by Adam Leyland - Thursday, 30th August 2007

 

 Is Al Gosling is the next Richard Branson? Still only 33, dressed in flip flops and T-shirt, he’s every bit as casual as the Bearded One, he’s into adventure and dangerous hobbies, and shows a fearless disregard for conventional business wisdom.

But it’s the brand that twins them. He’s built a hugely successful TV channel for extreme sports – surfing, skateboarding, extreme skiing, mountain biking – and turned it into an irreverent and youthful brand, off the back of which he’s launched a bunch of spinoff companies. Sounds a bit like Virgin, doesn’t it?

His energy drink is rivalling Red Bull across the continent. His clothing, Ex-Gear, is sold in his 22 Extreme Stores. There’s an online shop, an events company, and Extreme addicts will soon be able to hang out at Extreme sports parks.

In fact Extreme is now one of the world’s top 10 sports brands – alongside Manchester United, the New York Yankees, the Olympic flames and Wimbledon Tennis – according to a panel of top brand consultants.

The core of Gosling’s empire is still Extreme TV, which is now available in 59 countries and 10 languages, serving up coverage of the Gravity Games and the Snowboarding World Cup, alongside lifestyle shows like Rebel TV and Not Recommended Behaviour. But Gosling’s new project – a mobile phone network – could dwarf all he has achieved so far. The group’s non-TV revenue could, “if it all cruises”, soar from £8.5m last year to £24m. Or £100m by 2006 “if it flies”. september 2005 REAL BUSINESS 11 12 REAL BUSINESS september 2005

Founded TV distribution co in parents’ barn in 1995. Established Extreme Sports Channel in 50:50 deal with Euro cable operator UPC. Extreme brand spinoffs include drinks, mags, gear, clothes and now mobiles Uses same structure for all subsidiaries: 72% to him, 10% staff, 18% investors. Targeting 1m subscribers for Extreme Mobile by 2009.

How it all started
Gosling is as surprised as anyone by his success. Dyslexic, he had flunked his school exams at Gordonstoun, but with a passion for extreme skiing and other action sports, decided to launch a TV distribution business from his parents’ barn in 1995.

“It was loosely based on Mark McCormack’s TV distribution model. I had read about McCormack and Alan Pascoe and I said ‘I’m gonna do that’. I had no business plan, no strategic thinking, but I had some friends, athletes, and I just started persuading any TV producers or companies with extreme sport and adventure content that I could act as their international TV distribution partner.

“We had no money in the early days and kept overheads to a minimum. We were lucky because in a lot of cases the content is not that time-sensitive.”

It was on a trip to the Cannes TV festival in 1998 that Gosling had the idea for a TV channel. “I said ‘let’s do a TV station’. We were doing £1m of international business [none of it in the UK] but there wasn’t a TV station for this stuff, and we had a catalogue and longterm contracts with TV producers, so we went looking for finance. “We spoke to lots of people, but we couldn’t find anyone who was interested until we bumped into the cable company UPC. They wanted ideas for a new station, and tried to buy the company. I said no, but agreed to set up a joint venture. We would put up the content and create the brand; while they did the uplink and playout.

“It was the deal of a lifetime. I leveraged our content and relationships, and they put all the money ($22m) in for a 50 per cent stake.”

The Extreme Sports Channel was launched in May 1999. It proved an immediate success. “We originally calculated we would get distribution in 12 countries.” The UK alone, the 19th country to air the channel, has an estimated audience of two to four million viewers every month. And though he’s coy about the exact figures, the business is profitable too. “It broke even last year, after five years. It’s not a massive profit, but it’s heading in the right direction,” says Gosling.

Risky business
The first spinoff from the success of the Extreme Sports Channel was Extreme Retail, a mail order and online clothing company. The launch, in May 2001, was very risky – at the height of the dotcom meltdown, just as retail website boo.com was going bust. Nevertheless, Gosling believed wholeheartedly in the business, “and I was bloody minded enough to make it work.” It’s now a £4m sales business, and will make a £400k profit this year, Gosling predicts.

Other offshoots of Extreme have followed regularly on the heels. Ex Events launched in December 2001; 2002 saw the launch of a B2B mag and a clothing company. In 2003 Extreme Drinks was formed. And last year saw the acquisition of Legends, a chain of 21 UK surf, skate and snow stores, and the recruitment of Steve Hazell from Snow & Rock, to build a new high street operation.

In each case, the structure of the new companies has been identically formulated. Gosling takes a 72 per cent stake in each division, with 10 per cent going to the staff and 18 per cent to investors (including Nigel Wray, the serial investor and entrepreneur). “We’re almost like a branded VC firm,” says Al. “Each business has its own P&L, its own share structure. We look for opportunities where the Extreme brand could be of benefit. We take the brand, analyse a sector or opportunity, bring in management, do business planning, ensure we’ve got the money, or raise money, then let them get on with it.” It’s in this sense that Extreme is most obviously compared with Branson’s Virgin. Gosling is flattered but not convinced. “We’re a lot, lot smaller. Richard Branson launched his airline at the same age as me (33). And I suppose the other thing is that Richard Branson is the Virgin brand, whereas Extreme itself is the real selling point here. That is the essence of the brand, not me. The TV channel feeds people into the brand, kids grow up with it. It starts from there.”

Mobile makeover
With the imminent launch of his new mobile phone company – ExtremeMob – Gosling is hoping, however, that he takes his group into a Virgin-like hyperdrive. “The amount of money in mobile phones is frightening,” Gosling drools. “A £24bn industry in the UK alone. We call them telephone numbers. If we can get this right, the sums of money involved will take Extreme sales to over £100m easy. “Our goal is 100,000 subs by the end of 2005. That would be worth £15-20m. If we can do 300,000 subscriptions in 2006, the revenues would accelerate to £60-70m.” The goal by 2009 is one million subscribers.

It’s not without its risks, however. Stelios’ EasyMobile won only 15,000 subscribers in its first six months. But Gosling insists that as the only niche player in the market, he has an advantage. “There are 10 active players in the mobile market, but nine of the 10 are chasing the same customers, from 16-60. We’re only chasing the Extreme market (18-34 year-olds) and that allows us to be much more targeted in our marketing.”

Extreme will only offer pre-pay, for example. The phones will be Extreme-branded. And other services will include free email addresses and alphanumeric phone numbers (similar to the 0800 EXTREME idea). The business model for Extrememob also assumes its young customers will be heavy users of texts. And while Gosling says it will studiously avoid marketing to kids, offering cheaper phone calls after 4pm rather than 6pm will appeal to children. As Gosling points out “92 per cent of 11-year-olds have mobiles”.

And then there’s the content. Able to draw on its extreme catalogue of programmes Gosling says it will “deliver a service with an edgy content offering that feels more like a lifestyle magazine – always fresh and relevant.” This will take the Extreme brand even further away from its roots in sport and adventure to encapsulate a whole range of youthful pursuits: “snogging, cinema, fashion, boozing, sex.”

Raising Finance The launch of ExtremeMob puts him up against some very big hitters, and Gosling admits he has struggled to raise capital for this project, with one investor pulling out weeks before the intended launch. His reaction? To pare it down and do it from cash reserves and his own money. Gosling has raised cash by selling some of his shares.

The scheduled summer launch date has been put back, but the service is expected to launch online in the next few weeks via a dedicated website, www.extrememob.com, with fulfilment handled by Phones International. The roll out across Extreme’s retail stores will also begin this autumn. And the hunt for new investors continues. “If we cut marketing, the subs go down.”

Is he not scared? “My father keeps telling me to buy a house,” says Gosling. “I still don’t own one. But if necessary, I’m ready to lay all I’ve got, drop it all on this and spin the dice. I believe in this, man.”

Tags: extreme, extreme tv, gosling, extreme brand, extreme branded, extreme mobile, extreme sales, extreme addicts, extreme retail, fact extreme, launch tv distribution business, tv channel, al gosling, started gosling, tv station, extreme sports channel, gosling admits, gosling drools, gosling insists, gosling points, gosling predicts, programmes gosling, tv producers, extreme sports parks, rebel tv, tv revenue, 2003 extreme drinks, 22 extreme stores, established extreme sports channel, extreme brand spinoffs include drinks, virgin brand, mobile phone company extrememob gosling, wasnt tv station, business model, gosling believed wholeheartedly, international business, international tv distribution partner, cannes tv festival, extreme market 18 34 year olds, business plan, launch online, risky business, tv channel feeds people, youthful brand, 10, mark mccormacks tv distribution model, adventure content, clothing company, imminent launch, intended launch, raise money, 4m sales business, conventional business wisdom, money involved, online clothing company, top brand consultants, uk, virgin, hes built hugely successful tv channel, events company, extreme catalogue, extreme skiing, extreme sport, mobile market, 11 year olds, cable company upc, extreme sports surfing, richard branson launched, september 2005 real business 11 12 real business september 2005 founded tv distribution,