'Every little helps'

Dear Reader,

Last week Tesco presented its 2008 results. Tesco is a phenomenal retailer, always able to find new ways of improving its results. In 2008/09 it increased underlying pre-tax profits by 10% to £3billion.

Tesco’s press release includes its profit, revenue and highlights other important numbers. The release begins with revenue and profit, which are indeed impressive in an economical environment as this one. It continues to quote Sir Terry Leahy, CEO Tesco Plc, saying; “At a time when customers everywhere are feeling the economic strain, we are responding to their changing needs in all our markets by lowering prices, introducing more affordable products and offering even sharper promotions.” His statement highlights Tesco’s aim, which is to be a major food retailer of all the segments of the market but at a cheap price. He further on in his statement expresses satisfaction with Tesco’s expansion abroad and its Personal Finance division. Sir Leahy’s positive picture is reflected in the numbers and their admirable feat of doing well in the midst an economical crises. The press release is written to inform investors and to advertise Tesco's good shape.

Financial Times is very positive about Tesco’s results. The paper spends both the first and second paragraph writing nice sentences with almost no numbers and instead using superlatives describing Tesco. If the journalist was told to write the most important first she has made it very clear the retailer is a sound and attractive company. The paper’s Lex column concludes “Tesco shares should not be a discount brand.” The column is written for business people and is read by everyone who wants to know the big story of the day. The difference between the article and the column is however wide. The article is expected by people to be objective while Lex is known to have a strong opinion. However the day Tesco released annual results this difference seems to have been erased.

Bloomberg’s article about Tesco’s results is more factual and objective, which its readers expects it to be. It puts forward numbers and referenced sources and their opinions. The sources are also positive to Tesco, but it is clearly stated who has the opinion. Further down in the article it mentions a few disappointments but on a whole the article’s view is positive.

The Sun agrees with all the other papers and news providers the results were very good. Interestingly it is more the only one who quotes Sir Leahy saying “a number of people have more spending power in their weekly budget”. The Sun’s journalist might be unaware that he is the only journalist to offer an argument to why supermarkets in general are doing well. FT mentions competitors are also performing well, but it is this comment that explains why, because thanks to falling interest rates people with jobs have more money in their wallet these days. The article is written in much simpler words. The Sun's readership is not likely to ask for a full analysis, but prefers the story to be written in a simple way.

Internet Pirates and ISPs working together

Dear Reader,

Over the last couple of weeks there has been a big debate about internet piracy. The big Hollywood production companies and the music industry have seen their sales plummet as a direct effect from people downloading products illegally. On the other side there are the internet users and internet service providers (ISP) who directly or indirectly support downloading. Users get a hold of “free” music and the ISP convinces customers to buy a faster internet service as to facilitate downloading.

Sweden is the country in the world which has become synonymous with downloading. The recent ruling in a Swedish court sent the four founders of The Pirate Bay, an internet search engine, to jail for one year and fined them £2.5 million. The news of the verdict spread all over the world and is proclaimed a huge success by Hollywood production companies (to whom the fine was awarded). New York Times writes it was a landmark ruling and cites industry people’s joy over the ruling. The article is not biased, but does end with a quote from The Pirate Bay, saying “But as in all good movies, the heroes lose in the beginning but have an epic victory in the end anyhow”. Il Corriere della Sera, an Italian newspaper, also features the story on the first page. However instead of ending with that quote they end with a quote from Fini, an Italian music industry lobby group, saying the verdict is a success. The same type of coverage is given in British and Swedish newspapers. The most striking about newspapers coverage around the world is not what they put in their articles but that they all acknowledge the massive attention this story gets from ordinary people.

Most people have at least once downloaded illegally. Many continuously download illegally and have therefore bought a fast internet connection to do so. In contrast to the newspapers, people think pages like The Pirate Bay should be allowed to exist. They are not alone. ISPs are another stakeholder who benefits from illegal downloading. They sell faster (and more expensive) internet to customers wishing to download. I am one of them. If downloading would drastically decrease (as has happened in Sweden) ISPs would feel the pain.

The first lawsuit against an ISP in Sweden was filed two weeks ago. The lawsuit is not targeted to fine the ISP, but to make them hand over the identity of IP address user. The company refuses to do so, citing in their press release integrity would be violated if they did. I spoke to a person well connected with this ISP provider, who hinted that the press release was more of a marketing tool than anything else. He also claimed that if the ISP had handed the users identity, they would have lost business.

I think if the productions companies would really want to stamp out illegal downloading they would need to buy the ISPs. It is a farfetched idea, but only then would all business stakeholders work in the same direction.