Virgin Launches Net Radio Company

BOSTON (06/01/2000) - Virgin Entertainment Group yesterday launched Radio Free Virgin, an Internet radio company, which is the first of a number of online investments to the tune of US$247 million due to be made by Richard Branson, founder and chairman of Virgin Group PLC.

The Net radio company is a way to integrate Virgin's online offerings with the company's Megastore music shops, according to Virgin.

"We're trying to build a loyal customer base and brand awareness, and we want to drive people to the site," said Lori Levin-Hyams, vice president of corporate communication for Virgin Management Ltd.

Users can download the Radio Free Virgin player free of charge to their desktops from http://www.radiofreevirgin.com/ to listen to what Virgin claims is "CD-quality" music. Already, around 500,000 players have been downloaded, Virgin said.

Listeners to Radio Free Virgin can hear music from channels such as ‘In Rock We Trust' and ‘Hip Hop 101,' developed by Virgin Megastore disc jockeys around the world. Virgin hopes that listeners will then order the music they like from Virgin Megastore Online.

Some of the channels will feature cutting-edge music from Virgin Megastores in London, Los Angeles, New York, Paris and Tokyo, but others will relay music from smaller markets, allowing the kid-next-door's garage band to be heard all over the globe, Virgin said.

After selling 49 percent of his airline, Virgin Atlantic Airways, to Singapore Airlines, Branson decided to invest $247 million into Internet enterprises. The Virgin chairman intends to divide the money up between dot-com companies like Virgin Net, a U.K. ISP (Internet service provider), Virgin.com and Virginmega.com., Virgin said.

Zack Zalon, general manager of Radio Free Virgin, said that Net radio has more appeal for listeners than traditional radio which is becoming more geared towards advertising and therefore features less music.

"Radio Free Virgin mimics radio online but with a much higher value," Zalon said. "Radio Free Virgin is using the Internet as an incubator, soon it will be applicable to wireless applications, even video."

Malcolm Maclachlan, media and e-commerce analyst for market research company International Data Corp. (IDC), said that Virgin's idea is a good one, but is too late given the predominance of Amazon.com Inc.

"Amazon has locked everything up," Maclachlan said. "Virgin is going to become the music site where you can get anything, and it's a well known name, but there are other radio sites out there and they all link to Amazon.com."

Virgin Group, in London, is at +44-171-229-1282, or at http://www.virgin.co.uk/.

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