Virgin Media lost 17,900 video customers in the United Kingdom and Ireland in the first quarter of 2016, taking its total to 4.02 million. The company will introduce a new cloud-based 4K set-top box it calls EOS. It will initially have some TiVo software and a refreshed user interface. Liberty Global, which owns Virgin Media, plans to roll out EOS as part of its own Horizon system across the whole of Europe.

Virgin Media is now investing in extending its cable network in the United Kingdom. It is aiming to pass half a million more premises in 2016 and another million the following year. At least a quarter of these will be fibre to the premises.

Virgin Media serves just under 30% of the homes passed with video. Extending its network to new build homes may be one way to add customers, at less than £500 per home.

However, the company is still losing video customers. It is down by 49,000 over 12 months.

Perhaps the real question to address is why Virgin Media seems unable to sign up more customers from within its current footprint. It has around the same number of video subscribers in the United Kingdom that it had six years ago, while the penetration of pay television has increased.

The picture is rather better for broadband, which Virgin Media has seen as its ‘hero’ product, where it has a technical competitive advantage. In 12 months Virgin Media has added over 200,000 internet customers, taking its total in the United Kingdom and Ireland to 5.13 million.

Across Europe, where Liberty Global has a total of 22.58 million video customers, the company is consolidating its operations and attempting to move them to more sophisticated digital services that deliver higher value. 7.60 million of its customers are still described as ‘basic video subscribers’ that are either analogue or receive unencrypted digital signals.

Overall, Liberty Global lost 141,8000 video subscribers in Europe in the first quarter. The losses were mainly in Western Europe, with a loss of over 44,000 in The Netherlands and 42,000 in Germany.

The organic decline was mainly attributable to the loss of basic video subscribers, which accounted for 157,400 losses. There was a net gain of 19,300 ‘enhanced’ subscribers, notably in Hungary, Romania, Germany and Poland.

“We lost fewer video subs across the group, including in markets like Holland, as we push out killer apps like Horizon Go and Replay TV,” said chief executive Mike Fries.

Horizon Go is a TV Everywhere product available to over 2 million Horizon TV subscribers in four markets, offering up to 100 channels of live streaming services, recording, and programming on demand, including replay of live channels.

“We’re developing faster, cheaper and smarter devices, like EOS, which is a project name for our cloud-based set-top-box that we’re going to be trialing later this year,” Mike Fries told analysts. “It’s going to be faster, cheaper, provide more functionality than today’s Horizon box.” He said: “EOS is a set-top we intend to rollout everywhere at some point.”

Currently, Virgin Media has adopted TiVo in the United Kingdom, which he described as an “interim plan” or “medium range plan”. In Ireland, where Virgin Media acquired the former UPC business, Horizon is already being deployed.

The dependency on TiVo in the United Kingdom is further called into question as the company is to be acquired by Rovi. Yet Virgin Media has deployed TiVo to around three quarters of its customer base, leaving a large legacy to address.

Tom Mockridge, the chief executive of Virgin Media, said: “We are committed in the second half of this year to deploying EOS in the United Kingdom, we’ll put some TiVo software on it but that will give us a lot more functionality for our customers.”

The existing TiVo interface looks rather dated compared to the latest Sky Q offering, but he said that had so far had very little impact. Yet with Sky planning to launch 4K services, Virgin Media needs to appear more competitive.

Balan Nair, the chief technology officer for Liberty Global, described the EOS box as a “pretty high-powered” 4K box that will have a refreshed user interface. “Then, in the following years, our goal is to get Horizon across all of Europe,” he said, describing it as “the engine for next generation video for Liberty.”

Liberty Global ranks as the fourth largest group for digital television customers worldwide in the informitv Multiscreen Index.