Virgin Media Liberty Global takeover: Is TiVo under threat from Liberty’s Horizon box?

What’s new for the Virgin Media Liberty Global takeover? 

Is TiVo under threat from Liberty’s Horizon box? 

Virgin’s flagship TiVo digital TV recorder could be replaced by Liberty’s Horizon box after the £16 billion takeover announced yesterday goes through.

Launched in September 2012, Horizon is Liberty’s version of TiVo – a smart digital TV box designed to turn on-demand, live TV and mobile viewing into a seamless experience.

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Virgin has spent two years selling TiVo to a third of its customers, and the deal with TiVo’s American creators has four years left to run.

The Horizon experience differs slightly across Liberty’s European operators, so how does it line up against Virgin’s TiVo?

• Multiple tuners: Horizon has four cable TV tuners. TiVo has three. Both have built-in cable modems to support apps and YouTube streaming.
• Intelligent, personalised discovery: Both feature comprehensive keyword search and the option of recommendations based on what you watch and like. It’s TiVo’s major selling point, but it can make life more complicated.
• Mobile viewing: Both products support watching TV and recordings, and controlling your box, through phones and tablets, over WiFi at home and on the move with 3G and WiFi.
• Stream to TV with DLNA: Horizon lets you stream photo, home movies and music from your mobile or laptop to your TV screen over your home network. TiVo doesn’t.
• Apps: Both TiVo and Horizon support apps for social media like Facebook, major websites like YouTube, and games connected to broadcasters like Cartoon Network, but neither has been opened up to developers to truly exploit its potential.
• Advanced user interface: Horizon sports transparent graphical menus with slick 3D effects. TiVo’s interface looks flat and cluttered by comparison, but the proof is in the navigation.
• Home networking: TiVo is Ethernet-only, but Horizon offers Ethernet or WiFi, including 5GHz 802.11n which is ideal for HD video streaming.
• Storage: Horizon has 500GB, TiVo has 500GB or 1TB – but operators can change these specs easily.
• TV guide: Both have a 15-day programme guide, but TiVo also has a seven-day backwards guide for catch-up TV that was the first of its kind in the UK.

Horizon was created with TiVo’s arch-rivals NDS, and has launched in The Netherlands and Switzerland, with rollouts planned this year in Germany and Ireland.

It looks like the faster box, but that’s just by virtue of being new, and neither of today’s products will look fresh when the Virgin TiVo deal expires.

The question is, will Liberty dump TiVo early to have a single solution for all its customers but risk a consumer backlash, or stick with a product that’s clearly built customer loyalty and improved subscription revenues?

February 7, 2013

News stories for the Virgin Media Liberty Global takeover:

• Is TiVo under threat from Liberty’s Horizon box?

What does the Virgin Media Liberty Global takeover mean for customers?

Virgin Media will be sold this Spring to worldwide cable broadband and TV operator Liberty Global for more than £10 billion – but what will it mean to Virgin subscribers?

Will the Virgin Media change its name?

No – Virgin Media is a very strong brand in the UK, and Liberty won’t want to change that to a name that’s completely unknown to consumers.

What does this mean for the future of Virgin Media?

Liberty is a solid global company, while Virgin is still paying off the debts of the old UK cable companies which consolidated over the years until they became Virgin Media. 

The deal will secure Virgin’s future and turn those debts into an asset instead of a liability, while giving Virgin the freedom to pursue improvements to its broadband speeds, to the TV experience through TiVo and TV Anywhere, and its mobile network.

Will Virgin expand its cable network to cover new areas?

There’s a slim chance, but digging up roads to build cable networks is very expensive – the companies which built the original UK network could never beat the debts they got into.

On the other hand, the UK government is hoping to relax planning laws so that it’s easier to build new broadband networks – at least for the next five years – so there could be an opportunity for some carefully-targeted expansion while the window is open. 

Will Virgin Media stick with TiVo?

A lot of time and money has been invested in developing TiVo and the online TV Anywhere companion service and apps. 

However, Liberty Global has been working on its own next generation set-top box, called Horizon, which launched last year in the Netherlands and Switzerland.

Like TiVo, Horizon has been developed to break down the borders between live and on-demand TV, and Liberty has been working with YouTube, Facebook, Twitter and many other companies to develop an app-based TV experience.

Will Virgin start buying rights to Premiership football, Hollywood films and hit US TV shows?

Anything is possible, but Virgin has spent the past five years getting out of the ‘content’ business. It’s cheaper and less risky long-term to make deals with Sky, BT and other companies who compete for the rights than it is to get into bidding wars against them.

Why is Liberty Global buying Virgin Media?

There’s a crucial line in the announcement: “Liberty Global believes that the share exchange as structured may not be taxable to U.S. shareholders of Liberty Global.”

This deal is all about business: expanding Liberty’s global empire with more than four million new customers, getting a significant tax break through the sale itself, and using Virgin’s debts to reduce Liberty’s tax bill long term.

What is Liberty Global?

Liberty Global is a worldwide cable braodband and TV empire, with European operations including Belgium and The Netherlands.

It’s owned by American businessman John Malone, who has a long-standing business rivalry with Rupert Murdoch and will enjoy competing against Sky, one of Murdoch’s flagship businesses.