Virgin Media 2010 Annual Report Download - page 20

In addition to the increasing competition and pricing pressure in the broadband market arising from LLU,
mobile broadband and technological developments, such as long term evolution, or LTE, and 3G mobile
technology, other wireless technologies, such as Wi-Fi and Wi-Max, may subject us to increased competition
over time in the provision of broadband services.
Cable Television
Our digital television services compete primarily with those of BSkyB. BSkyB is the only pay satellite
television platform in the U.K. and has a high market share of the U.K. pay television market. BSkyB owns the
U.K. rights to both standard definition and HD versions of various sports and movie programming content, which
it has used to create some of the most popular premium pay television channels in the U.K. BSkyB is therefore
both our principal competitor in the pay television market, and an important supplier of basic and premium
television content to us.
Residential customers may also receive digital terrestrial television, or DTT. Digital signals are delivered to
customer homes through a conventional television aerial and a separately purchased set-top box or an integrated
digital television set. The free-to-air DTT service in the U.K. is branded Freeview. This service is provided by a
consortium of operators, including the BBC, and offers customers a limited range of television channels, which
include traditional public service broadcasting channels as well as BBC 1 HD, BBC HD, ITV1 HD and Channel
4 HD. Customers do not pay a monthly subscription fee for basic Freeview service but must acquire a Freeview
enabled set-top box or a television with a digital tuner. Freeview also offers a range of DVRs under the brand
“Freeview+”. Residential customers may also supplement Freeview DTT offerings by subscribing to additional
content through Top Up TV. Top Up TV is a pay television service offering selected programs, which are
typically downloaded to the set-top box overnight, for a fixed fee to subscribers who receive Freeview and have
purchased a Top Up TV DVR.
Content owners, online aggregators and television channel owners are increasingly using broadband as a
new digital distribution channel direct to consumers. In 2008, the BBC launched an initiative known as Project
Canvas, to develop technical standards to enable content typically accessed via a computer on the internet to be
delivered directly to the television. Project Canvas is intended to provide an open platform, allowing any
broadcaster to make its content available via Project Canvas enabled set-top boxes. Participants in the Project
Canvas joint venture include ITV, C4, Five, BT and Talk Talk. If Project Canvas is implemented in its current
proposed form, in which adoption of a prescribed interface is a condition for competing platforms to use the
“Canvas” brand, the availability of a standardized broadband-enabled television platform may result in increased
competition for pay television broadcasters. In June 2010, the BBC Trust formally approved the BBC’s
participation in the project. In September 2010, YouView was revealed as the brand that will bring the new
free-to-air internet-connected TV service to U.K. homes.
BBC and ITV also offer a free-to-air digital satellite alternative to Freeview DTT service, known as Freesat.
Freesat offers approximately 90 subscription-free channels, including selected high definition channels such as
BBC 1 HD, BBC HD and ITV HD. Freesat channels are delivered to the home through a separately purchased
satellite receiver. Freesat also offers a range of DVRs under the brand “Freesat+”.
Residential customers may also access digital television content by means of internet protocol television, or
IPTV. BT Vision, a combined DTT and VOD service offered by BT over a DSL broadband connection, is
available throughout the U.K. BSkyB also offers a VOD service over a broadband connection, Sky Player TV,
which provides live streamed TV and VOD on a subscription basis.
The U.K. government has stated that it will terminate ATV transmission by 2012. Consumers wishing to
receive television services will have to convert to DTV, currently available via cable, digital satellite, DTT or DSL.
However, when ATV transmission is terminated, the DTT signal and network may be strengthened. This will enable
DTT to be made available to additional customers’ homes that cannot currently receive a signal. It may also provide
additional capacity to allow the Freeview channel line-up to be expanded to include new channels.
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