U.K.’s Virgin Media CEO Talks BSkyB Competition, Content, Netflix

LONDON — While U.K. pay TV giant BSkyB and various TV networks invest in original content to differentiate themselves, competitor and cable operator Virgin Media prefers to carry a broad portfolio of networks and offer a strong broadband service, Virgin CEO Tom Mockridge said here Thursday.

“We invest enormous amounts in content,” in the sense of making available TV networks that Virgin carries, said the head of the cable firm, which is part of John Malone‘s Liberty Global. “We would rather have a comprehensive offer and don’t see the [benefit of] differentiation in programming” by spending on original programming developed specifically for Virgin, he said.

Speaking at a lunch event organized by the Broadcasting Press Guild in central London Thursday, he said ensuring the quality of Virgin’s broadband service is also key given that it has become the company’s primary product in the digital age. “It is about continuing to feed this demand” for broadband, Mockridge said, describing “speed and capacity” as priorities.

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The leadership of BSkyB, in which Rupert Murdoch‘s 21st Century Fox has a 39 percent stake, is based in large part on its offering key content, such as Hollywood movies, HBO series and English Premier League (EPL) soccer matches, Mockridge said. “The EPL is the Hollywood of the United Kingdom,” he explained.

In comparison, Virgin Media feels that “our position is based on being the leading broadband provider” in Britain, he added. Asked if BSkyB has broader and more popular services, he argued that “our services are as comprehensive as Sky’s.”

Mockridge also argued that Virgin’s focus on broadband means that the company is in a good position should U.K. consumers ever start cutting the pay TV cord, as observers have said some U.S. consumers have done. “‎If it happens, we’re gonna be the beneficiary,” Mockridge stated.

Is broadband becoming a commodity? ‎”Broadband may become ubiquitous, but not a commodity,” the Virgin CEO argued.

Asked about competition from the likes of BSkyB and telecom giant BT, he said: “Competition is a great thing.‎ There is opportunity for all.”

Mockridge also discussed Malone and former boss Rupert Murdoch. Mockridge, who was born in New Zealand, was a longtime lieutenant of Murdoch’s, running Italian pay TV firm Sky Italia and most recently overseeing U.K. newspaper arm News International after the phone-hacking scandal. He took over Virgin Media last year after Liberty Global acquired it.

He said it was a privilege to be working for Malone and having worked for Murdoch, saying “I had a great time at News Corp,” and that he now had a “great opportunity” at Liberty Global.

He divulged that the two moguls are “very good friends” who respect each other and have changed the media and entertainment industries. He highlighted that while they have competed with each other “at times,” they have also repeatedly worked together over the years.

Mockridge also recalled that Liberty Global CEO ‎Mike Fries called him after he left News Corp. “Mike is the guy who has really executed on that vision” of an international cable operator outlined by Malone. He said he first met Fries in Australia about 15 years ago, when Mockridge was at Foxtel and Fries was looking to improve Austar.

“The Liberty guys are long-term investors and practitioners in this business,” Mockridge concluded with more praise for his bosses.

The Virgin CEO in several instances touted the success of his company’s use of TiVo boxes, which he said are very popular with subscribers. Virgin recently agreed to offer Netflix via its TiVo boxes.

Asked if other online video providers, such as Amazon.com, could get similar treatment, Mockridge said the companies have held talks in the past. “We are certainly open to it,” he commented.

Regarding some observers’ suggestion that including Netflix minimizes the competitive threat of the streaming video service by making it just like any other network, Mockridge said Netflix would likely take offense to such descriptions. “This works for us and them” and most important, provides comfort and ease of use to customers, he said. “These things aren’t black and white.”

Addressing the recent sale of Liberty Global’s Chellomedia TV networks business to AMC Networks, Mockridge said it was “not particularly integrated with Liberty,” with the sale allowing the company to focus on its core competencies.

Asked if Liberty Global’s acquisitions spree in Europe in recent years meant the company and its top executives were buying like crazy, the Virgin CEO said: “They don’t buy like crazy. They make significant investments to drive scale in a very thoughtful way.”

Liberty Global is currently the largest cable company in the world, barring the planned Comcast takeover of Time Warner Cable.

Email: Georg.Szalai@THR.com
Twitter: @georgszalai‎