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Virgin Media to Offer TiVo Web-TV Platform From December to Lure Clients

Virgin Media Inc., the U.K.’s second- largest pay-television company, will start an Web TV platform with partner TiVo Inc. from the middle of December to sell additional services. The stock rose as much as 3.5 percent.

The offering will provide Web applications such as a catch- up service from British Broadcasting Corp., videos from Google Inc.’s YouTube, shopping from online marketplace eBay Inc. and photos from sites such as Facebook, the Hook, England-based company said today in an e-mailed statement.

Virgin Media is adding new services as it competes with rival British Sky Broadcasting Group Plc and free-to-air television channels offering their own Web-based television platforms that allow users to browse the Internet for programs. The BBC and phone company BT Group Plc will offer the YouView platform from the middle of 2011.

“The new service will differentiate us from the competition,” Virgin Media Chief Executive Officer Neil Berkett told reporters on a conference call today. “It will be faster, better and offer more choice.”

Virgin Media shares gained as much as 88 cents to $26.36 in New York trading, the biggest intraday increase since Sept. 24, and were up 2.4 percent as of 10:13 a.m. local time. TiVo shares rose as much as 3.9 percent.

Digital Video Recorders

TiVo has attempted to reverse subscriber losses by leasing its software directly to U.S. pay-TV providers such as Comcast Corp. and DirecTV. The company is also working with Cox Communications Inc. and RCN Corp., a cable service in New York, Philadelphia and Washington, to offer its boxes as the primary digital video recorder choice.

“For the first time, viewers will have a truly personalized viewing experience so they can get the most out of the wonderful worlds of the Internet and TV all in one place,” Cindy Rose, Virgin Media’s executive director of digital entertainment, said in the statement.

U.K. viewers are starting to move away from traditional broadcast channels to watch programs on demand through the Internet. About 2.3 percent of viewers watch TV through on- demand services, according to estimates from Richard Broughton, an analyst at Screen Digest.

Virgin Media CEO Berkett, who took over in 2008, initially changed the company’s focus to broadband and basic TV rather than competing with Rupert Murdoch’s BSkyB in premium pay-TV. The company sold some of its television channels to BSkyB for as much as 160 million pounds ($249 million) in June.

Faster Broadband Speeds

Virgin Media’s third-quarter earnings before interest, taxes, depreciation, amortization and other charges rose 11 percent as subscribers opted for its faster and more expensive broadband products, the company said last month.

Clients are subscribing to faster broadband speeds, which pushed up average cable revenue per user by 3.7 percent in the quarter. The company is preparing to start its 100 megabits-per- second broadband at the end of the year, and said it will complete the roll-out by the middle of 2012.

Chief Financial Officer Eamonn O’Hare has said that the proposed YouView platform, from BT and the BBC and partners ITV Plc and TalkTalk Telecom Group Plc, may benefit Virgin Media. “We welcome it if it’s going to drive more sophisticated content into the home.”

To contact the reporter on this story: Jonathan Browning in London via jbrowning9@bloomberg.net.

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net.

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