Ted Hall comments on the announcement that Virgin Media recorded its first-ever profit in 2011

The strong performance turned in by Virgin Media in 2011, with the company generating its first ever profit, caps a major turnaround for cable TV in the UK, which has gone a long way to shedding the poor public image that plagued the technology in the NTL-Telewest days. Virgin’s strategy of playing to its strengths – a powerful and increasingly reliable network – and acknowledging its weaknesses – the content business that it successfully offloaded to Sky – is bearing fruit and the operator is well-placed to build on its success.

While Sky will always likely remain the dominant force in pay-TV in the UK, Virgin Media has positioned itself to compete strongly with cable products that have – perhaps for the first time – real consumer appeal. An advanced – though by no means perfect – TV platform to rival Sky+ HD in the form of Tivo, supported by fast broadband speeds that deliver what they promise, are proving popular and, crucially now, profitable.

The success of Virgin Media in the UK, a market where cable operators have failed to emulate the dominant positions achieved by some of their European counterparts, also goes a long way to silencing those that had forecast the cable business’s demise in the OTT era. Indeed, cable operators, the owners of the all-important, increasingly smart “dumb pipe” have, as Virgin Media’s performance pays testament to, reason to be positive in a time when many players in TV continue to struggle.