Magazine article Marketing

Media Analysis: Virgin Gets in Tune

Magazine article Marketing

Media Analysis: Virgin Gets in Tune

Article excerpt

After tying up with NTL, Richard Branson is considering a return to music TV to take on the might of MTV.

The ink is not yet dry on the NTL-Virgin Mobile merger, but already there are reports that Virgin founder Sir Richard Branson is planning to launch a music channel to take on the MTV machine.

If any company has the credentials to create a credible challenger channel, it is Virgin. Given its strength in music retail, live events, digital downloads and radio, its lack of a branded TV offering seems an oversight.

But what does it take to compete in a world of converged media where AOL, Apple, Google, MySpace, Napster and the music labels are already encroaching on MTV's turf?

Patrick Johnston, head of business development at Entertainment Media Research, says there is a business case for Virgin to launch a TV channel, but not if it expects it to be a stand-alone profit centre. 'Virgin could try the basic video-channel approach,' he says. 'But the audiences are so small and fickle that there is hardly any ad money there, unless it sells across channels or media like Emap, whose channels are manifestations of its magazine and radio brands.'

Alternatively, Virgin could adopt the MTV model, with a flagship entertainment channel and supporting channels viewers can default to. 'But the programming needed for that is incredibly expensive, even for a company like MTV that can amortise its costs across dozens of international markets,' says Johnston.

Brand benefits

Branson will know this, because he has owned a 24-hour music channel before, which he sold to ITV in 1987 (see box). So instead, Johnston believes that a Virgin TV channel would be focused on harnessing the brand for the benefit of the whole business. 'Branson is a master at this. Audiences visit the Virgin Radio website even if they don't like the music, simply because of the brand,' says Johnston. 'And Branson defied expectations by (making a success of the) Virgin Mobile business.'

Viewed this way, a Virgin TV channel could do two key things. First, a Virgin channel exclusive to NTL - complementing, not replacing, MTV - might encourage customers to subscribe to NTL rather than SkyDigital.

Second, it would give Virgin a chance to drive audiences back to cash-generating businesses such as shops or digital downloads, says Mark Cullen, chief executive of branded TV company Enteraction.

'If it can pick up video rights for a decent price, it might be worth running a channel as a 24/7 branding exercise,' he adds.

A spokesman for Virgin says it is too early to comment on its plans, but maybe Branson is not thinking in terms of a linear music channel, says Cullen.

'For the Virgin Group, a transactional service could work. It would be possible to design an interactive shop front that is entertaining but also sells tickets to events, for example.' It might even offer on-demand music in the mould of BT Vision, the hybrid broadband TV platform launching later this year, which plans to offer 500 concerts and performances as an on-demand service.

Even if Virgin does not become a direct competitor to MTV as a TV channel, there is no doubt that any new offering will contribute to the pressure being piled on the broadcaster.

Channels such as Emap's The Box - one of 12 non-MTV music channels on the Sky EPG - may not have the same scale of ambition as MTV, but they drain audience. …

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