Author: Ben Debski

Toshiba racks up record losses

Posted on by Ben Debski

On December 21, Toshiba announced close to 7,000 job losses – or 30 percent of its global workforce – as part of a wide-reaching restructuring plan designed to head off major and continued losses . The announcement coincided with $4.5bn in annual losses and a 40 percent decline in the company’s share price since news of a profit overstatement emerged in April.

The so-called ‘Toshiba Revitalisation Action Plain‘ has four strands: “Decisive Action on Business Structural Reform”; “Strengthen Internal Controls and reform the Corporate Culture”; “Review the Business Portfolio and Operational Structure”; and “Reforming the Financial Base”. If successful, the reforms should help the recovery of the group’s reputation and repair major weaknesses in a range of its businesses.

The announcement coincided with $4.5bn in annual losses

While reports of the misstep started to emerge as far back as April, it took Toshiba until August to confirm it had overstated its profits by YEN 155bn over a six-year period. The scandal not only unearthed major losses at the company but also led to the resignation of its president and vice-president. Since then, Toshiba has posted a series of earnings restatements and shed a light on weaknesses in some of its business lines.

Aside from the 6,800 job losses in the consumer electronics division, the most notable aspect of the restructuring plan is the decision to sell the company’s TV and washing machine manufacturing plant to Hong Kong-based Skyworth for approximately YEN 3bn.

Speaking more generally, Toshiba will strengthen its internal controls and reform its company culture, and the review of its business portfolio and operational structure will continue into the New Year and beyond.

Google exec to lead TV corporation

Posted on by Ben Debski

The Singapore-based Google executive Michelle Guthrie has been named Mark Scott’s successor as managing director of the Australian Broadcasting Corporation (ABC). Guthrie will become the organisation’s first female managing director when she takes over in May and, according to the ABC Chairman James Spigelman, is “ideally credentialed to lead the national broadcaster in a digital era”.

The appointment brings an end to Scott’s 10 years at the helm, over which time he has introduced ABC News 24 and started work on the development of new digital platforms. The executive, who announced he was stepping down in September, recently oversaw a string of cuts and passes the baton to Guthrie in what remains a trying time for broadcasters.

Scott passes the baton to Guthrie in what remains a trying time for broadcasters

Speaking to ABC News 24 in her first interview following the appointment, Guthrie underlined the challenges facing the ABC and the industry at large as the transition to digital takes hold. “The key thing is really what audiences really desire”, she said, “and how that is really changing so rapidly with digital transformation. We really need the organisation to respond to those fast-changing audience needs very quickly.”

After graduating with a law degree from the University of Sydney in 1988, Guthrie went on to work primarily in media. Her past employers include Foxtel, Star and BSkyB.

“Michelle brings a unique local and global view to the role, having grown up in Sydney and worked at senior levels here and around the world”, said Spigelman in a staff email. “She brings to the ABC her business expertise, international contacts, record in content-making across an array of platforms, a deep understanding of audience needs, and corporate responsibility for promoting issues like diversity.”

Ad blockers deny publishers vital income for content creation

Posted on by Ben Debski

Adverts are everywhere and the majority of them are unavoidable: they are placed on billboards at the side of the road; they are found smack bang in the middle of people’s favourite TV shows, magazines and newspapers; they are plastered on the sides of buses and inside the carriages of trains. The only way to avoid them is to avert one’s eyes, which can be a challenge in itself, as advertisers have become extremely good at grabbing the attention of consumers.

There is one place, however, where people can fight back against the onslaught of adverts, and that is online. With the help of ad-blocking software installed on their smartphone or web browser, users can have a relatively ad-free experience as they peruse diverse content on different websites.

On the surface at least, having the option to block ads seems like a win-win for consumers tired of being bombarded with pop-ups and banners. But it is a little more complicated than that, as, by cutting out advertisements online, consumers are also destroying content providers’ ability to access ad revenue – something they desperately need if they are to continue producing the high-quality content their users love.

And if that wasn’t bad enough, adding to publishers’ problems are the ad-blocking companies, which are looking to take a cut of content providers’ already limited revenue streams.

Advertising is one of the core principles of any publisher’s business model. Publishing is all about creating content and selling advertising at a price based on the quality of said content

There are various suppliers of ad-blocking software: the aptly-named uBlock; AdBlock (which was recently sold to a mystery buyer, with the company refusing to name its new owner); and Adblock Plus, which is the biggest of the three. The last is a for-profit company and it manages to make its money by approaching publishers whose websites deliver ads in a manner it deems acceptable. It then offers these publishers the opportunity to apply to go on its ‘whitelist’ – meaning Adblock Plus will let specific ads through, so long as they meet certain criteria.

This service naturally comes at a price, and a hefty one at that. Adblock Plus will charge publishers up to 30 percent of their ad revenue just for the privilege of being a member of their whitelist. Many publishers are annoyed by this setup, with some claiming (such as technology site Ars Technica) it diverts funding away from content producers, many of which are struggling to keep their heads above water as it is.

Advertising is one of the core principles of any publisher’s business model. Publishing is all about creating content and selling advertising at a price based on the quality of said content (or selling advertorials to make up the difference), or, if there is enough demand for the content created, publishers can sell it at a premium via a monthly subscription, and thus (at least partly) remove the need for ad revenue.

There is no free lunch here. Hence, a piece of software that is capable of completely gutting the revenue stream from the publishing industry, while simultaneously providing consumers with the content they crave, is effectively holding publishers to ransom. At least, that was the opinion of Mike Zaneis, a Vice President of the Interactive Advertising Bureau in an interview he gave to CNET.

“Ad blocking to me is so fundamentally wrong; it just boils my blood”, he said. “It’s a huge economic problem for the industry, one the industry is just coming to grips with and to see as the fundamental threat that it is. For some publishers, itís a blip on the radar screen – less than five percent of users or ads are being blocked. That’s what we in the business call a discrepancy: it’s not that big a differential.”

But Zaneis was quick to point out that, for smaller publishers, especially those with a “young, tech-savvy audience”, more than half their users can be running ad blockers. The software has the potential to utterly crush their business.

Online publishers are clearly stuck in a rather precarious position, but all is not lost. Many publishers are realising that, by listening to consumers and improving their ad experience online, while also finding innovative ways to communicate to their users that advertising is essential to keeping the content they love free, the tide is starting to turn in their favour – stripping ad blockers of the power they have held over the online publishing industry in the process.

The adblockalypse
PageFair is a leading provider of counter-ad-block solutions; it helps online publishers identify users who actively use ad-blocking software, as well as assisting them in calculating and recovering the revenue lost as a consequence.

In the company’s 2015 Ad Blocking Report, it found that, globally, ad blocking cost publishers more than $22bn last year and that there were over 198 million active users of ad block software worldwide. Those numbers are set to rise unless something is done to counteract them, as, between 2014 and 2015, ad blocking grew by 41 percent globally, with the US seeing an increase of 48 percent (45 million active users) in the 12 months from June 2014. Statistics such as this have led some to some fear the online publishing industry is on the verge of an ‘adblockalypse’.

In the UK, however, research conducted by the Internet Advertising Bureau (IAB) revealed just 18 percent of all British adults online were using some form of ad-blocking software last November – up from 15 percent in early June, showing linear, rather than exponential, growth in ad blocking. The IAB study was more comprehensive than the one carried out by PageFair as it didn’t just look at the size and scale of ad blocking, it was also interested in identifying the main drivers behind people’s propensity to block adverts online.

Interestingly, the organisation found that, while 57 percent of those surveyed said the main reason they chose to use such software was to block all ads, the remaining 40 percent admitted they were more concerned with ensuring specific ads were blocked – ones they found particularly annoying and which negatively impacted their experience on the web.

Some publishers have opted to prevent users of ad blockers viewing their content altogether

Guy Phillipson, CEO of IAB said the issue of ad blocking is less acute among quality publishers and big-name news portals, but that long-tail publishers and local news sites, which tend deliver ads through techniques such as overlays and pop-ups, suffer a lot at the hands of the software.

“The small rise in people blocking ads is not unexpected considering the publicity it’s been receiving”, said Phillipson in a statement. “However, it does provide some perspective on the situation for those referring to an adblockalypse.”

“More importantly, it also provides a clear message to the industry – a less invasive, lighter ad experience is absolutely vital to address the main cause of ad blocking. That’s why we’re developing the LEAN [Light, Encrypted, Ad choice supported and Non-invasive] advertising principles for the online advertising supply chain.”

The principles proposed by IAB aim to strike a balance between consumers wanting a quality experience online and publishers’ need for valuable ad revenue. The organisation is advising publishers to make ads that are lighter in terms of file size and make fewer data calls; the latter in particular slow down websites and upset users who are worried about issues of privacy. IAB has also advised its members they should attempt to remove as many overlays as possible and ensure video advertising does not automatically play with the sound turned on. According to Phillipson, by getting rid of these types of advertisements, publishers will give consumers fewer reasons to employ ad-blocking software.

No ad-free lunch
Not only does the online publishing industry have to rethink the way it delivers ads, it must do a better job of communicating to consumers that the content they love is only free to them because of the revenue generated by the advertising they hate.

“There are two statistics that I think are quite interesting”, said Phillipson. “When we asked consumers ‘Did you realise that the advertising is paying for the content that you want to see?’ 56 percent of people said they weren’t aware of that fact. They didn’t realise that advertising funds the content that they love.”

In its survey, IAB also asked consumers: ‘Would you be willing to pay for this experience without advertising?’ Only four percent of those surveyed said they would. “It is quite clear then that the ad-blocking community wants to have its cake and eat it too”, said Phillipson,”as, for the moment at least, they are neither willing to pay a premium for ad-free content, nor allow any ads through.” For Phillipson, the more people who realise content is only free because ads pay for it, the fewer who will block them.

A number of online news sites have already started to test methods of communicating this message to their readers. Some publishers have opted to prevent users of ad blockers viewing their content altogether. On the website of City AM, London’s daily financial freesheet, users of ad-blocking software are met with the message: “As City AM relies on advertising to fund its journalism, please disable any ad blockers from running on cityam.com to see the rest of this content.”

The newspaper’s Digital Editor, Martin Ashplant, told The Guardian: “As an ad-funded organisation, the ability to serve adverts around this content is crucial to us continuing to provide it for free to our users. We hope that by making it clear to people that ad blocking hurts our ability to do this they will choose to turn ad blockers off on cityam.com, even if they decide to continue using them elsewhere.”

Similar tests are being conducted all over the world. In Germany, Axel Springer, one of the largest digital publishing house in Europe, chose to ban its readers from using ad blockers on its Bild tabloid website. Its approach differed slightly to City AM, however, with the site asking its users to turn off their ad blocker or pay a monthly subscription fee to browse its content mostly ad-free.

Publishers have been slow to react to changing consumer habits

The efforts of these various publishers to better communicate the value exchange that is occurring when people consume content is extremely important, but in order to apply IAB’s LEAN principles and improve the overall experience for consumers, publishers are going to have to invest a considerable amount of money in their websites. The cost of making these changes has deterred some publishers, though the extent of the problem, and what they stand to gain by addressing it, definitely outweigh the argument for inaction.

According to Phillipson, when representatives from the The Guardian gave a presentation to advertisers at the IAB Upfront event, they explained that less is more when it comes to ads. In fact, their website is one of the quickest to load on mobile devices because they limit the size of, and data calls in, ads to a bare minimum.

“I’m sure others will follow their lead”, said Phillipson. “They kind of have too. Within the publishing community, I haven’t yet had a conversation with anyone who has said ‘I’m sorry, we have to keep serving overlaying advertising because it’s making us money’.”

Blocking the blockers
From the data provided by IAB and PageFair, it is clear publishers have been slow to react to changing consumer habits, leaving data-heavy, poorly delivered adverts to run rampant online. By failing to communicate to their audiences that advertising is a necessary evil if they wish to view content free of charge, publishers have forced consumers to turn elsewhere in order to have their demands met.

By neglecting to address the issues surrounding online advertising for so long, publishers have opened the doors for third-parties to find solutions on their behalf, and ones that are not to the industry’s liking. Ad blockers, while managing to improve the overall internet experience for their users, are now threatening the producers of the content their users log on for in the first place.

Thankfully, both parties are slowly realising ad blocking is a zero sum game. Combine this with the fact that publishers now know they must streamline the ad experience in order to meet the demands of their users (who are willing to accept certain types of ads) and it becomes easy to envisage an industry that, rather than being on the verge of an adblockalypse, is capable of bringing about the demise of the ad blockers.

A three-point plan to tackle superbugs

Posted on by Ben Debski

In October, British Prime Minister David Cameron and Chinese President Xi Jinping announced a new fund to support research aimed at tackling the problem of so-called superbugs: disease-causing microbes that have become resistant to conventional drugs. It was a hugely rewarding moment for me personally as the chair of an independent review that has been calling for the creation of an innovation fund to address antimicrobial resistance since February last year. More important, it is a major step towards a real solution to this global problem, one that demonstrates the vital role that emerging-economy scientific and commercial innovation can play, especially when China takes the lead.

The announcement complemented a meeting in Berlin earlier in the month at which the health ministers of the G7 countries – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – sought solutions to the most pressing global health issues. One vital outcome was a shared commitment to tackle antimicrobial resistance, “first, by improving infection prevention and control; second, by conserving the effectiveness of existing and future antimicrobials; and third, by engaging in research to optimise such approaches and to develop new antimicrobials, vaccines, treatment alternatives, and rapid diagnostic tools”.

Drug resistance, like microbes, does not stop for border checks

These are the right objectives. But they can be effective only if most of the world works toward them simultaneously; after all, drug resistance, like microbes, does not stop for border checks. Here, the greatest responsibility lies with the G20 countries – and especially its emerging-economy members – which both suffer the most from drug-resistant infections and can do the most to solve the problem.

Cutting waste
To achieve the objectives identified by the G7, an especially promising target is drug wastage. By lowering the exposure of bacteria to drugs, we can slow the rise of drug resistance and keep our current medicines useful for longer, thereby reducing the urgency and cost of discovering new ones.

As it stands, huge amounts of antibiotics are wasted each year – even in countries with highly sophisticated healthcare systems. Indeed, in the US, 27m courses of antibiotics are essentially wasted every year on patients who visit the doctor with respiratory complaints that do not actually merit the use of antimicrobial drugs.

Such waste occurs largely because the vast majority of antibiotic prescriptions are made without the use of any diagnostic tool. Instead, doctors, often under pressure from uninformed patients, typically use so-called ’empirical’ diagnosis, applying their expertise, intuition, and professional judgment essentially to guess whether an infection is present, its likely cause, and the most appropriate treatment. In countries where patients can purchase antibiotics over the counter, the problem is even worse.

The plan
In October, I published a set of three specific interventions to address this problem. Together, these recommendations can limit overuse and build on current efforts to change doctors’ and patients’ behaviour within the current system. As countries like Sweden and the Netherlands have already shown, it is possible to keep antibiotic use relatively low.

Some progress has also been made in emerging economies, with China and Brazil reducing over-the-counter sales of antibiotics in large urban centres. But the goal should not be for the BRICS countries – Brazil, Russia, India, China and South Africa – to imitate advanced-country practices for prescribing antibiotics. Real progress over the next five years requires these countries’ healthcare systems to leapfrog ahead of those of the advanced economies, by implementing rapid diagnostic technologies and tools wherever possible, thereby ensuring that antibiotics are used only when truly necessary.

Given the stakes for the future of medicine, it is surprising that the world’s leading innovators are not jumping into this field

My first recommendation is to establish a global innovation fund to jump start research and development, by supporting world-class teams of researchers capable of delivering the best technical solutions. Given the stakes for the future of medicine, it is surprising that the world’s leading innovators are not jumping into this field (a notable exception is IBM Watson, which is considering relevant applications for its emerging ‘artificial intelligence’). Time will tell whether rapid diagnostic tests emerge from established companies like Apple or Google or from newcomers.

My second recommendation is to tie incentives to the public-good aspect of diagnostics. Antibiotic use stands out in medicine as one of the few areas where the benefits of using diagnostic tools – in terms of reducing wastage and slowing the development of drug resistance – accrue to society over the long term. The problem is that, at the individual patient level, diagnostic tests can seem unnecessarily costly or time-consuming.

I want to overcome this problem by creating ‘diagnostic market stimulus’ pots. This would ensure that the developers of these new tests – often small companies – and the doctors who use them receive strong incentives that promote uptake and rewards that reflect the wider benefits of their use. Though the system may sound complicated, the successful implementation of comparable approaches in research and development of vaccines prove that it can be done. This system would not only spur innovation; it would also help to increase uptake of new and existing diagnostics.

The third intervention is to support the large, objective studies that are needed to prove a new productís clinical and cost effectiveness, thereby enabling technological adoption by healthcare systems. Usually, the company developing the technology bears the costs of such studies, which can be prohibitively expensive for small companies. For healthcare systems, however, they would amount to a sensible and affordable investment.

If we are to defeat superbugs, we cannot continue to use 70-year-old technology and processes. At the same time, we cannot count on the prompt discovery of new and better antibiotics. And we certainly cannot rely on national solutions to what is clearly a global problem. Instead, patients, doctors, health ministries and companies worldwide must work together to change the way we use antibiotics, especially by supporting and embracing transformational technology.

© Project Syndicate 2015

Steel brings new lifeline for Angola

Posted on by Ben Debski

On December 15, the largest steel mill in West and Central Africa officially opened. The ADA Steel factory, which was launched by Luanda-based K2L Capital, is located in the previously neglected town of Barra de Dande, within the Bengo province of Angola. The $300m investment signifies a turning point in Angola’s afflicted history, not only with regard to economic and infrastructure development, but also in terms of a new influx of capital investment to the once war-torn country.

“ADA is part of the road to economic diversification as it will bring a new dynamic industry to Angola that is not related to the oil and gas”, said Georges Choucair, Chairman and CEO of K2L Capital. “It will also save $200m to $300m in foreign currency reserve for the Angolan National Bank.”

The mill enables Angola to be completely self-sufficient in steel

The mill enables Angola to be completely self-sufficient in steel – a drastic development when considering the state has relied solely on imports for its steel requirements. What’s more, ADA Steel is making use of remnants from the country’s protracted conflict; it plans to collect the scrap metal  littered throughout Angola and repurpose it as steel rebar for the construction industry.

Prior to the arrival of ADA Steel, Barra de Dande was a vacant area. The mill has brought with it water and electricity infrastructure, while the creation of 600 jobs has necessitated the construction of health facilities and a training centre for employees. It is estimated a further 3,000 indirect jobs will be created as a result of this communal expansion, which will have an incalculable impact on the local community. The factory is thus forming an epicentre of development in Barra de Dande and breathing life into Bengo.

With a production capacity of 250,000 tonnes a year, it is expected steel will not only become a major industry in the country, but also serve as a vital export to neighbouring states. Furthermore, given the private investment made by ADA Steel (which is the largest ever seen in Central and Western Africa) and the vast opportunities available in this underdeveloped nation, one can assume others will follow suit.It would seem Angola is at the beginning of a new chapter, one in which its citizens can benefit from crucial infrastructure and job creation, and finally put the legacy of its devastating civil war to rest.