Virgin: End of A Brand?
This week, the Times of India bought the UK’s Virgin Radio; it will be run by London based Absolute Radio. It has caused a few ripples, not least because many media luvvies in the UK saw India as a target for expansion, not the other way round.
Virgin Radio was owned by SMG, also owners of STV – the ITV stations in Scotland. The radio channel has performed poorly under SMG’s ownership. For the first time its listening figures are at the bottom of the heap of UK national commercial stations. SMG’s official web site still links to Virgin Radio Groove which closed last year. Overall, SMG has blown around £150m on Virgin Radio yet failed to come up with a decent marketing budget.
There are only three national commercial radio stations on analogue in the UK, of which Virgin Radio is one. The recent closure of national DAB radio stations Core, Live and theJAzz means Virgin Radio is still one of the few players in the national marketplace and a household name.
This would imply that Times of India was buying the Virgin Radio brand with a view to turning it around. Not so. Times of India have refused to pay the licensing cost for the name “Virgin Radio” – reckoned to be £8m.
There is a feeling that the brand Virgin is no longer hip and trendy, and it’s not an asset when you’re building a new popular music for 30-somethings. More than that, however, is the Times of India’s concern that the strings attached to the Virgin brand are just too great.
Here we have a great opportunity for the radio station formerly known as Virgin to make a new start. We can only assume that part of that start will be to make use of the web, video, forums and social networks. Unfortunately the Virgin license would mean that the brand name could only be used in certain ways to avoid conflict with other licensees – which may preclude, for example, the use of video on the web.
Virgin Radio was totally outclassed by BBC Radio 1 on social networks. While other media outlets were spending tens of thousands on billboard advertising and TV spots, Radio 1’s Chris Moyles show opened a Facebook page for nothing. Thanks to remorseless plugging on their weekday show, also free, they now have close to half a million fans. As a percentage of the population, they’re doing much better than Barak Obama on Facebook. That’s half a million people who have stood up in front of their friends and said “I love The Chris Moyles Show”. It’s half a million people who have explicitly allowed the Chris Moyles show to message them on Facebook with news every week.
Even this limited example is a demonstration of the power of social networks in marketing. It’s also makes clear why the last thing Times of India need is to start the relaunch of a business with one hand artificially tied behind its hypothetical back.
Which in turn raises questions for the Virgin model as a whole. We’re in a Web 2.0 world, where government is Twittering and bloggers get news before newspapers. Every business now needs to access social networks and user generated web sites. It’s a cost / benefit analysis. Is having the Virgin name attached to your business now losing a business customers and money?
Is Virgin a 1.0 brand concept in a 2.0 world?
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