Over on the Becker-Posner blog, Richard Posner is again contemplating the [bleak] future of the newspaper industry. The problem (as I, too, have blogged about in the recent past) is a serious one -- if "the newspaper" as a business model fails (because of competition from the free content available on the Net), who will invest the resources required for adequate news-gathering services in the first place?
"[W]hile in many industries a reduction in output need not entail any reduction in the quality of the product, in newspaper it does entail a reduction in quality. Most of the costs of a newspaper are fixed costs, that is, costs invariant to output--for they are journalists' salaries. A newspaper with shrinking revenues can shrink its costs only by reducing the number of reporters, columnists, and editors, and when it does that quality falls, and therefore demand, and falling demand means falling revenues and therefore increased pressure to economize--by cutting the journalist staff some more. This vicious cycle, amplified by the economic downturn, may continue until very little of the newspaper industry is left.
His proposal for reform, however, goes into the "Cure Worse Than Disease" file:
"Expanding copyright law to bar online access to copyrighted materials without the copyright holder's consent, or to bar linking to or paraphrasing copyrighted materials without the copyright holder's consent, might be necessary to keep free riding on content financed by online newspapers from so impairing the incentive to create costly news-gathering operations that news services like Reuters and the Associated Press would become the only professional, nongovernmental sources of news and opinion.
It's hard for me to summarize why this is so terrible an idea. One (immense) problem: (1) There is, and can be, no special copyright law for "newspapers," because the definitional (not to mention the First Amendment) problems are such that it is simply impossible to imagine such a thing coming into existence. ["Is the Volokh Conspiracy a 'Newspaper' within the meaning of the Posner Proposal? Slashdot.com? Facebook.com? Discuss"] So what Judge Posner is proposing is, necessarily, an Internet-wide prohibition on linking or paraphrasing without the copyright holder's consent. Given (2) the fact that virtually all content on the Internet (at least if it displays a "modicum of creativity" and is not simply copied from another source verbatim) is protected by copyright the moment that it is placed into a readable file, that's it for the Internet as we know it - any act of linking or paraphrasing such as this one will require copryight-holder consent.
So here we've gone and invented this fabulous global machine for linking and paraphrasing and sharing information, but nobody will be able to use it because we want to preserve the New York Times' business model. Hmmm.
My advice to the New York Times: don't count on that. Start thinking about how you can make money -- large quantities of it -- in a world in which linking and paraphrasing are pervasive and unrestricted. It's not going to be easy - if it were easy, we'd all be doing it already. But millions upon millions of people visit your website, every day - because you are the New York Times, and people value the product you produce. There's a way, I'm pretty certain, of converting that into income, though I don't know what it is and as far as I can tell neither does anyone else at the moment. Google, though, makes a lot of money giving away information, and you can too. Don't waste your time hoping that copyright law is going to come to your assistance, for it will not.
It's the old PBS conundrum all over again. As an art teacher, I realize the market set prices. But if you are an artist that is paid for by a specific source, you are limited to what you can and do produce. It's the old supply and demand argument all over again. If PBS was viable on its own, it wouldn't need government support. If newspapers are viable on their own, they also wouldn't need government support. Should the government be in the place of providing economic support for newspapers which less people read due to the combined effects of the Internet, less reading within the population or an avoidance of specific outlets due to the perception of political bias? I think not.
Posner applies the same conclusion to two things, linking and paraphrasing, that are very different.
Sites actually have control over what links into said site work. This control can be implemented using sessions or referer checking. With the latter, the NYT can accept links from LA Times pages but not Instapundit.
Of course, restricting linking is dumb, because links are how people get to a site's and monetization from somewhere else, but if that's what newspapers want, they can have it today.
It's somewhat interesting that Posner and newspapers think that linking is wrong. Do they really think that they'll get more readers if said readers can't get to them via links? Surely they're not so clueless as to think that they can't monetize readers that arrive via links from the outside. (Hint - links from the outside monetize exactly the same as links from the inside.)
The paraphrasing argument is more troubling because the problem isn't Posner's technical ignorance, but that he's arguing against the current treatment of facts by copyright law.
Copyright law says that McCartney gets royalties for the silly love song that he wrote, but not the thousands that someone else wrote. Posner's "paraphrasing" argument concludes otherwise.
The basis for Posner's position is that news gathering is expensive. I note that the facts behind phone numbers are far more expensive on a per-character basis. Yet, we've decided that the facts that phone numbers represent are not copyrightable.
Posner thinks that only sources that actually talked to the hospital should be able to report that the hospital said that Michael Jackson died. This won't work out well. Folks will get around that by simply dropping the reference to the hospital.
And, in what universe does CNN own the fact "CNN reported that Michael Jackson died"?
Of course, the next move will be for CNN and the like to start paying sources to not report facts to others. This will actually increase newspapers costs because sources will figure out that they are the ones who actually have facts to sell. Newspapers don't, they're just middlemen.
The death of newspapers will probably be the best thing to happen towards the goal of an informed populace in a long time.
I don't know if Fair Use needs to be modified. A lot of times I'll look at a quoted portion of a newspaper article on a blog and think that the amount directly lifted can't reasonably be classified as Fair Use. The practice of "Fisking" lifts way more material than necessary for an effective critique of the work.
The record companies found a way to cope with Napster, eventually: sue everyone, settle for small amounts, and watch as a legal market for MP3s develops. That didn't endear the record companies to anyone, but hey, they're still around. Maybe newspapers need to be more litigious.
The newspapers are actually facing a shift in who demands their product, yet they have largely failed to shift their business model and marketing to match. So why not strip out the ads and sell the content directly to the new set of demanding consumers?
It's ironic you make that comparison. There's a number of recent stories and studies showing that porn sites are actually having huge problems competing with free content provided on the Net. The "Old Media" primary content sources like Playboy and makers of adult DVDs can't compete with the low costs of Net-only producers; and even those outfits can't compete with the amateur industry, who take advantage of the Net's low distribution cost to provide competing products 100% free.
For the entire history of the Net (relatively brief though it may be), the porn industry has pioneered technology advances and newer business models roughly 2 years ahead of the "mainstream" Net. The problems faced by Old Media journalism, and the technological challenges it faces for any transformation, are exactly analogous to what the porn industry faces.
So if they want to find a solution to the problem... it may actually be better for them wait for the porn industry to figure things out, and follow their lead!
In what year do you think the history of the 'net commences?
Did everything that occur before then constitute the pre-history of the 'net?
Fwiw, I'd say that BBN had one of the earlier business models.
I do not want to dispute the overall points of your post, they are valid, I do want to debunk the above quote.
The pittance one pays to get a daily paper, usually around 50 cents, is intended only to cover the marginal cost of producing and distributing that individual paper to you. Paper, ink, trucks, and the various people involved in getting the physical product out to you.
Covering editorial and other costs comes from advertising revenue. Classified ads are mostly gone to better (sometimes free, sometimes not) venues. Same goes for regular ads, or at least they are paying less for a wide variety of reasons.
I hold the fundamental problem is learned in capitalism 101. The competition is destroying them through a combination of factors including better info, better service, more competition and just plain old arrogance on the part of newspaper owners and managers who refused to adapt to new technology in a meaningful way. That reduced the value of their product(s) to advertisers, and is the root cause of their problems.
It seems they really do want some sort of magical newspapers-only change in the law, where newspapers can continue their quite expansive reliance on fair use of others' copyrighted materials, while others are prohibited from quoting from or paraphrasing newspapers.
(As an aside, referrer checking won't work as it's trivial to spoof, but there are many other ways to limit access should the site choose to do so.)
Posner has no idea what he's talking about here, which is not exactly surprising since it's never stopped him before.
They key element is that the politicians will find ways to tax the internet. First will be online sales and that will spread to other taxes and other techniques. Other internet business models will evolve. Eventually, in my view, those who observe and record/describe events of interest (news?) will be able to sell the product of their observations on the internet. This business model will resemble the methodology by which music owners get income when their music is played on the radio. This isn't all bad because it will bring new players in the market and force propaganda mills like AP to offer news and not just the dogma the AP masters demand.
Go figure: usually I am the pedantic geek who corrects people using the word Internet so broadly... and the one day I edit myself for clarity, a fellow pedant hops on the thread!
There are more consumers than providers, so the consumers have prevailed so far. Once the providers are extinct, what will the consumers steal?
I was bemused, way back when, about the Milo Minderbinder biz proposal that the Internet would make content free for everyone. Seemed unlikely then, seems unlikely now.
What a stupid way to solve a problem.
The thing that makes a critique a full-on 'Fisking' is that it is a detailed line-by-line rebuttal. Including the entire piece is inherent in the thing, and necessary to avoid criticism that the one doing the fisking ignored a point or missed some detail.
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