Liberty Global sees strong next-generation TV growth

Liberty Global CEO Mike Fries

Liberty Global’s advanced TV platform Horizon passed the milestone of half a million subscribers in the combined markets of the Netherlands, Switzerland and Germany in the second quarter, strengthening the cable operator’s performance in video and limiting attrition of video subscribers, according to the company.

Overall, Liberty Global sold an additional 240,000 ‘next-generation’ video services in the quarter, taking the total of advanced services customers – including for Virgin Media’s TiVo-based platform as well as Horizon – to 2.9 million. This includes 2.3 million TiVo subscribers.

Liberty’s UPC Holding cable arm, operating across nine European markets, reported 65,000 Horizon additions in the second quarter across the Netherlands, Germany and Switzerland, including 245,000,180,000 and 85,000 subscribers in the Netherlands, Switzerland and Ireland respectively, representing 11% of its overall digital cable base or 24% in the three markets. In Germany, LibertyGlobal’s UnitymediaKabelBW unit added 34,000 Horizon subscribers to take its total there to 135,000 or 645,000 in all four markets. The overall number represents 22% of the company’s digital cable base, or 36% of the base in the five countries in which it has launched advanced TV services.

UPC also launched Horizon Go, the TV everywhere version of the product, in Poland in July. The operator is in the process of launching a new version of the Horizon platform in the country based on the use of cloud technology and the RDK set-top platform, as opposed to the NDS platform used in existing markets.

Liberty Global also passed the milestone of selling an average of over two services per customer for the first time.

The company overall had 24.5 million customers taking 48.9 million services at the end of June, including 21.7 million TV subscribers and 14.8 million broadband customers. The company added 268,000 revenue generating units in the quarter, including 239,000 organic additions and an acquisition in Poland.

The company lost 72,000 video customers in the quarter, its lowers second quarter loss sine 2006.

UPC Holding had 8.9 million customers taking 16.8 million services at the end of the quarter. It added 57,000 organic revenue generating units in the three months to June, double the amount for the same period in 2013, driven primarily by strong broadband internet growth and reduced video losses, offset by lower telephony additions. The company saw particularly strong RGU growth in the Netherlands and Hungary, where it was boosted by the success of new product bundles.

Liberty Global posted consolidated revenue of US$4.6 billion for the quarter, up 51% year-on-year, driven primarily by the acquisition of Virgin Media. Like-for-like growth in western Europe amounted to 4%, while central and eastern European revenue was flat on a like-for-like basis. The company posted operating income of US$670 million for the quarter, up 50% year-on-year, again primarily due to the acquisition of Virgin Media. Liberty Global posted a net loss of US$250 million for the period, up from a US$12 loss in 2013, with the increase primarily due to losses on derivative instruments.

“Our business is thriving on all fronts – operationally, strategically and financially. We added nearly 240,000 new RGUs in the second quarter, a 25% improvement over last year, fuelled again by our superior broadband speeds and advanced TV services like Horizon and TiVo,” said president and CEO Mike Fries.

Fries said that Liberty’s investment in content companies – UK broadcaster ITV, production outfit All3Media and Belgian commercial broadcaster De Vijver Media – were designed to “bolster our core cable operations over the long term”.