David Farnor | On 10, Sep 2013

Netflix is teaming up with Virgin Media to enter UK living rooms.

Netflix is set to pilot its video on-demand service through Virgin Media’s Tivo customers, giving them a chance to view titles through their set-up boxes – the first time Netflix has ever been available through a major pay-TV provider.

Virgin Media will send out letters this week to 40,000 of its Tivo subscribers inviting them to download and test the VOD app. A Netflix subscription will be required to view the content.

If the pilot is a success, Virgin Media aims to roll out the Netflix app to all of its Tivo customers by the end of 2013 – giving Netflix an additional 1.7 million screens to stream content to.

According to the BBC, Virgin may offer Netflix as “part of a bundled service”.

The merging of the service, which was previously only available via computers, computer consoles or other separate devices, with a pay-TV set-top company further blurs the lines between traditional television and streaming on-demand. With VOD touted as the future of consumption, it also marks an interesting acknowledgement from Netflix that cable TV is something they consider here to stay.

The union is a smart move from Virgin Media. Customers will be able to search for titles on Netflix through the same on-screen TV guide their use to find pay-TV programmes (House of Cards and The Usual Suspects would both appear, for example) – a decision that shows Virgin considers it necessary to adapt to an audience who now watch programmes on computers, tablets and phones. The company has proven flexible where it counts in the past. It has already joined with TiVo and, recently, BT to provide its sports channels to cable customers.

“We’re delighted to be bringing yet another groundbreaking service onto TV screens in millions of Virgin Media homes,” said Dana Strong, Virgin Media’s CEO, in a statement.

It’s also a clever play from Netflix, giving the company a bigger audience – or, at the very least, an easier way to integrate into customers’ existing viewing habits. If Netflix can become part of the living room furniture among those who do not use a PS3 or Xbox 360, it can capture a new demographic, giving it a leg up on its Amazon-owned rival LOVEFiLM and Tesco’s pay-per-view service, blinkbox. The market became more competitive this year, as Wuaki.TV entered the game. The platform, which offers a subscription service at half the price of Netflix as well as pay-per-download titles, is owned by Rakuten, the Japanese giant known for Play.com and Kindle ebook rival Kobo.

The news that Netflix will be available through an operator’s box first time has seen the company’s shares hit their highest levels since July 2011, according to Bloomberg. Their value has more than trebled this year.

In the words of House of Cards: “That’s how you devour a whale. One bite at a time.”

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