Virgin Launches Online Megastore

In what looks to be a major challenge to Amazon.com's (Nasdaq: AMZN) dominance in online book and music sales, leading entertainment retailer Virgin Entertainment Group announced the launch of its online megastore today.

The new online store, located at Virginmega.com, carries essentially the same products as the well-known brick-and-mortar Virgin Megastores, including music, books, videos and other entertainment merchandise. Virgin says the online store will eventually feature more than one million products.

The Web site will be managed by a division of Virgin that is appropriately named Virgin E-Commerce. Virginmega.com is targeted to U.S. consumers; sites for European and Japanese markets will be launched later this year.

More than a Store

Virgin is also aiming to be a big streaming media player with its new launch. Virgin's online megastore includes Radio Free Virgin, which will include twelve channels for online listeners. Six channels will be hosted by DJs from the company's brick-and-mortar stories in New York, Los Angeles, San Francisco, London, Paris and Tokyo. The other six will feature genre-specific music.

As the battle over digital music formats heats up, Virgin's launch has bolstered Microsoft (Nasdaq: MSFT). The online megastore will incorporate Microsoft's new Windows Media Technologies 4.0 for its streaming media offerings

Performances by artists and other entertainers in the brick-and-mortar stores will be Webcast on the site. That currently gives Virgin a distinct advantage over its online competitors, because Virgin continually attracts big names. For example, pop queen Jewel kicked off her poetry book tour last summer with a reading at a Virgin store, and indie-rock favorite PJ Harvey and talk-show icon Jerry Springer appeared at the New York store on the same day, last November.

"Virgin has revolutionized the way people discover, explore and purchase entertainment and we are committed to replicating that experience online," said Richard Branson, founder and chairman of Virgin Entertainment Group.

ross-Promotion

Another advantage Virgin has over online-only retailers is that the company will promote its e-commerce business in the 200 stores it operates in 14 countries. After 30 years of operation, Virgin's retail stores obviously have a well-established customer base to draw from.

Virgin also expects its e-commerce business to help its existing retail stores.

"We believe our online presence will also drive traffic to our existing brick-and-mortar operation," said Russ Pillar, CEO of Virgin Entertainment Group (North America). "We have been working very closely with the Virgin E-Commerce division to develop an integrated strategy to maximize the reach of the Virgin brand."