Virgin is out – why?

Virgin DigitalWell – Virgin Digital is done selling music online. They have transferred all their customer stuff to Napster.

When a customer focused, value add focused, cash flush company exits a market so quickly and quietly, it makes you wonder why. There are not that many reasons:

  1. It was hemorrhaging money: But I think not enough of a reason in this case.
  2. Outside core value offering:  Definitely think this is a good reason for Virgin Digital to exit this market.
  3. Outside company strategy: Reasonable, but not for such a quick exit.
  4. New strategy in place: And not compatible with existing strategy.  Very reasonable – and I think the most likely.
  5. Exec hated and killed it:  It happens, and could be related to any of the above.

So – if I am right about number 4 – that Virgin has a new strategy in place that is not compatible with the existing service, then what could that service be?  Here’s what I could imagine:

Virgin Mobile music download service.  A la carte downloads directly to your phone. Much like Verizon vCast. The open question there is: Would this be enough to draw new users to their service, or do will they need and do further differentiation?

We’ll see. I give it 6-9 months before they roll out a new service under a different corporate banner.

Posted on September 25, 2007 in Competition, Market

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