Charles on… anything that comes along

Tim Carron Brown - who pretty much deserves his own category here, doesn’t he? - was sentenced at Bournemouth Crown Court on the afternoon of Friday 26 June 2009.
(Image: HMRC)

He was sentenced to two and a half years, serving half of this time in prison, and disqualified from being a company director for eight years.

He was sentenced on the charge of cheating the Public Revenue, namely HM Customs and Excise, later HM Revenue & Customs, by dishonestly accounting for Value Added Tax (VAT) and/or monies charged as VAT in relation to four limited companies. An offence of cheating, contrary to common law.

The four companies, through which the fraud was committed by Carron Brown as a Director, are: Companytv Limited; Second Sight Limited; Anstruther Management Limited; Omedian Limited.

All of these VAT registered companies were run from a rented property in Waddock, Dorchester, and previously from rented property in Ickham, Kent. He was arrested in August 2006.

(Separately I’ve been told that there’s an application for bankruptcy proceedings against him, but haven’t confirmed that.) He was also subject to Bankruptcy Proceedings instigated by Lombard North Central (apparently a financial/leasing/loans organisation). He was made bankrupt at Weymouth County Court on 1 June 2009.

Relating to that, I’ve received a press release from HM REvenue and Customs:

Dorset VAT fraudster jailed

A Dorset based fraudster who illegally reclaimed £312,000 in VAT (Value Added Tax) was jailed for two and a half years at Bournemouth Crown Court today.

Following detailed investigations by HM Revenue & Customs (HMRC) officers, Timothy Colin Carron Brown (aged 52) pleaded guilty on 22 May 2009 to an offence of cheating the public revenue.

Peter Avery, HMRC Assistant Director Criminal Investigation said: “This sort of scam requires detailed planning on the part of the criminal and immense dedication from HMRC officers to unravel. This calculated attack on the VAT system not only robbed the exchequer, and therefore honest UK taxpayers, of public funds, but is also unfair to those respectable businesses that diligently abide by the rules.

“Tackling VAT fraud is a priority for us and we will not hesitate to pursue those who commit this type of offence. Anyone who has information about suspected tax fraud can call our 24-hour Customs’ hotline on 0800 59 5000 or email customs.hotline@hmrc.gsi.gov.uk”

Upon sentencing His Honour Judge John Harrow said: “I take the view that you invested a substantial amount of time and energy into the business ventures, and the companies were set up for a legitimate purpose. However you exploited the VAT system by fraudulently claiming VAT repayments of £312,000. This was taxpayers’ money and despite what was said (by defence counsel) it (the fraud) did have a degree of sophistication.”

Judge Harrow then commended the main investigating officer: “For the degree of hard work and investigation skills in this case.”

The VAT fraud involved Carron Brown submitting VAT repayment claims in relation to four VAT registered limited companies. The claims were not legitimate and he was not entitled to the repayments.

Carron Brown used a number of methods to perpetrate the fraud. These included reusing invoices for which he had already reclaimed VAT; submitting false invoices and records, and trading between his own companies to reclaim tax on purchases but not accounting for the corresponding sale.

The fraud was committed between 2001 and 2005. ‘Nil’ returns were rendered once officers began to probe into the companies. Carron Brown used the proceeds of this crime to fund a seemingly affluent lifestyle. HMRC and its prosecutors will pursue confiscation proceedings. The case was successfully prepared for prosecution by the Revenue and Customs Prosecutions Office (RCPO).

Here’s the explanation of the offence from HMRC: “VAT registered businesses must charge VAT on the selling price of any goods and services that are liable to VAT. This is known as ‘output tax’ and must be paid to HMRC.

“VAT registered businesses can reclaim VAT paid on their business purchases. This is known as ‘input tax’.

“In simple terms the amount of VAT that can be reclaimed as a ‘VAT repayment’ is the difference between the VATable sales (output) and VATable purchases (input).”

Update: the Dorset Echo has a piece about it:

It was proved that Brown submitted illegitimate VAT repayment claims for four VAT-registered limited companies for which he was not entitled to repayments.

Investigators found Brown used a number of methods to perpetrate the fraud, including reusing invoices for which he had already reclaimed VAT.

His other scams included submitting false invoices and records and trading between his own companies to reclaim tax on purchases without accounting for the corresponding sale.

These posts might be related (the database thinks..):
• Timothy Carron Brown taken to court? But what happened next? (Updated) (26 October 2008; score: 140.23%)
• Tim Carron Brown pleads guilty in Bournemouth Crown Court (22 May 2009; score: 80.68%)
• A rapper with a cochlear implant? Yup, there is (18 January 2008; score: 66.53%)

Wow, there’s been a lot of heat - and pretty much zero light - generated in the last few days, mainly because of a couple of stories from the New York Times, and then because of the endless argument (which shouldn’t be an argument) about “the future of journalism”. Oh, man, this stuff gets boring fast.

And more to the point, if everyone is worrying about what’s going to happen to newspapers, why is it that it’s the journalists who are doing all the debating and experimenting (I’m counting blogs and other web-only publications, such as TechCrunch and Engadget and the whole Nick Denton stable among the “journalists” thing, because like it or not they’re helping shape the landscape)?

Why is it us, the people who used to just have to worry about the grey stuff that went between the adverts, and not the publishers, who were the ones who put all the paying stuff around it? Because don’t fool yourself: the grey stuff, while it might excite your grey stuff, is expensive to make and isn’t a profit centre. It’s all the things around it that helped generate profit: the physical print, the adverts of various sorts, all sorts of other peripheral things (”special offers”, conferences organised by the newspaper, and so on).

A couple of tweets crystallised this for me. Paul Bradshaw pointed to Robert Picard who pointed out that journalism is not a business model, just a process.

Ian Betteridge then followed up: publishing is the business.

There you have the whole conundrum in a nutshell. Put it another way. Putting books into parcels is a process. Getting orders from people and then shipping those parcels to them at profit - that’s a business. Amazon is the business. Packing books is the process. It might be uncomfortable, fellow journalists, to think of what you do as book-packing, but look at it another way: people order those books because they want them, and are glad to get them.

To repeat: journalism is the process and publishing is the wrapper that you put around journalism in order to make it profitable and sustainable. Journalism will continue, just as putting books into parcels will continue, even if Amazon disappears; you’ll just do it yourself, buying it at a local store and sending it to Granny. Might be more expensive than Amazon, but that’s just how it is.

With that in mind, one has to consider what’s happening to news organisations (”newspapers” is starting to sound a bit 20th-century to my ears). The internet has come along and caught publishers completely off-balance. And there’s a new breed of publishers, who have started on the internet, and are internet natives, and they simply don’t play by the same rules either of print publishing or of print journalism. The former upsets print publishers, and the latter upsets print-origin journalists (in which I’ll include myself, at least until I had an epiphany I’ll explain below).

First, the NYT pieces that caused the row. The first, When the thrill of blogging is gone (sorry, I’m not going to do the daft headline capitalisation), takes as its jumping-off point that fact determined by Technorati that 95% of blogs are abandoned within a pretty short time, and then does the hard work of finding people who used to blog, and now don’t. Fair enough. Seems pretty straightforward to me: find a cultural trend, see if it’s backed up, write about it. Reflect the readership (because there must be plenty of NYTimes readers who’ve started a blog) back to themselves.

This kicked off something of a firestorm on Twitter, or at least those I follow on Twitter, where the NYT was accused of “dumping” on blogs. Er, no, people. It was corralling facts and relaying them. It wasn’t saying “all blogs are dead”. It was saying “lots of blogs die - howcome?”

The second piece, which had more far-reaching effects, looked at the cultural thinking behind a couple of really big news blogs, including TechCrunch. Ping! Get the Tech scuttlebutt - it might even be true! was, again, looking at something that really happens: tech blogs scrapping amongst themselves for page views, and putting up stuff that they suspected themselves wasn’t true, but what the hell, it might be, so let’s get it out there. Hence TechCrunch writing that Apple was looking to buy Twitter - even though Michael Arrington is quoted in the piece saying that he didn’t think it was true when he posted it. A telling quote from him is:

“Getting it right is expensive,” he says. “Getting it first is cheap.”

Oh, my. Twitter firestorm supreme. I found myself pitching into a three-, four-, five, six-way involving Jeff Jarvis, Matthew Ingram, Tim O’Brien (NYT Sunday business editor), Dave Winer… did I miss anyone out? The “print” journalists’ thinking: publishing stuff you know isn’t true just ain’t the way to do it. The response (from Jarvis, certainly): that’s how it is in some places. Jarvis makes this point more eloquently in a post on his own blog. It’s quite an interesting test of your own position whether you think journalism needs to be about “standards” or “process”. I found it offends me in some visceral fashion to think of publishing stuff that I really believe isn’t correct. That’s just not how I think of it being done.

But as I prepared to launch another tweet in the effort to breach the Jarvis defences, I found myself reflecting on something Clive James used to say in his TV reviews. “If I find I share an opinion with [some repugnant person], I reexamine it at once,” he said. Mine is the obverse: if I find I’m disagreeing with Jarvis, it might be time to step back and start questioning my own thinking, because there’s a high likelihood it’s faulty. Which led to my epiphany.

Here’s how it looks to me, viewed through yet another prism. Malcolm Gladwell wrote a really interesting piece in the New Yorker about how Davids - the little armies or organisations - can compete and defeat the Goliaths. He points to the example of a girls’ basketball team which beat many far more experience and able teams by using a tactic (the “full court press”) that’s unusual for that level; Lawrence of Arabia, who defeated the Turkish Army by using desert (essentially, guerilla), not military, tactics; and he points out that actually, David can have a pretty good shot at things by not playing according to Goliath’s rules. Because Goliath got where he did using his tactics. Of course he’s the best at them.

OK: now see the publishers of Gizmodo, Engadget, Gawker, TechCrunch et al as the Davids, fighting the Goliaths of the New York Times and, of course, the Guardian and all the other papers. Should they fight on the same terms? If they want to get beaten, sure. They’ll never be able to find the experienced journalists, the experienced sales people, the special something that the papers have been able to build up over decades. The papers have the news process down pat. They can get those stories into paper-sized parcels and out to people so effectively there’s no room left.

So the blogs have to create their own battlefield, their own rules, and fight there. (I’ll use the metaphor of military action because plenty is at stake in this. Get it wrong, and you get stuff such as the NYT management imposing 23% pay cuts on Boston Globe staff - to which one can only say “yeow”. Because

The [New York Times] company posted a net loss of $57.8 million for 2008, and $74.5 million in the first quarter of this year. The Globe has been the biggest drain by far, with operating losses of $50 million last year and a projected $85 million this year, not counting the union concessions, according to management.

)

OK. So blogs have to create their own rules. Such as what? Such as doing stuff that the papers won’t. Post rumours, and declare them as such; copy and rewrite like mad, so that how fast you can get the post up is more important than whether you checked it; let the readers in effect write the news; publish galleries of Photoshopped “is this the next iPhone?” galleries.

All the while, the Goliaths of the news industry stand by, shaking their heads. Hell, they’re doing it wrong! That’s not how you put stuff into a news parcel! It’s like this… hey, doesn’t anyone want it? Funny, the orders have dried up. And the Davids count the money they’re getting from adverts supplied against millions of page views. (They don’t have as many journalists as in a traditional news room, you say? Yeah. Life’s like that sometimes.)

What the established news organisations in the US really need to have right now is some people on their commercial side who really live on the internet, in the way that so many technology journalists have been for years and years. I wonder to what extent they do; all the talk about paywalls has that slight tinge to me of people who don’t live there, and look at all those millions of page views and think “surely we can persuade a few of them to pay”. I think actually that to talk about paywalls on web-only generalist content is to look in the wrong place. There are plenty of ways to make money on the internet - publishers like Denton and Arrington show us that. (Well, we can infer that they do from the fact that they haven’t vanished. If someone wants to send me their financials, or point me to them, I’d be happy to publish them.)

There is one note of relief: unlike war, it’s not absolute. There’s plenty of room for everyone to thrive in this: the Davids and the Goliaths can live alongside each other. But the latter have to adapt so that they can get it right, and trade on the things that have got them where they are - which in effect means their brand reputation - and capitalise on it. Else those Boston Globe cuts aren’t going to be the last.

In the meantime, it seems that the journalists are having to do not only the packing of the news parcels, but also try to build the business around them. Thus you get efforts such as “how to save newspapers in 140 characters“. Many are praiseworthy, but aren’t the humble (or not) scribes plenty busy just trying to pack the parcels? Rather like the stockbroker’s friend who asked “Where are the customers’ yachts?”, I’m tempted to ask “where are the publishers blogging and tweeting about the next business models?”

Because remember: journalism is the process. (Talking about the “future of journalism” is a bit daft. The future of parcel-wrapping? Yeah, probably more automated.) Publishing is the wrapper that makes journalism profitable. Denton and Arrington have created wrappers that work for internet content. Has everyone else?

These posts might be related (the database thinks..):
• The fourth man in the Quinn saga? And has any report *ever* found against a government minister? (21 December 2004; score: 37.22%)
• Journalism or "churnalism"? Nick Davies of the Gdn weighs in.. (31 January 2008; score: 35.97%)
• How editors think the newsroom works, and how it really does (8 November 2006; score: 30.99%)

It can be quite depressing to be part of a story that’s being about a subject you know about, where people who are ostensibly your peers - that is, equipped with the same skills as you, with access to the same tools as you - are reporting on it. Because it shows how rubbish people can be at simply reading a piece of text and regurgitating it.

If the future belongs to amateurs, one has to really worry. Though the professionals aren’t always doing such a bang-up job.

Case in point: PaidContent. PaidContent UK wrote a story which absolutely correctly said that Guardian management is considering whether to keep the printed Technology section going. Prices of raw paper have risen; job ads, which was always meant to be the raison d’etre of “G3″ specialist sections (Guardian 3: there’s G1 - the main paper - and G2, the “features” bit), have moved online, especially for technology jobs.

Nevertheless, the Technology supplement does get job ads, and it does occasionally get display ads. So the idea of closing it isn’t a fait accompli.

Robert Andrews got wind of the review that’s going on, which is part of a far larger look at costs, and wrote about it. (I could argue about the link text - “may” would have been good - but anyway.)

Robert did try to contact me before writing; I was offline (though I had my mobile…). He did speak to the Guardian’s press office. Apart from being finicky - Online started a long time ago and Vic Keegan wasn’t the launch editor - it’s a good piece of journalism: find something out, speak to those who are in a position to speak about it.

(I’d take issue actually with this:

The move is thought to be due to worsening tech ad spend but also the fact that many readers, naturally, are online natives with a voracious appetite for tech news throughout the week… one school of thought has it that a weekly dead-tree edition seems like anachronism.

Actually, it’s very evident that the people who read the print section aren’t exactly the same ones who read the Technology content online. They get something extra. And it’s important for other reasons: it’s easier for a civil servant to show a piece of paper to a minister; easier to wave in their face than a website.)

(Note also that Azeem Ashar adds some detail in the comments.)

Next up: Press Gazette. Following up the PaidContent story, they actually did contact me - we spoke by mobile. Look, there are my quotes in the story. Accurate. Journalistic. Good. Can’t argue with the headline or intro. Though I would say that there aren’t any staffing implications. We’re more than busy anyway, and we could be just as busy even without the print section - we’d be writing stuff for the main paper, the features section, and so on. (And again, interesting comments.)

And now we begin the slide downhill - and the depressing thing is that it’s the lousy reporting that actually gets bounced around the blogo/twittersphere.

First, MediaWeek, which has a story that was originally headlined “Guardian to close Technology supplement”. And then an intro: “The Guardian is considering dropping its Thursday Technology supplement, according to Paidcontent.”

Exactly how crap is that? Intro and headline completely disagree. And it’s a complete ripoff of PaidContent’s er, content. I emailed to complain, and the headline was changed. Otherwise it wouldn’t have been. (MW says it came from Brand Republic. Thanks a lot, BR.)

And finally we come to the World Editors’ Forum, which wrote:
Headline: The Guardian reconsiders Technology supplement
Intro: The Guardian is due to drop its Thursday Technology supplement, paidContent:UK reports.

I mean, come on. That’s just incompetent. I’m sorry, but it is. The headline is correct; the intro, wrong. That’s not what PaidContent said.

Some more:

It is also feasible that the printed edition just could not compete with its online counterpart, which is updated daily. Technology enthusiasts, moreover, are presumably more inclined to log on regularly than wait for the Thursday paper to land on the doorstep.

“Could not compete”? What rubbish is this? Have they bothered to find out who runs the online content (me) and who edits the physical section (me)? Apparently not. even though I’m all over the internet like a rash. Hell, my mobile phone number is on this site. I’m not a hermit.

Nick Passmore launched the Online supplement in May 1994. In 2005 it was rebranded Technology with the arrival of new editor Charles Arthur, and its science counterpart supplement Life was merged into the paper when the paper adopted a berliner format.

Nice - they’re read the comments on the PaidContent story. Except they didn’t research this blog. I didn’t arrive until November 2005, two months after the September relaunch in Berliner format.

So let’s see, that’s a slew of factual errors, a basic subbing error (headline doesn’t agree with intro), in a piece just four paragraphs long. (I haven’t bothered to fisk it all.)

The trouble is that this leads to people saying “Oh noes! The Guardian is dropping technology coverage!” NO IT BLOODY WELL ISN’T. Which I pointed out (and they then corrected.)

So the score: two lots of good reporting, where sources are checked (PaidContent, Press Gazette); two of crap reporting (MediaWeek/Brand Republic, WEF). Trouble is that the meme that gets passed around Twitter (for sure) is the idea that it’s going to close - no doubt, none of the subtlety in the original story.

Frankly, that’s a bit crap all round, and makes one consider the final score.
1) how well can proper journalism (PaidContent, UKPG) survive when you have copy/pasters all around? Copy/pasting is cheaper than finding stuff out. Quicker, apart from anything.
2) look how easily ideas get crunched into misconceptions in being translated into 140 characters, especially if they’re taken from headlines that are just plain wrong.
3) some people can’t read, parse and regurgitate a piece of text.
4) I wonder how many times have I written something that’s unwittingly incorrect because I haven’t been able to get at original sources? Not often, I hope. But this is the sort of experience that makes me even more determined not to accept lazy copy/paste stuff, and to check stuff with sources. Properly.

See you next Thursday in print.

These posts might be related (the database thinks..):
• My new job: editing the Guardian's Technology section (26 October 2005; score: 52.65%)
• The online money is in distribution, not content (10 January 2008; score: 47.64%)
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Welcome Tim Carron Brown watchers! We bring you news!

After my various posts and stories over the years about Tim Carron Brown - you know, the guy who seemed to have the bad luck to always be at the top of companies that couldn’t quite keep ahead of the maw of liquidation, bankruptcy or simple vanishment - we bring you news from Bournemouth.

You’ll recall that he had been charged with… oh, let’s bring it up again:

Timothy Carron Brown, the company director behind the collapsed television production house Iostar and the £43m dotcom disaster Efdex, is due to go on trial for cheating the public revenue and forgery.

The prosecution is being brought by HM Revenue and Customs, and involves four companies of which Carron Brown has been a director, including Omedian, Anstruther Management, Company TV and Second Sight.

Carron Brown was amongst those blamed for the failure of Iostar, the television company which channel Five’s newly appointed chairman and chief executive Dawn Airey briefly joined as chief executive last year.

(Or take a break to read some more background on Iostar’s vanishment.)

He has now been charged with 13 offences, including two counts of cheating the public revenue, four counts of being knowingly a party to the carrying on of a business for a fraudulent purpose, six counts of forgery and one count of using a forged instrument.

When Carron Brown was contacted by the Telegraph at the time (May 2008), he denied all the charges.

Hard to know quite what changed his mind in the interim - was it the people who had formerly worked with him at Iostar who were prepared to be witnesses for the prosecution? Was it the long interviews with the police? - but on Friday he pleaded guilty in the Crown Court. (I’ve had this from two entirely separate sources, so I’m happy to report it. Anyone can point me to the Bournemouth docket, I’ll link.)

I’m still intrigued by the comment that was left on this blog on May 13 by “Piers Diacre”:

While it may seem that a lot of people are snivelling about Tim Carron-Brown, mostly they seem to be ex-employees who had willingly signed on to work for his companies. So what if the business plan did not work or was ahead of its time or was never going to work. At least Tim had the guts to try and the ability to get many of his ideas at least in to launch mode.

Yeeeess. Some things do not and cannot fly, though. Launch mode doesn’t work on cars, for example. Iostar never seems to have had a sustainable business, even if its business plan or model was, in theory, great. That’s the difference. I think that’s why Dawn Airey departed muttering about lawyers and suing people. My, she was angry.

“Piers” again:

It may be that a lot of the fault is, but surely there are others who share part of the blame - the usual suspects - disingenuous directors,greedy investors will be the first to blame the man in charge.

If Tim is blessed with one thing, it is a very fine business brain indeed - without it he would never have been in a position to get the backing for the three or four businesses he tried to start in the .com space.

I am happy to have him as a friend and he is been a very good friend for many years.

That’s good to hear. However, I understand there may be others who feel, how shall I say it, rather differently about TCB. Such as Peter Teal, who wrote a book called Crooks & Cronies, over which TCB sued (successfully).

If you want to leave a comment (no libel please: facts only) then please do; please leave your email because I intend to follow up on this on a bigger forum. Alternatively, just email me - charles.arthur@gmail.com - with details. If you want or need to remain off the record, that’s fine.

These posts might be related (the database thinks..):
• Timothy Carron Brown taken to court? But what happened next? (Updated) (26 October 2008; score: 130.87%)
• Tim Carron Brown sentenced to two-and-a-half years' jail for 312,000pd VAT fraud (updated) re Omedian, Companytv, Second Sight Ltd, Anstruther Management (26 June 2009; score: 116.02%)
• A rapper with a cochlear implant? Yup, there is (18 January 2008; score: 76.55%)

There have been some calls by beleaguered MPs looking for an out for “an independent investigation into MPs’ expenses”.

Seems to me that this is already going - the Daily Telegraph has had 25 people going at it for weeks.

So here are five reasons why, and one reason why not, the Daily Telegraph is better than an “independent investigation” into expenses.

1. It has a professional team which has access to all of the data
2. It is publishing the results of the investigation concurrently with its findings
3. It is answerable in the courts if it gets it wrong on any item
4. It has not been appointed through any political manoeuvring
5. It is giving those suspected of wrongdoing the chance to reply

There is however one reason why it’s not as good as an independent investigation:

1. The actual investigation isn’t being done in public; we see the results, not the working.

On balance, I think we’re better off with the Telegraph doing it. As I write this, the Telegraph is publishing more - Ian Gibson. Who is offering an explanation about his second home flat which he sold to his daughter at, allegedly, half its market price.

Can you imagine what an “independent” investigation of all this would look like? They would vanish into a room forever. MPs would come and go. There would be little murmurings. There might be “salmon letters” (which come from an inquiry when a person may be criticised in the final report) flitting back and forth. And then, don’t doubt, a great big nothing.

No, I think we’re better off with the press doing this sort of stuff. Perhaps we could try it with some other evidence where we aren’t quite certain we’re getting the true story. Any chance that the full papers from the Deepcut inquiry (inquiries?) could find their way to the Guardian?

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• Steve Jobs piece in The Independent magazine (29 October 2005; score: 27.13%)
• How the House of Commons made it harder to work out how much MPs have cost: by using PDFs (21 October 2004; score: 26.85%)

• Felix Salmon » Blog Archive » WSJ.com’s barbell strategy | Blogs |
  

  My feeling is that Murray’s latest bright idea is doomed. He’s giving away most of the stuff that people want to read, and he’s trying to make money from selling stuff people need to read. The problem is that for all the WSJ’s astonishing levels of self-regard, there’s precious little of that material out there. Open the paper and ask yourself how much of it really isn’t replicated, for free, anywhere online. The answer is that there’s very little — certainly not enough to persuade hundreds of thousands of people to pay good money for an online subscription.

  It seems like whatever strategy people have for charging for content online, it’s the wrong one. Charge for general news? Everyone can get it. Charge for niche content? Nobody will buy it. It’s like watching people trying to buy pots of striped paint.

• How could 9,000 business reporters blow it?
  

  In May 1990, the Wall Street Journal published “The Reckoning,” a devastating, 7,000-word account by Susan Faludi, then a staff writer, of the human toll wrought by the leveraged buyout of the Safeway grocery chain. It is safe to say that that piece, which tied the Safeway lbo to workers’ suicides, heart attacks, and more, would never be proposed, let alone published, today.

  Faludi’s article was distinguished by more than its scope and length. It also took on a practice that at the time was at the very heart of Wall Street’s business model, not to mention one of the preeminent firms of the era, Kohlberg Kravis Roberts & Co. It then expanded the story’s scope to take into account the social costs of high finance. Similarly, the Journal’s Alix Freedman took on the tobacco industry at the height of its power in 1996, when she won a Pulitzer for stories exposing how ammonia additives heighten nicotine’s potency.

  By contrast, in the past few years, business-news outlets, increasingly burdened financially, less confident editorially, competing ever more fiercely among themselves, torn by the tradeoff between access and scrutiny, have slowly given away their sense of perspective. The result was an insiders’ conversation—journalism that, while well executed on Wall Street’s terms, in the end missed the point. There have been exceptions—a preliminary list would include Shawn Tully at Fortune, John Hechinger and others at the Journal, Mara Der Hovanesian at BusinessWeek, Diana Henriques and others at the New York Times, and Scott Reckard at the LA Times. But to this day, and even after the collapse, the most complete accounts of the mortgage mess have been provided not by the mainstream business press, but by This American Life’s “Giant Pool of Money,” and Chain of Blame, a book published last year by reporters for the Orange County Register and National Mortgage News.

  ….and further down….
  

  The rise of M&A [mergers and acquisitions, when companies buy other companies] coverage represents the triumph of Wall Street insiderism. It is the opposite of Faludi’s vision. Significantly, M&A has become a business-press career launching pad: Andrew Ross Sorkin, who writes the Times’ DealBook column, and former Wall Street Journal M&A reporter Nik Deogun are among the field’s superstars……
  … Predatory lending happened in plain sight; it didn’t take a muckraker to see what was wrong. Yet business journalism kept its blinders on, played it safe, fixated on stock market concerns, and allowed its BS detector to atrophy just when it was needed most.

  Fascinating analysis by a former Wall Street Journal staffer of how everyone - well, pretty much every business reporter - got caught up in the personality-driven stories and share price twiddles, rather than getting down and dirty with the balance sheets and earnings reporst (and derivatives). A long but hugely worthwhile read. And the incredibly ranty comments (basically, “bloggers all said this endlessly”) are intriguing… though the very last one, pointing out that there had been an article about Madoff in 2001 in Barrons, shows that it wasn’t all one-way traffic.

  Just a motorway, with a footpath in the other direction.

• The “Lack of Vision” thing? Well, here’s a hopeful vision for you
  

  So you’re on an ocean liner and it sinks. Step No. 1 is: Tread water. Step No. 2: Grab the first floating thing that happens by.
  That’s where the newspaper industry is located today — desperately grabbing at whatever debris is available

  OK, nice that you noticed. So what have you got?
  

  The old way:
  Dan the reporter covers a house fire in 2005. He gives the street address, the date and time, who was victimized, who put it out, how extensive the fire was and what investigators think might have caused it. He files the story, sits with an editor as it’s reviewed, then goes home. Later, he takes a phone call from another editor. This editor wants to know the value of the property damaged in the fire, but nobody has done that estimate yet, so the editor adds a statement to that effect. The story is published and stored in an electronic archive, where it is searchable by keyword.

  The new way:
  Dan the reporter covers a house fire in 2010. In addition to a street address, he records a six-digit grid coordinate that isn’t intended for publication. His word-processing program captures the date and time he writes in his story and converts it to a Zulu time signature, which is also appended to the file.

  Basically, the new way is data-driven - and more flexible in all sorts of ways for that. It’s the journalist as data wrangler, which I’ve argued before is exactly where we need to move to.
  

  Why this matters
  The 2005 story can be found by archive search, but the labor cost of reacquiring and sorting for relevance every story listed under the search term “fire” is expensive and inaccurate. Consequently, its commercial value approaches zero.
  On the other hand, the 2010 “story” is only a subset of a much more complex and valuable data set, which exists within a data structure that allows its information to be retrieved accurately and reconfigured in useful ways.

  Get it? Some don’t.
  

  So I understand my curmudgeonly colleagues when they scoff behind my back at the word “metadata.” They don’t see its value, so they mock it. The beancounters? I expect even less from them. And the newspaper management class? Don’t get me started.

  Actually, it’s different at The Guardian - can you say Open Platform? - where the management class does have an acute realisation (sometimes driven at them by the journalists) of the importance of all this stuff.

• tynan wood: my job and welcome to it
  

  What gets under my skin are the comments that invariably accompany these screeds about the future/death of journalism. It’s amazing to me how many people out there firmly believe they know how to do my job better than I do, despite the fact they have no idea what I actually do. So I thought I’d try explaining what I do, and how it’s changed as a result of the blogosphere, in an effort to clear up some misconceptions and, hopefully, shut some people up.

  Another long read. And worthwhile too for its description of how an article gets written and then….
  

  Popular blogs that do nothing but write a quick summary and link to the original may end up getting more traffic – and by extension more ad revenue — than the folks who paid me to do it.
  This is fucked up.

  …
  

  Now there are some (notably Dave Winer) who say journalists will disappear and be replaced by sources. In other words, why should anyone bothering reading my story when they can go directly to the 8 or 12 people I interviewed, or 8 or 12 others of their own choosing? Why let me or my editors be the filter?

  My response is, why shop at the grocery store? Why not hunt and kill your own food? All you need is a gun and a hunting license. Why not farm your own vegetables or, for that matter, build your own cars? All you need are tillable land and the right parts (though you’d need someone to make those, I suppose). Why not write your own software code – there’s plenty out there for the tweaking. Why rely on professionals for anything?

  The answer? Because most of us are lousy shots. We don’t know how to raise our own food or hoist an engine block. We’re not coders and don’t want to be. Because there is a difference between amateurs and professionals, and it is easier and faster to rely on people who already know how to do these things.

  Seems like a good point to me. But maybe we were all happier as hunter-gatherers…

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Earlier today Ben Goldacre tweeted: “Treat your dog for separation anxiety with a pill: amazingly this is not a spoof” - and a link to Reconcile, aka fluoxetine hydrochloride, which “helps manage separation anxiety”.

Fluoxetine hydrochloride? Oh, yes, you may know it as Prozac and various other trade names.

This though rang a loud bell with me. I’d written about it ages ago, and said so. Looked it up on the database I keep on my machine of all the stories that I wrote at the Indie. Oh yes, there it is, back in April 1998.

It is on the web, but the version on Findarticles seems to have mated at some stage with something about Northern Ireland - not to any good effect.

So here’s the original article that I wrote and which appeared in The Independent on April 16, 1998. Enjoy.

by Charles Arthur, Science and Technology Editor

With unhappy adults delighted by Prozac and hyperactive children calmed by Ritalin, drugs companies have discovered a new sector in need of pharmacological help to get through the day: dogs.

With fewer dogs actually working, and more and more people leaving them behind while they go off to work, a growing number (of the animals) are believed to suffer from “separation anxiety” - a psychological fear that they have been abandoned.

But since most dogs have problems with conventional psychiatric treatment - they find talking difficult, and are forbidden from lying on the couch - the Swiss pharmaceuticals company Novartis has stepped in.

Yesterday after a decade of effort the company received Europe-wide approval for a drug to treat canine separation anxiety - a problem that it claims affects up to 15 per cent of dogs of all breeds. Some vets say the problem has afflicted the animals since humans first domesticated wolves tens of thousands of years ago, though it has only been formally recognised for about 20 years.

“It might sound strange that dogs would suffer from anxiety,” commented Beverley Cuddy, managing editor of Dogs Today magazine yesterday. “But a dog is a pack animal. If you keep a single dog it regards you as its ‘pack’. Then it gets very upset when your routine changes - say if you start going to work. The dog doesn’t feel able to cope on its own and becomes terrified at being alone.” Such dogs will howl, chew furniture, soil the house and even mutilate themselves.

Novartis’s solution is twofold: a drug treatment lasting between 60 and 90 days, costing about 40 pence per day; and behavioural treatment, which is free (but comes with the drug). With 6.5 million dogs in the UK alone, the potential market is huge.

Chemically the drug, named Clomicalm, works in exactly the same way as Prozac: it sustains high brain levels of serotonin - the neurotransmitter associated with a “happy” state of mind. “The advantage is that it makes the dog more accessible to behavioural treatment,” said the spokesman. “The owner should have guidelines and rules for how they treat the dog before and after they arrive home.”

Ms Cuddy said, “This isn’t a miracle drug - the main problem tends not to be the dog, but the owner, whose lifestyle perhaps doesn’t support a pet.”

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• Murdoch Wants A Google Rebellion - Forbes.com
  

  In a recent interview with Charlie Rose, Wall Street Journal Managing Editor Robert Thomson drew a bead on Murdoch’s beef: “Google devalues everything it touches,” he said. “It divides content quantitatively rather than qualitatively.”

  Interesting - Murdoch’s is one of a rising number of voices. But then one also thinks “he would say that, wouldn’t he?” Rose’s comment is very incisive, though

• Paying for online news: Sorry, but the math just doesn’t work. » Nieman Journalism Lab
  

  Are these viewer retention assumptions valid? Granted, they come from the top of my head. If you disagree, make your own assumptions; the math is simple. We don’t have a lot of real-world before-and-after figures from news sites that have imposed fees. But we know, for example, that the New York Times’s 2005-2007 Times Select experiment drew 227,000 paying customers at an average of about $3.70 a month (based on reported revenue of $10 million a year), at a time when the Times’s free content was drawing 13 million unique visitors a month — a conversion rate of less than 2 percent. Or consider that the Wall Street Journal has about a million paying subscribers at $8.66 a month, versus 14 million monthly UVs at the free New York Times site. Print circulation for the two are roughly equivalent, but the Journal’s fee cuts its online audience to just 7 percent of the Times’s.

  Based on this, retention rates as high as those I’ve modeled don’t look attainable, and retention high enough to increase net revenue is plainly not in the cards. (To get a net gain at a seemingly reasonable $5 a month rate, retention would have to be about 45 percent.)

  A simple tollbooth approach at any price cuts out the vast majority of the audience, and would mean that newspapers were retrenching to print — saying in effect, “If you want our news online, it’s there, just pay the fee, but we’re no longer investing much energy in developing our sites, because there’s no money on that side of the fence.” A newspaper industry retrenchment to print would mean a withdrawal from competing online. The game would be to squeeze the remaining profits out of print while the clock runs out; while readers continue to migrate online, now to non-newspaper online-only sources; and advertisers follow the audience to the Web.

  And then you do the maths.. we do need to see some better modelling on this. But he has a good case.

• Michael Kinsley - Life After Newspapers - washingtonpost.com
  

  It is tempting, but too easy, to say the problems of newspapers are their own fault. True enough, the industry missed a whole armada of boats. If newspapers had been smarter, or moved faster, they might have kept the classified ads. They might have invented social networking. But that’s all hindsight. I didn’t think of these things, nor did you. Judging from Tribune Co., for which I once worked, the typical newspaper executive is a bear of little brain. Until recently, little brain was needed. Even now, to say the newspaper industry has no problems that a busload of geniuses couldn’t solve is essentially saying that the industry’s problems are insoluable. Or at least insoluable without help.

  Insoluable? When did the Washington Post dispense with subs or a dictionary? The trouble with this article, though, is that it’s saying “there will be news after newspapers”. I think we’ve heard that.

• AlterNet: This Crisis Is Way Bigger Than Dead Banks and Wall Street Bailouts
  

  For the first time since the 1930s, millions of American households are financially ruined. Families that two years ago enjoyed wealth in stocks and in their homes now have neither. Their 401(k)s have fallen by half, their mortgages are a burden, and their homes are an albatross. For many the best strategy is to mail the keys to the bank. This practically assures that excess supply and collapsed prices in housing will continue for years. Apart from cash — protected by deposit insurance and now desperately being conserved — the American middle class finds today that its major source of wealth is the implicit value of Social Security and Medicare — illiquid and intangible but real and inalienable in a way that home and equity values are not. And so it will remain, as long as future benefits are not cut.

  US social security and health care are what they really have? Scary. Oh, and the author of the piece? James K Galbraith. You may have heard of his father, John?

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• Rands In Repose: The Makers of Things
  How do you sink the foundations of a bridge underwater without submarines? You build a giant watertight box. Simply terrifying and amazing at once. Rands’s point though is about how you need to think the impossible to enable enormous change - like we need now in all sorts of industries
• Freeconomics 2.0 - or how Pay! is the New Free! - broadstuff
  

  Which brings us to the core issue for new content creation - artists may starve in garrets for art, but they still starve. Others just exit and do something else, The main reason that Freeconomics has survived to date is that copying other people’s stuff is the lowest form of content creation going. Problem is, as YouTube is finding, its hard to attract paying customers or advertisers to such content. Without significant Google subsidy, YouTube would collapse in months.

  So where does that leave us?

  Simple - Freemium will work in some cases, there is about $50bn for Ads to subsidise stuff (it will grow, but not rapidly in recessionary times as Ad spend is tied to GDP) and there are some last pools of risk capital left among the rocks.

  But that is not going to fund Teh InterWebz. In Google we (may) trust, but for many of the others we’ll be paying cash.

  Alan Patrick (aka @freecloud) on how the Free model is in collapse. Hey, isn’t everything these days? And how many of these Web 2.0 companies really are self-supporting, outside of V(enture) C(apital) money?

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Yes, it’s a scene from Season 5 of The Wire. It’ll make sense if you read to the end.

Paywalls. We ought to talk. Please note that I’m not talking from any knowledge of any plans that commercial people in the Guardian have; I am far too lowly to know what they’re thinking about. I’m just saying that with the collapse of papers all over the place, largely caused by a collapse in print advertising that isn’t seeing a concomitant rise in online advertising spend, newspapers are going to have to think of all sorts of ways to generate revenue. Perhaps it’s selling links. Perhaps it’s buying readership. Whatever: but put everything back on the table, baby, because all those optimistic predictions from the first and second dotcom booms now look frayed and careworn.

Which makes it interesting to see Tim Burden slagging them off. Go visit his site, it’s interesting. But first, he has a post from February (see how remiss I am) which offers ten reasons why you shouldn’t have paywalls.

Let’s take them on then. (I’ve put this into an ordered list so you can see the numbers - on his post he’s done it just in paragraphs, which I think makes it hard to follow the rebuttals in the comments.)

So here we go. Here’s his assertions, his (usually shortened) arguments; click back for the full ones; and my response.

1. Paywalls annoy people
   The hapless reader has found a link in Google or a blog or some other site. Worse, in his RSS feed. He clicks, waits, and finds he must sign up or pay money. He clicks back, angry for having wasted the time. If he clicked from your blog, he’s angry at you.
   That’s tough. Perhaps it depends on how the blog presents it: a must-read piece? How hard is it to sign up? Does the paywall take Paypal? Does Paypal take penny payments? It’s not a foregone conclusion. And the FT, for example, lets you read a certain number of stories per month, then puts up the paywall.
   Consider this too: if you get enough of those situations where you click the link, and find a paywall, eventually you’ll think to yourself that damn it, you’re going to pony up.
2. Paywalls discourage links
   Because paywalls annoy people, I for one won’t link to a site that has them. People shouldn’t: it’s disrespectful of readers.
   You might think it’s disrespectful now, but you’d find it a lot more disrespectful if the site you used to link to shut down, wouldn’t you? You used to think its content was worth someone’s time, but not their money. What if it turns out that wasn’t a fair exchange?
3. Paywalls are anti-web
   The web is built of documents, and links between documents. No links, no web. It’s a tautology. So if paywalls discourage links, they must be anti-web.
   Does that make the iTunes Store and the iPhone App Store and eMusic and Napster and Netflix and all those other sites that charge for content they hold anti-web, too? Or are you “pro-web” (as opposed to anti, right?) if you have a shopfront that anyone can browse but only charge them to get the content? I thought that’s what a paywall was.
4. Paywalls must fail
   Anybody can make content and get it to me for free. And they will. Put up a paywall and watch them storm the ramparts.
   Yes, anyone can make content. If you’d like to read my children’s analysis of the world news they heard on the radio, you’re welcome. In fact, if you want to write one, go right ahead. You may find it eats into the time you have to actually work, or rest, but hey, it’s free, and everything wants to happen for free, doesn’t it? Except, for some peculiar reason, the mortgage/rent and the food in the parlour. And that computer on the desk.
   On the other hand, if you want to read the work of people who have had to overcome evasion and stonewalling to find original content that could have some relevance to you (eg government or corporate misspending or malfeasance), or just things that you’d like to know about but haven’t the time to find, then you might consider that if those people - let’s call them “journalists” - can’t get paid via advertisers, they might look to you to help with those mortgage/rent/food/computer payments.
5. Paywalls cause war
   If you are actually successful at having content no one else has, and charging for it, someone will find a way to get it free. And then your programmers will get overtime to fix it.
   Yup, someone will find a way to get it for free. Probably by copy/pasting it. Then their credit card will get zonked, or similar. But that isn’t the key problem. It is already possible to get most major films on DVD for much less than is charged in shops; yet people buy the real thing. If you trust that most people will behave honestly, given the chance, the problems of people taking content for free becomes more of an edge case.
6. Paywalls are a scam
   Because readers can get the content free elsewhere, and you can deliver it for free, you are trying to charge for something that has a value of…FREE. Rip-off!
   This is a repeat of No.4 above. And it’s also a syllogism. The content doesn’t have a value of “free”. As gets mentioned below, papers have survived for a long time by delivering readers to advertisers (a thread that is being frayed). Thus the content has a value: the value implicit in being a method of getting readers and advertisers together. In the past, that’s been quite high. Problem now is that advertisers think they have better ways to find “readers”. Which may be true. The question then becomes (which doesn’t get dealt with in this debate) what the implicit value of the content is. But on its face, if it’s stuff that people will seek out, it’s higher than zero.
   How can I state this so confidently? Because I know what the web used to be like. I can promise you that I didn’t spend much of the day trawling the web when the best thing on it was Yahoo’s Site of the Day.
7. Paywalls limit readership
   Anyone in the content business knows that their product is not newspapers, or broadcasts, or magazines, or even news, or even content, or even information. No! It is readership. Your product is readership, which you sell to advertisers.
   True. But maybe the model is going to have to change. In which case we also sell readers to each other: the thing that becomes valuable is the other readers who are prepared to cross the paywall and discover each other’s shared knowledge and interests arising out of the content they find there. I suspect the FT’s Most Read stories give a useful indication of something.
8. Paywalls hurt ad revenue
   Follows from above, paywalls reduce readership. Someone will be quick to say, “Oh, but it will be a qualified readership, more valuable.” Bullshit. You can get the same qualification by having users sign up to comment/upload/post on forums etc. There are two types of readers: one hit wonders from Google and locals. Your job is to get locals to participate, not try to squeeze every last dime out of them.
   Participation is nice. Money is a lot more useful. And if the “locals” think they’re getting something of value, might they not be persuaded to pay for it? Which then means that objection (1) at the top, about random readers clicking through, becomes less of a problem.
9. Paywalls are old-think
   In the olden days, newspapers had monopolies. Those monopolies can now die with a Wordpress install. In days of yore, you could force people to pay your price. Now, the only price is…FREE.
   Haven’t we gone over this a couple of times already? I’ve considered spending a couple of days really researching what really happened to lead to Saffron Walden’s town square getting dug up. It would require interviewing market traders, shopkeepers, council officials, people representing the company that put up the money that was used for the development, and the company that is doing the construction work. Three days total work, probably. Then I could write it up. It might stop it happening again; it might expose flawed thinking among those involved. That would be useful. But it doesn’t happen for free.
   The idea that truly useful content generates itself is the grand misconception of those armed with a web browser and a Wordpress installation. It’s not true. Oh, sure, you can tell us what your cat ate and link to a story about Obama or Gordon Brown and give us the benefit of your knowledge. That ain’t useful, though. It’s not even free; it costs your time that you could be spending learning something useful, like how to program the iPhone and write a kick-ass app.
10. Paywalls don’t work
    Oh right…we don’t have to argue from principles. We can just gather empirical evidence.
    Good links, all of them. But circumstances change. And the WSJ hasn’t abandoned its paywall. The New York Times is wondering quite how to monetise its content again (because things are getting tight there). So we all thought that free was the only workable model? Sure, and we used to think that a phone without a keyboard would be a flop. Times change.

Does any of my arguments make paywalls inevitable? No. Do any of this make paywalls utterly rebuttable? I don’t think so. We’re going to see a time of huge experimentation pretty soon, and paywalls are definitely going to be in that mix.

Oh, bonus link: David Simon interviewed in the Guardian plus the shorter news story in which he says that the death of newspapers in the US will mean, in the short term, more corruption:

“The internet does froth and commentary very well, but you don’t meet many internet reporters down at the courthouse.”

(And yes, I’m aware of the irony in linking to his argument about the need for paywalls on the Guardian’s site which has no paywalls.

Oh yeah, apart from its digital archive. To point that out would be supererogatory.)

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