Shop flop hits Virgin Media for £55 million

Humbug: Virgin Media was forced to write down £55 million after they had a poor run-up to Christmas
Nick Goodway11 April 2012

Virgin Media today wrote down the value of its TV shopping channels bid tv, price-drop tv and speed auction tv by £55 million after they had a poor run-up to Christmas.

Chief executive Neil Berkett said no decision had been taken on whether to close the channels but added: "Basically, TV shopping is a business model and a target market which is just not suited to 2009 in the UK."

But elsewhere Berkett was pleased with Virgin Media's final quarter, with growth in cable TV and broadband customers and revenues. Referring to the bad old days when what was then NTL had a reputation for terrible customer service, Berkett claimed: "We are really starting to see people pay for quality, and I'm talking Virgin Media here."

Six out of 10 new customers now pay a premium for higher-speed broadband while more and more are using video on demand.

In mobiles, Berkett is keen to shift Virgin away from its traditional cheap pre-pay customers to more loyal and profitable contract clients. That has led to lower revenues as pre-pay disconnections almost doubled to 224,000, outstripping gains on contracts of 71,000.

Fourth-quarter revenues were unchanged at £1 billion with operating losses up from £17.8 million £50.2 million after the writedown.

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