Can Virgin Megastore penetrate the Web?

Media mogul Richard Branson jumped into the Net retail game last week with Virgin's e-commerce play, Virginmega.com.

The online version of the Virgin Megastore offers the usual online music retail fare, with a twist of the Brit attitude that has earned the Virgin brand something of a cult following in the UK. The question is, cheekiness aside, how does Virginmega.com hope to survive against Net giants Amazon.com and CDnow?

Speaking to The Standard from his country estate outside London, Branson was short on the technical details of the project, but long on spirit. "We have a site that comes alive in a way Amazon doesn't," said Branson. "Our prices will be better than theirs and we have a breadth of knowledge in other areas that will also strengthen us."

The hard part will be to appeal to people living in, say, Des Moines, Iowa, who may never have been to an offline version of the Virgin Megastore.

"That's our challenge," Branson said. "But we're better known than other brands that have become famous on the Net were when they first went [online]."

Furthermore, he added, Virgin has street cred with people who really know about music - tastemakers, if you will. "People like that spread it to others," Branson said. He noted that the Virgin brand is also well respected in the music industry, having broken Lenny Kravitz and the Spice Girls, among others, through the Virgin record label, now owned by EMI.

The site's "insider" strategy is evident from its first-day offerings. The idea is to appeal to fans' glamourlust through original features and photography of their favourite bands. The front page pulls the user in with magazine-like teasers to articles, then provides an easy link to relevant CDs for sale.

"We'll be different also in that we'll tell people what they shouldn't be buying," added Branson. "We'll put our thumbs down on things that really suck."

In addition to news and information about artists, a 12-channel, streamed version of Radio Free Virgin offers broadcasts by popular DJs in many genres of music from around the world. A "VIP Lounge" offers registered members a discount and site personalisation capabilities.

Customer concerns

The most obvious question is how Virgin intends to translate the stores' popular listening stations to the Web site. What many consider the key to the popularity of Virgin Megastores is that customers have a chance to listen to new releases on headphones before shelling out their 16 bucks for the CD. This feature could be problematic online.

Streaming a specific track or album "on demand" is currently held up by limitations established by the Digital Millennium Copyright Act, which for now has blocked online radio stations like SonicNet's Flash Radio from offering too much personalisation. The major labels dislike the idea of an online "jukebox", fearing such a high level of personalisation will kill consumers' desire to buy CDs. Virgin is aware of the matter, and at launch has no streaming version of the listening station.

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