Goonervision

It had to come. Arsenal FC has started its own television channel.

We've seen lots of approaches to the task of monetising football. Almost every club has its own web site (though few are as charming as the one for Royale Union Saint-Gilloise, the 'other' Brussels team, which includes a touching little museum of artefacts from the days when they were in the first division). We've seen ITV Digital drop a bundle on televising lower league matches - though this was at least partly due to the fact that they'd paid way over the odds for the content.

But the odd thing is that not that Arsenal are doing this. It's that they've waited so long. Man U set up its own TV channel in 1998; Celtic and Rangers signed a deal with Setanta last year. (That's why Virgin apparently packages Celtic TV and Rangers TV together - not a combination likely to appeal to many Glaswegians.)

But it's not a passport to riches. MUTV has a viewer share of less than 1% with 48,000 viewers. That might work nicely if you were very niche, but MUTV isn't. It's competing with... let's see; BBC1, ITV, Sky Sports... and all the national newspapers...

None the less the fact that these clubs can launch their own TV shows is a confirmation of two great media trends. One, the fact that we're inhabiting a multi channel universe, and channels are becoming more and more focused. (That actually has big implications, which the government typically hasn't realised, for public service broadcasting; the Reithian imperative was created for a media-poor universe, but it's equally important for a universe which is so media rich, so filled with niche, with focus, with partiality, that we need somewhere to have an objective, or at least even-handed (the two are not quite the same) broadcaster.)

And two, the costs of television have come down dramatically. (And indeed of film, as the Blair Witch Project showed. Cannes in a Van continues the trend of stripped-down film making and showing.) There's always been "cheap television" but now, *good* television can be cheap, too.

I do wonder though if the economics really stack up. The worrying thing is that on the numbers I'm seeing for MUTV, I'm not sure they do. And MUTV presumably isn't paying on an arm's length basis for its content.... the message for other broadcasters is stark.

What's with Logica?

Logica's profit warning was entirely unexpected. And yet I can't help thinking it shows some of the weaknesses with consulting businesses.

First of all, a major contract coming to an end - and not being replaced with new business. I'm not sure we ever have particularly good visibility of these contracts - until they don't get renewed. But I can remember two or three profit warnings in the sector that looked pretty similar. And only one (Xansa - when HBOS withdrew from a contract early) was completely unforeseen.

Secondly, a provision for delays on a contract. Okay, that's bad management. But it does happen.

What's good about that, though, is it doesn't seem to show a slowdown in the commercial sector. It just seems to show that Logica has messed things up.

What's more worrying is the statement on public sector business slowing. The software sector has been a big beneficiary of UK government spending over the past few years - and the purse strings may be tightening. I'd guess the same is true of other support services, and I wonder if we'll see further profit warnings from the likes of Capita and Serco.

Intriguingly, outside the UK, everything seems to be going well. So I get a little hunch that picking tech companies with big European operations might be smart. There aren't many of them on the London market - but there are a few. Or you could, I suppose, jump straight into German tech stocks. They're not all as big as SAP...

Public sector software consolidation

Interesting news today that IDOX has acquired Caps Solutions - in fact, a reverse takeover (the CEO of Caps takes over as CEO at IDOX).

Caps always had a huge position in local council planning software, concentrating on geographical information systems - identifying and mapping where things are. IDOX was the new kid on the block, focusing on document and records management rather than 'planning', and started moving into other council services areas too.

So putting the two together could make good sense - though the documentation says nothing any any potential software integration, which I would have thought was the ultimate game plan. Perhaps the two companies need to wait till their CTOs have argued out the issues there... Meanwhile, it gives the joint enterprise a clear lead in functionality and market share over its competitors.

The price doesn't look too high either - 70% of turnover, and 12x earnings (about 8x EBIT, though no EBITDA figure is given) - below the software sector as a whole. Though I notice that despite a 7% increase in revenues last year, Caps turned in a lower profit - if that can be turned round, the acquisition would be a fair bit cheaper.

Strange view of a pre-digital world

I'm doing a bit of research on Financial PR companies at the moment, and one of the sources I've had a look at is Simon Brocklebank-Fowler's preface to Crawfords City Directory, 2007.

He has a lot of good things to say. But I'm afraid he is really living in the past. Here's what he has to say about retail investors' access to information:

"For all their failings, the UK Sunday papers remain surprisingly well informed about Monday announcements, and they provide almost the only source of effectively real time information available to the retail investor, deprived of Bloomberg and RNS."

For a start 'effectively real time' meaning 'something that was published yesterday' is a very odd turn of phrase to anyone who has worked in the IT industry... with a demand for 'real' real time.

But also... well excuse me here, but I thought the internet was now available to ordinary households? I thought you could get broadband for fifteen quid a month - which shouldn't prove an extortionate amount for anyone with a few grand to invest?

Er... Motley Fool? Sharecast? Citywire? Wallstrip (if you're US focused)? ADVFN? Even the Evening Standard now puts its financial scuttlebutt online (and has RSS links, so you don't have to go and look for it) at thisismoney.com. All of these seem to have passed Mr Brocklebank-Fowler by. And I wonder how well he is doing his job as a PR if he doesn't at least check on bulletin board comments from time to time.

Now if I had a good graphic designer here I would draw you two pictures. First, the archetypal private investor of twenty years ago. He's Victor Meldrew - tweed jacket, pipe, and why is he so cross? That's right, he's waiting for the Sunday Telegraph with its share tips, and the paper boy is ten minutes late!

Second, today's retail investor. He's sat in front of the PC, flicking between the Investor's Chronicle website and the ADVFN bulletin board and maybe then tabbing to some trade PR on the company concerned to check out whether this is spin, or maybe worth dropping a few grand into.

And why is he so cross? Oh yes, he can access his bank account online - and he's overdrawn :-)