Astral tests Virgin branding by Grant Robertson
Source : Globe & Mail
August 26, 2008
Richard Branson never saw a product he couldn't slap his brand on. From airlines to restaurants, cola to credit cards and health clubs to hotels, all have carried the banner for the billionaire entrepreneur's Virgin empire throughout the world.
Now Canadian radio is getting the Virgin treatment.
In a first for Mr. Branson's ever-growing business, his Virgin Radio division is entering the North American radio market through a deal with Astral Media Inc. that will see the Canadian company's top-40 station in Toronto fly the Virgin name, likely followed by stations in other markets across the country.
Astral will pay an undisclosed sum for the rights to use the Virgin name, and will get access to content such as syndicated shows and events such as live music festivals.
Toronto's Mix 99.9 station switched to Virgin Radio 999 yesterday, and the company will be watching to see if listeners tune in before taking the strategy across Canada.
"Our reaction right now is let's wait and see what happens in Toronto. And if that's positive, as we all expect it will be, we can look at other markets," said Jacques Parisien, president of Astral's radio division.
Mix 99.9 was one of 52 stations Montreal-based Astral picked up last year when bought Standard Broadcasting Ltd. for $1.1-billion, making it Canada's largest radio operator with 82 stations.
"The stations that we bought were good stations, were performing well, but not way up there," Mr. Parisien said.
"Our commitment was to energize them and make the investments appropriate for them to become leaders in their respective target groups."
Details of the agreement are confidential but it is believed the brand arrangement will last about 10 years.
Mr. Parisien said the cost of using the name fits within Astral's marketing budget and will not cut into profit margins, a number analysts watch closely.
The deal represents the latest foray into Canada for Virgin, after it began offering cellphones in 2005 and opened book and music stores in airports. It also sponsors the Virgin Music Festival, which makes several stops across the country. Its charity, Virgin Unite, is also active in Canada.
Despite those businesses, Canada is relatively unexplored territory, a Virgin executive said.
"If you went to the U.K. or Australia you would probably find 10 to 15 different Virgin businesses," said Andrew Black, chief executive officer of Virgin Mobile Canada, who is in charge of finding other branding ventures for Canada.
The Virgin Radio announcement comes as commercial radio revenues are growing in Canada. In a new report yesterday, Statistics Canada reported revenue for the industry grew 6 per cent last year to $1.5-billion. Of that, FM stations generated more than 78 per cent of ad revenues, and nearly 95 per cent of pretax profits for the industry.
© Globe and Mail
Now Canadian radio is getting the Virgin treatment.
In a first for Mr. Branson's ever-growing business, his Virgin Radio division is entering the North American radio market through a deal with Astral Media Inc. that will see the Canadian company's top-40 station in Toronto fly the Virgin name, likely followed by stations in other markets across the country.
Astral will pay an undisclosed sum for the rights to use the Virgin name, and will get access to content such as syndicated shows and events such as live music festivals.
Toronto's Mix 99.9 station switched to Virgin Radio 999 yesterday, and the company will be watching to see if listeners tune in before taking the strategy across Canada.
"Our reaction right now is let's wait and see what happens in Toronto. And if that's positive, as we all expect it will be, we can look at other markets," said Jacques Parisien, president of Astral's radio division.
Mix 99.9 was one of 52 stations Montreal-based Astral picked up last year when bought Standard Broadcasting Ltd. for $1.1-billion, making it Canada's largest radio operator with 82 stations.
"The stations that we bought were good stations, were performing well, but not way up there," Mr. Parisien said.
"Our commitment was to energize them and make the investments appropriate for them to become leaders in their respective target groups."
Details of the agreement are confidential but it is believed the brand arrangement will last about 10 years.
Mr. Parisien said the cost of using the name fits within Astral's marketing budget and will not cut into profit margins, a number analysts watch closely.
The deal represents the latest foray into Canada for Virgin, after it began offering cellphones in 2005 and opened book and music stores in airports. It also sponsors the Virgin Music Festival, which makes several stops across the country. Its charity, Virgin Unite, is also active in Canada.
Despite those businesses, Canada is relatively unexplored territory, a Virgin executive said.
"If you went to the U.K. or Australia you would probably find 10 to 15 different Virgin businesses," said Andrew Black, chief executive officer of Virgin Mobile Canada, who is in charge of finding other branding ventures for Canada.
The Virgin Radio announcement comes as commercial radio revenues are growing in Canada. In a new report yesterday, Statistics Canada reported revenue for the industry grew 6 per cent last year to $1.5-billion. Of that, FM stations generated more than 78 per cent of ad revenues, and nearly 95 per cent of pretax profits for the industry.
© Globe and Mail
