Q&A: Dale Barnes, director of innovation, Virgin Media

Virgin Media’s director of innovation Dale Barnes talks to DTVE about the UK cable operator’s plans for new services over the coming year.

What are your main priorities for the year ahead and why?

We’ll complete our ambitious programme of doubling the broadband speeds of over four million Virgin Media homes this summer and my team is in the fantastic position of exploring innovative new services enabled by superfast broadband speeds. From the launch of SmartCall to the development of a TiVo app that allows the residents of a low carbon building in Leeds to monitor their energy and water usage, 2013 promises some amazing next generation services for our customers.

What further innovations are you planning in broadband services and how well placed is the network infrastructure to deliver a greater range of higher speed services?

The launch of Virgin TV Anywhere, our cloud-based entertainment service taking VM TiVo onto computers, tablets and smartphones is a great example of what we can do. By leveraging the capabilities of Virgin Media TiVo, we’re bringing our multiple platforms together and enabling our customers to take their favourite content with them and across their choice of screens. And our ground-breaking WiFi on London Underground service, used by over one million people, was made possible by our next generation fibre optic network, capable of carrying a huge amount of data and delivering an outstanding user experience.

We’ll also harness the power of our fibre optic network to bring pioneering new connected services to our TiVo platform, such as a bespoke app for a development of eco flats and offices in Leeds that helps residents to monitor energy and water usage as well as view local transport information right on their TV screens.

Meanwhile, our business division will be paving the way for the deployment of the next generation of ‘small cell’ wireless networks. After winning the UK’s first city wireless concessions outside of London since the Government announced the first phase of its super connected city initiative, Virgin Media Business will be rolling out a free public Wi-Fi service to 1.2 million people in Bradford and Leeds city centres.

As demand for superfast broadband continues to grow, our unique cable network is well placed to deliver a fantastic range of higher speed services. In the summer of 2011, we demonstrated this by successfully testing internet speeds of up to 1.5Gbps at TechHub in Silicon Roundabout using the same infrastructure and technology we use to provide residential customers with speeds of up to 120Mbps.

Will speed continue to be the key battleground to win customers? How concerned are you about BT’s investment in fibre as a competitive threat?

When the Internet first took off, the ‘killer app’ everyone was looking for was fast connectivity that just works, all of the time. The current explosion of the internet of things means super-fast, ubiquitous connectivity will continue to be the bedrock of our digital lives.

If you’re in a household with teenagers the need for superfast broadband becomes very evident, very quickly! As more people use more connected devices, superfast broadband means everyone can get online at the same time, whether they’re streaming their favourite TV shows, downloading music or talking to friends and family on Skype.
1.5 million people took superfast broadband (30Mbps or above) with Virgin Media in 2012 and over half our broadband customers are now on superfast speeds. Our ambition has helped move the UK broadband market forward and the competition will only benefit consumers.
 

To what extent can you add value to broadband as a customer sale – for example by leveraging the capabilities of the TiVo platform? Is there a way to differentiate other than by ‘more speed for the same price’?

Alongside consistent, reliable, superfast broadband speeds our customers can enjoy a whole host of other benefits. From a dedicated broadband connection is each Virgin Media TiVo set-top box, delivering a whole host of great apps and Through the Middle content and the service is evolving all the time. Since launch, we’ve brought everything from Sky Sports and BBC Red Button services to web-based apps like YouTube and Spotify to TiVo. This, alongside initiatives such as WiFi on the London Underground at no extra cost for our mobile and broadband subscribers is how we’re putting the power of our network in our customers’ hands.

How big do you think the market for 100Mbps and higher speed services is as a proportion of the overall base? How much of a business market is there for these services?

When we launched our 50Mbps broadband service in 2008, it was the fastest widely available service in the UK and became a significant driver of demand for superfast broadband – around one in five of our customers currently enjoy speeds of 50Mbps or above.

According to Cisco, there were 8.7 billion connected devices in 2012, growing to 15 billion by 2015 and to 40 billion by 2020. This fantastic trajectory will be spurred on not just by human interaction with the Internet but also things like connected refrigerators and coffee machines running in the background in connected homes. This so-called Internet of Things will drive broadband usage and faster speeds will ensure everyone will continue to enjoy a fantastic experience.

It’s the same story for our business division, which accounted for 30% of group revenue growth and saw revenue rise 5.2% on 2011 as the growing demand for superfast broadband continued to be reflected by a steady stream of contract wins.

What further developments does Virgin Media have planned for the TiVo platform for the year ahead?

Following the hugely successful launch of Virgin TV Anywhere, we’re looking to make even more content available to watch on the go. We’re talking to content providers, broadcasters and regulators all the time, encouraging them to think about content creatively and enabling viewers to make the most of the new digital landscape.

Another version of Virgin TV Anywhere is also in the making that will enable customers without iPhones or iPads to access the app from their Android mobile devices.

Will the Liberty Global acquisition have any impact on the investment in TiVo going forwards (for example if there is uncertainty about whether Liberty Global will want to standardize all its advanced TV services around Horizon at some unspecified point in the future)?

Virgin Media TiVo is an excellent service, as demonstrated by the incredible success we have already enjoyed – Virgin Media has become the fastest growing pay TV company in the UK since its introduction.

Liberty Global has enjoyed similar early success with the launch of Horizon in the Netherlands and we both have exciting development roadmaps – this is clearly an area where we can learn from each other.

What further plans do you have to differentiate the TV platform this year (for example to commercialise targeted advertising, introduce further OTT services)?

We’re always talking to content providers so that we can bring together more of the content our customers love – including everything from vibrant HD channels to sports coverage and ‘Through the Middle’ streaming services.

In addition, we have a great understanding of our TV customers and a network intelligent enough to understand viewer behaviour, so we are thinking about how we could bring engaging and relevant ads to households. Of course, our priority has always been our customers and any new advertising services will be developed with them front of mind.