Media Forum: Will Virgin 1 be a success?

Should advertisers be getting excited about Virgin 1, Alasdair Reid asks.

If £100 million a year buys you a Sky One, what does £40 million get you? Virgin 1 is the short answer - but we'll have to wait until the autumn to find out more. However, the numbers, even at their most basic, don't immediately seem promising.

It is, of course, rather crude to suggest that yearly programming spend translates neatly into audience ratings, profile and your place in the general pecking order. It's talent and vision that really count, we all know that.

But an ITV or a BBC1 doesn't get much change out of a £1 billion programme budget, while an elegant little middleweight mover such as Channel 4 can rub along on half of that. Sky One is top of the second tier, as the most-watched pay digital-only channel - a fact that hasn't saved it from often savage criticism down the years, not least from the advertising industry.

And Virgin 1 isn't going to seem like a replacement for Sky One in all those Virgin cable homes deprived of the channel thanks to the continuing dispute over carriage fees. After all, viewers watch programmes, not budgets; and fans of Prison Break, for instance, won't exactly be consoled by the news that Virgin 1 has bought a programme called The Real Exorcist from the US. Virgin insists that its new offering should not ever be viewed as a potential Sky One substitute, but what are the odds of it being successful?

Can Virgin produce something distinctive and watchable? Absolutely it can, Jonathan Webb, the managing director of Virgin Media Television, responds. And he points out that it will be designed mainly to serve viewers on the Freeview platform - proof positive, if any were needed, that the Sky feud is a total red herring here. Webb explains: "Our analysis is that men are underserved in Freeview, which has lots of drama skewed towards women. Virgin 1 won't be blokey, but it will be a broad entertainment channel aimed at men, where all the growth (in digital multichannel viewing) is coming as we move towards analogue switch-off. It will showcase the best of Virgin's technical capability. We are the only broadcaster with access to the biggest on-demand platform in Europe. We also have four million mobile customers hard-wired into our business."

Will advertisers be interested? Andy Bolden, the media director of GlaxoSmithKline, remains to be convinced. He says: "These days, it's surely very difficult to fulfil the remit of a general interest channel. It feels like a one-size-fits-all type of approach, and I'm not sure that's needed any more. As an advertiser, it feels as if I have more than enough channels to choose from."

But Toby Jenner, the joint managing director of Mediaedge:cia, argues that the new channel might actually be about the bigger picture. It may primarily be a means of leveraging the Virgin Media proposition as a whole. He comments: "While I'm sure it can be a top-ten channel, I'm not convinced it will be distinctive. The bigger issue, from consumers' points of view, are the opportunities there will be to cross-sell. There will be the chance to tell people about the whole of Virgin Media - cable, telephony and internet, as well as television. That makes sense to me."

And Marie Oldham, the head of strategy at Media Planning Group, says we must make an effort to be generous here. She concludes: "We'll assume that Virgin always wanted to be in the content business - and that this isn't just a hissy fit, an expensive way of showing that it is not backing down in the Sky dispute. Virgin then needs three things.

"It has the first - a strong Virgin brand that it can build on. Second, it must invest hugely in content. Virgin 1 won't be accepted by the consumer if it fails to deliver on that. And third, it has to invest in marketing. Sky One has only reached the position it's in now because it has done just that. You'd have to assume Virgin will get there, but we also shouldn't forget that there have been some failures in the past. Virgin Cola, for instance." YES - Jonathan Webb, managing director, Virgin Media Television

"Virgin is a challenger brand that commands huge levels of expectation. People expect it to be British, witty and sharp. We have been careful to ask for the right amount of resources to meet those."

MAYBE - Andy Bolden, media director, GlaxoSmithKline

"I'm looking for clever people to come along and tell me how best I should use this sort of channel. Choice is a good thing, but I'd like to know how Virgin 1 will offer anything different for me. I need to be convinced about that."

MAYBE - Toby Jenner, joint managing director, Mediaedge:cia

"I'm not convinced it will be distinctive. The male viewer angle is smart, but you can't escape the fact the programming has to succeed. I don't think Virgin 1 will ever make or break an ad schedule."

MAYBE - Marie Oldham, head of strategy, Media Planning Group

"It will have to unearth some undiscovered gems if it is to make a £40 million programme budget work. And there's also the feeling that, these days, it's difficult to make headway with a single solitary standalone channel. I think it has bitten off rather a lot."

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