We’re going to pay for all this free stuff

Ultimate Fighting, a mutant blend of martial arts and street brawling, is wildly popular in the US and globally with pay TV revenues bigger even than boxing. People pay up to 45$ a go for live access to the bouts but it is a sport under attack.

Everytime the Ultimate Fighting Championship (UFC) promote an event, illegal pirate broadcasts of the pay-per-view event spring up relentlessly all over the internet – up to 200 on a single US video streaming site and many more around the web often in jurisdictions beyond the reach of US copyright law. It's like the 45$ PPV charge is becoming voluntary.

As this article from BusinessWeek makes clear – ProSports vs. the Web , it is not just UFC that is fighting a losing war against internet piracy. Every single baseball and football game in the States was available free and live (and illegally) last season online.

Do we care that this 220 million dollar business is under threat? Ultimate fighting has been called “human cockfighting” and maybe we should not weep over the demise of a business model that depends on getting men to pay a lot of money to watch other men getting beaten senseless.

But it’s a sign of the times – the disruptive force of the internet is gathering strength and portends some surprising and dramatic results.

For rights owners in the broadest sense, it’s not looking good. If what happened to recorded music (80-95% of content consumed for free with prices for the legal stuff way down) is anything to go by, the results of rampant piracy could destroy business models across a range of industries - sport, movies, TV, books, games.

For example, it is easy to foresee the value of football's Premier League TV deals going down significantly as more people get used to going online to see games illegally. This could get very serious when it is common place to link the TV to the internet and everyone can easily get pirated games in their living room. I could see football club's revenues in the big European leagues dramatically declining.

Will we as the consumers of entertainment end up suffering? I think so. It has been argued that music is still here despite the amount of illegal downloading going on - musicians can make money in other ways like more live shows. But the effects have yet to really filter through - high prices for recorded music have traditionally supported the promotion of new acts and maybe we will see a dearth of new bands in the future. I also worry for the future of the kind of films and TV shows I like - they are expensive to make and if noone wants to pay, even by watching advertising, then who will make them? At this moment in time, the internet's attack on expensive charges for entertainment looks like its all good news for us consumers but I suspect that within a few years the downside will be all to clear.

Are price comparison sites a rip-off?

One of the big benefits of the internet is price transparency - quickly being able to see comparative prices and grab the best deal. The price comparison site has sprung up to make this easier and they are now a routine part of life for most of us. But are they to be trusted?

One reason for doubt has to do with a certain cuddly meerkat and an annoying opera singer. PC sites spend a fortune on advertising suggesting they are chasing a very profitable slice of business. If companies can afford saturation TV advertising it usually means they have very high profit margins and you should be wary. Examples are online Bingo, 118 services and certain car insurance companies - it is their customers' cash they are splashing with these campaigns.

So without having any direct information about the profitability of PC sites I can be pretty confident they make a lot of money and this is reflected in the prices. Perhaps it is no coincidence that motor insurance premiums are reported to be rocketing (33% rise in premiums). Direct line, which doesn't use PC sites, uses that fact in its advertising saying that you can save money by cutting out the middle men and their fees.

Another point of concern is how broad the coverage of a site is. You assume that quotes are gathered widely from all market participants but sometimes only 10 or 15 are actually featured out of hundreds of possibles. Some companies besides Direct Line generally don't deal with PC sites - RBS, Green Flag, Tesco, Churchill.

When you consider the ownership of some sites then things can become even murkier. For example Admiral, a FTSE 100 insurance giant, owns Confused.com and some customers have complained "Admiral always come out top of their comparisons". The meerkat company is owned by insurance group BGI.

The papers have been full of reports recently about boilerjuice.com which claims to find the best price on heating oil. It is PC site owned by an Irish company that also delivers heating oil and has ten different brands which are all featured on the site. Some newspapers have conducted tests and found that the site has directed customers to their own brands even when much more expensive than rivals. It is an apparent conflict of interest which the government is looking at - Energy Minister demands heating oil enquiry.

Another danger was highlighted by the Telegraph last week:

Biba, the British Insurance Brokers' Association, claimed this week that some sites were giving people insurance quotes that did not reflect their individual requirements owing to the focus on the lowest headline price. This has led to customers buying products with higher than expected excesses, or which are unsuitable.

"They [comparison sites] have become the tail that wags the insurance industry dog," warned Biba's head of corporate affairs, Graeme Trudgill. "They have made it all about the price and not the cover."

A final conclusion: it's pretty simple really - don't forgo price comparison sites if you find them useful, just don't assume that they are the last word on price and do at least some shopping around, including offline in some cases.

Latest article at Advoco (my Spanish tax site) What should you do with your savings in 2011?

10 reasons you've got to love the internet

It's funny how it was only after the Dot Com bubble that the internet really took off for ordinary people. Lots of crumby online businesses came and went (bankrupt) and we were mainly left with Amazon, eBay and online travel booking. A lot of the good stuff has only really become ingrained since broadband became ubiquitous in the last 5 years. I couldn't believe it when I read YouTube was only 5 years old the other day; it seems to have been around forever. That site is one of my top ten reasons why the net is now ingrained into my life and doing without a connection would be unthinkable, like losing water or electricity. Here's my list (in no particular order) of 10 reasons the internet has made life better:

1. TV on demand

A really recent one this because it was unthinkable just a couple of years ago when there wasn't enough bandwidth to contemplate everybody streaming TV shows over the internet, but now with 4OD, iPlayer and countless others, it is routine to get almost any viewing you want, when you want. Now that these services are being improved and built into TV sets (Virgin already do it) you can never complain again that "there's nothing on". Annoyingly much of the UK material is not streamable in Spain.

2. Settling arguments

There used to be a time when petty arguments over silly things could fester unresolved indefinitely but now the ultimate resolver of disputes is on hand to hand out judgement. I once had a passionate dispute with someone who was convinced that 9/11 occurred in the 90s and it was only when I brought up (several) news reports that they backed down. I have lost plent of arguments in a similar way.

3. Travel

When did you last go to a travel agents? How about checking in online? How much do you think flights would cost today if the internet hadn't happened.

4. Business

The 1980s and Mrs Thatcher did a great deal for small business and entrepreneurs. The internet has done a lot more.

5. Music

The reason I love YouTube so much is purely for music. Think of any song by any artist in any era and it will be there. You can save your favourites and use it like a radio. There's also a ton of music you can download legally and freely. It used to be to discover new music you had to listen to the radio; now you can browse countless sites and see your favourites as well as hear them. And you can listen to any radio station you want.

6. Shopping

My sister has just published a book. It is fantastic and full of recipes for the sort of (mainly) British favourites that I used to enjoy as a kid. I thought I would buy several copies to give away. Problem - the list price is 20£ (it's a big glossy hardback) and the discounted price on Amazon around 13£ I think. But a quick search using Google's Shopping results section and a 7.99£ offer inlcuding delivery popped up. I bought three and they threw in a free book because of a special offer. The book is called Ramblers Rewards and the cheap bookseller TheBookPeople.

7. Blogging

Writing and reading other non-professional opinions is one of the ways the internet has made life more democratic.

8. Reviews

You never have to take a chance on anything these days, be it book, film, product, holiday destination etc. They are all exhaustively reviewed online.

9. Facebook

Say what you like about social networking but it is amazingly easy to keep in touch and make new connections using sites like Facebook.

10. Information for life

Well, of course, I couldn't go without mentioning sites like our's which provide the information you need for doing anything from paying your taxes to fixing your computer to diagnosing that funny pain you've been feeling in your big toe.

That's my list but I am sure everyone will have their own particular ways that the internet works for them.

Telefonica to call time on "All You Can Eat" internet access

It seems like the telephone companies are starting to regret the way that internet access has always been charged. Since dial-up faded away and broadband came in, it has been charged at a flat rate by the Internet Service Providers regardless of how long the user is online or, more importantly, how much data they download; the "all you can eat" buffet model.

It does seem kind of ridiculous now that heavy users, streaming movies and downloading music and games 24/7, pay the same as the occasional user who is just sending a few emails. Particularly given that the latter may be adversely affected by the former i.e. light users subsidize heavy users but everyone suffers equally when the network runs slow at peak hours. From my experience this is early evenings with my Telefonica connection when I imagine a lot of kids are downloading stuff after school and people are illegally putting movies in their memory sticks for the night's viewing.

Telefonica's CEO Julio Linares has called the current situation "unsustainable" quoting figures that 5% of mobile internet users produce 75% of the traffic -

Telefonica wants to charge more to customers who connect more

It will be difficult to change the status quo however sensible some kind of metered charging appears to be in theory. People have got used to paying a flat rate and will not take kindly to feeling like they have to watch every minute they are online or, more likely, pay for every Byte they download.

It might be OK if the majority of light users got a big benefit from the new regime i.e. monthly bills halved (Telefonica's ADSL charges are very high when compared to the UK) but I suspect they won't. If they can get away with it the ISPs will be looking to increase overall revenues and only they will benefit (both from lower usage of their networks and increased charges from heavy users while light users pay about the same). We'll see but enjoy the free, all you can eat option while you can.

From our website: time to do your non resident Spanish taxes?

Will Spanish business ever get the internet?

Anyone who has ever lived in Spain (or owned property there, or done business there, or even been on holiday there) will know that generally levels of customer service leave much to be desired. During my family's 8 years in Spain we have had all sorts of problems with all kinds of private sector organisation from the local shops to nation-wide corporations. Not only can service be slow and erratic but outright deception seems to be a common and accepted tactic among those employed to deal with the public.

This is hardly news but I would just like to comment another twist to this sorry record of bad service - the 'net hasn't changed much. On the surface of things Spanish business seems to have embraced the internet, not to the extent of the US or Northern Europe, but at least most reasonable sized businesses have a web presence and offer some options for online service. However dig below the surface, i.e. start making orders, enquiries, complaints etc online, and you will find that the same poor service culture exists online just the same as offline. Many times I have used an email for enquiries, quotes etc and not received a reply. The attitude seems to be 'out of sight, out of mind' and the online message is often. You need to get on the phone (if you can get a response there) or go down to see someone face to face.

As an example I needed 4 new tires for our car and decided to save money by getting a deal online (my local tire changing garage charges at least twice as much as they should). There are a lot of options once you do a search and I got what looked like a good deal from webneumaticos.es and all seemed well on the surface with automated payment, email confirmation etc I then arranged a garage to do the fitting again finding one with a website and all the trappings of modern service and communications. Without boring you with the details needless to say I soon got bogged down in a host of problems and it has taken me 2 weeks of chasing, unreturned phone calls and broken promises to get the job done.

Advoco has written before about how Spain can lift its economy out of recession and focused on a better deal for autonomos and employers. Maybe businesses need to start getting serious about service culture. It can be changed. Pre-Thatcher Britain used to be equally rubbish but now I would say most businesses are good on service because they have to be. Even in Spain I have noticed that Telefonica (or is it Movistar) seemed to have improved their previously appalling customer service record of late.

Related article at Advoco.es - 30 ways to market your business in Spain