The End of Journalism?

Rupert Murdoch recently won a victory as Google has now reduced the number of articles that can be read by its aggregation service of the news, just as one newspaper group in the UK started to charge for reading its online content.

Is this really a victory for Murdoch and newspapers or is it merely a stay of execution?

Newspapers argue that there is a large cost involved in producing their content and so it needs to be recognised particularly as circulation numbers of their hard copies drop as online news becomes more accessible. Indeed, content drives much of the huge 'portal' business on the web that Google is so good at - Google being the almost unchallenged kings of pulling it altogether and then selling zillions of contextual adverts near it and accruing enormous revenue off the back of content. Authors of books have the same issue - Google is a massive threat to the origination of content.

But Google and others would argue that news is becoming ubiquitous on the web. The rise of blogging and phenomena like Twitter means that news is being transported at source by millions for free. Indeed when you sift much of what is printed on trashy newspapers most of it comes from the internet in the first place - newspapers are just the old form of news aggregation.

It's true that newspapers have had a great run for their money. It's a format that has produced vast profits for the proprietors over the years and Murdoch is testament to how rich you can be off the back of content aggregation. Google, arguably, is just moving the concept of news and content into the new millennium.

The argument that the production of news is expensive is moot. Robert E. Heath explains, “I’m not suggesting that news gathering is inexpensive. Or that bloggers will replace reporters. But many in the industry seem to be tripping over the fallacy that if something is expensive to produce, there must be a profit-making market for that product. If that were true, there would be a vibrant market for diamond-encrusted buggy whips.”

In business we all learn fast that if the production of your goods is expensive then you likely have a very limited market to buy it. Delivering news to the masses is now the key part of the business, and Murdoch has not really changed the model of his content production for years - so maybe he is in the wrong here.

Certainly, as a blogger, and knowing that my content is not widely delivered anywhere, I just need to be happy that I have some people who read what I write. I know that if I attempted to charge for it, no one would read it and so it would be pointless writing it. Similarly, if I tried to 'monetise' my site by displaying adverts, as I did when I started following Google's advice, I got far less readers.

In a microcosm, here is the dilemma for the news industry. Change is very much needed - the value of the content needs to be reviewed and the rise of the distribution service is where the real money is. Murdoch, if he were starting again today, would never invest in such an antiquated business model. He needs to recognise that, as do all media types.

Predictions For 2010

As 2009 closes out and most of us want to close the door on it as fast as possible, still more bad news wallops us causing Lord Mandelson to shout that the loss of 1,700 jobs at the Corus plant as, 'Galling'.

So our thoughts start to turn to the year ahead - to a world of old rate VAT and the potential emergence, at last, from technical recession although verbally we have been assured the world is fine according to our leaders. I started to do my own bit of research on the subject of what we might expect ahead and I came a across a very helpful prediction site hosted by a bunch of psychics at http://www.psychics.co.uk/. But then again, some of you already knew I would do that.



Read them for yourselves but my favourites are:

• As commanded by Gordon Brown, Osama bin Ladin will die. No doubt Pakistan will be short of spin bowlers and select him, where he will be recognised as a famous terrorist leader and be shot by a sniper.


• An unspecified MP will be caught performing an indecent act in a public toilet. This is a safe bet as surely we have had one a year for a while or are we talking about indecent acts as 'flipping' now?


• A secret human cloning experiment attempts to clone a famous person - I can confirm the person in question will be Bruce Forsyth in order to extend the show beyond his years but wig makers are still dubious about being able to hide the join line.


• Barack Obama expresses an interest in holistic healing and it becomes a watchword in his speeches. He will be seen on live TV sipping his own urine while having his face covered in leeches.


• Britain and Germany make a green energy agreement and a huge new wind turbine farm will be constructed just outside the front doors of Parliament. Plenty of wind coming out of there.


• Quantum physicists will find a way to get electricity from water, and the MP caught in the act in the toilet will claim he was merely testing the theory.


• A celebrity is kidnapped and huge ransom is demanded, but the kidnappers got the name from Ant and Dec's list and so no one has ever heard of them.


• Britain will withdraw all troops from Afghanistan bar a few token ones from the 1st Battalion of Sitting Ducks. Straw prices go through the roof in anticipation of the draw for the short ones.


• A strike by Civil Servants will cause widespread disruption as the country struggles to find out why it has no effect on anything and no one misses them at work.

So here a few of my predictions in the same vain:

• Gordon Brown saves a baby from drowning and wins a landslide at the election as his popularity as a world superhero soars. An independent inquiry 30 years later reveals that not only Lord Mandelson threw the baby in but the real one did drown and Brown saved the plastic replica.


• Bankers agree to give up all rights to any bonuses for 50 years and most take their holidays working in parts of Africa worst affected by drought, starvation and disease.


• England come narrowly close to winning the World Cup when they are beaten in the first round by Algeria and drawing 0-0 with Slovenia after heroically beating USA. But due to a countback on non-qualifying dives, lack of unnecessary referee abuse and no hand balls they are tragically eliminated for lack of unfair play. David Beckham announces his retirement to pursue a career in banking and Wayne Rooney becomes a monk.


• Osama bin Ladin doesn't die but is actually found hiding out on the wing for Scotland's rugby team.


• MPs vote for abolishment of all expenses is a popular move, but go onto a lucrative bonus scheme in aiming to halve the budget deficit by 2014 - Brown earns £10m in 2010 as he hits the first milestone.


• X Factor is syndicated all over the world and Simon Cowell becomes the inaugural First World President by popular vote with Cheryl Cole narrowly missing out in s sing-off. Louis Walsh is condemned to death as a traitor to the cause in the first public decree while Sharon Osbourne is put under house arrest for life as a dissenter.

I'll work on a few more real ones in the coming weeks, but I am sure that unless you were part of the groups who won the £90m Euromillions last month, you just can't wait to see the back of 2009.

Stoic Britain in 2009?

I think we all need a pat on the back. 2009 has to be one of the worst years in terms of crises for many a long time, yet the average person in the street, young or old, took it all with a traditional British stiff upper lip.

We have endured 6 successive quarters of GDP contraction. We have endured 4 years (and more) of serious decline in household income, with 2009 being by far the worst. We have added well over 1m to the dole queue and there are still more to come on that. We have seen major companies try to impose draconian cuts on staff at banks, the Royal Mail and BA as good examples; we have seen the loss of major household names like Woolworths, MFI, Threshers, Borders. We have seen the near collapse of the financial system, with 5 household named high street institutions falling largely or wholly into public hands. We have seen the exposure of long term, systematic abuse of the taxpayer by MPs on their expense claims with some stepping way beyond the point of common decency and into the world of crime. We have seen more deaths in Afghanistan in one year than all the previous years of that engagement added together - and totalling now as many as those lost in the Falklands conflict. Even as we watch with horror as that seemingly pointless engagement continues, that still our troops are not being given the right support, numbers and equipment to do the job they are asked to do. As the official inquiry into Iraq starts, it is already clear that the public were grossly misled into supporting a war that had no legal grounding - making Britain no better than a rogue state intent on imposing its will on others because it wants their assets.

Why have we put up with it all? Even in the Glasgow East by-election, the status quo was endorsed. During the year there was much talk of discontent amongst workers and potential riots in the streets as Britain suffered from the depths of the recession. We have seen that wile private firms have suffered badly from the effects of the recession and the credit crunch, the public sector has enjoyed an unscathed path with hardly any job losses, no major cuts, good salaries and fantastic pension rights as more private firms close their final salary schemes.

For many we have seen our assets corrode at an acidic rate - the stock market has regained ground but most of us look at our pension and savings statements with fear and depression. Our homes have lost some 25% in value and although they are back on the rise, many people are now in the mire of negative equity or under the cloud of delayed payments. Many firms have deferred their tax under the government schemes and face a big cash call soon that may yet send more companies under. The VAT reduction to 15% will be reversed as of the end of this month and prices will rise sharply.

And perhaps most depressingly, we have been shielded from the true cost of the massive bank bail outs we have been party too. The National Audit office have now fixed the current running total as £850 bn and rising - a spend totally unanticipated by anyone and we are still worried about further liabilities as now the next wave may not be sub-prime mortgages but sub-prime national debt as whole states or countries like Greece and Dubai start to falter on debt repayments. The result is that we are likely to be paying for the huge borrowing on all this until 2032 although Government calculations seem to be wrong each month as the borrowing requirement keeps exceeding estimates.

In amongst all this bad news - terrible news - the population seems to be unfazed and carries on regardless. Even terrible disasters like the Cockermouth floods seem to move us little anymore as we become numb to the pain around us. Perhaps we are in denial - all this bad news is being locked out so that we can focus on existing in our way. After all, there are no food shortages, we still have credit and we still have means of getting what we need. Indeed, the travel industry, with the exception of BA, reports that holidays have not fallen off at all - for most of us, life goes on.

One theory why we have not been up in arms and rioting in the streets is that we have a focus for our fury. The one benefit of the bizarre banking drama has been that we can collectively and unreservedly hate the people who caused the mess we are in - the bankers. The issue just won't go away. Even as the money still pours in from the taxpayer creating an artificial market condition where every bank in the world can make vast profits quickly with little investment and cost, they are demanding bonuses for effectively just pocketing our cash. They are not even demanding it - they are blackmailing us for it.

At one point in the year, I advocated that we do not pay our tax as enough was enough - why should we give our money and see the direct result as being MPs cheating us for cash and bankers queuing to buy shiny new sports cars? Why can't we see more care homes for the wounded returning from Afghanistan or better equipment and transport for them so that they can be protected against the unseen enemy? If money was so easy to be handed out, why did we have to pay so much tax before, if debt was so good for us?

I can only put it all down to the old spirit of survival and stoicism by the British people. At the direst moments we had the surreal moment of an open racist on prime time TV telling us that Hitler had a point in so many words. And still we carried on.

I think as the year closes, we should all pat ourselves on the back for our courage, fortitude and downright ignorance of what is going on around us. By putting our heads in the sand, young kids in Afghanistan will continue to die and rich people in the City will continue to earn a fortune off the back of our mindless handouts and behave as if they earned and deserved it. Why, when history is rewritten, we will find that the likes of Goldman Sachs, RBS and the other banks saved us, not we them.

And we will believe every word of it, just as we did of the rewritten history in the TV program, 'The Blair Years'. The one thing that Mandelson and Brown got right in the last year is that the public was stupid - the rest they got totally wrong.

I Can Feel A New Tax Coming On

I heard a minister on the radio yesterday talking of taking up legal consultation to reduce the current legal limit for blood alcohol when driving - the legislation is also looking at introducing guidelines for drug levels in blood also.

On the face of it, this seems a good idea. Being over the limit while driving makes a vehicle a potential lethal weapon and we can only applaud positive moves. But the devil is in the detail. The current limit allows, realistically, for about a single drink to be taken and then driving. Lowering the limit effectively says no alcohol but doesn't, if you see what I mean. It would be better to take the issue off the table and say no alcohol or drugs are allowed in the system - it may be impractical but at least we know where we stand.

But all this presupposes that police and medical evidence shows that a good proportion of accidents are caused by alcohol levels between the old level and the new - by lowering the level we are trying to eliminate that band of accidents. That's the bit that the minister studiously avoided - there is no evidence to prove that a new limit would eliminate a new swathe of road accidents.

What it will do is to effectively give the police carte blanche to stop individuals on suspicion of being above the new limit - and because this will unlikely be manifested in poor driving it will be based merely on the opinion of the police. You can see what is coming next, can't you? There will be a new band of alcohol limit between the new an old limits where the police will have the discretion to fine individuals if no accident has been caused and an automatic 3 points on the licence - as it will be deemed some kind of warning against drink driving.

The best part from a revenue collection viewpoint is that there is no need to add new equipment to have to get a return on investment, police will have total discretion to stop people and it is unlikely they could either detect by smell or bad driving that a person is between the new an old levels so there can be no arguments. It will purely be down to the police.

Realistically, if there is new evidence of a whole band of accidents where it is proven that levels of alcohol below the old limit was the primary cause, then I am all for this. If not, suspect the worst, is my opinion.

Public Service Is The Place To Be

One of the most recession proof areas of the last 2 years of crisis has been the Public Sector. Makes you think we are a bunch of mugs in the private sector.

As unemployment hurtles upwards, very few jobs have been lost in the public sector as private firms have borne the brunt of the downturn in terms of laying people off and cutting costs. There are few firms in the private sector which have grown to any great degree while many have contracted or even disappeared. Meanwhile, despite a colossal budget deficit and borrowing now at 59% of GDP and rising, the public sector shows no sign of having to rein itself in - except of course if you are in the Armed Forces where there have been many crazy cuts as we attempt to fight two wars and have suffered as many casualties in Afghanistan as we did in the Falklands War.

The Sunday Times Appointments Section, barometer of how the job market is in terms of investment, has for some time been packed full of senior public sector appointments with salary packages that would make most business people look at least twice. The recruiters in this sector, like Rockpools, have been making a mint and the market for Health Interims is more healthy than the industry they supply - it's big, big business. Executives in the public sector are paid very well - far more than many of their private counterparts considering they create no wealth. Then there are the pensions. Let's not go there - I had a recent statement on my plans and frankly the prospect of retirement depresses me greatly. I can see myself never being able to stop work.

Workers in the Public Sector just don't get that point as they hassle for more pay citing the private sector as the yardstick.

It's not just redundancies - the public sector is like a vast sponge for money and it just keeps expanding. Latest estimates show that almost 1 in 4 jobs in the UK are in the public sector while the sector just absorbs more money and wastes a vast proportion of it on projects that deliver little and continually over run. In the MoD there is dreadful control of assets, huge contract overspends and then too few people at the business end with little enough equipment to do the job, while the civil servants back home pocket a share in a £48m of bonus payments. Injured troops or the families of the dead get precious little compensation for their losses when clerks in the MoD can sue for massive payouts for little than a bit of bullying or stress - try Helmand province for a bit of repetitive stress. MPs consume vast expenses for little to show for it and cannot see why the public is at odds with them - indeed, they want more pay and to continue to stand at the next election. The NHS is full of padding and overspends yet vital drugs are not given due to cost. Education is delivering mathematically sub-standard and illiterate graduates who cannot even get jobs - the list goes on. Yet we have not saved a penny despite a huge borrowing crisis.

Now we have the final insult. As soon-to-be 84% owners of RBS, we (the public) watch in sheer horror as traders and executives are to be paid over £1.5bn in bonuses from making profits that we (the public) have created for them by bailing them out and giving them free money to re-capitalise, none of which they have passed on to the economy.

It's a story that you could not write it's so idiotic and unbelievable. Globally £15 trillion has been spent on saving the banks and all we have done is lined their pockets by giving them profits as easy as spearing fish in a barrel. As Gordon Brown enjoys a resurgence in public opinion even though the public do not understand why we fight wars, his crony, Lord Myners, says that, 'Bankers should get into the real world'.

Let's just remind ourselves, this is the same Government that told us we could not get caught up in recession as our economy was so strong, then it would not hit us so bad for the same reason when it did and now of the G20 richest nations we are the only one still in recession which is the longest on record for the UK. Let's also remind ourselves that WE own a huge stake in most of the high street banks and WE are the major shareholders of these companies. WE have the capability to demand how they pay their people.

The Government continues to sit on the fence and just lob insults - as they should have done to have avoided the crisis we are in, they should ACT now. To hell with competition, stop the bonuses and reform banking.

A Sense of Perspective

So the Board of RBS will resign if the Chancellor uses a veto to stop payments of up to £1.5bn in bonuses in their investment banking arm this year.

As a taxpayer and an interested party in the matter as I participate in the 70%+ shareholding we have in that bank, I say the door is there and mind it doesn't smack your backside on the way out.

Why are we arguing about this? A year ago this company was broke and dead, thanks to the board of directors who are largely the same as before with a few notable exceptions. Had we allowed them to fail then they would have collapsed owing hundreds of billions - that's how bad it was. Even though we rescued them they made thousands of redundancies of everyday banking staff who were not party to the mindless decisions to squander money on such stupid activities as playing poker to buy ABN AMRO or for that matter loan Dubai World around $2bn.

So they have turned £6bn in profit - thanks, we will take that as we generously allowed them to write off a further £8bn in loans only a few weeks ago.

For the public at large, it is incredible that a few strutting peacocks in the city dare hold us to ransom when we came to their aid and preserved their way of life not 12 months ago. They tell us the 'talent' that is capable of winning and losing so capably will go and join other banks if we don't pay and then we'll be sorry - and that by paying them they are doing good by their shareholders.

Hi guys - welcome to the real world. The public is your major shareholder and the 'talent' can leave whenever it likes - don't let us stop them. I'm a shareholder, that's my vote.

Honouring Debts

The one thing that is becoming apparent about the Dubai World debt crisis is that Governments are getting tired of just accumulating more debts.

The governments of Dubai and Abu Dhabi are taking a pragmatic view on the debts at Dubai World - they basically say they will pick and choose where to bailout but creditors need to front up to their responsibility as well as Dubai World doing so. While there have been some short term liquidity measures taken by the UAE banks, effectively Dubai World is a pretty unsafe bet and no one is going to step in and pick up a full tab.

At last, some sanity. It finally shows, if a company or entity recklessly gambles on growth via continually rising asset values and creditors lend them money because they think they cannot lose as they can trade and trade the debts, perhaps the Dubai hiccup has taught us the lesson that a debt is just a debt. The even better news is that just because Dubai World is big and important, Governments are in no way going to just save it when it makes stupid decisions.

The fall out of this crisis, being downplayed in most quarters as a side show and trivial in the great scheme of lending, has yet to be really felt. I suspect that credit agencies and creditors will be taking a great deal more interest in what the British Government is doing in order to secure its ability to repay its growing debt. Hope isn't a strategy, as I have blogged before, and it is high time we saw some action on curbing and cutting costs as well as strategic spending to stimulate the economy rather than just shoring up the balance sheets of banks who risk the free cash to make more profits while no real effect is felt in the actual economy.

I still believe that Dubai is a salutary lesson once again that not enough is known about our financial system, locally or globally, and there are few safeguards against high risk products being traded.