In view of some of the recent threads on this mailing list, I thought you
might be interested in the following recent article from the New York Times.

D. Huffman



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November 28, 1996

United Kingdom Witnesses The 'Virginization' of the Net

By BRUNO GIUSSANI 

LONDON -- Every month the London-based Internet Magazine runs a six-page
updated list of all the Internet service providers, or ISPs, in the United
Kingdom. And it is real news: from the customer's perspective, the market is
like quicksand. Prices and coverage change constantly, mergers and failures
are reported weekly, and "almost daily we receive e-mail from a new ISP
asking to be added to the listing," the editorial staff reports. 

Some 200 companies are actually fighting for a share of Britain's Internet
market, estimated at about 3 million users to date. 

The latest entrant into this already overcrowded and fast-growing market is
the aeronaut and rule-smashing entrepreneur Richard Branson, the man behind
the many Virgins: Airways, Megastores, Cola, and several dozen other
companies selling everything from condoms to computer games, books,
television and radio programs, holiday packages, personal pension schemes,
wedding outfits and much more -- all of which add up to $2.5 billion in
annual revenues worldwide. 

Branson's VirginNet is scheduled to go live in Britain on Thursday and he
has hinted that the service might be expanded to other European nations in
1997. 

A joint venture of Virgin Communications (which holds 51 percent of the
shares) and Britain's fourth-largest cable operator, CableTel, VirginNet
labels itself as "the first customer-friendly Internet access service." A
recent news release adds: "Despite the hype and clear customer benefits, the
Net hasn't taken off for the family or person in the street." It goes on to
promise that "the Virginization of the Net will change that." 

Just what is the "Virginization" of the Net? 

"We've spent months designing software that you can install and use without
knowing anything about the Net," said the service's marketing manager,
Martin Keogh. Within 10 minutes after putting the disk into the drive, the
user will be visiting his first Web site." 

It will take substantially longer than that for Mac users, however, since
VirginNet's Apple version is vaguely promised "in the near future." 

For Windows users, the VirginNet package will ship on CDs distributed
through Megastores and other retail outlets or bundled with US Robotics
modems. It will include a "virginized" version of Netscape Navigator as well
as GlobalChat, RealAudio and Shockwave. 

The service will also include parental control and filtering software, Keogh
said, because "a lot of people are scared" by reports of pornographic or
other objectionable material online. "We're going to take a strong stand and
avoid anything that's illegal," he said of VirginNet, which is being
marketed to home users. 

There will be two pricing options: unlimited access for £10 a month (about $
16.50), or four hours for £6, plus 2 pence for each additional minute
online. The service will also offer a free 24-hour, seven-day telephone hot
line. 

"It couldn't be simpler, and it couldn't be faster," Branson said, "because
we've focused on the essentials: VirginNet is an efficient, easy-to-use
service." Rather than being about technology, he added, the service is
"about getting more out of life." 

This is not a new promise among Internet service providers. In fact, while
Branson is widely considered a gifted marketing strategist, nothing
announced so far promises to differentiate VirginNet from the rest of the
ISP pack. 

Keough acknowledged: "In this first stage we'll only sell Internet access
and the content that's available out there. But we'll do it in a Virgin way:
friendly, fun, entertaining. We'll make the Net more relevant to the user by
helping him to find the information he needs within a personalized interface." 

The company hopes to achieve these qualities with a combination of
technologies. It will be the first European ISP to use Broadvision's
One-to-One, which delivers customized pages to users based on their
profiles. VirginNet will combine One-to-One with search engines from Excite
and Muscat. 

But even in that, the service will not be unique in Europe for long; The new
Swiss Telecom's Internet venture, Blue Window, has also recently signed an
agreement with Broadvision. 

Sometime in spring, the company says, a London-based editorial team will
start delivering exclusive content for VirginNet's customers, including
news, sport results and radio broadcasts. Internet-based education services
will be provided through a partnership with RM, a major supplier of
information technology to schools and colleges in Britain. 

At about the same time, Branson may bring other Virgin companies into the
picture. Computer games developed by Virgin subsidiaries can already be
found online at Sound and Vision, a new Web site for children. Keogh was
unwilling to give more details, but it is clear that by combining Virgin
Airways reservations with Virgin hotels, Virgin holidays packages, Virgin
movie theaters or Virgin vouchers, a compelling Internet-based global
booking and shopping system would be created. 

Yet, Keogh insisted that the retail services "will not be Virgin-exclusive." 

Whatever the eventual success of such plans, right now VirginNet may have a
tough time fighting for market share. Staff members at the London
headquarters say they are convinced they'll be able to make the difference
by leveraging "the Virgin feeling and brand." And in fact, the company's
branding could make a difference. 

Most of Britain's current ISPs are less than 18 months old, with little or
no track record. Although well known within the Internet industry, even big
trucks like CompuServe, Pipex (a branch of UUnet) or Demon don't offer
consumers the immediate confidence often associated with a recognizable
name. Virgin is probably one of the most successful brands in British
history, and at a time when potential subscribers are rushing to get online
but increasingly confused about picking an ISP, a familiar name may make all
the difference. 

Competitors like Richard Woods of Pipex argue that "the idea of transferring
a brand that has been successful in a business sector to another area does
not mean an automatic transfer of success." 

"The customers are increasingly looking for expertise," Woods said, "and
Virgin doesn't have much of it." 

At Cocoon Internet Services, Latif Horst, too, expressed doubts about the
VirginNet launch's representing a threat to his business. "British Telecom
has entered the game about a month ago," he observed. "There you go for a
familiar and well-known name. But the BT service is very poor, and their
easy-to-install software is terrible. This market is about much more than
just brands." 

And James Gardiner, the marketing manager for Demon, was recently quoted as
telling Internet Magazine: "When BT launched its Internet service people
asked me if I was concerned about a recognizable name coming into the
market. We saw a huge increase in our subscribers without any new
advertising, and that's because BT legitimized the market." 

VirginNet does not yet have the content of America Online or even of
Microsoft Network, nor can it claim the technical expertise of Pipex.
Nonetheless, as a name that suggests an umbrella for successful businesses,
some observers say, it may denote a generalized notion of quality. 

"Virgin is one of the only brands not tied to a specific good," Philippe
Villemus, the marketing director of the Soccer World Cup 1998, wrote in a
recent book. The same could net be said of an Internet service labeled
Lacoste or Pepsi: those brands cannot be used for things too different from
their original product -- shirts and sodas. 

Virgin, Villemus added, "is a name that evenly conveys youth and
aggressiveness; it can be used on any product that needs to pull these
strings." 

So why did Branson initially pick the name Virgin in the late 60s when he
launched Virgin Records -- no longer owned by his group, incidentally? 

"Because we were new in this business," he said. 

Sounds familiar. 

Bruno Giussani is the editor of Webdo -- Swiss News On Line. 



VirginNet <http://www.virgin.net>

Main Virgin Home Page <http://www.virgin.co.uk>

Sound and Vision <http://www.vsv.com>


Copyright 1996 The New York Times Company 



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