Berkett defends Virgin 1 performance

With just 0.17% DTH share for the last 3 months of 2007, the channel has had a disappointing start since its high-profile launch on 1 October.

However, speaking at a Broadcasting Press Guild lunch today (5 February), Berkett said the channel was “ahead of plan”.

“We're starting to reap the cross-platform benefits of having a channel of our own so that we can start to talk to viewers about the full array of Virgin Media products,” he said. “That's almost as important in its own right as generating impacts and revenue.”

The V1 launch activity, which took place around the time of Virgin's very public battle with Sky, placed the emphasis on premium content.

But Berkett reiterated the company's latest strategy of focusing on ‘mid-TV' rather than premium TV.

Premium sport and movies were less important going forward, he said, but the launch strategy was “not a mistake.”

“There's no money for us right now in terms of premium TV. Why bash our heads against that? Let's concentrate on mid-range TV. That's where the profit pool is growing and where we have competitive advantage. The premium TV profit pool is stagnant.”

Berkett was unable to comment on any M&A activity ahead of the company's results at the end of the month.

When asked whether Sky's reduced stake in ITV had renewed his interest the broadcaster, Berkett said: “The bid for ITV was a moment in time. The market is completely different today from what it was then. For us to consider anything in terms of acquiring an ITV lookalike would have to be viewed on its merit.”

He said he was confident that pay-TV would weather the current economic storm and that there would be minimal impact on demand for products.

However, he added: “If I had a business model that was 80% reliant on an income stream aligned to linear TV, I'd be concerned.”

Berkett stressed the importance of broadband to the company's growth plans, stating that broadband was VM's “hero product,” with both a technological and economic advantage over rivals, particularly in terms of broadband speeds.

Virgin is upgrading its broadband packages to 10MB and 20MB and will offer around nine million homes a 50MB product by the end of the year.

“The biggest mistake we could make in having broadband as a hero product is to become a utility,” he warned. “How we ensure we're not just a pipe is critical in our evolving strategy, so control of content has to be a critical component in that.”

Berkett added that integrating VOD, portals and mobile, spearheaded by content division chief executive Malcolm Wall, was paying dividends and resulting in “a better consumer experience”.

Have your say

You must sign in to make a comment.