nik newark

You know its time to get out when...

…Richard Branson moves in.

It is one of those odd mysteries of the modern world how the Virgin empire actually manages to turn a profit, given that it has a talent for starting new business in industries which shortly afterwards dive into a sudden and terminal decline.

It's really quite spooky how Richard B manages to identify industries which are about to have all life squeezed out of them. Or, maybe, just maybe, it is Virgin moving into a new market which causes the collapse, like a bloodsucking vampiric leech slurping on highly competitive markets until they turn inside out?

Let's take a closer look!
Record Labels - not doing so well at the moment are they? Richard entered the record label business in the early 1970s, when recorded music was quite a healthy and profitable industry to be in (albeit a corrupt and nasty one). Within 15 years, the record industry was in trouble, and had to start inventing a stream of new formats (CD, DAT, DCC, MiniDisc, HDCD, DVD-Audio, SACD) and endless reissued / remastered deluxe editions in order to stay afloat. To be fair to Branson, he got out of the business in 1992, selling Virgin Records to Thorn EMI. But then came Britpop, and the industry looked healthy for about three nanoseconds, and Branson insanely started a new label “V2”. He's since sold that too.
Record Shops Where have they all gone, eh? Branson has eaten them all, that's what.
Airlines and Other Transport Squeezed by the budget carriers on one side, increasing oil prices on another, concerns about environmental damage, concerns over terrorist attack, and concerns about the entire world becoming increasingly homogenized, virtualized, globalizationified (new word there, borrowed from GWB, prob'ly), you'd have to be mad to get into the airline business. Now, trains are another matter, but given that the track record (oops, a pun) of British railway operators over the past 50 years has been pretty shoddy, it is statistically unlikely that Branson can do any better. Especially as his heart isn't really in it - he far prefers balloons, and
Spaceships Obviously a real money spinner this one. Virgin Galactic plan to take people to the edge of space. And then back. Assuming that he can foot the enormous insurance bill he will be faced with, and he can get hold of some inexpensive tax-free rocket fuel, and assuming that when it all actually works enough people still think it is cool enough to do, Branson might break even on this one. But the only way he is likely to make a profit is if he opens a Little Shop in the Exosphere selling overpriced postcards, T-shirts and trinkets. Mind you, I did quite enjoy the Virgle thing.
Broadband operators So, they've had it OK for a while haven't they? Leasing stuff from BT, owning a switch or two in some dusty building in Canary Wharf, making up their own fictional connection speeds, billing people as they see fit, and spinning off their helpdesk function into a profitable business in its own right. But they've been wingeing of late about iplayer and other easy-to-use video streaming services which turn their revenue model upside down a bit (all those pesky customers, unreasonably actually using the bandwidth they've bought…). So diminished profits and enormous competition here too I think.
Mobile operators See broadband operators, only more so. Historically have wanted to make their money by trying to be the sole provider of content to their users, rather than letting their users download stuff from anywhere. Now only seem to make money from ringtones, whose sole market seems to be made up of 7-14 year olds with too much pocket money. They'll all grow up shortly, and the new young generation will have wised up, and think that ringtones are like “totally rinsed”.

The only thing I know is that when Branson enters the market, it is time for everyone else to get out. So, given that Branson now runs the VFestival, it is probably time for Michael and Emily Eavis to close up Glastonbury and go home.

Actually, I read somewhere (Wikipedia maybe) that Richard Branson's sole income comes from being a successful knitwear model, and all proceeds are used to prop up the rest of the Virgin empire.

With that in mind, a musical tribute to the great man himself, an offcut from the latest Chrysanthemum Fiends Long Player (forthcoming, probably) entitled Richard Branson.

Posted by nikn