Thanks to consumer demand for catch up tv on demand, UK cable company Virgin Media have managed to halve its money loss.

Around 25 viewers every second are using Virgins service to catch up on missed tv shows like EastEnders on their TV set, rather than via a pc screen.

Coupled with faster broadband, Virgin customer numbers increased 8,100 to 4.74 million in the three months to the end of September.

That’s compared to a loss of 26,200 customers the previous quarter. Sales were also up 1.3% to £953m and losses down to £60m. However its a long way behind the 94,000 new customers at rival Sky TV had during the same period of time.

Neil Berkett of Virgin was delighted with growth in the tv-on-demand service, allowing users to watch BBC and Channel 4 shows as well as Hollywood movies. The service hit 66 million average views a month during the quarter, 46 per cent higher than the previous year.

He said: “We differentiate ourselves with the VoD product; it is really coming to the fore. It is a real growth prospect for us and we have barely scratched the surface.”

Virgin is set to face increased competition in on-demand programming next year. BSkyB is to launch a VoD service next year, while the BBC, ITV, BT and Five are working on Project Canvas, a move to bring internet TV into the living room. Mr Berkett was undaunted, saying: “Bring it on,” he said “This is a world that cable was made for.”

Revenues at Virgin Media rose 1.3 per cent to £953m in the three months to the end of September, up from £941m the previous year, and beating analyst expectations by 1 per cent. It added 17,800 net new customers to services excluding mobile over the three months. Jerry Dellis, an analyst at JP Morgan, called the results “very strong”.

Mr Berkett said: “The growth was really pleasing as it was not just through cost cutting.” He added pay TV services benefited from people staying at home more: “Pay TV is good value for money and broadband is a necessity.”

Also attributed to the rise in revenues is the group’s success in attracting “higher value customers, who buy more from us and stay with us longer”. Average revenue per subscriber grew 6 per cent to £44.24. Virgin’s services cost, on average, £18 each. Carphone Warehouse’s cost about £12. Mr Berkett said the rise in revenues shows viewers were happy to pay more for quality: “We are concentrating on value for money not on the cheapest.”

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