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Has Virgin Media screwed up its launch?

Posted in Media February 19th, 2007 by jasongoodman

Two new media businesses have launched in the last month. One, Virgin Media, is from an old-school entrepreneur. The other, Joost, is from two new-school ones.

You can tell a lot about a new company by the way it launches itself. First impressions count. So what are my first impressions of these two new businesses who are both aiming to take entertainment into the 21st century?

Let’s look first at the launch of Virgin Media. Branson has always wanted to get into TV, but he’s gone even further and launched a quadruple-play media company instead. Well, when we say launched a new business, what he’s actually done is merge a bunch of existing businesses to offer fixed line telephony, mobile telephony, broadband access and cable TV to its customers.

I’m a customer of one of the swallowed-up businesses, broadband company Virgin.net, so I was curious to see what the new merged entity had to say for itself. A very glossy piece of direct marketing popped through my letter box a couple of days ago (no email though, which I thought was a bit odd given that was the way the Virgin.net used to talk to me). It was an expensive-feeling A4 brochure, with nice photos of attractive young people enjoying media experiences. I started reading, but after about 5 pages of bundles and tables, M this and XL that, I was already lost. The offer was very confusing, and I didn’t understand the benefit of signing up with Virgin Media.

On the same day they also wrapped the free Metro newspaper, so I thought I’d try again. There were fewer bundles on offer, but on the inside back page was the sting: The full package would cost me £125. Per month! My first mortgage was close to that! I don’t care if I’m already paying more than that to four different companies; it’s a hell of a lot to give to one.

Then that evening I saw a series of TV ads. Big Hollywood star; script designed to grab your attention; heavy media weight. So far, so old school. But worse than the unwelcome interruption in my otherwise pleasant evening, was the fact that there was nothing there for me, an existing customer. Haven’t these guys watched a bank advert in the last two years? (Or a telecoms advert for that matter. Oh hang on…) It’s all about your existing customers these days. Customers are cool. Retention is the new acquisition.

And then my colleague Glyn sent me a link to Iain’s blog. Iain is also an existing customer of Virgin Media, and he attempted to stay an existing customer when he moved house. But he suffered the mother of all customer service disasters in trying to do that. (Interestingly his problem was resolved when the Complaint Reduction Manager from Virgin Media read his blog post and sorted it directly.) Now they have to find a way of responding to peoples everyday calls.

So there’s my Virgin Media launch. Confusing direct marketing, TV ads that left me cold, a scary value proposition, and word-of-mouth reports of catastrophic customer service. And it all feels distinctly tired and like they don’t really get the internet. Hmm.

So let’s look instead at a completely new kind of media company. Joost is the new business from the clever blokes who created internet telephony giant Skype. And they’re taking quite a different approach.

They’ve existed as a business for over a year, but operated in stealth mode for most of 2006. They assembled a group of engineers and quickly got on with building a new TV platform. Towards the end of last year, they quietly started talking about themselves ‘off the record’ to a few key bloggers and influencers as ‘The Venice Project’. They chose to use a project name rather than the eventual brand name, as they knew the platform wasn’t quite ready. Quickly the community of technology developers and early adopters who scout blogs for news of disruptive new business found theveniceproject.com and applied to become beta testers. The lucky few got an early version of the software, and got involved in helping to develop it, reporting bugs and suggesting improvements.

In early 2007 the platform was working pretty well, so they wanted to get some more people onto the platform. To make the necessary noise they told their blogger friends a little bit more about themselves – their name, Joost, and their proposition: full screen television on the internet. The blogosphere went mad with anticipation. Joost.com went from zero to the 500^th most popular site on the internet in 2 days. And they now have a huge waiting list for invitations for their still-in-development service.

So what’s all the fuss about? Well it’s free. Due to its peer-to-peer technology, its capacity for content library is unlimited. It works like TV, with a cool EPG interface rather than complex web navigation. And it puts the viewer in charge. If you want to watch a show about cats, type ‘cats’ into the search box. Click on one of the results, and you’re watching a TV show about cats. Once you’re watching, you can chat about the show with any other cat lovers who are watching that channel. There’s a great article in this month’s Wired that tells you everything else you need to know.

So what did Joost get so right with its launch? Well, like I said, first impressions are everything. Joost is allowing itself to be discovered by the people who are most receptive to it. They’re building something genuinely new, not just bolting old bits together. They’ve started with a disruptive, customer-centered proposition, and the marketing flows from that (not the other way around). They’re building a team of evangelists who will do lots of the marketing work for them.

The sad thing is, this recipe sounds a lot like what Virgin used to do in the good old days. The brand grew and became powerful because it did something new and disruptive. People felt it was a personal kind of company that ‘got’ them. Customers recommended it to other people in pubs, because they felt like they’d discovered it, they had an emotional investment. The brand didn’t do big interruptive marketing, they had a conversation (like the still-brilliant ‘pinched from Virgin Atlantic’ on the bottom of the Upper Class salt and pepper pot).

They were doing a very modern kind of marketing 20 years ago. How did it go so wrong that they’re now doing dumb ‘grenade to catch a fish’ image advertising for an offer that’s distinctly lacking in substance?

Disclosure: My agency Albion worked very happily with Virgin.net for a couple of years, and I was brought up as one of those Virgin evangelists who couldn’t help evangelise when there was something to evangelise about. Joost are a current client. And this is a personal take on two businesses I’m interested in, not PR puff for Joost (they hardly need it).