Virgin back in BUCKMAN’S profit despite Russia BATTLE TO...
Transcript of Virgin back in BUCKMAN’S profit despite Russia BATTLE TO...
ohn Buckman hands hisfold-up bicycle to themaître d’, scans the menu,gently rebuffs the somme-lier’s suggestion of Englishsparkling wine (“You can'teven cook with it”) and set-tles in for a philosophicalchat.
The British-born, US and French-educated head of the ElectronicFrontier Foundation (EFF) is a manwithout borders, who splits his timebetween London and Silicon Valley,running two businesses, indulginghis passions for the arts, and cam-paigning for freedom on the internet.
When The Independent caught upwith him in the UK, he was alive withtales of a recent “soirée” at his Lon-don home, a regular event he holds inthe style of a French salon. He hadinvited a shakuhachi player to enter-tain the guests, if entertain is the pre-cise word, since the didgeridoo-styleJapanese flute is more of a personalmeditative tool than a performanceinstrument. “It’s the one perform-ance where it is perfectly acceptableto fall asleep,” he says.
One of Mr Buckman’s businesses isMagnatune, a distributor of worldand classical music and defunctstyles of Eighties electronica, byartists who have found no place in themodern factories of iTunes and cost-cutting record-label giants. Unliketraditional labels, Magnatune lets theartists keep the rights to their work.“I make about three months’ rent for4,000 musicians, and that’s my con-tribution right now,” he explains.
Mr Buckman’s other venture isBookMooch, whose 250,000 mem-bers swap second-hand booksamongst themselves. “It was inspiredby a Bruce Sterling science-fictionstory, where everyone had a watch onthem that kept track of what theywere doing and suggested favoursthey could do for others at no cost tothemselves, through an invisible co-operative net.”
This pair of ventures, like hissoirées, speak to Mr Buckman’sbelief that the world is at its bestwhen people collaborate, share and
create, and where the internet is themost powerful force for achievingthese goals. It is a vision of the webthat is under constant threat fromcorporations that aggressivelyenforce “all rights reserved” copy-right, and from governments andcourts who spend too much timesnooping on what people do online.
Which is why he joined the EFF,and the board of the Open RightsGroup, a similar UK-based campaigngroup. “I am not actually a very polit-ical person,” he says, “but I find thereis a British person in me, saying:‘That’s not on.’”
The EFF was founded 21 years agoin an early wave of public and corpo-rate concern about computer hack-ers, to defend computer program-mers and entrepreneurs caught up inthe US authorities’ campaign againstcyber-crime. Some of its first fundingcame from the co-founder of Apple,Steve Wozniak. It still advises hack-ers these days – not the “black hat”types out to steal people’s credit-carddetails, but the kids and hobbyistswho risk falling foul of intellectualproperty laws when they tinker withother people’s source codes or hard-ware – and it goes into battle to shapecopyright and free-speech lawsthrough the US court system.
It took on the Texan telecoms giantAT&T which was revealed to havesecretly aided the security servicesby allowing them access to phonerecords and to wiretap customers inthe wake of the 9/11 terror attacks, acase that was stopped only whenCongress retrospectively legitimisedthe assistance. In the UK, the EFF iscampaigning against new laws toblock websites suspected of aidingmusic and film piracy, and last weekit welcomed the Government’s climb-down from provisions of the DigitalEconomy Act that would have forcedinternet service providers to do so.
“Instead of trying to get lawspassed or repealed, we try to get caselaw we like,” Mr Buckman says.“Judges are much more reasonablepeople than politicians. They listen toarguments and they are supposed tomake a decision based on what
everyone heard, not on a back-roomdeal. But when you consider we are50 people working on the entire bodyof US law against every companythat wants to push things too far, thatis not many people.”
For many companies, particularlymusic and media businesses, theEFF’s lines are hard to swallow. Butthe bottom line, according to itschairman, is this: the internet is new,the laws governing it are new, and itis important to carve out as muchprotection for free speech and free-dom of activity as possible. Laws thatmight seem to be aimed only at childpornographers or music piratesmight one day be used to infringebasic human rights and to censor theweb in egregious ways.
“One of the most interesting thingsthat WikiLeaks has taught is thatyour best defence against the govern-ment is putting your words out ondead trees. If you are purely digital,you don’t have seem to have any-where near as strong a legal defence.A huge amount of our effort goes intobuilding up case law to show that
journalism online should have all thesame legal protections. And by jour-nalism we mean a very broad defini-tion of journalism that includes blog-
gers and citizen journalists. Essen-tially anyone who writes on the inter-net engages in journalism, and wethink should be protected.”
The EFF under Mr Buckman iscarving out an influential niche in theworld of advocacy, on – as its namesuggests – the frontier of technicaland business innovation. There arerunning battles to come betweenthose who envision a sometimesanarchic, always collaborative, inter-net where people freely share, adaptand build new ventures, and thosewho want to impose order andrestore the primacy of intellectualproperty over those who would stealit. The polymath has chosen his side,and Mr Buckman is clear about why.
“London is a screaming example ofthe success that openness leads to,”he says, before cycling off into theCentral London traffic. “In the Euro-pean Union now, every talentedperson who leaves school spends acouple of years in London. It’s thenew British empire. Where before wehad bureaucrats all over the world,now we have Anglophiles.”
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Virgin back inprofit despitestiff headwinds
VIRGIN ATLANTIC returned to cruisingspeed yesterday as the airline’sfinances soared back into the blackdespite taking a £40m hit from the ashcloud and winter cold snap.
The carrier, which is still majorityowned by Sir Richard Branson, report-ed pre-tax profits of £18.5m over theyear to the end of March, with revenuesup by 13 per cent to £2.7bn. The previ-ousyear, the group slumped £132m intothe red as the credit crunch and thesubsequent recession wreaked havocin the aviation industry.
The upbeat figures came the dayafter Virgin Atlantic finally did a dealwith its pilots to avert strike actionthreatened for months in a dispute overpay and conditions.
Virgin Atlantic chief executive SteveRidgway was bullish yesterday. “Wehave demonstrated the resilience ofour business by weathering the tough-est economic period for aviation andhave now returned the business to prof-it,” he said.
The momentum is continuing, theairline added. In the most recent quar-ter – the three months to the end ofMay – Virgin Atlantic has introducedtwo new Airbus A330s and alsolaunched a new route from Manches-ter to Las Vegas.
Revenues for the quarter rose by 7.6per cent to £658m, the group said.
However, Mr Ridgway warned oftougher trading conditions ahead astheglobal economic outlook continuedtodarken. “A sharp recovery in the firsthalf of the year has been tempered bymore challenged trading in the latterperiod due to increased capacity in themarket and high fuel prices,” he saidlast night.
Virgin Atlantic is not the only carri-er to be feeling the pinch. Air Franceand Lufthansa both recently publishedfinancial results hit by spiralling oilprices, while US carrier Delta admit-ted its fuel bill was outpacing its rev-enue growth.
That said, Virgin Atlantic is goingahead with plans to invest £100m inthe business over the months ahead.The investment programme includesplans to buy new Airbus A330 aircraft,launch additional services to theCaribbean and Ghana, and create 1,000jobs.Thegroup is also doubling the sizeof its Virgin Holiday retail chain, cre-ating another 200 jobs as the networkof stores expands to 120 outlets.
“Whilst we have been very focusedontrading the airline back to profitabil-ity, we have worked hard to introducenew aircraft, new routes and extrarotations to the existing network wherethere has been high demand,” Mr Ridg-way said.
Following this week’s deal with thepilots’ trade union, Virgin Atlantic willnow undertake a major recruitmentdrive to up both cabin crews and pilotnumbers. Some 63 per cent of VirginAtlantic members of the British Air-linePilotsAssociation this week votedin favour of a settlement of the dis-pute, in response to an improved offerfrom management including a prof-it-sharing scheme and a review ofworking conditions.
By Sarah Arnott
BP FACES yet more vexation fromits Russian activities after minori-ty shareholders in its TNK-BPjoint venture launched an 87 bil-lion-rouble (£1.8bn) damagesclaim yesterday.
The action is just the latest to fol-low the British oil giant’s abortiveattempts at a $10bn (£6.1bn) tie-upwith Russia’s Rosneft earlier thisyear. That move was blocked in thecourts by BP’s TNK-BP partner –the Alfa-Access-Renova (AAR)consortium – on the grounds thatit violated the joint venture’s share-holder agreement, which specifiesall investors’ activities in Russiamust be offered to the company.
The Rosneft deal may have col-lapsed, but the debacle is not yetover for BP. AAR is still pursuingthe company, claiming damages ofreportedly as much as $10bn. Andearlier this week, BP launched acounterclaim, against Renova, overitsholdings in other Russian oil andgas companies.
In the latest development yes-terday, two claims were lodged byTNK-BP minority shareholders,ledby Andrey Prokhorov, in a Russ-ianCourt of Arbitration. The claimsassert that TNK-BP has sufferedsignificant losses: first becausemanagers in BP group must havebeen aware of the Rosneft talks butdid not notify TNK-BP of theopportunity, and, second, becauseBP rejected subsequent TNK-BPsuggestions of a joint deal.
The hearings will go ahead fromSeptember. But BP yesterdayroundly rejected the claims. “Wedo not believe there is any legiti-mate basis whatsoever for such aclaim,” a spokesman for the com-pany said. “If any such claim is ad-vanced against BP or the directorsof TNK-BP Holding, these will bevigorously defended.”
By Sarah Arnott
BP hit withnew legalheadache inRussia
Virgin has this weekmanaged to avert thethreat of strike actionfrom its pilots, with unionmembers backing animproved offer from theairline’s management
THE CHIEF executive of Tui Travel,owner of Thomson holidays, haswarned that more smalltravel firms are likely to collapseinto administration, as the touroperator unveiled a jump inthird-quarter profits.
Following the collapse of touroperator Holidays 4U last week,Tui’s boss, Peter Long, said: “Thesmaller companies in this envi-ronment will find it very diffi-cult. There is a reasonablechance that these companies willnot survive.”
His comments came as Tuiposted a 57 per cent leap in prof-its to £88m for the quarter to30 June. It was boosted by a“strong” performance from itsNordic and UK businesses,despite the squeeze on consumerspending in this country. But inthe wake of the unrest in theMiddle East and North Africa,Tui’s French tour operators havefaced “very challenging” trading.
Still, Tui’s fortunes contrastwith Thomas Cook, which hasissued three profits warningsthis year and recently lost itschief executive.
By James Thompson
Tui warns of more pain tocome for travel industry
John Buckman’s entrepreneurial skills areput to good use in the battle to defend hisvision of the web. Stepen Foley reports
BUCKMAN’SBATTLE TOKEEP THEINTERNETFREE FOR ALL
BUCKMAN IN BRIEF
n Campaigner: Chairman of theElectronic Frontier Foundation since2010; director of the Open Rights Group.n Entrepreneur: Currently chief execu-tive of BookMooch, a book-swap serv-ice, and Magnatune, an artist-friendlyrecord label. Previously founded Lyris, adirect-marketing firm. “At one pointGeorge Bush used my software to sendout all his emails in his re-election cam-paign. To do penance I gave a free copyto the Howard Dean campaign.”n World traveller: Born in London andraised in France and the US, his familymoved around with his father’s job as anexecutive for Singer sewing machines.Studied philosophy at Bates College inMaine and the Sorbonne.n Musician: Renaissance lute and violada gamba player, and a composer of jazzand classical jingles for radio.
Peter Long, CEO ofTui Travel, fears moresmall companies will
go bust VISMEDIA
John Buckmanbelieves in the
sanctity of freespeech on the web
J