MUST READ - Project Santa

The information in this message is not hearsay, speculation, or rumour, but comes direct from the heart of Virgin Media technical operations at Hook, passed on by a contact who is informed, reliable and will remain strictly confidential (his/her job depends on it)

This week we have all experienced a sudden change in the way Virgin encrypts its premium channels. This post explains some facts and what's to come very very soon. It probably won't cheer you up. Sorry :-(

Remember when Virgin pulled Sky channels off their feed? That was a tough choice for Virgin. It hurt Virgin and it hurt Sky. The reduced ability to convert Sky customers over to Virgin and loss of advertising audience meant that both companies wanted to renegotiate terms. Ulimately Virgin wanted to get Sky channels back for the Christmas period but this was not straight forward because Sky was concerned about the high number of non-paying customers able to view Sky channels via the Virgin network. To be fair Virgin have also been concerned, but Sky forced them via the Terms and Conditions of supply to implement a comprehensive encryption system to lock out all non-paying customers before Christmas.

Hence many months ago was born 'Project Santa'!! An internal Virgin project to provide to its customers Sky channels with enhanced encryption before Christmas. The project has several important phases. Firstly there is new advertising, which you may have seen, warning customers about the illegality of certain pieces of equipment. Then there is direct mail warning some customers directly to disconnect equipment and coupled with telephone hotline to report offenders.

The next phase was to get Sky back on the feed. This was turned on in November successfully and has put Virgin in a much better position to recruit new customers in readiness for their Christmas programming. The final phase is to address encryption and security. This is more complicated because they want to secure the network but with little or no impact on paying customers. What you have all witnessed in the last week is the first step of the program with an interim Nagravision software upgrade which will soon move the whole Virgin tv network over to Nagravision version 3. Enabling rolling daily code changes is merely an early side effect of this implementation. Virgin knew that it would be circumvented quickly, but it was designed to de-stabalise the illicit set-top-box market before Christmas and wipe out a proportion of the existing usage for non-paying customers who do not have the expertise to remedy.

What you have not seen yet is the final step and cutover to full Nagravision V3 encoding. This requires all paying customers to be issued with a new card for their set-top-box and in some cases a firmware upgrade. This is no small operation. New cards are already in manufacture and a special Royal Mail contract for guaranteed delivery before Christmas has been signed. The recent software change has enabled very limited testing of N3 to be started in about 1000 individually selected customer endpoints. So an exact date for cutover is not decided as yet and will be determined by the recarding and testing work in progress. The deadline should be before Christmas. Although contingency is in place in the event of unforseen problems.

The bottom line is that N3 will go onto the Virgin TV network very soon and this will render all non-paying cutomers set-top-boxes useless for probably quite a long while. N3 is currently in use in several european tv networks and has not been circumvented to date. Whilst nothing is unbreakable, it will be measured in months rather than weeks and may require bespoke hardware rather than just a software fix.

I have every expectation that this post will be heavily flamed and rubbished. But have in mind, many of the readers / posters here make a living from selling set-top-boxes and they are hoping for a busy December as people ready themselves for a rich Christmas programming selection on cable tv. The last thing they want is for potential customers to hear what Virgin have planned for what will become a very expensive freeview box. Utimately time will tell.

Have a very Merry Christmas one and all

......

 

That all sounds quite feasible.
The return of the Sky channels was more to do with the fact that there was to be a very expensive ( for both sides ) court hearing about the use of Virgin channels on Sky and vice versa. There was an out of court settlement previous to the hearing which allowed for both sides to use each others owned channels. ( Virgin have Bravo, Living, Hallmark etc. Living is very popular due to Most Haunted and Sky did not want to lose it )
So I think the return of Sky channels, whilst always a priority to stop the customer loss, was more of a coincidence than timed with this encryption disruption ( which they have done a few times previously )

The move to nagravision 3 would be the most logical conclusion and they would be mental not to do this at some point. I can't see it happening soon unless they can get new customer boxes at further subsidised rates.

As for the advertising, it is my belief that whilst Virgin wanted to keep the knowledge of these boxes quiet in the past there are now so many in use that the hurt is too much to outweigh the risk of informing yet more people.
They are doing it in a manner that suggest they think that people paying for services will be indignant at Joe Bloggs next door not paying and will grass him up. I believe it is human nature for VM customer to rather ask joe Bloggs to get him a box.

Just my opinion.

 

I guessed this was a new era as it had all the hallmarks of a new system.

Some of the others chose to poo poo my similar thread warning of this presumably to keep the orders flowing in!

Not good news but I am sure someone will put a good spin on this.

TIME WILL TELL!

 

it does not have all the hallmarks of a new system though. You are making assumptions again.
It has all the hallmarks of the same system going through the same things it has gone through before.
Nothing has changed and the OP is just a rumour stating that things will. As I said, they would be crazy not to change. I just don't think that they can afford to ( but then they will get to a point where they can't afford not to. I just don't see who will bankroll further borrowing ).

 

Unfortunately Bahco, you do not seem to have read (or understood) what you have had pointed out to you on the other thread. We have been hearing these 'reliable source' stories for a long time now and get fed up replying to them and pointing out what the issues are.
I think you should really do a good bit of research and find out what you are talking about, or even search through this forum and find countless threads predicting the end for these boxes. The end may come some day and maybe even you will be the one to point it out after you hear from a reliable source about what is going to happen, but as it has been pointed out to you elsewhere, we are not seeing anything new here and while i don't wish to pooh pooh your thread unless you have something constructive to say you are merely appearing to be scaremongering.

The people who know more about this than I do have better things to be doing than taking you by the hand and showing you the ins and outs of these things.

 

Virgin media restructured their financing and signed off a heads of agreement with their creditors to delay $2.7billion of loans until 2012 and be provided with a £100million revolving facility.

Details here:

http://www.cfo.com/article.cfm/12543100?f=insidecfo


The key paragraph in the above report is:

its report said that Virgin Media offered its lenders either to remain in the existing loan or to accept significant improvements to existing margins and fees in return for agreeing on a number of changes.

i.e. Virgin Media is paying for N3 by way of restructuring loans and payments on a promise that that investement will increase revenues by converting significant numbers of non-paying customers to paying customers by cutting off the ability to use illicit set-tob-boxes.

I don't intend to reply to all posters, just thought the above info was relevant to the question of How does Virgin Media pay for this upgrade.

Cheers

 

That's already old news and as I've pointed out they have merely made it so that 1.25Bn is due now in 2014 instead of twice as much 2 years sooner.
This will in no way finance any new infrastructure and considering their 3 quarter operating loss for this year.

Code:

Q3 2008 Q2 2008 Q3 2007
£m £m £m
Revenue
Cable
Consumer 610.3 610.3 607.7
Business 153.4 156.8 160.0
763.7 767.1 767.7
Mobile 145.5 143.9 158.7
Content 81.9 79.5 79.8
Total Revenue 991.1 990.5 1,006.2
OCF 325.0 332.9 341.5
Operating income (loss) 48.6 (333.1) 46.7

is so high that they won't be able to finance the debt I can't see them financing new ventures.

Btw. I'm an investor. I have all quarterly statements and operating costs in front of me.

oh and also. Restructuring debt does not release funds for new venture. It's basically saying to your creditors "we can't afford to pay you back what we agreed, so can we agree different payments due at a different date ?" and is in no way a generation of investment capital. It is usually what a company resorts to when they say "look, you'll have to accept something or we will go tit's up and you'll get none of it back".

 

I would only wish to kindly point out from published data on:

http://biz.yahoo.com/pz/081106/153966.html


SUMMARY FINANCIAL RESULTS (unaudited)
-------------------------------------

Q3 2008 Q2 2008 Q3 2007
--------- --------- ---------
GBP m GBP m GBP m
Revenue
Cable
Consumer 610.3 610.3 607.7
Business 153.4 156.8 160.0
--------- --------- ---------
763.7 767.1 767.7
Mobile 145.5 143.9 158.7
Content 81.9 79.5 79.8
--------- --------- ---------
Total Revenue 991.1 990.5 1,006.2

OCF 325.0 332.9 341.5

Operating income (loss) 48.6 (333.1) 46.7


Thats £48million operating profit in Q3
and £46million profit in Q1
£333million loss in Q2 was due to one off depreciation of assets in the mobile division and nothing to to with net, tv or phone.

Loan restructuring is done for a variety of reasons, one beneficial side effect is that it can release operating income for capital expenditure.

Virgin Media spend £146million on fixed assets for Q3, mostly on broadband investements. The N3 expenditure may not be accounted for until probably Q1 2009.

Also a revolving credit facility is a source of funds that the bought-out firm can draw upon as its working capital needs dictate.

I don't have a view inside Vergin Media's accounts, only what they publish publicly, but not only do they have the means to fund N3, they have already done so.

Thanks for listening

 

Fair play and I hope they are pap.

A bit unfair as I am only asking what is going on and giving my opinion with the evidence I have had.

I have not seen any scaremongering threads on this forum or even contributed to them.

 

LMAO have a look here then if you havent seen scaremongering threads:

http://forums.afterdawn.com/search/...threads+&ie=ISO-8859-1&oe=ISO-8859-1&sa=#1355

Take your pick!!!

 

Hey Des!

I wish they'd keep all this rubbish to one thread, it's all over the place now!

 

Hi Eva, you know these are my favourite threads LOL.

 

There must be about a dozen of them! lol! All newbies of course!

 

Better off leaving them to it, theres more important things to be doing on here than reading the same old ..... over & over

Got your pm, Cheers Eva

 

Grand, hopefully that will sort it out, let me know how you get on!

 

As the saying goes "all good things must come to an end" , but "when one door closes another one open's" , so i am fairly confident if the cable companies are able to disable the boxes there will be something new avaliable that they will have to fight against so.... "where there's a will there's a way" !!!

 

hmmmm, who says this aint also another Scare tactic from an actual Virgin rep already!!!

I tend to stay quiet on Threads like this due to the fact you just dont know.
There could be a 100's of Virgin reps on here right now and could even be them opening certain threads to try different scare tactics. Scaremongering as its been said.

For example if my Dad had just read this thread, thats it, he'd be ringing up tomorrow (either sky or virgin) and getting hooked up Legit!lol, theres so many out there that would do the same..

Ive read so many of these threads on various forums but havnt commented on many.
I know a few Guys who Work and install for Virgin and have done for Years and what they tell me and others is totally different.

All I say is We'll see wont we!

 

Here Here!

 

i also have a motorised satallite system and dragon cam (this can emulate all encryption platforms incuding kudelsky groups nagravision.) it is also capable of being loaded with firmware for decrypting foriegn tv packages obtainable from speciallist forums such as this .several foriegn pay tv providers including the german equivalent of sky (premiere world) and the spanish equivalent have switched to N3. we lost digital + (spanish) about this time last year and we still (i mean the techheads/hackers) cannot get it back and according to clever people on these forums there is no likely fix in the foreseable future coming. if this N3 card swop go's ahead this could really be game set and match.i dont know how many subscribers v.m. have but these cards cost these t.v. company's 12 euros each.even if royal mail get the cards out by xmas there will have to be a transitional period with N1 and N3 encryption running simultaneously to iron out any software glitches and incompatabilty issues especially on older stb's requiring updated software.i cant see them doing the switch at xmas and potentially switch off a good few subscribers.

 

if v*rgin are upgrading to nagravision 3, then why bother with the new "grass thy neighbour" advertising?

if this nagravision 3 has yet to be liberated, (which is why v*rgin are paying so much money for the switchover) then why spend more on advertising?