Virgin Media and Netflix strike TV deal
Virgin Media has brokered a deal with on-demand TV service Netflix that will grant 40,000 Tivo set-top box subscribers with access shows such as Arrested Development and Breaking Bad.
The partnership – the second to be ratified by Virgin Media in a matter of weeks after it struck an agreement with BT to broadcast its rival’s fledgling TV sports channels – will sprout its first shoots of life this week when Virgin rolls out a trial to subscribers of the advanced Tivo set-top box package.
Netflix can expect to see its pre-existing customer base of a reported 2 million swell by 1.7 million – almost 50% of Virgin Media’s 4 million TV subscribers – with a specially developed Netflix app likely to be offered as part of a bundle package.
The agreement represents sound business for both parties, with Virgin Media poised to bolster its content portfolio with original and exclusive series such as House of Cards, while Netflix will expand its UK customer base and gain traction in the living room.
However, the deal will not go down so well with key rivals such as Sky and Lovefilm, both of whom now face an escalation in competition from adversaries now mutually strengthened.
Virgin Media has adopted an aggressive business development strategy since being bought out by Liberty Global for a reported £15 billion earlier this year. Having already sided with Sky’s bitter rival BT in the simmering TV sports row, the latest announcement will do little to quell the already tense relations shared by the UK’s foremost pay-TV providers.
Stuart Bryan, September 10th 2013