September 28, 2005
Rumour: NatWest bars IE in favour of Firefox
This is the rumour: a colleague tells me that NatWest bank has barred access to online account customers using IE, asking them to switch to Firefox for the purposes of security. This is the fact: NatWest, having blocked Firefox for many years, now mostly supports it. Still, progress of a sort.
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September 26, 2005
More Glasgow talent
Meanwhile David Shrigley's mates the band Franz Ferdinand are touring the US.
'Alex Kapranos [asks] bandmate Robert Hardy. "What do you think we should do next, Robert?" "We must do a song about heartache," replies the bassist.'
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David Shrigley profile
Excellent profile of the personally charming but professionally disturbing artist David Shrigley.
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September 23, 2005
IE designer switches to Firefox
Elegant, expert description of how Microsoft has let Internet Explorer wither on the vine by one of its original UI developers.
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Flat tax - the arguments in favour
An excellent account of the arguments for a single rate of tax, including the startling statistic that after George Bush's vilified tax cuts of 2003, the tax take is projected to go up by 18.2%.
Posted by Mark at 3:41 PM | Comments (0) | TrackBack
September 22, 2005
Sony toils
Sony has finally announced its big restructuring. There will be plant closures and job cuts. The consumer electronics section has been the most badly effected. It won't end here. More cuts will follow. Sony made a strategic error buying into content twenty years ago and has been paying for it ever since.
Sony's soul is in hardware. Hardware innovation in the entertainment business has often sat poorly with content owners.
Originally Sony grew thanks to selling cheap transistor radios. When radios were invented, the record companies and the live music unions in the UK tried (in part successfully) to stop recorded music being played on them. It would kill the sales of records and the concert industry, they said. In the seventies Sony benefited from video cassette recorders, and people taping TV shows, an activity the TV companies tried to ban, but which eventually launched the huge video sale and rental business. In the early eighties Sony invented the Walkman, a device whose success was predicated on sales of music cassettes but also home taping of music. Home taping was another activity the record companies also did their best to ban but the Walkman ended by giving a fillip to the pre-recorded music cassette - a format which outlasted its natural technological life.
In the mid-eighties Sony bought Columbia pictures and Columbia records. The talk at the time was about vertical integration. Don't just own the hardware, the business gurus said, own the content that runs on it. That way you own the whole entertainment value chain.
But who could say which of the great movies of the last twenty years is a "Sony" picture? How has the brand synergy benefitted Sony? When has a "Sony" act ever made a difference to a consumer decision to buy a Sony TV or gadget?
Instead Sony's ownership of the glamorous movie and record business has proved first a distraction and then a hobble for its consumer electronics business. Sony management has stamped on consumer electronics innovation in an attempt to build in anti-piracy safeguards (digital rights management - DRM).
Howard Stringer - a super bright man - is precisely the wrong choice to head Sony as a whole. He is an ex-TV exec. A content man. In 2005 consumers are in mortal combat with the content industry. They want cheap, easily accessed digital entertainment. They will pay for it, but it has to be convenient.
How is it that seven years after the launch of the original MP3 player the Diamond Rio, Sony doesn't have a universal, cheap portable MP3 player on the market? (Instead it pursues ATRAC). How is it that the only decent portable TV player is made by the French niche outfit Archos?
Owning Sony pictures and Sony records has proved a disaster for Sony's heartland consumer electronics business. Sony wanted to protect its content assets from digital piracy. But it hasn't got traction with its own DRM services - as Apple did - in part because it is a player in the very market it is attempting to act as a gatekeeper to. Anti-trust, and commercial considerations hamper its attempts to compete there.
The solution for Sony is to undo the cracked logic of the movie and record company acquisition, demerge, and let each business pursue its own logic. Let the content folks defend their content, the consumer electronic folk champion consumer convenience, and let the regulator and the marketplace between them decide who gets to dominate the DRM.
Posted by Mark at 8:29 AM | Comments (0) | TrackBack
September 21, 2005
We don't want your money
I am registering for VAT (the UK's sales tax) online. Thanks to "e-Government" this can now be done by filling in a simple form. However when I have submitted the form there is no acknowledgement by email. Is it broken? Has my registration succeeded?
I have to ring an office in Northern Ireland to chase the application. I am told that my application will be processed and a VAT number issued "by mid-October". Because "there is a backlog".
The sheer incompetence of this is baffling.
What happens when they get an online application? Do they copy it out onto vellum?
What is the issue in issuing a VAT number? Can't it be done automatically? What is to process? Do they have to vet me as a suitable taxpayer? I have identified myself as a net payer, you would have thought that my money would be welcome. The delay of a month in issuing a VAT number simply means that the revenue are missing a month's interest on the entirety of the new revenue from VAT registrations. Assuming annual VAT revenue of £73.1bn, and an annual turnover of 7% of new registration, that means that the revenue is forgoing £26m a year in interest alone.
This is enough to pay for the odd ministerial lunch.
When I was last VAT registered, in the eighties, the administration was pin-sharp. Something horrible has happened to this institution in the meantime.
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Germany - hmmm ...
Well, it turned out not to be May 1979. More like February 1974. I guess Germany needs to experience five more years of fuss, muddle and drift before they are ready to act.
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September 15, 2005
In Germany - it's May 1979
An excellent survey by James Meek of pre-election Germany. He emphasises the fatalism, the gloom, the sense of something coming to an end, even as the economic opportunities to the East open up.
The worry for Europe politically is that Merkel prescription: job cuts, lower benefits and lower taxes, will in the short-term create a destabilising boom in unemployment. But if Germany - and Europe - can weather those 3-4 years, the result will be a much more dynamic EU economy as a whole.
Posted by Mark at 8:40 AM | Comments (0) | TrackBack
September 14, 2005
Oil, aviation and gas prices
If the Iraq war was in part aimed at assuring low oil prices, the strategy seems already to be in trouble. A combination of increased Middle East instability, Chinese growth and the transient effects of Hurricane Katrina are creating a blip in fuel prices.
This is not a bad thing for the world economy. Oil is a limited resource which has recently been selling for very low prices. The West (and America in particular) has had few pressures in the 25-odd years since the last oil shock to force economy on fuel consumption and investment in alternative energy sources. The result has been a huge growth in inefficiency, symptomised by energy-guzzling air-conditioned buildings, SUVs (4X4s in the UK) and short haul air travel.
The impending bankruptcy of Delta Airlines and NorthWest Airlines in the US is in part caused by higher oil prices. One of its impacts will be a switch to more fuel-efficient, larger planes. Out go the 50-seaters and in come the 70 seaters. Airbus's gamble on larger capacity planes looks very shrewd.
Posted by Mark at 4:20 AM | Comments (0) | TrackBack
September 13, 2005
Skype, eBay and Paypal - it's about owning identity
Here is Matthew Gertner shedding some light on the Skype and eBay transaction. Meg Whitman's statements about the rationale behind the deal ("Whitman said eBay will use Skype to make it easier for buyers and sellers to communicate directly with each other, thus making eBay a more attractive place to do business") are so limited that one has to look elsewhere. Gertner suggests that it makes more sense to see it as Skype buying eBay. And what is the attraction? Paypal.
Look at this way: Skype (or rather the underlying technology which powers it, Fasttrack) is the best, most scaleable client-based person-to-person "presence", communication, file-transfer, transactional platform ever created. eBay (and Paypal) are the most successful web-based transactional platform.
Put the two together and you get the ability to store and index large amounts of data without costly data centres (phone directories, inventories of goods for sale, transaction histories, reputation indices) and the ability to aggregate demand, wants lists and gots lists. You even have the basis of a really flexible global market in virtual goods (legal Kazaa).
This extends both eBay and Skype(Fasttrack)'s model in the direction of maximal value - as the owner of person-to-person contacts at the point where they generate most value - i.e. the transaction.
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September 9, 2005
More advice for Skype
Business Week shares my scepticism about an eBay link for Skype and quotes one of its key VCs as backing an IPO.
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September 8, 2005
eBay to buy Skype?
Well, here is a turn-up for the books. the WSJ reports that eBay may be making a bid for Skype.
"EBay's massive and loyal userbase of 157 million could be a perfect target for the Skype telephony software" witters the article,"users could use Skype to talk to likeminded enthusiasts and auctioneers or call up scammers to shout at."
This is a very strange story ...
EBay in its auction format requires contacts to be made via the site to stop illegal transactions, auction bidding rings and so on. Whilst chat may be a useful addition, telephony services are hardly useful (no record of the conversation). Video may be helpful (you can show me the object I am bidding on), but for Skype the deal has some glaring limitations. One positive point is that eBay has no stake in telecoms, but conversely, they have no track record in the industry or understanding of the hardware business (critical to Skype's widest prospects). Why would eBay take on the telcos? It's just not their business.
The other suitors who have been mentioned thus far - AOL, Microsoft, Yahoo, seem much more likely partners, companies with a technology background looking to power pervasive computing. Microsoft in particular, with its long-standing interest in
a) customer ownership
b) the telco sector
seems by far the partner with most to gain (and a handy stack of cash to pay with).
Perhaps the eBay "deal" is best viewed as a stalking horse designed to get the others into the ring.
Posted by Mark at 11:27 AM | Comments (0) | TrackBack
September 5, 2005
Merkel performs well in TV debate
A nice piece by the Guardian's Luke Harding on the German presidential TV debate. Let's just hope Merkel prevails.
What's bad for Germany is really bad for the UK (stagnation, low demand, low investment) despite the liberal press's schadenfreude.
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