Virgin Media to Feature Netflix

Virgin Media is testing delivery of Netflix video to its customers using TiVo boxes. The test will involve about 40,000 of its Tivo-using subscribers.

Virgin Media said it planned to roll out the app to all of its 1.7 million TiVo customers by the end of 2013. 

The feature illustrates how hard it is to precisely describe "what" role many applications or services play in the video entertainment ecosystem.

Some would legitimately consider Netflix a distributor of content, a bit akin to a cable TV, satellite TV or telco TV provider. The difference, in that view, is the delivery mechanism. All of those customers pay a recurring subscription fee, and each of the providers assembles its own menu of content. 

Others might consider Netflix a programming network, akin to HBO. That is the way Netflix is being delivered by Virgin Media as part of its test and proposed roll out. Netflix essentially is a "channel" in that context.

It likewise is becoming harder to describe the roles other Internet ecosystem participants are taking.  Apple is a device supplier, but also a music service and content store. It may take on other roles in the future.

Google is an app provider, a device supplier, an ISP, an advertising network and a supplier of operating systems and browsers. Other roles likely will emerge. 

Microsoft is an operating system supplier, but now also a smart phone, tablet and game player manufacturer and a supplier of global communications services.  It is becoming a music services supplier. 

Some might consider the move by Virgin Media dangerous, as it enables a competitor.  It certainly is unusual, for the moment.

But Virgin Media gains by doing so. By making convenient Netflix access a part of the video subscription, Virgin Media adds more value to its video subscription customers. Most such moves by legacy providers to embrace new providers entail some risk. 

But Virgin Media clearly believes the benefits outweigh the risks, in this case.