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The National Union of Students has seen a virtual £50m turn into £5m over the last year after ITM, the company which runs NUS Online saw it's value drop to 10% of what it was just over a year ago. In September 2000, NUS announced an "online revolution" which the union promised would 'reach out to every student in the country'. This revolution has provided NUS with little more than a partial mailing list, as few unions were willing to sign away the rights to their websites for the next thirty years. ITM Activate, who own activate.co.uk were signed up to run the system which would offer all unions free hosting, email, software and an e-commerce service, and hopefully give activate a monopoly in the student recruitment market. Individual unions were urged to join in with the promise of £500 worth of computer equipment and a guaranteed income.
At the time NUS proudly boasted that the deal was worth £50m to the Union, but all was not as it seemed. ITM Activate, then valued at £1bn had announced that it intended to float on the stock market. As part of the NUS Online deal, NUS were to receive a 2.5% stake in the company once it floated with the chance to get another 2.5% if the site performed well. At the time, this would have made the unions potential stock holding worth £50m. Despite a funding crisis this summer at NUS, where tens of thousands of cutbacks were made to core services, the union could not cash in on it's shares, because the firm never floated on the stock exchange. Since then, ITM Activates values has plummeted, making 5% of the company which NUS had been due to receive worth £5m. But as we said, that was only if the firm floated, which it hasn't. Whether an alternative deal has been struck, or whether the union has received absolutely nothing whatsoever is unknown as union officials have made no comment. And we wonder why they're in financial trouble!
So despite signing away internet rights for a whopping 30 years, NUS have so far received next to bugger all. Despite giving priority advertising to companies in a market worth £5bn a year, NUS claimed that they never intended to make money from the deal. NUS President Owain James said;
"We're not trying to get money out of it. If we ever did make any money from it, the SUS would vote on it. The only payment ITM has made to us is to cover staff costs - £100,000 maximum."
Since then, very few unions have signed up to the deal, despite many unions looking for alternative web solutions to the historical situation of having websites housed on university an college servers. Virgin, Uniservity and Oncampusuk have all made inroads into the market, providing more flexible solutions for unions, and more importantly, real, not virtual money.
The deal is also designed to monopolise the student market, not just banning on-line advertising by competitors, but also 'off-line' advertising, such as posterboards and adverts in union newspapers. Unions which have signed up are required to "encourage" students to register their names and email and postal addresses on the site so that ITM can add them to its direct marketing database, and access to this database for emailing is about the only thing that NUS have got out of the deal.
Last month Owain James announced that he would be emailing 250,000 students urging them to lobby parliament. Worth singing away internet rights for 30 years?
Guardian, NUS launches email campaign
Guardian, Net losers
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