Yahoo Finance Netflix is our fourth biggest channel now, says Virgin
Virgin Media is accelerating the roll-out of its new set-top box amid rising demand for faster access to Netflix, which it said has become its joint fourth biggest “channel”.
The streaming service is integrated into Virgin’s pay-TV service and is more watched than all traditional channel except BBC One, ITV and Channel 4. It is on a par with BBC Two.
The fact is likely to compound nervousness at the BBC and ITV over the growing share of viewing being taken by Netflix, particularly among younger viewers. Both sell old programmes and are seeking new commissions from the streaming service but have expressed fears that their brands as public service broadcasters are being eroded.
David Bouchier, the operator’s entertainment chief, said: “Netflix is right up there with BBC Two in terms of viewing now. We’re an integrater of entertainment and we don’t feel threatened by that.”
Around 2.8m cable TV households will be entitled to a free upgrade to an ultra-high definition set-top box without signing up for a new contract under Virgin’s accelerated roll-out.
The move is expected to cost Virgin Media, which is owned by the New York-listed giant Liberty Global but licenses its brand from Sir Richard Branson, around £100m.
It is designed to boost the loyalty of its television customers amid rising competition from cheaper options such as BT TV and Amazon’s Fire TV. Mr Bouchier said the one million households who already have Virgin’s new V6 box are less likely to cancel their contracts, partly because of faster access to Netflix, which runs slowly on its older technology.
Virgin is also due to lose its claim as being the only pay-TV operator to carry both Sky Sports and BT Sport. Sky and BT signed a reciprocal wholesale deal last month which called a truce in their long battle. Each had sought to attract subscribers with sports channels unavailable on the other, with Virgin a neutral beneficiary.
The operator is now attempting to promote its integration of Netflix as a key advantage over Sky. As a major TV producer in its own right Sky views the streaming service as a more direct threat, although it has held talks about bundling it into pay-TV subscriptions.
Such a move would however be a strategic shift for Sky, which is due to come under the Disney umbrella as part of a sale of 21st Century Fox assets. Disney last year announced it will remove its own programmes from Netflix to concentrate on selling its own subscriptions direct to consumers.
