Brand that's Virgin on the tarnished?

Virgin Radio's new owners appear to have decided that the famous brand wasn't worth keeping...

Last Updated: 31 Aug 2010

Indian media group Times of India, which bought Virgin Radio for £53m in May, said today that it will change the station’s name to Absolute Radio as of October 1st.  Apparently it decided that it wasn’t worth buying the rights to use the Virgin name as it looks to expand overseas – so does that mean that recent failures have taken some of the shine off the famous brand?

Well, the issue isn’t entirely straightforward. The Indian group has only bought the UK operations of Virgin Radio – so apparently the terms of the licensing agreement would have only given it the right to use the Virgin name within the UK. A spokesman told the BBC that ‘in the changing media landscape that was not a viable option for us’ - apparently the Indian group has big plans to go global under the Absolute banner, both by targeting international listeners and by expanding into areas like concerts, gaming and mobile media. Virgin Radio does have other operations around the world, so the name change prevents any possible confusion.

Nonetheless, the fact remains that most people in the UK won’t be familiar with the Absolute brand – or at the very least, they will be a lot more familiar with Virgin. The station currently has a very healthy 5m listeners here in the UK, and the last thing the new owners will want is to lose them. So changing the name is still a risky move. 

However, it’s obviously one that Times of India thinks is worth taking. And we can’t help wondering whether their decision suggests that the all-powerful Virgin brand isn’t quite as lustrous as it once was. There was a time when the public would trust anything with that bold red and white logo on the side – but now that the business has had rather mixed fortunes with some of its recent investments (like cola, trains and TV for example), perhaps at least some of that trust has been eroded? Certainly Sir Richard’s attempts to scoop up Northern Rock at a knock-down price didn’t go down universally well…

Of course it may be that Times of India just wants to plough its own furrow overseas. And it could be that it’s made the wrong call because it doesn’t understand the draw of Virgin in the UK. But we wouldn’t be surprised if consumer perceptions of the famous brand – even here in its heartland – aren’t quite what they used to be...

In today's bulletin:
Punch pulls final dividend
OECD takes wind out of Gordon's sails  
Small business banking like pulling teeth  
Brand that's Virgin on the tarnished?  
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