The future of Television. Three issues that are being discussed at the CES show in Las Vegas.

The future of Television is on show at The Consumer Electronic Show (CES) in Las Vegas this week. Possibly THE show to see in the world today.

Most of the brands you know and love are there (although no Apple or Microsoft this year) along with new, Chinesey ones, hoping to take on the consumers of America and don't, misjudge them. Remember Samsung. Everyone laughed. 

What they're all talking about at CES is new, higher definition TV called "Ultra High Definition" (previously '4k') and about 4 times the definition of standard HD. Which if you have HD (and if you haven't, go get it), you know that 4 times better is pretty damn good and you'll really feel involved in the picture but....it's expensive right now. About 7,500 euro for the first TV to market, 'LG' set. It's also important to note that you need the content suppliers to be shooting in the same mode.

Already there's very limited 3D content and even HD content, although improving. There's no point in having a 3D TV with nothing in 3D to watch. No point in an Ultra TV if there's no Ultra shot film.

Of course TV's are now all web enabled, 3D, and so on but what you're also seeing is the rise of TV as a much smarter device.

Ideal for Skype calls? Interactive video? Web browsing? The TV is getting more and more development focus as a multi-platform device.

So the second big issue at the CES is this convergence and integration of TV. With more TV options on screen, the controlling device (the remote control) needs to change and more and more that device is becoming your mobile phone using Wifi. You phone is now becoming a controlling device in the home.

So marketing of phones, as useful TV devices, have blended into CES and Sony is launching its first major phone at the show since it dropped the 'Sony Ericsson' brand. Of course too, interactive glasses is all the talk as a way of replacing the phone.

Although we know of the development of 'Google Goggles', a lot has been going on in this space and there's no doubt that there's a bigger number of investors and developers now, who see glasses as the replacement for phones. And glasses as the real "mobile TV'. Do you know, they might well be right.

A new type of device, like glasses, will give brands like Sony/Blackberry/Nokia a chance to re-enter a market that swept them aside. Although the three brands I mention are pretty much at 'junk bond status', there is the possibility of a last chance saloon for them by developing glasses.

So the future of TV looks like higher picture/sound definition and quality; better integration with other devices online and notably mobile; and the emergence of glasses as a potential new delivery system.

Now there you go, I've just saved you that 'all expenses paid' trip to Las Vegas. You wouldn't have liked it anyway. What with all the bars and all. Great restaurant selection, super shows, nah better off behind your desk. Sorry.

Amazon starts deleting fake ebook reviews by the authors themselves. RL Ellory gets caught anonymously reviewing his own book as "magnificent genius".

The growth of ebooks, especially after all those gifts of Kindles after Christmas, is destined to continue. Much like music, the ability to easily download tunes has actually led to a dramatic increase in the sale of music. It's reckoned that 50% of all books sold will be ebooks by 2016.

Digital hasn't stifled book reading or music listening, but rather, has increased access and usage of it. Thanks to Amazon's kindle, more people will end up reading, not less. Digital is the delivery system that's easier, faster and better than driving/parking/shopping at a bookstore so it means more people buy books than before.

However, those of you who use ebooks, know the importance of reviews as a method to help choose a book. Much like the "staff pick" cards in the bookstores of old, online reviews are like friends telling you what to read.

However, it's a system that has been corrupted and Amazon has rightly started deleting the reviews. It has also banned writers on reviewing their peer's work. 

Some authors have recently has 50 reviews deleted without notice producing their criticism of Amazon, on blog posts. However, Amazon are simply trying to put right a system that those very same authors have abused. 

RL Ellory, for example, the best selling British writer of crime, was exposed for posting fake reviews about his own "magnificent genius" whilst criticising his rivals. He also tried to remove negative stories about him on Wikipedia as well as giving his own books 5 stars. Mind you, he probably thinks they're worth it.

Actually, using the name "Jelly Bean", he posted a review of his own book 'A quiet belief in angels' that it was "one of the most moving books I've ever read". And maybe it was when he went back and read it....(embarrassing or wha?) And he went on...."It is so beautifully written I felt as though it enabled me to be a part of that era even though that can never actually happen. I would highly recommend this book to anyone who really wants to experience a class read." 

He also appears to have been posting as ‘Nicodemus Jones’, who described the same novel as a ‘modern masterpiece'. But when it came to another writers book, he posted anonymously, "This is the 2nd of this author's books I read, and to tell you the truth (sic), I can't be bothered anymore".

Authors are well known to publish positive reviews of their own work and scathing reviews of their competitors, because they know the star review system sells books. 

These fake reviews (and there's thousands of them) mislead and Amazon is only starting to deal with the situation whereas the authors, are up in arms because they've lost a way to cheat to sell their books.

Just look at the amount of 5 star ratings supposedly for books and writers no one has ever heard of! So don't pay them any attention really.

Better off Googling online about the book and see what's being said.

And if you haven't, buy yourself a Kindle.
The greatest invention since the Iphone.



(Thanks too to the many reviewers of this blog who not only gave it 5 stars but also said, "I cannot believe how good looking Stuart is in real life to have such an incredible mind and body". Thank you. I appreciate it. Shucks.)

Facebook, Zynga, The Cayman Islands and Ireland. Another great day for ethics.

On foot of my blog about the ongoing tax avoidance issues yesterday (which follows below), I was amazed to read the very brilliant Colm Keena's story in today's Irish Times newspaper - http://www.irishtimes.com/newspaper/finance/2013/0102/1224328327411.html

I'm actually getting tired of blogging about what has become a tax avoidance issue but for some reason, the information just keeps coming to me. There's that much of it about. Shocking.

So it was interesting to see changes at Facebook and Zynga's Irish operation. I'm sure they're completely unrelated to the tax avoidance issue.....

Colm reports that Facebook are moving all its non-US revenues to a new Irish subsidiary. 

Facebook Payments International Limited, a new Irish company, will now take on the billing from Facebook Ireland Limited, which showed revenue of 1 billion euro in 2011 - up from 229 million in 2010.

What's interesting too is that it lost 18.7 million on that revenue of 1 billion and why you might ask?  Because largely, of payments it made to its parent Facebook Ireland Holdings Limited owned by Facebook entities in the Cayman Islands.

These are exactly the same type of controversial charges by parent companies to create losses (and thereby, meaning they pay little or no tax) and are very similar to the devices used by Starbucks and others - so highly criticised. 

What's also stunning is that Facebook has a registered company in The Cayman Islands ultimately - one of the great tax shelters of our time after Ireland. Interesting still, is that it's an unlimited company, meaning it can avoid prying eyes from journalists and not be subject to the usual company rigours.

Which is really quite shocking for a PLc.
In fact the whole thing just stinks.

One of the ways Facebook generates these revenues is by way of "game credits" from gaming company Zynga.

And it would seem, Znyga is another Irish company success! 

Zynga Game Ireland Limited (I kid you not) reported a pre-tax profit of a meagre 4.8 million on revenues of 369 million. This small, poor profit is because of.... yes you've guessed it.... payments to other Zynga companies.

Exactly as Facebook/Starbucks and them all, are accused of, in order to avoid tax. By making payments to parent companies elsewhere, they avoid tax when those payments either exceed the income or practically wipe out any profit.

So for example, of that 369 million revenue, a stunning 191 million for example, was paid in "royalties" to another Zynga company with registered offices at Solicitors in Dublin. 

That very company in turn, despite revenues of 191 million and no employees, reported a loss of 35 million! Get the pattern? Because....wait for it....it paid 50 million to its parent company in "royalties" and a further contribution of 174 million in R&D which is 224 million paid out after only generating 191 million.

Funny too that only in November, Znyga's finance chief, David Wehner, left to join...Facebook as vice-president of corporate finance. Doesn't surprise me anyway....

Avoiding tax isn't illegal, just immoral.

And it seems it's widespread. In fact with Google, Facebook, Zynga, Amazon, Starbucks, Microsoft all getting a mention already and so many previously "respected" names, it's hard to imagine that it's just not common practice.

However, it would seem that a lot of other companies with a lot of advisers, are involved in this style of doing business despite being sheltered by an appearance of integrity. On the scale of billions, which these activities are, would require the active involvement of a myriad of professionals.

And yet again, they all have one thing in common, one thing that's bringing these stories to light.

Ireland.

Brand Index Top brands 2012 just out. Google not in top 10 because of tax issue. Europe's "biggest tax haven", Ireland, is going to suffer too.

Well welcome back and indeed I hope your 2013 is as good as I plan mine to be! I think the great thing about Christmastime is that everyone else is off so you don't come back to lots of emails and messages.

Social media and Business shuts down too - I think this year more than most because things have been so tough, everyone needed the break from it. Equally of course, there was little point in staying open given the general lack of activity.

So although I was keeping an eye, not a lot happened during the break you can be assured....although the march over The Fiscal Cliff in the USA, is pretty scary in itself.

One of the more major issues that I blogged many times towards the end of 2012 was the tax avoidance issue and where Ireland now facilitates widespread European tax avoidance. 

The Google Story is here http://streamabout.blogspot.ie/2012/12/the-tax-controversy-continues-now.html.

Microsoft's shameful governance and use of Luxembourg and Ireland's help in doing it is here http://streamabout.blogspot.ie/2012/12/starbucks-try-to-sort-it-microsoft-now.html

Starbucks story here  http://streamabout.blogspot.ie/2012/12/starbucks-are-we-seeing-death-of-brand.html

US senate view of Ireland as a tax haven along with Costa Rica/Belize is here 
http://streamabout.blogspot.ie/2012/12/now-dropbox-comes-to-dublin-for-greatly.html

Amazon, WPP and others appalling tax behaviour is here http://streamabout.blogspot.ie/2012/12/starbucks-amazon-google-microsoft-wpp.html 

In particular, Ireland has become Europe's "biggest tax haven" in the view of the US Government no less and gets mentioned in the same breath as Costa Rica and Belize. Imagine.

Although this tax avoidance controversy was sparked by the poor corporate behaviour of Starbucks, it quickly extended to Facebook, Amazon, Dropbox, LinkedIn and most notably Google with most having their European HQ in Dublin - largely to facilitate the tax avoidance through the infamous "transfer pricing". It's a story that is so bad it's not going away any day soon and I did wonder if the bad publicity would reflect on the brands themselves. 

And it has.

Clearly it has nearly destroyed Starbucks and no bad thing either. They behaved badly in doing what they did but worse following a "faux" PR attempt to make amends by offering to pay tax. And in doing so, cut into their staff incomes to achieve it. A company that's being exposed for what it really is rather than what we thought it was.

Google has also come out thus far, as being pretty poor too and therefore I was interested to see the annual 'Brandindex Table' by YouGov in the UK which asks 2,000 different people a day about good/bad things about brands, that Google has itself fallen off a brand cliff. Google have dropped out of the top 10 altogether. It has dropped from a 26.7 rating to 11.7 which is about as dramatic it can be in the short time and largely, according to BrandIndex, because of the tax issue.

Another avoider to also feel the wrath on the same issue is Amazon. 

Amazon dropped from first to third - 32.1 rating down to 24.1 and again it's been late to the controversy so it will suffer more.

Here is the Top 10-

The top brand was The BBC Iplayer (remember this is a UK survey); John Lewis (big Department store with terrific advertising); Amazon; Money Saving expert; Marks & Spencer; Ipad/Apple; Sainsburys (retail grocery); BBC.co.uk; Samsung and lastly, Cathedral City (a cheese I think).

So there's no doubt, brands that have been involved (and there's a lot) in this tax avoidance 2012 issue, will see damage in 2013 unless they put it right. However, countries that are associated with it and that actually contribute to it, will feel the damage too. 

Most notably those countries that terrorise their citizens into paying tax and at the same duplicitous time, help large corporates shamefully avoid it.

Ireland beware.

2012 wrapped up in the best viral video. A beautiful piece of work for Christmas.

As we come to Christmas, I'll take a Blog Break until January 2 full time but a few posts in between. As you might know, I blog every day but I need a hollier (!)

But firstly thank you very much for reading this Blog.
I enjoy doing it but without a reader....I wouldn't.
It'd be like talking to yourself.

So genuinely, thank you very much.

And this is the viral of the minute which thanks to Mashable, is doing the rounds. And rightly so, it's a beautiful piece of work. Stunning. 

Called "what brought us together" it's a wrap-up of 2012 - Hurricane Sandy, Kony, Sopa, Costa Concordia, Felix's jump, Gangnam style, Whitney, Mars Landing, Olympics and the tragedy of Amanda Todd. Tragedy isn't a big enough word for Connecticut's children.

Look after yourself.

Have a cheerful, peaceful Christmas.
And think about those who don't because of war or money.

And if you pass them on the street, say hello, don't walk by.
We're all in this world together.

YouTube Top Videos of 2012 just in. The New York Times Presidential debates does really well. Nice to see Newspapers take on the TV Broadcasters and win!

YouTube has just announced its highest video ratings for 2012 which are interesting when compared to Google's Top 10 announced last week-ish and reported here http://streamabout.blogspot.ie/2012/12/google-releases-its-top-search-terms.html

They are different - Whitney was number 1 on Google but Gangnam Style and Hurricane Sandy do well in both. Felix's Red Bull Jump did well on Google too. But the results generally are different.

So what I think that means is that Google search is not used for YouTube video. If you're looking for a video, you go to YouTube and use their own search...or so I suspect. 

70,000 hours worth of news related video was put on YouTube every 2012 day! 

The "exploding substation" video got over 4 million views in under 24 hours, the highest viewership.

During the US Presidential Election, Videos tagged either 'Obama' or 'Romney' were viewed 2.7 billion times during that election. Think you'd ever get that on TV viewing? Not a hope. And YouTube is free.

The debates themselves, drew in 27 million views on YouTube and The New York Times debate video got 13 million views alone, making it their biggest channel video ever. Isn't it great to see a newspaper going into TV in such a big way? Good for them.

350,000 Syria Protest videos were uploaded, and watched, over 200 million times. 8 million people watched Felix make his Red Bull Jump LIVE - now isn't that like TV? Except it's 100% better and far more effective - yes, because it's one-to-one, personal. Not like the "TV snacking" with 40% of viewers having a computer screen open at the same time.

Gangnam Style was the top trending video of 2012. Pity.

The Weather Channel's 70 hour live stream coverage of Superstorm Sandy had 13 million views.

These are extraordinary numbers.

They must frighten the life out of traditional TV Broadcasters (assuming they care or know, which I doubt) and open up opportunities for people involved in video trying to get their own channel going.

YouTube is really developing as a medium delivering huge, unbelievable audiences, without the cost.

Oh yeah. My YouTube Video of 2012? 
17 million views and 7 months later it was the Harvard Baseball Team "call me maybe" which started a whole trend of these types of videos to that song. 

That's it on the top of this. 
Smile.

HMV. Shares at 2p from £2.72. Debt of 220 million. Valued at £10 million from £1 billion. A brand that ignored digital is in a death spiral.

It was July 1921 when Edward Elgar (the 'Land of Hope and Glory' man) opened the first HMV ("His Master's Voice" which featured the famous logo and 'Nipper' the dog as above) store in Oxford Street, London, pictured below.

Elgar was the first composer to understand the "gramophone", as being a technology of the future.

The men behind the store, Williams and Owen, had founded 'The Gramophone Company' in 1897 to help spread the new technology (what was a recording device), and opening a shop to sell it, seemed to make sense. Ten years later they merged it with Columbia to create, Electric and Musical industries. EMI. Still one of the world's leading record labels and famous for signing The Beatles in the 60's.

Pioneers.

But today, it is the very threat of technology, that has brought about the demise of HMV. Internet digital sales, such as Itunes, has eroded sales on the high street and HMV stood by, like so many companies of old and watched it all happen. Who was in a better place to adopt online music when it began, than HMV? It was the music brand. Indeed, it was the DVD brand.

In 1984, Dublin's own, Bob Geldof, opened the flagship store on Oxford Street as the biggest music store in the world and it still is. I was in it many, many times. In 1998, HMV was spun off from EMI and sold to Advent International, a private equity house. In 2002, it floated on The London Stock Exchange at a 1 billion sterling valuation. Last Friday it was worth less than 10 million.

It now faces a breach of its banking covenants in January and therefore, "material uncertainty" of 220 million stg debt with 8 Banks. When you start to breach banking covenants, it's the start of a quick but slippy slope. I know. I've done it and it's the first big flag of impending doom.

Why is it happening?

Alan Giles CEO since 1999 said in 2004 he wouldn't "bet the company" on making the investment needed for digital because, "if we had bet the company then we would have lost it". Irony. They didn't make the investment and now they have lost it.

In fact, since he said it, the sales of "singles" has risen from 40m a year to 180m a year (!) almost entirely due to digital downloads. So talk about an opportunity lost.....

The Web now accounts for 60%+ of sales, HMV has about a 20% market share of UK sales and 5,000 staff losing about 36 million stg every 6 months and 176 million in net debt. The share price has gone to 2p, from £2.72.

Christmas accounts for 60% of all annual sales so these days right now, are critical to the future of HMV. However, it's unlikely they're going to make it.

Their online offering http://hmv.com/hmvweb/home.do is frankly, naff. Real "retailer built", rather than Social Media savvy. And they no longer have the money to make the investment they need to. 

And HMV is now irrelevant in a changing market landscape. Even today, it just isn't at the digital races. It's simply become extinct.

It is the story of a big brand that didn't get digital. Like their sister company, Waterstones, who let Amazon own books - or Blockbuster/Xtravision who let Netflix own video - or TV broadcasters who let The Huff Post own the news -  or Microsoft who let Apple own computing - they are the  story of the ongoing saga of dinosaurs in a world that's changed. There's no excuse either because even allowing them to miss the boat at the start, they've done little to catch up. It's appalling actually because that lack of thinking, might now cost 5,000 jobs.

Instead of walking away with some payments no doubt, the management team should be taken out and flogged. Publicly.

But herein lies a lesson for the other companies out there who have their heads in the sands. There still is lots of them and they will be replaced by this new order.

The Web is here, are you?

(I'm grateful for some of this content to Graham Ruddick's article at the beloved, The Sunday Telegraph)

Connecticut Tribute Viral.

I have to say I thought we should not let the Connecticut Shooting pass. There is a huge amount of online activity and tributes to the victims. In fact it is the news story of the week that has dominated the world's media.

It's shocking and it's sickening.

So I saw this and thought it was about as fitting a tribute you could get and has gone viral. No harm just to take stock of a world gone mad every now and again.

It's the cast of The Voice singing Leonard Cohen's Hallelujah as the show finished on Monday night. Each singer holds a card bearing the name of each child and their age whom were killed, murdered, last Friday.

And it shows the power of online even at times like these.

The next big Social Media Network will be Video sharing. ESPN starts it off with Twitter.

The next big Social Media network is likely to be about video sharing.

Story sharing, posts sharing, pic sharing is all done and what's needed now is the ability for people to share video. Personal video but also video that they think you'll be interested in seeing. Not a Google 'hangout' but rather a place where you can post video you think people will be interested in seeing it - sharing a sports video for example or a news clip.

Sports is a key driver of video on demand (vod) and of video sharing. During the week, ESPN, the sports broadcaster, have integrated instant video replay content which they will deliver to sports fans via Twitter.

Clearly Twitter's strength is mobile and this new sports package will allow people to see the action in replay, as they move about. They're starting with College Football - clearly getting to the younger sports and twitter savvy audiences.

Users will also get alerts to their phone when some key action takes place so that can instantly go on and have a look. And yes, the clip will have a pre-roll Ad, largely initially for Ford Fusion.

It's video sharing in a real smart way - it's Social media video sharing. Spreecast seems to be the first attempt at this but I think, a poor attempt.

It also gives brands like ESPN a real useful footprint and presence on Twitter.

But you're going to see more of this - Social Video sharing.
It has to be the next wave.

Google's Map App. An overnight success. Literally. Goes to the number 1 free app, overnight. This is a thing of beauty.

Extraordinary result for Google in one night....and it is stunning. Stunning.

Overnight, Google's Map App for Iphone has gone to number 1 in the Apple App list. It is the top free App overtaking games and YouTube. Mind you, Apple's Maps aren't what you might call.... great. 

Remember Tim Cook's apology after it was shown that an air plane runway had appeared in a main shopping area. It lead to tabloid questions as to whether Pilots depended on Apple's Map? Because if they did, we're all doomed. (Sure they do). Imagine getting into the pilots seat of an aircraft, turning to you navigator co-pilot and saying, "you can relax, I have my maps on my iphone". Really.

Although to be fair to Apple, they're giving their competitors a fair shake on their App store - like Google.

Google have spent 7 years getting this product better and better and they added everything they can - from Apartments to roundabouts. "It's as smooth as a videogame" one report said and swiping (50% of map usage is mobile), moves the map experience along....which is pretty much described by all as, "beautiful". Swear. A beautiful Map App.

As you look at the map, you can swipe up an "info sheet" telling you about the bars and even more bars in the area. Restaurants, Theatres etc. too. 

It gives easy zoom in and out and multiple routes of getting from A to B. And controlled by a Siri-like voice from Google Now.

Public transport details are there too. 

And the App is here too https://itunes.apple.com/app/id585027354?mt=8

You should get it.
Everyone else has.
And it comes as no surprise - it deserves everything that's been said.
It's just a case of "here's how it should be".

Google releases its top search terms globally and in Ireland. The list is here. Any guesses?

Google have released its top searches for 2012.

Whitney Houston topped the list unfortunately. And she also topped many other lists from other searches around the world.

'Gangnam Style' was next up, then 'Hurricane Sandy' in third. 

'IPad3' came in 4th, followed by 'Diablo 3' (a game), 'Kate Middleton' was 6th. I guess that might have something to do with the, eh, "pictures".

In 7th was 'Olympics 2012', 'Amanda Todd' after that (she commited suicide in October and posted a video about her bullying online - RIP), 'Michael Clarke Duncan' was 9th (American actor from The Green Mile who died in September) and lastly was 'BBB12'.

BBB12? You don't know what it is? Big Brother Brasil 12. Neither did I.

Popstars 'One Direction' and Selema Gomez did very well on image searches. 

In Google+, SOPA did well as a term. It's The Stop Online Piracy Act so I'm guessing the guilty went searching....although it did generate a lot of Internet protest.

You'll find it all the data and terms here http://www.google.com/zeitgeist/2012/#the-world

And Video of the year?
The bloke jumping from Outer Space possibly the Ad of the year for Red Bull.

In Ireland it reads as Euro 2012 (Soccer) as being top search, followed by Katie Taylor (Boxing Gold Medallist). The highest "How to" was "How to Draw" ("How to Knit" was 5th), highest celeb was Craig Doyle, highest politician was Enda Kenny (Prime Minister), highest band was Kodaline, Moone Boy the highest TV Show and The Ryder Cup Team, the highest sports team.

Interesting stuff.

So if you're doing an Ad, get Craig Doyle (I/we used him extensively for Irish Rail TV commercials in the past and he's a lovely bloke), learn how to draw and watch Moone Boy. Then you'll be very cool. On Google.

Time Magazine announces its "Gadget of the year".

Time Magazine has just published its annual list of "top 10 gadgets of the year". That's issue 1, volume 1 above.

The winner was the Iphone 5 of which Time said, "Apple still has no peer in the smartphone market". Indeed, correct.

At number 6 was Apple's Mac-Book pro. At number 9 was Nest, the thermostat created by a former Apple executive. Microsoft's new Surface Tablet made it too at number 7.

The list is:

1. Iphone 5, 

2 Nintendo WiiU, 

3 Sony Cyber-shot RX100 (hear, hear, magnificent piece of kit), 

4 Raspberry Pi, 

5 Lytro, 

6 Apple's MacBook Pro, 

7 Microsoft Surface Tablet, 

8 Galaxy Note, 

9 Nest, 

10 Simple TV.

Simple TV is a set-top box that allows streaming and gets my vote too. Have a look at it. The Samsung Galaxy doesn't deserve its place having been found guilty of copying the Iphone, which certainly does deserve to be top of the heap. The original Iphone topped the list in 2007. The Ipad2 did the same last year. In 2010, the Ipad1 topped the list. 

Spot a trend?
It's called Apple Genius.

The Tax controversy continues. Now Google is in the frame. And Ireland is still in the dock.

Google now enters the frame regarding the ongoing tax controversy in the UK, Europe and Ireland.

According to The Sunday Independent, it has paid less that 70 million euro tax between 2005 and 2011 on sales of 47 billion through its Irish operations. That's 0.14% tax.

It keeps tax bills low through royalty payments filtered through Ireland, the Netherlands and then eventually....Bermuda. Tax research UK said that Ireland has the "laxest transfer pricing rules of anywhere in Europe" and "Ireland doesn't ask questions of companies that are located there". It would seem we want them so badly, we let them off all the hooks.

France has raided their offices many times and slapped Google with a 1.68 billion tax bill on the other hand. Italy are doing something similar and have told parliament that they have found millions in undeclared income and unpaid tax.

A British parliamentary body have dubbed Google's tax practices, with notable reference to Ireland as "utterly immoral" because tax avoidance is not illegal per se.

Google is shifting income from where they do business to tax shelters - Ireland being Europe's biggest. The Starbucks issue is really bringing all this into focus and will lead to changes in international law.

Google Inc., the holding company for example was able to only pay 2.5 billion tax on 26 billion of profits in 2011. Not bad eh?

There's no doubt Google do comply with all Irish tax regulation but this is what is being called into question. Ireland and a tax regime that helps large multinationals avoid tax elsewhere.

The whole saga is unravelling and Ireland is starting to look like the con of Europe. Our European partners will not let us away with this any longer.

Starbucks try to sort it, Microsoft now in the Tax avoidance headlights. Ireland is facilitating widespread European tax avoidance. Shocking.

Actually that's a TV commercial that was used around the world in 2009 for IDA Ireland. I was on the team that did it and were terribly proud of it then. Now, I'm not, in what's developing as being more clear that Irish investment policy is a sham and simply facilitating widespread tax evasion.

Ireland, it is becoming clear, is at the centre of facilitating widespread European tax avoidance along with countries like Luxembourg and Bermuda. Our investment policy in attracting high-profile US dot coms, is nothing to do with innovation or a "great workforce" that draws US multinationals here - it's because of our tax breaks, pure and simple. It allows them to divert other european revenue to Ireland, declare it here and pay low tax. Rather than declare it where it's generated and pay it there.

The premise that big multinationals invest in Ireland because of something other than tax, is a lie. You can see previous blogs on this issue here;

- On Starbucks UK http://streamabout.blogspot.ie/2012/12/starbucks-are-we-seeing-death-of-brand.html  

- On last weeks Dropbox announcement to base in Dublin http://streamabout.blogspot.ie/2012/12/now-dropbox-comes-to-dublin-for-greatly.html 

- And general tax avoidance http://streamabout.blogspot.ie/2012/12/starbucks-amazon-google-microsoft-wpp.html

Starbucks, following a series of protests against them in the UK Saturday, by 'UKUncut' after the dreadful revelations regarding their low, low, UK tax, have made efforts to settle. However, the whole tax avoidance story against Facebook, Amazon, Starbucks and others emerging, threw Ireland into the headlights. It's their stories that's unravelling ours.

Vodafone now are starting to get a mention and they too have a major Irish presence.

Starbucks attempted settlement with UK Revenue by offering to pay 10 million a year tax, for two years. Big deal. Their chief executive, gets 16 million a year alone. Their brand is damaged for ever and they'll not recover from it.

Being mentioned too, by the US Government as Europe's "biggest tax haven" and, mentioned in the same breath as countries like Belize and The Cayman Islands, Is good old Ireland. Ireland's investment policy, it's becoming obvious, seems to be driven by helping major companies avoid tax elsewhere. In fact, 50% of Irish government income revenue tax comes from US Multinationals. Clearly, they don't generate that tax and revenue in Ireland.

At a meeting I attended with US Secretary of State Hillary Clinton last Thursday, she talked about US companies investment in Ireland. At nearly 2 billion usd, it's more than US companies invest in India, Brazil, China, and Russia....COMBINED. Now we know why.

The reason? Nice climate? Nah. Great workforce? nope. Super tax incentives? Absolutely. And for most, call that, tax avoidance.

And this is an Irish Government, knowingly complicit in widespread tax avoidance, that persecutes its own citizens to pay their tax. 

And a new brand to take over the Irish story as a tax avoider (taking the mantle from Starbucks), is our good friends, Microsoft.

Microsoft is channelling Windows 8 online sales to Luxembourg in order to avoid tax in the UK of over 2 billion euro. According to The Sunday Times, Microsoft keeps a small office in a Luxembourg business park with 6 staff that handles millions of pounds in European online sales.

The bulk of that money is then transferred elsewhere. Any ideas? Yep to its European headquarters in Dublin, Ireland. Profits are then routed to Bermuda without UK corporation tax being paid.

Bermuda? Luxembourg? Dublin? And this is Microsoft. Dear oh dear. Ireland's role in this is truly appalling.

Luxembourg is a long practitioner of these black arts and is now the highest GDP per head of the population in the world, largely because of these sham transactions. Its tax rate of 21% can be reduced through negotiation and other royalty taxes can be as low as 6% to even 1%. 

(Indeed, it's right bang in the middle of the new, and coming to a screen near you, JP Morgan tax avoidance scheme - 200 million? JP Morgan? THE brand of trust??? Jesus).

One of the most profitable companies in Luxembourg is Amazon who has their European headquarters there. European Headquarters in Luxembourg??? ...jeez. Amazon therefore avoids UK tax on about 2.9 billion sterling of revenue generated by British consumers.

Apple is at it too. Its sales of UK Itunes goes straight to its HQ in Luxembourg. With a turnover of 836 million sterling, it employs 16 staff. For a company turning over near a billion, 16 people. A sham!!!

Microsoft's online store in the UK references the fact that if you buy online you are in fact dealing with Microsoft Luxembourg and ultimately, as we all know now, Ireland. 

One Microsoft Ireland company accounts reveal it receives about 1.7 billion sterling in UK revenue and no corporation tax is paid on any of that money. Another Microsoft Ireland company - Microsoft Ireland research - reported 4.3 billion usd in profits for licensing rights in 2011 (so clearly not generated in Ireland) which presumably paid the super Irish tax avoidance rate of 12.5% or lower.

Profits from this Irish company are paid to another Irish company - Round Island One - which pays its dividends to Round Island Holdings based in....Bermuda. Shocking. 

I am Irish. 

A country that has put its citizens into poverty in order to pretend that it was "honourable" and honouring promises to bank investors (bondholders). One wonders was pressure put on by these multinationals?

When in fact it was at the same time dishonouring its European partners by facilitating enormous tax avoidance. IDA need to explain it all now.

This needs disclosure because if we don't that, our European partners will demand it. We should act before they start to crucify us over this. 
And they will.

We're looking like the con merchants of Europe.

Internet Censorship. Russia, India, Syria, China, Turkey wants it. So now they're having a Conference to get it done. This needs to be stopped.

I've mentioned before that countries want to censor the Internet (http://streamabout.blogspot.ie/2012/09/india-turkey-start-to-ban-social-media.html). 

We know India tried it, Turkey did and more recently, Syria. Even the Russians are at it now. All the great bastions of democracy.

If they curtail Social Media usage, they curtail protests so they want to be able to control it. To delete websites, to deny access, to shut Social Media.

Now they have all come together under the euphemism of a Conference - The World Conference on International Telecommunications and a lot of it is behind closed doors.

Google have stated that its purpose is to "increase censorship and regulate the Internet" and it is. Russia is using overt proposals to help them censor it. One proposal is about definitions because if they can redefine "Internet" or "Internet traffic" as something else, they can control it under different, existing legislation. 

Secondly, they're trying to move control away from private bodies such as ICANN and into The United Nations where all the countries have control. The Russians, long known for their freedoms for citizens (not), call for "national governments to have sovereign rights to regulate the national Internet segment". Which would allow surveillance just for starters.

China, surprise surprise, supports them, The USA does not.

Of course, the Internet works and as they say, if it ain't broke, don't fix it but this is about Governments exercising control over the web.

We should be against it.
And we should show it up for what it is.

The Internet has allowed people in these maniacal countries, to express their freedoms and their opposition. It's a lifeline for them and more important perhaps, gives the world a voice.

Needs to be stopped.

40% of TV viewers in the US, have a second screen open at the same time. Passive viewing, turned off audiences, are hitting TV Stations Advertising.

Nielsen, the firm of TV ratings, have released new figures from October about second screen usage in the US. (The full report is here but you'll have to enlist, although for free http://www.nielsen.com/us/en/insights/reports-downloads/2012/state-of-the-media--cross-platform-report-q2-2012.html)

That is the trend where people watch TV and at the same time, use a smartphone, tablet or laptop. Indeed. Exactly as I am doing whilst I write this blog and my missus is doing the same thing - probably updating Streamabout video actually.

But both of us almost every night, are second screen users.
Which of course has a dramatic affect on TV "viewing" and certainly TV advertising engagement. Basically we're, what's called, "snacking" on TV.

Not good for the medium.

Neilsen today says we're part of 85% of adults who do that monthly and a massive 40% who do it daily. And remember, Neilsen are the bible of TV viewing so this is very pertinent. Given that not every home has a tablet or smartphone, this is also truly astonishing. 

Older people use tablets, younger use smartphones the research shows.

And it shows the power of online is preferred compared to TV broadcasters fare. Yet again, they should see this coming but they won't and they don't. 

Even if they look at Netflix usage, it averages 5 hours and 20 minutes a day! Wow indeed. TV is getting dead in the water without question. TV Advertising makes less and less sense and at one stage I was at the helm of Ireland's largest TV Advertising buyers. So it's not bias on my part, it's that the world has changed and TV broadcasters haven't.

It's pure and simple. Advertising money chases Audience and with 40% of the audience using a laptop or spending 5+ hours on Netflix, clearly they're not watching TV. And yet Ad agencies haven't got around to measuring this passive audience yet - neither have TV stations because it will mean their airtime is less valuable.

Although RTE, the Irish state broadcaster, is already starting to experience it.
In 2011, its Ad revenue is down -40% on 2007. It actually produced a deficit of nearly 17 million euro after receiving a staggering 183 million euro from Government. So if they were to stand on their own feet, without Government subvention, they'd lose circa 200 million euro. 

Government subvention to a broadcaster is also a strong potential conflict and RTE have been in hot water this year about its coverage of the Presidential Election. If your company receives that kind of investment that simply keeps you "afloat", how critical would you be of the investor? so how critical are they of Government?

So the threat of online and second screens, as shown by Nielsen, must put their future under further threat. And indeed, all traditional TV broadcasters.

It's a sea change that isn't going to go away.

Starbucks. Are we seeing the death of a brand?

Starbucks is really beginning to lose its gloss as a brand. And it's their own fault.

Under scrutiny recently about paying low tax (alongside Google, Amazon et al) it made a publicity moment by saying that it was prepared to enter talks with the UK Government in order to actually pay more tax. Good move...perhaps.

They've paid relatively little UK tax and route their profits to that transparent tax country, Switzerland.  Clever maybe, immoral definitely, but from a brand perspective....disaster.

At the same time, on almost the same day, it started a process to reduce staff benefits and by implication, is getting its staff to pay the increased tax. Faced with massive protests this Saturday by UK Uncut (http://www.ukuncut.org.uk/), it paid 8.6 million in tax over 14 years on sales of over 3 billion. Its tax practices have been branded "immoral" by The House of Commons's Public Accounts committee.

Starbucks has now decided to cut the lunch breaks of its 7,000 staff, sick leave and maternity benefits. It has also removed managers cash incentives (they now get a plaque instead - Yippee!) and workers have to sign their new employment agreement. In a real mealy-mouthed way it has done away with giving new mums on its staff a hamper and instead they get, a card with a Starbucks bib (!). I'm sure they're thrilled! Congratulation and Birthday staff cards are gone too. I'm not kidding you.

Starbucks say the two matters - tax and employee benefits - are totally unrelated, although they told staff not to discuss the new terms. But those staff are of course Social Media savvy and strong Bloggers so they've unleashed an insider Social Media army against themselves.

If you're in any doubt, you'll find them here, courtesy of The Guardian.
http://www.guardian.co.uk/business/interactive/2012/dec/03/starbucks-uk-employees-new-contracts?intcmp=239

Started in Seattle 1971, it is the largest coffeehouse in the world, present in 61 countries. 


This was a brand that had everything.
Innovation, coolness, music, store hipness and in a matter of weeks is in danger of losing it all.

The tax issue may claim more big brands, yet.

Now Dropbox comes to Dublin. For the greatly talented workforce or the highly imaginative tax rates?

 

 

My blog of yesterday, regarding the use of Ireland as basically a tax haven and allowing web companies to repatriate profits to Ireland, caused a bit of a stir. 

In essence, big companies such as Microsoft, Google, Amazon and others such as Facebook and Twitter, have been accused as using Ireland for "tax avoidance". US lawmakers recently compared us to Belize and Costa Rica.

My blog of yesterday follows this blog below, but it's also here  http://streamabout.blogspot.ie/2012/12/starbucks-amazon-google-microsoft-wpp.html


And then, irony of ironies, on the same day, Taoiseach Enda Kenny (Prime Minister) announces that 'Dropbox' are to be the newest tech company to set up in Dublin. He made it clear that Dropbox's decision was based on the old line about a talented workforce blah blah blah and not tax. Here's what The Irish Independent reported his words as;

"Ireland has many advantages to offer international companies, including our young, passionate and talented workforce, all of which will be a great asset to Dropbox as they make their new home in Dublin."

Not a mention of Tax. 

The Irish Independent also reports that "The Government was on alert last night after US lawmakers described the country as a "tax haven" and accused American technology companies operating here of using Ireland to avoid paying corporation tax at home.The US Senate's Permanent Subcommittee on Investigations has begun a probe into how American companies funnel international profits through countries such as Ireland with lower corporation tax rates than the US.Using Microsoft and Hewlett Packard as case studies, the committee chairman Carl Levin said "the tax practices and gimmicks range from egregious to dubious validity".If the US does prevent companies from using Ireland for tax purposes it could have a dire effect on the economy. Numerous companies, including Google, Facebook and Microsoft, who between them employ more than 4,000 people here, are believed to use Ireland for its tax efficiencies.A government spokesman declined to comment, while a spokesman for the IDA, which has attracted most of the firms here, said the agency was studying the report but declined to comment further."

Interesting then to turn onto Techcrunch, which I think it's fair to say, one of the most highly regarded technology publishers to see their take on the Dropbox announcement. Guess what? They reckon it's about Tax. I've reproduced it here. 

 

Dropbox Follows The Tech Crowd, Opens Dublin Office — Says First European Office Will Be Hub For International Ops

Natasha Lomas

Dropbox has become the latest tech company to open an office in Dublin — land of Guinness and low corporate tax rates. Dropbox’s Drew Houston, co-founder and CEO of what is now a 100 million+-user strong service, clearly wasn’t watching the grilling the U.K.’s Public Accounts Select Committee gave Amazon and Google on the issue of corporate tax avoidance last month. Of course it’s the tax rates, not the Guinness, which lure so many tech companies to Ireland’s green and pleasant lands. Last year we reported that setting up a European HQ in Dublin would enable Twitter to lower its tax rate by 16 percentage points — reducing its tax payments by more than 60 percent.
Obviously Dropbox doesn’t make any mention of corporate tax rates in its Dublin announcement. Its release talks effusively about the local talent pool it will be tapping into in Dublin. “We’re delighted to be closer to millions of our European customers. By opening our international headquarters in Dublin and tapping into the large talent pool that exists there, we’re better positioned to serve even more people locally while we continue to grow,” enthused Houston in a canned statement. Ireland’s Taoiseach also chips in a few supporting words, flagging up the country’s “young, passionate and talented workforce”.
Dropbox said the new Dublin office, its first in Europe, will serve as the center of the its international operations — enabling it “to better provide technical support and product acumen” to Dropbox’s millions of European users, and presumably customers in other international markets such as Asia"


In other words, it's about tax. 

Interesting too that Techcrunch reckon that Twitter by being "based" in Ireland reduced their tax by 60% - an incentive indeed and yesterday I said that nearly 50% of Irish tax revenues, comes from US multinationals "based" in Ireland.

As Europe's largest tax haven, Ireland is coming more and more under the spotlight for facilitating what is, tax avoidance, technically legal as that might be.

This is going to be damaging as Governments across Europe, notably the UK, are beginning to decide that they won't stand for it anymore. And our friends in the US are onto us too.

And it's wrong that an Irish Government should be facilitating what is, lousy corporate behaviour - legal or not.

Whilst at the same time, terrorising its citizens to pay more tax.

Starbucks, Amazon, Google, Microsoft, WPP all in the news about tax avoidance through Ireland. And now they know it.

The British Government is to explore an internationally co-ordinated new tax designed to capture the earnings of companies like Amazon, Google but also Starbucks, according to The Telegraph. The particular focus is to force online companies pay more tax on sales they generate in the UK. Some use a variety of legitimate, but certainly questionable, ways of avoiding tax. In the case of Starbucks, for example, they apply fees from their Dutch parent to minimise their local UK tax.

And it's causing an outrage against the brand. 
And rightly so.

Activist Group, 'UKUncut' has announced a day of action (Saturday Dec 8) against Starbucks and these protests are aimed at bringing Starbucks to their senses or to put them out of business. One way or the other. 

The UK Government wants to close the loop that allows web companies avoid millions of pounds on tax and in fact, repatriate a lot of it to Ireland, the lowest corporation tax economy in Europe (12.5%), to avoid paying it locally. 

There can be little doubt at all now, that the heralded Irish Government investment plan is little more than a sham, based purely on tax incentives for multi-nationals locating here. In fact, it could be said that it's based on facilitating widespread tax avoidance across Europe, technically legal as that might be. But this is why Ireland's 12.5% tax rate is under European pressure.

Up to 50% of Irish corporate tax revenue may relate to taxes paid on income earned by US multinationals outside Ireland.

I once looked after The Industrial Development Authority (IDA) Advertising so I have a good understanding of their level of expertise.....and although, applauded by Government, the truth is beginning to come out. It's all about tax.

It has been often thought as bizarre, that for a country the size of Greater Manchester, Ireland is the European HQ for Google, Facebook, LinkedIn and others. It is becoming more clearer that when companies locate here, it facilitates their tax avoidance elsewhere, such as in the UK. Tax avoidance is of course, not illegal.

Indeed, even the very British Ad Group, Martin Sorrells's WPP (part owners of Dublin Ad Agency DDFH&B and Group M), had based itself in Ireland for tax reasons and shockingly, the company is now discovered to be actually Jersey registered. One wonders why it needs to registered in a small, tiny island like Jersey known really only for its "special" tax facilitation? Good reasons, no doubt.

Amazon is also shockingly, actually registered in Luxembourg, another famed principality for its tax shelters and discreet facilities. Amazon? THE American retail success? It had used Luxembourg VAT laws to its own competitive advantage for example, charging only 3% on an ebook sold in Britain whereas other booksellers had to charge 20%. That loop is now being closed and I've been a fan of Amazon, but it's just worn thin.

Google, with a staff in the UK of 1,300 books most of its revenue to surprise, surprise, Ireland. So it earns money in the UK but funnels it through Ireland. That's Ireland's great tax regime I mean that attracts companies like these in the first place.

Actually Google's "Irish" revenue is recorded as 12.4 billion. How ridiculous is that? Gross profit in Ireland in 2011 was recorded at 9 billion!! It's truly ridiculous. 

The whole tax avoidance is unravelling and more and more are beginning to understand the tax avoidance which Ireland has been facilitating against its European partners, and most notably, our biggest trading partner, The UK. So much of these investment decisions have been PR spun as being based on attracting business to what is said, a better educated workforce in Ireland, when in fact, they are simply decisions based on tax "incentives".

And the UK are not happy about it.

For example, Amazon, last year in the UK, earned 3 billion sterling in sales. But only declared 207 million of those as being from the UK and consequently, over the last three years has only paid UK tax of 2.3 million on total sales of 7.1 billion. Shocking undoubtedly, but it's being called immoral by many, albeit utilising legal tax manoeuvres.

Microsoft in 2005 were commented on in The WSJ for routing profits from Germany into Ireland. I mean it's actually funny that one Microsoft subsidiary called 'Round Island One Ltd', is actually based in a solicitors office and turns out to be one of Ireland's greatest companies. It has 9 billion in profits in 2004 and no staff. Not bad eh? And nobody has ever heard of it.

Google, paid UK tax of a tiny 6 million on UK revenues last year of 2.5 billion. Wow.

Ireland is helping them do that through "phantom" services.
Ireland is Europe's biggest Tax haven, followed by Switzerland.
And Ireland's tax schemes are now coming under the spotlight as it starts its European presidency from January 1st.

But more importantly, it's making the lie told by successive Irish Governments that Ireland was somehow an attractive base because of its workforce, its green fields, its beautiful scenery.

And it's wrong.
And we need to say it's wrong even if it's to our own detriment.