Saturday, July 1, 2006

Canada is Cool - Richard Branson Says So

It's only appropriate to say good things about Canada on Canada Day, eh. It's our version of July 4, but not quite as steeped in history. Being one of the last outposts of British sensibilities, Canada has a great mix of British, American and homegrown values that make it a pretty cool place to live.

As I'm writing this, the England/Portugal World Cup semi is on, and everyone around here - who hasn't fled to cottage country - as all well-heeled Torontonians do (which I am not!) - is pretty much glued to the game. A LOT of England flags flying and flapping in the wind from cars going up and down Yonge St., which is very near by.

I'm mentioning this as a setup to Catherine McLean's interview that ran in the Globe & Mail today with perhaps the most famous Brit of them all (next to Beckham these days), Sir Richard Branson. He was in town yesterday
at Virgin Mobile Canada's head office for a few things, but mainly to launch the Virgin Music Festival. In true Branson style, as the article explains, he made his grand entrance to launch this festival by "rappelling from a helicopter through an open roof". Gee, maybe Jeff Citron could learn a few things from Sir Richard about getting attention! I digress....

Anyhow, he has certainly taken a shine to Canada recently, and that's consistent with some of the attention I've been trying to attract in terms of all the good things going on up here in the IP communications space. His Virgin Festival of course, is a great vehicle to support and promote Virgin's music interests, and Toronto is the first market to host the festival outside the U.K., where it's been a big event for some time. I have no doubt it will be a huge success, and will serve as a test market for more festivals across the U.S. Well, for what it's worth, the Rolling Stones have long been using Toronto as their base to prepare for their tours, and we've been the lucky recipients of many impromptu club shows by them around town over the years. Of course, it doesn't hurt that their long-time manager, Michael Cohl, lives here.

Aside from music, Sir Richard also have Virgin Mobile, and that's really what I wanted to talk about here. Vigin Mobile is Canada's best-known MVNO, which runs over the Bell Mobility network. The article notes that for the first time, yesterday, they shared some numbers about how they're doing. Virgin Mobile Canada isn't sharing revenues, but stated having sold 250,000 handsets to date, and are targeting to hit 400,000 by year end. From what I can tell, this is on par with the U.S., where I believe the leading MVNO has 3 million plus subscribers. While we don't know if they're making money, this is not an insignifcant number for Canada, and validates they are reaching a niche with some degree of success.

The real thing to pay attention to here is the marketing strategy Sir Richard discussed in the interview. To date, Virgin Mobile has lacked a direct marketing presence, so building the brand and giving consumers a real touch point for the Virgin name has been a challenge. Their plan now is to open 120 "mini stores" nation wide over the summer, where consumers can directly buy handsets and Virgin Mobile services.

Sounds like a good idea to me, and shows that you don't have to go big to succeed. These stores are a relatively low investment and will give Virgin a great channel for testing the waters for market acceptance. Much easier to go this route, which can easily be ramped up as opposed to investing heavily in megastores, which is a bit like the Vonage approach of saturating the market on a large scale and hoping to land as many customers as possible. In fact, the article notes that Virgin did just that, shutting down their only Canadian music megastore in Vancouver last year.

Sir Richard may not be everybody's cup o' tea, but for Virgin Mobile, I think he's got it just right. Only in Canada - pity.

So, the takeway for those outside Canada is that we've got a great market here, and if it's good enough for Sir Richard, it's probably good enough for you too! So, stay tuned to my blog, and I'll keep the good stories coming.

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ipcom said...

Posted by: Ravi Rao

Just a quick question here - Do you, or anyone you know use Virgin Mobile, in Montreal? What is the quality / level of service? I'm interested in getting a cellphone with them, but have no idea what exactly I'm getting into ...

Thanks a bunch!

ipcom said...

Posted by: Dan W

Just a thought. Virgin Mobile does rely on Sprints network. I heard that Sprints network is as good or even better then the big players.
Best of luck,

Kind regards,

Dan W