IBC Conference: How Virgin is “reimagining the traditional TV format”

Pay TV operators are joining the free ad-supported TV (FAST) bandwagon to beat out competition from connected TV (CTV) platforms from manufacturers like LG and Samsung, but doing so in a controlled strategy to keep the consumer within their own ecosystem.

“As basic pay TV channels decline, we think there’s a natural growth for FAST to fill that gap but we don’t expect or plan on having hundreds of such channels,” says David Bouchier, Chief TV & Entertainment Officer, Virgin MediaO2. “We’re reimagining the traditional TV format.”

The operator began its journey to FAST in the UK a year ago with the launch of 19 channels including three from Pluto TV (Catfish, CSI: New York, and 5Cops) and others from partners like A+E Networks EMEA, All3Media International, Banijay Rights, Blue Ant Media, Extreme International, Fremantle, Little Dot Studios and Tastemade.

“It’s all about Virgin remaining the user interface of choice” David Bouchier, Virgin MediaO2

Earlier this year Virgin added another 11 FAST channels including UKTV Play Full Throttle (UKTV); History Hunters (A+E Networks); Qello Concerts (Stingray), and Real Crime (Little Dot Studios) all available for customers with a v6, TV 360, or Stream set-top box.

“A traditional paid television operator such as ourselves has to respond to new competition coming in from CTV manufacturers where multi-channel availability is now available through IP direct to the TV screen,” Bouchier says. “At the same time, traditional providers of paid channels are themselves going over the top (OTT) through direct-to-consumer (DTC) subscription video-on-demand (SVOD) services.

“So, for us, it’s about ensuring that we keep our services as the destination point for household viewing. Whether they are viewing SVOD from Netflix or Disney+, watching the traditional national networks like BBC and ITV, or watching premium sport through Discovery, it’s all about Virgin remaining the user interface (UI) of choice.”

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Careful curation

“We have lots of great basic and premium channels. We don’t need 150 channels” David Bouchier, Virgin MediaO2

Prior to joining Virgin Media, Bouchier was a member of the management executive of BSkyB in the UK, where he was responsible for handling the company’s investment in German pay TV, before moving to News Corporation as MD of Programming for Sky Italia. He subsequently returned to the UK and established his own pay TV broadcast businesses, creating several pay television channels.

“The distinction between ourselves as CTV providers is around content strategy,” he says. “Whereas they start from ground zero in terms of content and aim for volume, we have lots of great basic and premium channels. We don’t need 150 channels.”

In fact, Bouchier says Virgin will evolve to about 50 FAST channels from its current 30.

“The key thing is that we curate, we don’t aggregate,” he stresses. “We don’t do volume. FAST is complementary programming to our existing pay channel and local is the key.”

What Bouchier means by ‘local’ is English language content carefully chosen to resonate with UK audiences.

“In the early days when setting up FAST it was predominantly supported by back-end technology providers. We’d have hour-long meetings talking about technical delivery which is all very well but you get to the end and I’d ask ‘what channels do you have?’, and they’d reply, ‘we have pages and pages of channels’ and they’d send me an excel spreadsheet detailing them all.

“But that wasn’t necessarily what we wanted. Channels from the US that our viewers have never heard of won’t resonate.

“So we made sure that our first FAST channels are predominantly English programming. We worked with many of our traditional suppliers and tried to hit on the genres that we know audiences like which are Family, Kids, Mystery and Crime as well as long-running factual series like Homes Under the Hammer. We have a great deal with DAZN for a channel dedicated to women’s sport.

“Speaking generally, they all perform as well as one of our basic long-tail pay channels,” he says.

Seamless viewing experience

Another key point for Bouchier was to make the channels visible in the TV guide (EPG) alongside its other pay and free offerings.

“This is a critical point I want to make to fellow operators. It was very important to bring them into our EPG so they have the greatest exposure possible and are perceived as part of the regular broadcast linear channels.

“Our customers are used to channel surfing and seeing multichannel in our EPG,” he continues. “No one has done it like this. If you switch on Samsung TV, for example, and get Samsung TV Plus, it sits separate from where you watch the main broadcast channel. We wanted to integrate FAST into our existing EPG.”

That led to certain challenges because, if the channels sit within the EPG they have to be licenced by Ofcom, and therefore have to conform to Ofcom requirements.

“It’s not a huge hurdle certainly for traditional channel providers but you may need to handhold providers from outside the UK through the process.”

Dynamic advertising

“The advantage for advertisers is they get more granular data” David Bouchier, Virgin MediaO2

Aside from curated, local content and integration into the EPG, the third pillar of Virgin’s FAST strategy is monetisation. Virgin Media works with Amagi and Magnite, including its video ad server SpringServe, to manage and develop FAST services on Virgin TV, with the opportunity for Virgin Media and its channel partners to monetise FAST through targeted, dynamic advertising.

“FAST allows us to tap into new sources of advertising by accessing revenue from programmatic advertising which has traditional only been available to online.”

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Getting to that stage required Virgin build a new front end to the user interface in order to obtain opt-in consent from customers to deliver a targeted ad program.

“The advantage for advertisers is they get more granular data. If they want access to customers watching crime programming, automated programmatic advertising enables them to bid for our inventory in a much more dynamic fashion.”

The number of pay TV channels has declined as providers move to ad-supported video on demand (AVOD) which is more economical than traditional linear. FAST fills the gap.

“Everyone’s got to make money out of it and the UK with Germany hold the second biggest advertising markets in the west after the US. So there is upside potential because we are a lucrative ad market and there’s some way to go to maximise those monetisation levels.”

David Bouchier will present the fireside chat: How to bring FAST to market – fast at the IBC2024 Conference on Saturday, 14 September.

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