Free downloads: The money spinner!

There has been an interesting debate over the last few years as to whether the downloading or file sharing of movies/music on internet should be banned or not. The movie/music industry has been arguing that a lot of efforts, time and money go into the making of it so they should have all the right in the world to make money out of it and that they have not been able to exercise that right due to rampant downloading/file sharing that takes place online. On the other hand, there is a strong belief that there should not be any restrictions of such kind. Recently, the Dutch government passed a landmark judgment that such downloading of content is perfectly legal. The decision was a result of the study undertaken on behalf of the Dutch Ministries of Education, Economic Affairs, and Justice, which concluded that such file sharing adds to the social welfare and that it has an overall positive effect. Surprisingly, it also says that such ban restricts free flow of information and invades internet user's privacy. On the face of it one may feel that the industry will suffer huge losses as the direct revenue from the sales of original CD/DVDs will go down, though I believe this will benefit the industry as a whole.
Of late, we have seen a number of Hollywood celebrities flying down to India in order to promote their music/movies. Why this sudden influx of celebrities? It is because they have realized the potential of the Indian market (i.e. commercial potential). How did we become a potential market for them? It is because we have been exposed to their music/movies through internet. Same is the case in other countries as well. India is more attractive, of course, because even if a small percentage of population is interested in something, the absolute number is always going to be large considering our population. So these companies should realize that internet, on the contrary, has opened up new sources of revenue for them which did not exist earlier. Somebody who had seen Tom Cruise’s earlier movies on his/her computer (by downloading it from some free site) is now shelling out Rs.150 plus to watch him in multiplexes. We have seen Lady gaga promoting her album and getting interviewed by Shahrukh Khan in India. Paris Hilton also launched a product line here recently and these are just few examples. How frequently did this happen earlier? Not much.
Same is true for music as well. Fortunately, there are some artists who realize that the times are changing and they have used that knowledge to their advantage rather than making a fuss about it. Some local band in US had uploaded their music videos online and these videos were made available for downloading free of cost. People had an option to pay if they liked. How many people actually paid is still a mystery (as given a choice nobody would like to pay for something that is freely available) but one should look at the bigger picture. On one hand, a local band got a platform to reach out to a worldwide audience free of cost and on the other hand they get to mint money when they go for music concerts and the same people who had downloaded their videos for free will pay a huge sum to watch them perform live, provided of course they make some good music. So it is a question of sacrificing Rs. 10 in order to make Rs. 15. It is also a lesson for music companies that they cannot take people for granted. Earlier, the original CD costing Rs.60 is now available for Rs.30 and still these companies are making profits. Internet has acted as a great equalizer in this case as it has not only expanded the market for these companies but at the same time it has brought the cost down for the end-users.

Save the bill

As one would have expected the Lokpal bill has hit the dead end owing to dissonance between the ‘Anna team’ as they like to call it and the government, the biggest area of dissension being the proposal to bring Prime Minister & higher judiciary under the purview of the bill along with other demands. But let us not discuss the ‘delay’ part as it had to happen considering the consequences of implementation! What I want to highlight here is one of the USPs of the bill i.e. crowdsourcing: the fact that the bill is open to people’s opinion and that the suggestions of people are being incorporated in the bill ‘to the extent possible’. One may argue here that it is not crowdsourcing in real sense as it is drafted by a committee not people and that point is well taken but I am only referring to the 'editing part' for which the common people are being invited.
Something similar is happening in Iceland as well after the banking fiasco. The council is drafting clauses of the constitution and it is being uploaded on their website/Facebook for people’s opinion. This whole idea of taking vox populi into account while forming legislation has a downside to it I feel i.e. popular opinion tends to be loaded in favour of emotions rather than rationale and emotions can’t be the basis for any law. And also what I feel is most important when we talk about public opinion is ‘majority’. So it made me do some research on situation prevailing in Iceland which is experiencing something similar though it is the constitution that is being referred to people there compared to Lokpal bill in India. What I read on fastcompany.com was terribly disappointing. Of two thirds of Iceland's population (3.2 lacs) which is on Facebook an average post elicited 4 to 5 comments. I, then, checked on indiaagainstcorruption.org and found a total of 1817 comments on Lokpal bill, not a big number considering India’s population. You would find more comments when any wannabe celebrity changes his/her status on any networking site! At the same time I also admit to have not taken the pains to go to the site and comment on it like most of the others. This is because most of the people think their opinion will not have any impact and in the process we lose out, something that happens during election as well (though I must say that I have never missed out an opportunity to exercise my right to vote). So unless the situation improves in terms of more people contributing to the cause we will end up having a legislation by the committee members for the people instead of by the people for the people which is actually the objective behind it. It is practically impossible to reach out to everyone personally for their opinion; closest we can go is to have a national debate on it if possible (even that will only lead to chaos). So please go out or should I say please log on to the site and have your say for a better India.

Going gaga over Gaga

Though I have heard and experienced that time changes everything, change of definition over a period of time is something that I had never expected. So it was nothing less than a shock to me when the CFDA (Council of Fashion Designers of America) awards were announced and Lady Gaga was chosen as the Fashion Icon! If one goes deep into deciphering the meaning of the word ‘icon’ one would realize that it refers to a person who embodies certain qualities that others would like to imbibe. It just beats my imagination as to how can Lady Gaga who dresses the way only she can, be adjudged as a fashion icon? Nobody can disagree that she is a crowd puller, can attract attention like nobody can and that the number of awards she has won for her music is more than the number of songs she has sung! She is one of the most successful celebrities around. But considering her outrageous dressing sense; I just fail to understand the logic behind this (though personally I am a big fan of her and believe she carries herself better than most of the celebrities). Not long ago she was selected as the winner of both the best dressed and worst dressed awards at the Shockwaves NME Awards. She was also declared Hollywood's biggest fashion victim in a poll conducted by WENN.com. And now she is in the same league as Kate Moss & Nicole Kidman who have won the same award earlier.
CFDA is a respected body and has been operating for a long time so there must be some reason why it went gaga over Lady Gaga! The arguments in her favour included her global popularity and the fact that everyone wants to see her no matter what see wears. In fact the reason why people wants see her all the time is, I guess, because they want to see what she is wearing! She has always been known for doing things in unconventional manner, here again we see her winning the award due to some unconventional reasons! How many girls would actually want to dress like her is another debate altogether (as an icon is someone people would like to imitate). But she is a winner all the way for changing the way we define fashion.

Consumption versus saving

I always thought of writing something about it but never did. But when I read this news yesterday I could not help but write this. According to The Telegraph, inflation destroyed savings worth $58 billion in UK in just one year! Why it happened? Average rate of interest earned by people on their savings account was about 1.6% and inflation was about 5.2%. Now compare that to what is happening in India: savings account rate is around 3.5% and the wholesale inflation rate hovers around 8.5-9%. And the extent to which WPI underestimates the actual inflation is a foregone conclusion now. Assuming the savings rate of 3.5% and inflation rate of 9% (on a conservative note as the actual rate is much higher than this considering the limitations of WPI), we see that Rs.100 deposited in a bank account become Rs.94.5 (Rs.100+3.5-9) by the end of the year.
This is not nuclear science and we all know it. Now if this situation persists for a longer period of time people start forming an opinion about the situation which basically leads to two kinds of actions. Some (those who like to live for the moment) may be inclined to think that despite savings if their money is getting eroded, they might as well spend it now which leads to even more inflation! So this not only leads to problems for economy as a whole but it creates more problems especially for those who decided to save as they have postponed their purchases, they are missing out on an opportunity to buy at current rates, and also they will see their savings account shrink for deciding to save! There are some who think the other way: they believe if anyways their money has to erode by the end of the year they might as well save some more money for future requirements. This in turn will lead to control the inflation to the extent they save which will benefit those who are buying at this stage (the live for the moment type)! Whichever way you consider, in such a situation those who decide to spend now benefit and those who decide to save lose. But those who save are immunizing themselves against any future emergency which is not possible if you decide to spend all that you have. So eventually it is a fight between those who live for the moment and those who live for the future.
Let us see what an overdose of either of these situations can lead to. If most of the people start spending their money like there is no tomorrow just to beat erosion in savings, we will be encountering even more inflationary situation in the future. Secondly, if all of them decide to save their money for the future it will lead to lesser demand, decrease in production accompanied by loss of jobs etc. So what is the solution? The answer is to strike the balance between present and future needs by doing some financial planning! If you have observed when we say ‘spending’ money we are talking about spending it on food, clothes etc. So the idea is to make sure that the ‘spending’ part has ‘planned investment’ as one of its components. What this will do is that it will take the money out from the savings account so you will not lose money due to inflation and also it will provide for your future needs so it takes care of future emergency as well. I admit, this is what all of us do and that this does not warrant a torture in the form of such a long and boring post but as we see there are lot of issues in the economy so I am sure there are some who are not doing what is mentioned and messing things up. This is post is dedicated to all of them! I also confess that this post could have been a one-liner but since I had some free time I thought of stretching that one-liner!

Time to serve those niches

McDonald’s has done it again. In the past, it had customized its menu to suit the taste buds of its customers in India and now it dishes out something for the spicy-food lovers as well. It has introduced a new range of spicy food exclusively customized for India. It is one of those organizations which realized quite early that success in India depends not only on introducing products that have been successful globally but the extent to which these global products have been Indianized. We saw that with the introduction of more vegetarian dishes earlier and now the spicy range. So it is certainly spicing things up here! Introducing a whole new range will certainly lead to more footfalls as there are many who shy away from McDonald’s for want of spicy food. I may be wrong when I consider people preferring ‘spicy-food’ as a niche market, as the number of people preferring it is huge in India. But creating a whole new range of products specifically for these people certainly qualifies as a niche, I feel.
Second example that I came across recently is of Axis bank. New ad by Axis bank shows a typical young couple arguing where the pregnant wife is not happy with her husband for preferring his banking related work over her and then the second part of the ad shows a bank guy coming to their doorstep to get the work done. It essentially talks about the priority banking service provided by the bank where it is prepared to go the customer’s place in cases like these. This just goes to show what competition can do the industry. Not long ago, it was a pain going to banks and getting your work done and now they are coming to your place!
And mind you these both examples are of companies which are more popular for serving the mass markets. But the way things are going, even this kind of companies cannot ignore the niches. And anyways it makes sense for companies into mass products to serve the niche market as well if it is cost effective. Let’s say in case of Axis bank when you go to your client’s place it helps you develop that rapport and know him better. Who knows you may just end getting another client for opening a savings account when she delivers! I may sound too imaginative when I say this but when the competition is cut-throat even the niche markets need to be served.

Dressing up badminton

It seems this is the season of bizarre news. I had written one post earlier about a town in Italy that had banned girls from wearing mini skirts. This post talks about a new ruling by badminton world federation which has made wearing of skirts mandatory for all female players! This shocking move is making news everywhere. The federation is of the opinion that this is important to ensure attractive presentation of the badminton. So their stupid logic is that the popularity of badminton depends on what players wear on court. The federation wants badminton to be as popular and eye-catching as tennis it seems. This is nothing but a desperate attempt on part of the federation which wants to glamorize the sport on similar lines as tennis. And as one would expect this move has elicited cries from many parts with the world champion Lilyana Natsir giving it thumbs down. It is also expected to raise eyebrows in conservative countries especially in Asia. We have already seen how Sania Mirza’s dressing sense on court was criticized by certain section of people.
This proposition is not only outrageous and illogical but at the same time it is an insult to the players who have dedicated their life to the sport. You can not expect to make any sport more popular or more ‘presentable’ by dictating the dress code of its FEMALE players. Nobody can claim that tennis is popular or presentable because of the way Sharapova dresses herself on court. This claim will only undermine the skill sets of Sharapova who has made it big purely on her skills, so let us not attribute her success to her dress code which is her personal choice. Agreed, badminton is not as big as tennis and that it should make efforts to make it big but this move just does not make sense. All sports cannot be equally popular and we have to accept that. Badminton has its own icons and followers, we have players like Saina Nehwal who can inspire a generation of young shuttlers based on her achievements rather than what she wears on court. Fortunately sanity prevailed and decision regards to the dress code has been deferred and hopefully it will never come into effect.
There are other ways of making a sport popular. It should do what Hockey federation did with Premier Hockey League (PHL). Having teams at state/city level and making them compete with each other should help. It will also give a chance to some of the unknown players to make an impression. PHL may not have been a runaway success but it certainly made people, other than hockey fans, notice it. You could actually see people turning up at stadiums with their families like IPL. Even at IPL matches we see how the female spectators and even those who do not follow cricket (there are few but still the specie does exist in India) turn up at stadiums or watch at home. So you never know doing the same in badminton may help the cause. However going the IPL or PHL way always has a danger of putting sport in the same category as going for a movie on a weekend as it then becomes a pure form of entertainment due to the commercialization/glamorization of sport.

DIScount CARD the idea

I do not know the name of the company but I read somewhere that it is coming out with a card that is giving discount to the LGBT community i.e. lesbian, gay, bisexual, transgenders people. One of the supporters of this said finally this community will have one reason to cheer that there are certain places friendly to them as well. It is hard to see any logic in this. If someone is really concerned about the community than he should take steps to represent their interests at a national level which would help them live a normal life as we do rather than subsidizing their food, clothes, and drink bills which will not serve any purpose. In fact, it will only lead to discount-induced purchases which in turn will lead to inflation!
The reason why I say this is because there is no way of verifying anyone’s sexual preferences. So even those who do not fall in this category but do not mind being considered a part of it will go for this card and avail of its benefits. This just looks as one of those marketing gimmicks by retailers to boost their sales and nothing else as somebody who is actually concerned about their well-being would take more concrete steps. One more way it will be misused is when the number of people holding such cards will be used to extrapolate the population of LGBT category.