Engage in some legitimate protest: support PIAS’ record labels

In aftermath of the SonyDADC fire and the destruction of PIAS’s stock, here’s an opportunity to engage in some legitimate protest. Put your money where your mouth is, and support the independent record labels affected.

The law of unintended consequences: riots and independent record labels

Small actions can have big consequences, and unintended ones at that.

It’s doubtful that those who attacked and set fire to a distribution centre in Enfield last night intended to deal a serious blow to independent record labels, but then it’s unlikely they’d much on their minds beyond a spot of social burglary.

A nice example of market victory (and marketing failure).

I need a new mobile phone, but thanks to some marketing failure, I’m getting a new mobile network.

Unusually, I am not using the verb “need” in the usual geek sense, where it is a synonym of the verb “want”, and often accompanied by the positional emphasiser “my precious” when IT hardware is involved. No, “need”: once the onboard hard drive has mysteriously wiped itself for the third time, action is required.

Having been well served by my HTC Athena – which chronicles the past several years by damage to its aluminum case – there is no way this side of a frontal lobotomy that I’m going to embrace the

Lewis’s: End of a Era

Lewis’s doesn’t need any introduction if you’re from Merseyside. Not John Lewis (that was always “Lee’s”, short for George Henry Lee – the John Lewis store in Liverpool, until JLP took the silly decision to supress the historic brands), but an older department store, more prestigious in its day.

That day was over in the 1970s, but it was a still an impressive experience when I went there as a child in the 1980s. Since then, as the chain it belonged to dwindled and lurched from insolvency to insolvency, it’s slowly faded away, till, on May 29th, Lewis’s closed for ever.

I wish I’d been back in the city then, as I’d like to have visited one last time. Lewis’s was a Liverpool institution in the most fundamental sense – a fixture of the city centre since 1856 – and a little piece of the city’s identity dies with it. Even as a pale shadow of it’s past, Lewis’s was a counterpoint to the soulless and placeless shopping terraces of Liverpool One, which – barring a few notes about the old dock beneath the development – could be in any city in the UK.

On the BBC website, there’s a audio slideshow which is worth a look, and the “Lewis’s fifth floor: A department story” continues at the National Conservation Centre until the end of August.

It helps to understand eBay’s motives, Ms. Honeyball, or Why is eBay is fighting for you?

It’s amazing what eBay does these days. Now they even have their own MEP. Well, not quite, but eBay’s “Grassroots Campaign” has won the support of Labour MEP Mary Honeyball.

Writing on Labourlist today, she says:

I wanted to tell Labour supporters about a campaign I am promoting to ensure that goods bought online are freely available at a fair price. Currently, European rules do not adequately support online retailers & customers.

I am very pleased to be part of E-Bay’s drive for greater fairness in online selling. Having gained three quarters of a million signatures on their petition, E-Bay held a breakfast meeting with me as the main speaker yesterday morning to launch their campaign to reduce over-pricing by designer branded goods.

All very worthy you’d think. Our elected politicians uniting with an innovative business to protect consumers?

Not even close.

For some time now eBay has been in litigation on the Continent with LVMH, the luxury goods house. 

LVMH are particularly annoyed about the large numbers of counterfeit products on eBay – which they say eBay are doing too little to deal with, despite profiting from the sales via listing fees and PayPal charges.

eBay, for its part, says that this is just protectionism from LVMH – who have exclusive distribution agreements with retailers in different territories, that these are threatened by online competition, and that the agreement carve up territory and keep prices artificially high.

The saga has been something lawyers and retailers (or retail lawyers like me) have been following with interest for a while, as it raises some interesting intellectual property and competition issues.

What it certainly isn’t is some David versus Goliath fight in which eBay are standing up for the rights of consumers. They are standing up for their right to profit from sales (and resales) of LVMH’s products by eBay sellers. They rightly recognise that luxury goods which are much cheaper online will drive people to shop with online outlets – and eBay is by far the largest and best known.

eBay would like European Law changed so that they have greater protection from rights owners such as LVMH, and also so that LVMH cannot enter into the kind of exclusive distribution agreements that they have traditionally used.

It is disappointing in the extreme that Mary Honeyball does not mention this relevant history when extolling the virtues of eBay’s campaign. She may be wholly unaware of this (although this would in itself be a concern) but if she knows why eBay is pushing the campaign it is surely incumbent upon her to make these motivations clear to people whose support she is seeking to garner for that campaign.

Mary Honeyball concludes by saying this:

One of the reasons, albeit not the most important one, I am so keen to support E-Bay and on-line selling is my own personal experience.  E-Bay saved my bacon when I needed a fancy hat for a wedding.  Not being prepared to spend lots of money on an item I would more than likely only wear once, I turned to E-Bay where I found the very thing which was subsequently delivered the next day.  In fact, I liked the hat so much that it’s now had more than the expected one outing.

The E-Bay campaign has only just begun.  We now need to lobby the European Commission to change the rules.  I will continue to blog as the story unfolds.

(“This is an eBay Promotional Broadcast by the Labour Party”. Ed.)

We interfere with things like competition law and intellectual property rights at our peril, especially when we are asked to do so by vested interests. If someone asks for a change in the law, we should always seek to understand what they will get out of it.

It also bears saying that this campaign is a campaign against physical shops, and therefore in essence against the jobs they provide (the costs of which form part of the higher price paid offline). High street retail creates far more jobs than distance selling, and it is therefore odd that a Labour MEP should be supporting a campaign that necessarily seeks to reduce offline retail and increase online retail. Moreover, you cannot use a German worker to run a shop in London in quite the same way you can use German labour to operate a postal distribution hub in Germany.

This seems an odd position for a Labour MEP to be in, especially a Labour MEP representing London – an area with a significant number of the type of stores that eBay would like to undercut. I wonder how many of the relatively low-paid shop assistants whose jobs are at issue would be pleased with their MEPs efforts?

This post expands on a comment made on LabourList to Mary Honeyball’s original post.

#Waterstone’s Fail, or Who buys from Waterstone’s online?

Last week I was tweeting (and tweeting, and tweeting) about the deficiencies of the Watersone’s website. 

I love physical bookshops. There’s something deeply enjoyable about being able to browse through different possibilities on a whim, assessing whether or not it’s worth making an investment (both of time and money) in reading a particular book, and possibly discovering something you might otherwise have over looked. I also have a soft spot for Waterstones, who are pretty much the only chain of proper bookshops left in the UK.

(Borders simply isn’t a bookshop; it’s a store selling media, one type of which is books. An example of quite how un-bookshop it is: when it opened, their Oxford branch alphabetised their entire law section.)

I realised recently, however, that there’s only one two physical bookshops I actually use on a regular basis: The Works, and the WHSmith branches at various railway stations. And I buy the same type of books from both: run of the mill paperbacks, thrillers, crime fiction, and the like, either because it’s cheap (the Works) or convenient (WHSmith). Everything else – from hardback fiction to legal professional texts – I buy online.

The problem that Waterstone’s physical stores face is simple: Amazon. Is the experience of physically browsing for a book worth paying at least an additional 20%? And what if you aren’t browsing, but know exactly which book you want? In that situation, what benefit is there to be had from buying from a physical store (especially now Amazon started offering free delivery on orders over £5)?

Wouldn’t you expect that the Waterstone’s website would be at roughly the same price as Amazon? If it isn’t, then the market should simply tip towards the online-only operator. Bizarrely, Waterstone’s website (whilst cheaper than their stores) is pretty consistently more expensive than Amazon. Today, I placed an order with Amazon for five assorted fiction books, at a cost of £30.53. The same order placed with Waterstone’s online would have cost more than £42. Even allowing for a possible rebate on the latter price (£1.25, via the Waterstone’s Card - of which Amazon have no equivalent), the average price per item was almost £2 more from Waterstone’s.

It all adds up to a great big #WaterstonesFail.

It does beg one key question – with this price point, who on earth is the target customer for Waterstone’s online?

Unlike Amazon, Waterstone’s do allow returns to physical stores, and possibly for some people that’s a benefit worth paying the higher price, but to take advantage of this you have to live in reasonable proximity to a Waterstone’s branch (which cuts out a whole segment of the online market who shop by distance means due to not having a local store) and it has to be cheaper and more convenient to return items to a store rather than via Royal Mail (which purely on a financial basis has to affect whole swathes of people using public transport).

You have to wonder how successful they can be over the longer term!