Liberty Global ended 2013 with 21.8 million video subscribers, down 294,000 over the year, to creep slightly ahead of Comcast, which lost 305,000, ending up with 21.7 million. That makes Liberty Global the largest cable operator outside China, for the moment. Only 13.2 million of its cable television customers were digital, with 7.6 million still receiving analogue services, which could be seen as a growth opportunity.
Liberty lost 234,000 analogue video subscribers in 2013 but gained 149,000 digital video customers. Virgin Media, its largest operation, lost over 45,000 television customers in 2013, although it upgraded 670,000 to TiVo.
With TiVo on Virgin Media in the United Kingdom and Horizon TV rolled out on its Dutch, Swiss, Irish and German operations, Liberty Global now has 2.5 million customers on advanced services, just under one in five of its digital video subscribers. It is still not clear whether the group will aim to consolidate on a single platform or continue to support both TiVo and its own Horizon service.
The majority of those 2.5 million homes are on TiVo with Virgin Media, which now has 2.0 million, or over half of its 3.8 million television homes. There are now 210,000 Horizon TV homes in the Netherlands, 150,000 in Switzerland, and 75,000 in Germany.
Among other operators in Europe, Com Hem in Sweden has 38,000 TiVo homes, out of 597,000 digital television customers, while Ono in Spain has 259,000, out of 795,000 video subscribers.
With fewer than half a million Horizon homes out of 8.3 million digital cable customers across Europe, excluding its recent Virgin Media acquisition, Liberty has a long way to go to upgrade its platform, or a significant opportunity. There is an even larger challenge, or opportunity, to upgrade another 7.6 million homes that are still on analogue cable television.
The main aim is to increase ‘revenue generating units’ by selling more services across its customer base, including broadband. Although over half of its customers take more than one service, over ten million currently take only one, which the company describes as “a significant growth opportunity”.
Mike Fries, the chief executive of Liberty Global, described 2013 as a “watershed year” for the company. “With the acquisition of Virgin Media, we significantly enhanced our scale which now encompasses 47 million homes passed and over 24 million unique customers.”
If its results are adjusted to include Virgin Media for the full year, annual revenues for Liberty Global exceeded $17.3 billion.
Liberty is also aiming to expand its European empire further, reaching an agreement to acquire Ziggo in the Netherlands, creating a national operator with around 1.9 million digital television subscribers.
However, Comcast will overtake Liberty Global again if its proposed merger with Time Warner Cable is approved, giving it around 30 million digital cable television customers in the United States.
Meanwhile consolidation is likely on an even more massive scale in China, with long-term plans to create a national cable television network.
Nevertheless, Liberty Global is establishing a footprint across Europe, in a dozen countries, from Ireland to Romania. While each country has its own character, there should be economies of scale across such an operation, nominally based in the United Kingdom.