV services in Britain.

"We run six HD channels, Sky runs 40," he explained. "Even with that superior HD position, VOD has played its role over the last six months. We’re finding that VOD functionality is negating HD superiority."

-Linda Hardesty