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Dubai downgraded, but not for long

Written by . Posted on 25 September, 2009. Filed under Article. Tagged , , , . No comments.

Dubai Metro

Alan Morton-Smith
Mindreign.com
25/09/2009

At 9:09:09 PM on September 9, 2009 Dubai achieved an impressive feat of engineering, by launching the world’s longest automated driverless rail system. Built in just four years by a Japanese consortium, the Red line is 52km long (comparable in length to the Northern line on the London Underground), and possesses the world’s biggest underground metro station. Dubai’s Roads and Transport Authority (RTA) expects 318km of metro lines to be in operation by 2020, which is just shy of the entire length of the New York City Subway.

However, all is not well in the state, which is one of the seven members of the United Arab Emirates (UAE). It has been hit by one of the steepest fall in property prices worldwide — a 47% decline in a year, according to Knight Frank’s Global House Price Index — as well as having been battered by the global financial crisis. As a result, its economic boom came to an abrupt end in 2008 after several years of windfall oil revenue. According to figures released by Fitch Ratings on September 24, the Dubai Government’s debt will have tripled from last year, to reach $30 billion by the end of 2009. This is nearly 40% of GDP, and has resulted in firm downgrading the ratings of seven banks, including the country’s largest lender by assets, and the largest bank by market value. Although it is the stated intention of the federal UAE government to support financial institutions, the ratings agency said that their ability to do so has deteriorated. In addition, Fitch has placed the country’s largest telecoms firm Etisalat on watch, with a view to potentially downgrading it as well.

Prestige projects

However, these short-term financial difficulties aren’t putting the brakes on the numerous prestige projects which have been announced in the UAE in recent years. Take Al Maktoum International Airport, for example, which is currently under construction. With no less than six parallel runways, a cargo capacity treble that of Memphis International Airport (today’s largest cargo hub) and 100,000 parking spaces, it’s a project on a staggering scale. This in turn is merely a constituent part of a complex which will eventually cover an area of twice that of Hong Kong Island, and will be home to 750,000 people. It’s all part of the emirate’s strategy to diversify its economy and wean itself off the oil and gas sector, which provides around a third of the UAE’s Gross National Product. The aim is to transform itself into a regional headquarters for banking, technology, media, shipping and aviation. Not that they need to hurry — the UAE has proven oil reserves which, at the current rate of extraction (2.5 million barrels a day) will last for at least another 150 years.

Dubai in particular has been building on past successful ventures, including the Jebel Ali Port, built in 1979 and the biggest such facility in the Middle East. The country is now the third most important re-export centre in the world, behind Hong Kong and Singapore. There was a significant amount of controversy in 2006 when the owner of Jebel Ali Port, Dubai Ports World, purchased the British firm P&O — who at the time were the fourth largest ports operator in the world. This opposition arose because P&O had port management businesses in six major US seaports, and various American political figures argued that the takeover would compromise US port security. But given that the UAE is a long-standing ally of the United States, this seems very unlikely indeed. However, Dubai Ports World eventually sold P&O’s American operations to American International Group’s asset management division for an undisclosed sum. AIG was subsequently one of the major financial institutions which had to be bailed out by the US federal government.

It can certainly be argued against the above xenophobic sentiment that the UAE is one of the most liberal countries in the Gulf. But this is still far removed from Western norms — for example, there are regulations banning things such as kissing in public and wearing skirts above the knee. According to the United Nations High Commissioner for Refugees, the constitution of the UAE provides for freedom of speech and of the press, but in practice, the government uses its judicial and executive powers to restrict those rights. Journalists regularly suffer from several forms of intimidation and harassment. Given the high-profile attempts to lure international media outlets to Dubai, as well as the focus on promoting itself as a tourism hub, clashes between traditional sensibilities and a modern outlook can only increase.

Post credit-crunch

Realistically, Dubai really has nothing to worry about, despite what a credit rating agency may say. The federal United Arab Emirates government is buying Dubai’s bonds and is still aiming for a nationwide growth rate of 3% for 2009. Once the credit crunch fully subsides and the global economy emerges from recession, it will most likely be a case of ‘business as usual’. Some of the more interesting developments will come from how the country squares its stated desire to become a major trade and tourism destination with the conservative values it espouses. The native population is already hugely outnumbered by foreign workers, with only 15-20% of residents being UAE citizens. According to a projection by Dr Abdul Khaleq Abdullah, Professor of Political Science at the Emirates University, this percentage will reach 10% by 2015, and 0% by 2025, which would be unprecedented. What would happen in a country with such a demographic make-up? As long as it’s good for business, the country’s rulers are unlikely to object.

Where might television be headed?

Written by . Posted on 22 September, 2009. Filed under Article. Tagged , , . No comments.

Alan Morton-Smith
Mindreign.com
22/09/2009

This year’s Emmy Awards were held in Los Angeles on September 20, in recognition of excellence in prime-time television. Started in 1949 to honour shows made locally in the LA area, it has subsequently expanded into a national event, and is considered to be the television equivalent of the Oscars. Many news outlets commented on the fact that the event was light on surprises. The awards for best drama series, best comedy series, best lead actor in a drama, best lead actress in a drama and best lead actor in a comedy all went to the same winners as last year. This, it might be argued, is indicative of the rather conservative approach of the academy members who actually decide the winners. The best example of this might be the satirical “fake news” programme The Daily Show, fronted by Jon Stewart. A very worthy winner, but also the recipient of the award for best variety, music or comedy series for the seventh year in a row. As the Guardian put it, “it takes them a very long time to notice shows, which makes it hard for anything new or less hyped to break through”.

The power of the web

In the context of a significant proportion of the population with broadband across Europe and North America — ranging from 85% in the Netherlands to 60% in the USA — this approach might need to be radically rethought. People are accessing more TV content online than ever before, through sites such the BBC’s hugely successful iPlayer; Hulu.com, backed by News Corp, NBC Universal and Disney, and also via less legal means, such as The Pirate Bay. The ability to access content on demand, not bound by any TV channel schedules, is an idea which has been much-lauded for many years but is only now being fully realised. Combined with the ability to share clips and links in a very short timeframe, individuals and shows can rocket from obscurity to global recognition at dazzling speeds. Susan Boyle is the most impressive example of this, with videos of her — from her appearance on Britain’s Got Talent,  various interviews, and her 1999 rendition of Cry Me a River — having been watched online over 100 million times since April, when she first arrived on television.

Indeed, the power of emerging media was recognised at the Emmys, with Dr Horrible’s Sing-Along Blog, a musical short film produced exclusively for internet distribution, winning an award. It consists of three acts of approximately 14 minutes each. They were first released online as individual episodes, with two-day intervals between each one being made available. Directed and financed by Joss Whedon, the creator of Buffy the Vampire Slayer, it cost just over $200,000 to make, which he had recouped by November of last year through sales on DVD and via the iTunes store. In a blog post, Whedon stated that, “We’ve been able to pay our crew and all our bills”.

Another interesting aspect of how power is shifting online is that, according to Bloomberg, television programmes such as The Simpsons and CSI are for the first time commanding higher advertising rates at web sites including Hulu.com and TV.com than on prime-time TV. Marketers are willing to pay more because these sites provide committed viewers who actively seek out shows. There are fewer adverts, and consumers are twice as likely to recall web ads, according to David Poltrack, chief research officer at CBS. That said, whilst web viewing and online advertising sales are increasing, they are still too small to replace traditional revenue sources.

Transition

Although the internet is undoubtedly becoming a considerable force in the television industry, we are still in a transitional phase, and a great deal of work lies ahead in establishing new, profitable ways of doing business online. The problem of how to do deal with illegal filesharing, for so long a problem for the music industry, is now becoming more critical for the TV networks as well. One key problem is the considerable time-lag between when series are broadcast in different countries, which often leads to fans, impatient to see the latest developments, taking things into their own hands. This could potentially lead to a similar approach taken by the film industry, where movies are increasingly given a single worldwide release date, in a bid to combat piracy.

Despite the success of Joss Whedon’s short film, with its low budget (by television standards) there will arguably always be a market for high quality, lavish productions by the likes of HBO, responsible for such series as The Sopranos and Band of Brothers. It will also be intriguing to see how public sector broadcasters, such as the BBC, recast themselves in this rapidly shifting environment. One thing is for sure, though: the great and the good who cast their votes for Emmy awards in years to come will have a far greater array of programmes to choose from than ever before. Here’s hoping they can keep up.

Google: The World’s Librarian?

Written by . Posted on 21 September, 2009. Filed under Article. Tagged , , , . No comments.

Alan Morton-Smith
Mindreign.com
21/09/2009

Google Books is an ambitious project, for which the ultimate goal is create a comprehensive, searchable, virtual card catalogue of all books in all languages. To that end, they have already digitised about ten million books and made them discoverable online. It’s a key plank in the company’s strategy to “organise the world’s information and make it universally accessible and useful”, as their mission statement has it. Launched towards the end of 2004 in partnership with several high-profile university and public libraries, it now also incorporates the in-copyright books of thousands of publishers as well.

This process has not been without controversy, and there have been a multitude of allegations, lawsuits and protests about the company’s actions since its inception. One of the main points of contention are so-called “orphan” books — that is, books still protected under copyright, but which belong people who cannot be traced. A group of authors and publishers in America sued in 2005, citing “massive copyright infringement”. In October 2008 a settlement was reached, in which Google set aside $125 million to resolve outstanding copyright claims, and said it would share any future proceeds. It would also provide the means for copyright owners of out-of-print books to submit claims to Google, and lead to the establishment an independent Books Rights Registry. Both parties are currently seeking judicial approval for this deal.

Several rivals, including Microsoft and Yahoo!, Google’s major competitors in a number of fields, are vehemently opposed to the settlement. Indeed, Microsoft has gone so far as to say that it is “an unprecedented misuse of the judicial system”. They started their own book digitisation programme in 2005, but wound it down less than three years later. Amazon, the principal retailer of books online, is similarly against the agreement, labelling it “dangerous”, and noting that it could give rise to a “cartel structure that leaves the public susceptible to abuses”. All of these firms, in conjunction with such organisations as the British Library, are members of the Open Content Alliance. This group is pushing for Congress to intervene, as they feel that this would lead to a more equitable solution than the settlement.

Across the other side of the Atlantic, the European Union is in the process of reviewing copyright law, to establish whether it is still fit for purpose in the digital age. The picture in Europe is much more complicated than in the US, with each of the 27 member states having their own varying rules. Earlier this month, the EU started a round of hearings on the Google project, which is interesting in the context of already having their own publicly-funded digitisation project, in the guise of Europeana. There is a fear that should the agreement between Google and the authors and publishers be given the go-ahead, it could put European education and research institutions at a significant disadvantage to their American counterparts.

For Google’s part, they argue that the nature of a class-action suit means that it is impossible to open up the deal to other parties. They also note that the project actually increases competition in the market for digital books, and significantly expands online access to works, with its initiative offering a counterpoint to such services as Amazon’s Kindle, which is currently the dominant player. There’s also a significant gain to be made in resolving the status of books whose owners are proving difficult to trace, as well as the issue of excessively long copyright periods. Millions of in-copyright works, including hard-to-find out-of-print books would be made available, providing them with greater exposure, and potentially generating new revenue.

Google would also offer very extensive access to its digitised library, including being able to view free, full-text online editions at American public libraries. This would be at no charge to the library or the reader. In addition, universities and other organisations would be able to obtain institutional subscriptions to collections from some of the world’s most renowned libraries, including Harvard and Oxford. The firm is also making conciliatory gestures, such as the recent hint that they would let other internet companies sell digital copies of their out-of-print books. The previously mentioned Book Rights Registry, which was created with an initial $34 million from the firm, is an independent, not-for-profit organisation which would seek out copyright holders, maintain accurate contact information for them, and provide a way to opt in or out of Google Books.

Whilst this is clearly a deeply contentious issue, and Google’s creed of “don’t be evil” has not always been upheld (in their censoring of search results at the behest of the Chinese government, for example) the greatly increased access this project offers to researchers across the globe is a boon for human knowledge, and benefits us all. On a slightly more prosaic note, the potential for the firm emerging with an unfairly dominant position in the book business can also be said of Amazon at the moment. The establishment of a major alternative would be most welcome. Sony, for example, is in favour, and has said that it would have “numerous and significant pro-competitive effects”. On the issue of finance, Google will be paying 63 percent of royalties generated to the copyright owners, in addition to the initial financial settlement. There is also the potential for added revenues for these owners via library access, in the form of per-page printing fees. The firm’s approach has drawn the ire of many, but the end result will be free access to great collections of the written word.