NETWORK : Virgin on the Net?
After records, air travel, vodka and cola, Richard Branson is setting his sights on cyberspace. By Stephen Pritchard
Monday 02 December 1996
There were no balloons or stunts: just the staged roll-out of CD-Roms, boxed in yellow but with the distinctive Virgin label, in computer software outlets and Virgin Megastores. The disks offer a three-month free trial to the Virgin network. Mr Branson obviously hopes that word of mouth will make him a serious player in cyberspace.
Virgin is no stranger to computers: Virgin Interactive is one of the largest leisure software houses. The company tried, and left, the PC marketplace a few years ago and is now the largest European manufacturer of floppy disks.
Nor is Virgin a stranger to competitive or complex markets: witness its foray into air travel and, more recently, personal finance. But cracking the Internet will be a challenge, even for Virgin's marketing might. The field is crowded, revenues are unpredictable and customer loyalty thin.
Alex Dale, Virgin Internet's publishing director, hopes to tackle at least the latter by giving users a much higher level of customer service than they are used to. The company has a charter for its services, setting out in detail what Virgin surfers can expect (for example, the capacity of its links to the United States, or the number of users per modem). It has a 24-hour help desk; engineers can come to your home to set up your PC's Internet link, and the Virgin home pages contain a detailed guide to the Internet.
Virgin Internet is a joint venture with the telecommunications firm International CableTel; that the partners are serious is shown by an investment of between pounds 50m and pounds 100m over three years. The ambition is to reach the top five service providers in the UK.
Mr Dale believes that the Virgin brand name might be enough to persuade computer owners to pick up the disk for a free trial. The rest - winning paying subscribers at pounds 10 a month for unlimited access, or pounds 6 plus 2p a minute after five free hours - depends on the service living up to its promises. "The product stands up on its own two feet," Mr Dale says. "It would be a good product, even if it did not have the Virgin name on it."
On paper, the Virgin Internet technology looks impressive. Modems support speeds of up to 56,000 baud using a new protocol called x2, pioneered by US Robotics. The backbone for the system is provided by International CableTel, which already runs the network that broadcasts terrestrial TV and Vodafone's mobile phone signals. Virgin will trial cable modems in the second quarter of next year, and broadband radio by the end of 1997. Mr Dale describes this process as "developing an alternative superhighway to BT".
On the Internet itself, Virgin's strategy is a halfway house between services such as CompuServe or America Online, which charge by time online for their own bespoke content, and straightforward Internet service providers such as Demon or Pipex.
Virgin will provide its own content, three-quarters of which is in the public domain. The rest is restricted to Virgin customers, but there is no access charge for pounds 10 subscribers. Some of the content, Mr Dale admits, will flag other Virgin brands, though he stresses that sites will not be biased towards his firm's wares. Other services include Autonomy, an intelligent agent that searches the Net for users, and the search engines Excite and Muscat.
Content does not come free, so Virgin is looking beyond subscriptions for other sources of income. The first is likely to be transactions, according to Mr Dale: shopping online, with payments taking place over the Internet. The second will be advertising. Mr Dale is certain that the Internet will move from an information source and entertainment medium to include shopping. "At some point, people will buy their groceries over this," he predicts.
For now, though, his challenge is in meeting Virgin's goal of broadening the appeal of the Internet. "The Internet, as it currently exists, is good for enthusiasts," he says. Indeed, even computer users have not embraced the Net in the numbers the pundits predicted. Mr Dale suggests that much of the Net is hype and little action. "Eighty-five per cent of the country have heard of the Internet," he says. "Of that 85 per cent, only 10 or 15 per cent have any idea what it actually is."
Even among computer owners, a minority use the Internet. According to the company, as few as 10 per cent are connected, although 40,000 people come online each month.
Mr Dale believes that making the Internet easy to use will make a real difference. This is the reason behind the home installation service currently on trial, the help pages and the software package, as well as VAT-inclusive pricing. Would-be subscribers can even order a modem through Virgin.
Mr Dale likens the development of the Net to the growth of the phone system. When phones first came along, he points out, someone else had to connect calls. He must be hoping that a substantial number of the 40,000 monthly "newbies" will choose Virgin to connect themn
Life & Style blogs
Who is Teresa Fidalgo? Debunking the fake ghost story that's got Instagram spooked
Astrological signs are almost all wrong, as movement of moon and sun throws out zodiac
The distress of some Zayn Malik fans is real, and they need support, say experts
NHS property sale could raise £7.5bn to help pay off its growing deficit and free up space for housing
Gay marriage, one year on: Couples mark first anniversary of same-sex marriages
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
The West has it totally wrong on Lee Kuan Yew
Revealed: Putin's army of pro-Kremlin bloggers
- 1 East 17 bandmember Brian Harvey in 'very desperate situation’
- 2 Yorkshire man to win £10,000 off a £1 bet placed six years ago if Dan Jarvis becomes Labour Party leader
- 3 Vladimir Putin says Russia will fight for the right of Palestinians to their own state
- 4 Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
- 5 The West has it totally wrong on Lee Kuan Yew
£6 per hour: Recruitment Genius: This is an exciting opportunity to join a gro...
Negotiable: Recruitment Genius: A Service Delivery Manager is required to join...
£12000 - £24000 per annum: Recruitment Genius: A opportunity has arisen for a ...
£32000 - £38000 per annum: Ashdown Group: A successful accountancy practice in...