Virgin’s 50Mbps Strategy: Next Step Is Blurring TV, PC, Mobile

Virgin Media’s new 50Mbps broadband service, unveiled today, will open up a range of new content opportunities for the company. At Monday morning’s launch event, CEO Neil Berkett (pictured) told me: “We will see more and more applications like the iPlayer being brought in in the future. The situation is not that far away where you could bring the fusion of all these applications together on the big screen, whether that’s Virgin Media (NSDQ: VMED) or Sky Sports News, whether you’re watching it live or whether you’re sifting through the 5,000 hours of archived footage on the iPlayer. Or bringing in content or application providers on top of that.”

Despite trialling broadband TV service Voom’s HD offering earlier this year, 50Mbps launched today with no special content partners. For example, there’s no indication of a hi-def desktop BBC iPlayer, both organisations told us.

CTO Howard Watson told me the next step is to blur and eventually abandon the distinction between TV, PC and even mobile: “What we are working on is how you converge the TV with world with the world of the internet and create a one-screen experience – and combine that with the mobile phone.” The blurring could happen quicker than one might expect – Virgin could roll out 100Mbps tomorrow, Berkett said, though 50Mbps is a more manageable step up. Berkett made much of that fact that VMED had developed the high-speed broadband technology “from our own wallet” and said he would welcome similar investment from rivals in network-developing, presumably rather than invest on the condition of Ofcom support as BT (NYSE: BT) suggested it would in July.

Virgin’s 20Mbps broadband had already formed the centre of Virgin’s strategy under Berkett, who had pulled back from its “quad-play” ambitions for now. The new service, costing £51 per month (or £35 with an £11-a-month phone line), means movies download in just three and a half minutes and music even quicker. The promo literature says The Beatles’ entire back-catalogue will zip down in just six minutes and 15 seconds – a perplexing boast, since the only Fab Four music yet online is still illegal…

“Can’t switch off piracy”: So won’t faster broadband mean more file sharing? “The customer has had 10 years of copyright abusing, you can’t just switch it off,” Berkett said, favouring working with content producers to educate downloaders that, “yes, that’s value for money and I will start to pay for it”. It would be naive to invest in the future of next-generation broadband without accepting some responsibility for protecting IP, Berkett said, but he stressed the importance of “bringing the customer with you” on any schemes to stamp out copyright abuse.

Too expensive?: By most people’s standards, 50Mbps is not cheap; Berkett described it as a “premium product” – but still, the customer base for 20Mbps – the previous premium product, costing £35 – has now grown to 55 percent. The new service is available to 1.5 million homes from today and the company expects to offer it to 12.6 million customers by next summer. Release.