Advanced Television

Virgin Media chief discounts ITV bid

February 7, 2008

From Colin Mann in London

Neil Berkett, acting CEO of UK 'quad-play' operator Virgin Media, has given a strong indication that it is unlikely to launch a renewed bid for commercial broadcaster ITV plc, and also confirmed that it does not intend to compete in the 'premium TV' market.

He told members of the Broadcasting Press Guild that the November 2006 approach had been “a moment in time” which he described as “a view of the apparent value of the asset, a view of what Virgin Media could do with that asset and a view of potentially monetising some of our tax position. The market is completely different today to what it was then and for us to reconsider anything in the acquisition of a production asset, an ITV-lookalike, we would have to view it on its merits.”

Berkett took the opportunity to question the acquisition by BSkyB of 17.9 per cent of ITV, a move which effectively scuppered the then NTL's takeover aspirations. “The flipside [of NTL's bid ] is 'Was it sensible for somebody else to acquire 18 per cent of ITV?' Was that part of their strategy? Does that mean they don’t have a clearly defined position?”

He said Virgin Media would concentrate on its 'mid-range' TV products, where it felt it had an economic advantage, and the 'profit pool' was larger – rather than fight on premium TV programming. The operator was deferring investment in its planned IPTV service, and would be concentrating on its 'hero product' broadband offering.

Berkett nevertheless remained wary of the service becoming a utility, and stressed the continuing importance of content, in recognition of Virgin Media ownership of cable and satellite programmer Virgin Media Television (formerly Flextech) and 50 per cent stake in UKTV. “The biggest mistake we could make in broadband would be to become a utility and therefore how we ensure we are not just a pipe is absolutely critical in evolving the strategy. Control of content and content in some shape or form has to be part of that.”

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