Wednesday, September 02, 2015

How Original Is Anything You Do ?

As Sony Music announce an amnesty for samplers, it begs the question of how original any combination of seven notes can be: minors and majors, timbre, sustain, emphasis, chords, arrangement and many other musical devices extend this most basic of vocabularies, but at the end of the day, you're rehashing the same old stuff. And as rock music moves towards its seventieth year, it's not surprising if it sounds like everything has been done at least a few times.

So, how do you differentiate between what is original, what is copied, what is 'sampled' and what is coincidence ?

Of course, if this is true for music it's even more true in film and TV making, where seven is again the magical number.

And,, come to that, can you ever write original code or come up with an app that hasn't been done amongst the one and a half million odd ones already out there ?

Yet, our IP regime is based around the concept of original work, a concept that is becoming less and less easy to enforce.

Of course, copying a plot and all screens, or a song and all parts is one thing, but how small does a work need to be before you can claim originality ? The Intel sound theme, the Easterners drum roll ?

How original does a work need to be ? Most modern music is hugely derivative, deliberately or not. Once upon a time, God Save The King was the national anthem used by most countries (it's still used by Lichtenstein..), yet Happy Birthday is still a copyright protected work (you should be paying a fee every time you perform it in public, or be somewhere that has already paid the fee).

This is what makes Sony's move interesting: rights are generally thought to vest in whole works: what Sony are doing is moving the discussion on and establishing Elemental Rights. Clever.

Monday, August 31, 2015

Digital Monopolies

Monopolies have long been considered a bad thing. Governments have departments to stop them from taking advantage of market domination and nationalised industries are considered an anathema in the modern world simply by dent of being monopolies, even perhaps when having competing companies makes no sense (do we need three mains water pipes or two sewers, three train companies on the same line, or even more an one company providing broadband infrastructure?).

But in the online world monopolies abound. They survive by dint of having one main competitor ir having their market presence iverlapped by similar functions.

I recently spoke to a client who had switched away from using Google Adwords. The result was that their search engine rankings collapsed, as did their audience. This shows that Google is in a clear monopolistic situation and also abuses this position. It is clear that the EC is right to want to break up the company.

You can expand this further in social networking, ecommerce, online auctions, cab booking, spare room hire. US investors want to invest in monopolies and it is incumbent on businesses to drive their market share in this direction at all cost.

The result is that the current industrial landscape is similar to that of the early twentieth century, with vast monopolies dictating prices and keeping markets inefficient.

In the UK, where Labour candidate Jeremy Corbyn has put forward the idea of nationalising the railways and possibly other services beyond, a country where much of the infrastructure is ironically owned by the nationalised utilities of other countries, and where broadband provision to the home is a virtual monopoly in most of the country, there is finally an alternative view to the notion that private companies are always the right way of providing services to the public.

This conversation needs to be broadened out in Europe, where the current EC initiatives seem to mive in favour of supporting the creation of pan European businesses. And it will be American companies such as Liberty, Sky, Google and Apple that will benefit from this, not Axel Springer, Vivendi or ITV.

Thursday, August 27, 2015

BT Is A Monopoly The UK Cannot Afford

OFCOM and our various governments in the UK believe that broadband is a done deal. It's sorted, everyone has it and we're riding high in the world tables.

The reality is that this modern utility, which has become pretty much essential to life, makes our railways look efficient.

I have been on and off with my BT broadband connection for two weeks. Watching BT react to this has been fascinating. They have, naturally, tried to use technology as their first line of support, so have good online and desktop tools to figure out where the problem is. Kudos for that.

Then they start to fall apart. There's a helpline, online help, a social team to deal with Twitter criticism, and eventually you end up at an Indian call center. The operatives there are very intelligent and well trained and clearly have good automated tools for testing lines, etc... And if they cannot fix things they escalate to a second level team and then this gets escalated to the engineers at Open Reach, who are a supplier to BT Broadband despite being part of the same company.

But the trouble is that all of these support systems and pathways begin to disintegrate if there is a real problem. I suspect that we have a local problem with water ingress in a cabinet or on the lines that is causing the outage. The Indian support boosted the line and this helped. Then our connection went again when it rained.

This is a difficult problem to troubleshoot, but at the end of the day I'm a customer who can't work.. My wife, who works for Google, says her colleagues finds this riddiculous, living in what is called the UK's 'Silicon Valley'. She therefore has to battle on another monopoly pretending to be a business (Great Western Railway) to get to work.

But this is a bigger problem for OFCOM, the UK regulator (and equivalent to FCC). I could switch to Sky or TalkTalk or any other provider and the problem would not go away. There is only one line coming into this house and BT provide it. (Unfortunately I live in a part of town not covered by the excellent Virgin Media, who provided me with a brilliant service in London for over a decade).

I am able to post this criticism thanks to my EE mobile. Just have a look at this:

This is much faster than my BT Broadband connection in my living room. Trouble is, I only have 20GB a month allowance with EE, and I easily use around 100GB a day (yeah, Netflix...). If my account had no cap I would have told BT where to sling their useless service. So, why can't I ? Why is there no competition in this private market. Because it is hugely subsidised by Government.

So, back to linear TV, but with great IM, email and browsing over 4G (or 3.9G as my knowledgable friends insist I call it).

Worse still, last weekend I was at our house in Wales, where I was getting 20Kbps from our Sky account, which is on an unbundled BT exchanged. There is no mobile phone reception at all unless the wind blows in a certain direction. House prices in the area have collapsed due to the lack of connectivity.

Wales, Berkshire, BT is a problem this country cannot afford.

Whoever in Government who spends a penny on Overseas Aid, Education, Transport, Defence, anything, should consider what provides value for money.

OFCOM is a government QUANGO that exists to make the Government (and themselves) look good and they are providing a buffer, along with institutions like the Welsh Assembly Government, that are protecting and feeding BT instead of encouraging real competition.

There are only two options here: renationalise BT or implement real competition.

Wednesday, August 19, 2015

Sorting Out The BBC

The BBC is wriggling, writhing and, no doubt, holding hundreds of W1A type meetings trying to figure out how it can justify its massive tax revenues and Royal Charter.

Well, it can't.

An organisation that cannot run its main TV channel (BBC1 HD) 24 x 7, but rather inserts weird helicopter noises and test cards for half an hour at a time really does not need management consultants or execs on £500k a year to tell it why it is a bad failure.

So, let's start with technology.

The majority of its channels do not broadcast for 24 hours a day. Indeed, four of its channels pay full dollar, but run for different hours (CBBC, CBeebies, BBC3 and BBC4), so why not merge them into two channels - I make that at least four million a year in savings immediately. BBC News is used to fill gaps in both BBC1 and BBC2 schedules, so it seems that three could become two there also. Another million. The trouble is, this is loose change, or the price of a presenter to the BBC.

Launching a barebones PC in the country who gave us Rasberry Pi when you can't even run your main TV channel seems to be total madness. All such initiatives should be closed down, saving another ten million or so.

No costs have been appropriated to the iPlayer or to online sites created by the BBC, which often stymie innovation and startups in the UK, but cutting twenty million or so from here can do no harm.

The £100 million spent on trying to launch a media asset management system and, probably, another £100m in privatisation sweetners to the likes of Siemens and RedBee should be substantially reduced.

I think we may be close to totting up £200m on technology that can be saved from the BBC's current budget with no discernible impact on licence payers.

Next. let's look at management. Oh Jeez, where do you start. Any company that parody its own management so well must be chuckling all the way to the bank. There's little doubt that £100m of savings could be found tomorrow by running the BBC the way commercial broadcasters are run.

Then there is programming. Unfortunately, the BBC does not own Masterchef, Downton Abbey or Top Gear (oh, sorry, it does, but the brand is now worthless...). I can't remember the last decent drama production blockbuster it produced (OK, Poldark, which I hated). But it is a rights factory and BBC Worldwide has done a half decent job of capitalising on its rights and reputation. However, BBC International should be generating billions more in revenues and profits.

Regionally and locally the BBC has stifled all innovation and development and runs a hugely subsidized business whilst local media has collapsed. BBC Alba and S4C should be funded by local government, not the BBC. Another fifty million.

So, there you go, I have saved most people in the UK £1 per week that they can spend with Netflix, YouTube, Apple, Amazon or some other awful US non-taxpaying behemoth. 

Wednesday, August 12, 2015

Finally, The Media Tipping Point

The share prices of many of the world's largest media companies took a serious hit over the last week. The reason seems to be that investors and shareholders have finally noticed that a seismic change has already taken place in the TV industry.

Of course, it has, it started twenty years ago and is yet to reach real critical mass, but is predictable.

Broadcast linear TV will see collapsing figures over the next five years.

Binge box set viewing will see continued growth, as will tips from girls in bedrooms on fashion and other faddish vlogging phenomena which will be tomorrow's mainstream TV shows.

The irony is that the TV industry is becoming more like the music industry. In the sixties, anyone with a guitar and talent had a chance to be signed, and this has been true ever since. Of course, they were exploited by big labels, but at least anyone had the opportunity.

Now the same is true of TV. If you get 100k YT followers you are a brand. With a million YT followers you are a valuable brand. And YT aggregators have taken over from record labels as the big cigar guys (check out your Pink Floyd).

We are seeing a sea change. The fact that a hugely valuable company like ITV does not have a Netflix like platform should be terrifying to its shareholders, but it does generate great programming, so has a mitigation.

HBO has its own player, but when all rights in the UK have been sold to Sky, this is never going to be global, which it needs to be. A cheap deal has stymied its ability to create a global brand.

Netflix largely has crap on its service, but it delivers media in the way that people want to consume it, on any device, any time, for a low monthly fee. And it ices its turds with a few very clever commissions.

Perhaps most telling is the signing of the ex Top Gear team by Amazon Prime with a massive budget. The BBC only produced a few shows in a series (quality, budget ??), but Amazon will look for 20-30 per season, every one with a multi million pound budget. If you have a service in the UK, US, Australia and Japan, the economics are a no brainer.

Meanwhile the morons at the EC are trying to create a single market for rights, with the sole effect of annihilating European production businesses and nurturing American companies such as Netflix, Hulu and Sky.

If, like Sky you have businesses in the UK, Ireland, Germany and Italy buying the rights to the Premiership becomes something only a few US companies such as Sky can afford to do. Of course, if Viacom buys Sky, we will have a 'domestic' champion, but at the moment we do not.

And waiting in the wings is Apple, which could buy most countries, let alone companies. It would make a huge amount of sense for them to acquire content, or content companies, something neither Google nor Microsoft will do (Samsung is another story and Sony are already in this market, albeit a busted flush..)

But the point is that the tipping point, the 'convergence' that we have been talking about for two decades is finally here because the markets tell us so.

Friday, July 24, 2015

Plugge It To The EU

In 1931 a suave Brit called Leonard Plugge visited the owners of the Benedictine distillery in a small town on the Northern French coast to see their transmitter.

In an eureka moment (possibly lubricated by his guests' product), he decided to take on the BBC who, on Sundays especially, only broadcast a rather heavy schedule of sermons and church services.

Realising that a transmitter on the English Channel could reach the towns of the South Coast he started his service, Radio Normandy.

Very soon he courted advertising for his burgeoning service which, with stronger transmitters, now reached the Midlands of England and was attracting higher listnership than the BBC.

So, he manufactured and started 'plugging' his own brand of face cream which became a massive success and kicked off broadcast advertising in Europe.

Why do I relate this obscure, if important, piece of trivia from the history of the media.

Well, today the EU ba ked up recent moves by the EC and announced an investigation into Sky and their relationship with major Hollywood studios.

The EU is determined to see a single market in media (just like we don't have in anythings else due to pervasive national interests), and this is their opening salvo.

The Board of Sky must have been down the pub celebrating all day.

There is nothing that they would like to see more than a single content marketplace now that they gave rolled up Sky operations in the UK, Ireland, Germany and Italy and have a half decent online service that could be rolled out all over the continent.

The trouble with this is that a single European market may be good for consumers who want to watch the BBC in Slovakia, or Scandie Noire in its original language in Portugal, but it's awful for the production industry in Europe who will be left with many fewer sources of revenue since they will only be able to sell their production once in the whole of the EU.

There is another problem, funding for TV, whether from public service or commercials, is based on borders. Dismantling this will be hugely disruptive and will make it even easier for Big Media and Big Internet from the USA to buy up the best properties. It will also make it easier for them to operate - just look at the problems Netflix has had rolling out in Europe.

So, I reckon there are a load of US media and internet execs joining those Sky guys down the pub.

Meanwhile, the rest of the industry is left out in the pouring rain on this wet summer's day, wondering at why the EU is set to play havoc with a very successful industry.

Leonard Plugge would be revelling in the irony of how the Europe has come a full circle in dismantling its media borders, but the irony is that he was also a Tory MP, and I suspect would be vehmently opposed to what the EU is now proposing.

Tuesday, July 21, 2015

Apple, Things Are Tough, So Can You Now Pay The Money You Owe The World ?

With today's financial results, Apple is now bigger than all but 50 countries around the world. New Zealand is a minnow, as is the Ukraine or Hungary.

But the company has a huge problem. It is generating useless money.

The US has a corporation tax rate of around 35% and California whacks another 8% or so on top (in the UK the total would be 21% and is soon to be reduced to 18%; in Ireland it is 13% for domestic companies, but 3% for Apple).

So, Apple cannot realize its massive profits which are squirreled away in low tax domains around the world.

The result is astonishing. The company actually raises money in the US to pay off its shareholders with new money so that it does not have to bring its dodgy stashes onshore.

This begs major questions about Apple's balance sheet because money that cannot be returned to shareholders is not a liquid asset, but Apple show it as such on their balance sheet.

Meanwhile countries like the US and the UK, and certainly countries like Greece and Spain could perhaps do with Apple paying its tax liabilities at source. 40% of $200 billion is a lot of money (and, to be fair, if you extend this to the likes of Amazon, Microsoft and Google, the overall figure becomes really significant.

'Big Internet', including Apple and Google is now so big it has become a problem that the world has to deal with.

Frankly, these guys make bankers look like saints.