Red Light Camera Vendor Not Doing So Well With Public Opposition Driving Down Its Revenue

from the awww...-too-bad dept

There's been significant growing opposition to red light camera programs, which have a long history of showing absolutely no safety benefit, and are often run for-profit by local governments in combination with private companies. That opposition is leading more and more cities and towns to dump the red light cameras -- while some operators are getting caught illegally decreasing the time of the yellow or amber lights to try to issue more fines.

Jeff Nolan alerts us to the news that one of the biggest players in the space, Redflex, has announced that public opposition to its cameras has created a real drain on revenue, and its profits were down significantly. This would be the same Redflex that just so happened to fail to live up to its contract in Denver to deliver data that could be used to determine whether or not the cameras were really effective.

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The Secret 'Profits' Of YouTube

from the don't-worry,-be-happy dept

It's become quite common for folks who dislike "web 2.0" or the concept of "free" business models to mock YouTube as an absolute disaster. For example, music industry lawyer (and hater of all things "free") Chris Castle has already declared the site dead (which is news to, well, just about everyone). Over in the UK, the Independent is running an odd little article that goes back and forth on whether or not YouTube is a real business proposition and then tries to extrapolate from there whether or not "free" works as a business model. The whole discussion is a bit off -- since YouTube really doesn't represent a good example of a business model that uses free, since the bandwidth costs of hosting video is so high. To use that as a proxy for the concept of free would be a mistake, since most other business models don't have that same issue.

That said, really the only truly worthwhile parts of the article are the ones where analyst Keith McMahon speaks up. He seems to be one of the few folks out there who actually has bothered to look at YouTube within the larger context of Google itself, and makes a few important points about (a) why YouTube helps Google in many other ways and (b) Google benefits from the widespread belief that YouTube is losing tons of money:

"There are many urban myths surrounding the way that companies extract value from the internet," he says. "Google's spin-off benefits from owning YouTube include the accumulation of our data and strengthening of their network design -- and the more time people spend watching online video, the more advertisers will pour into marketing on the internet as a whole. There's no doubt that Google can afford YouTube."

McMahon also believes that by keeping quiet about YouTube's hidden benefits and by allowing the misconception of it as a deeply unprofitable business to circulate, things work very nicely in Google's favour when it comes to negotiating with copyright holders in the world of TV, movies and music. Copyright holders can't demand money that isn't there, and it would certainly take no more than a hint of profitability at YouTube for lawyers to descend, threatening court cases and demanding higher royalties. In the new, topsy-turvy world of online economics, it seems astonishing that losses on paper have actually made YouTube a more powerful online force.

This leaves out another point as well: the more that people believe YouTube is unprofitable, the less likely they are to build serious competitors. I have no idea whether or not YouTube is actually profitable directly yet (I'd doubt it), but I think those who are insisting that the acquisition by Google was a bad idea, or that YouTube is somehow on its deathbed, haven't taken much time to understand some basic trendlines or the larger picture of how Google views YouTube, and the opportunities it has to make money via YouTube down the road.

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The Ethical (And Mathematical) Dilemma Of Madoff Investors Who Took Some Money Out

from the what-to-do? dept

With respect to the Bernard Madoff scam, I'd been hearing plenty of people ask "where did the money go?" since there's none left. The answer has always been pretty straightforward: as a Ponzi scheme, much of the money went back out to the earlier investors who took some money out. The rest was probably invested in various investments whose value has gone down to almost nothing in the last few months. However, this is apparently creating something of a quandary for some of those early investors who took money out -- but still had some money (theoretically) still with Madoff. Should they apply for aid from the Securities Investor Protection Corp?

SIPC acts like an FDIC for these types of investments, helping to protect investors in cases of fraud. But some are realizing that if they took money out from Madoff over the years (and some did so profitably), if they go ask for money from the SIPC, it could alert regulators to the fact that they profited from Madoff's scam -- and they could suddenly owe the "profits" they had taken out in the past. The Feds can demand that those who profited from Madoff's scam return the money -- but that will involve actually being able to track them down. For some "victims," it may be better to just keep what they have, keep quiet, and forget what they thought they still had invested with Madoff. But there are concerns for others who have already admitted to cashing out (sometimes a long time ago), are they suddenly going to be forced to return the money they took out of their accounts?

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