Inside the world of business
Order is music to major labels' ears
THE IRISH music industry got an early Christmas present with the news that the Government plans to issue a minsterial order that would allow copyright holders to compel internet service providers (ISPs) to block access to websites that they consider are engaged in piracy.
It’s something that the industry has been looking for since a case forcing cable operator UPC to impose certain anti-piracy measures failed in the High Court last year. Mr Justice Peter Charleton highlighted loopholes in Irish legislation that prevented him from granting an injunction. After much lobbying, and even a threat of legal action from EMI and industry body Irma, the major labels are hoping that the statutory instrument will address all their demands.
But events have moved on since the UPC case. It’s now reported that the Data Protection Commissioner has found that Eircom’s implementation of a three strikes policy, where users the music industry accusses of sharing copyrighted material risk losing their broadband connection, is in breach of data privacy legislation.
Separately, a recent European Court of Justice ruling, while ostensibly about filtering, or monitoring networks for the sharing of copyrighted material, found that ISPs can be forced to block access to certain websites that infringe copyright.
It’s hard not to have sympathy with the record labels, which have found that new technologies are eroding their business models and allowing people to easily share their products for free. The same issue is hitting movie studios, newspapers and software companies to name but a few.
The labels point to the massive drop in sales of CDs in Ireland; from €146 million in 2006 to €56 millon last year. More measured critics accuse them of seeking remedies that are disproportionate to the activities that they are trying to discourage. Others would say they have simply failed to adapt to the new economy. Wherever you fall on the argument, there is little doubt the issue will end up in either the Irish or European courts in 2012, or both.
Investors stay loyal to US despite downgrade
STANDARD & Poor’s may beg to differ but the United States remains the investor’s safe haven in times of trouble. The US ratings agency caused a furore in August when it said the world’s largest economy was no longer worthy of its AAA rating, citing for the move concerns US politicians might not be able to agree on how to put US finances on a stable footing and fears that its debt would continue to grow.
S&P executives stated at the time that the agency thought US debt would hit $11 trillion this year, the equivalent of 75 per cent of gross domestic product, increasing to $14 trillion by 2015 and to $20 trillion by 2021, which at that point would mean that it was 85 per cent of GDP.
There is still little clarity on the US budgetary outlook – indeed borrowing is heading for $15 trillion under the most recently agreed budgetary patch – but that has done nothing to dent the blue-chip status of the country.
After a brief market tumult, which saw shares record their worst one-day fall since the dark days after the Lehman collapse, the most notable victim of the whole affair was Standard & Poor’s own president Deven Sharma.
The dollar is up 8.6 per cent against a basket of other currencies, bonds have returned 4.4 per cent, the S&P500 Index has rallied 1.7 per cent and the cost for the nation to borrow has fallen to record lows, with the average monthly yield in November on 10-year notes below 2 per cent for the first time since 1950.
Demand for US assets is increasing as consumer confidence, manufacturing and employment show the US is strengthening as Europe struggles to save its currency.
None of which is likely to appease the French as they fret about the very real prospect of losing their own triple-A rating in the knowledge that the markets are unlikely to be quite so sanguine.