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Netflix offers TiVo access in pay-TV first

Netflix will be available through a pay-TV platform for the first time, thanks to a deal announced today between the US streaming giant and and UK cableco Virgin Media.

The deal means that Virgin Media TiVo subscribers will have access to the world’s leading internet TV network, if they sign up to Netflix. Using the Netflix app, TiVo households will then be able to watch Netflix series, documentaries, comedy and kids’ titles through their set-top box. After a pilot this week, Netflix will be available to 1.7 million Virgin Media TiVo homes this year.
 
The addition of the Netflix app to Virgin Media TiVo, which is the fastest growing pay-TV service in the UK , will allow viewers to watch Netflix original series including House of Cards, Hemlock Grove, Arrested Development and Orange is the New Black, as well as Netflix exclusives including the critically acclaimed hit series Breaking Bad. 

A stand-alone Netflix monthly subscription costs £5.99.

The Netflix app will complement Virgin Media’s collection of more than 6,000 hours of on-demand entertainment, and access to other content apps including BBC iPlayer.

Virgin Media viewers can already rent hundreds of films from Virgin Movies, subscribe to Sky Movies and PictureBox.  
 
Virgin Media chief operating officer Dana Strong said: “Virgin Media TiVo offers different ways to watch, either subscription or pay per view, all seamlessly integrated for simple, intuitive viewing so there’s a world of great entertainment at your fingertips and everyone can be sure of the perfect TV moment.”
 
Netflix global head of business development Bill Holmes said the UK had “given Netflix a fantastic welcome”. 

This week’s pilot involves 40,000 Virgin Media TiVo households already selected to use the Netflix app. Netflix members will be able to log in using their existing Netflix credentials, and new members are able to sign up for Netflix through the app. Access will be rolled out to all Virgin Media TiVo customers later this year.
 
The Netflix deal, which follows Virgin Media’s recent announcement of another deal allowing TiVo users to watch BT Sport for free, raises the possibility of Netflix being made available across Liberty Global’s other services, reaching 25 million customers in 14 countries.
 
Netflix itself now has 37 million members in 40 countries enjoying more than a billion hours of content every month.

Commenting on the move, Informa Telecoms & Media senior analyst Ted Hall said: “Today’s announcement goes some way to settling a debate over how pay-TV operators should address the threat posed by new OTT contenders challenging pay-TV’s established hierarchy.

“In treating Netflix as an ‘internet TV network’, Virgin Media argues that it is simply expanding its content offering and positioning TiVo as the market’s leading connected-TV platform.

“The danger for Virgin Media is that its customers will find Netflix to be a revelation that they would not otherwise have stumbled upon, opening their eyes to a low-cost subscription TV service that satisfies their core entertainment needs. Rather than strengthening the appeal of TiVo, the addition of Netflix could in fact do the opposite and encourage customers to cut the cord and settle for a cheaper combination of broadband, Netflix (via other devices) and free-to-air TV.

Virgin Media will be confident, though, that it can negate this risk by offering Netflix at a discounted rate as part of its bundled service offering – a move it is expected to take once the full service rollout commences – and by continuing to improve the overall TiVo-led cable bundle proposition, which features premium content that users of Netflix alone would not have access to.

“If successful, the deal could be the first of many between Netflix and pay-TV operators. With Virgin Media now part of the Liberty Global family, its strategic decisions may well be indicative of similar moves in the offing for other operations within the world’s largest cable provider.”

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