By: Alan D. Mutter
Online aggregators are preventing publishers from charging for their content
Publishers who want to sell access to their digital content face two towering challenges.
Unless they can overcome these obstacles, revenues from subscription content will never amount to anything more than a modest increment to the top line — and nothing near the windfall that newspapers hope to reap from the investments they make in producing unique and valuable content.
Unfortunately, the two big obstacles to charging for content do not appear to be readily surmountable, suggesting that publishers will need to be more creative about merchandising their journalism in the future than they have been to date.
The first and most obvious issue facing publishers is that an entire generation of consumers has been raised to believe that digitally delivered news and entertainment can be had for free. Accordingly, the percentage of consumers willing to pay for general-interest news almost universally can be measured in the low single-digits.
But a second, equally vexing problem is the one I want to discuss today: You can’t sell much content if you can’t effectively stop other websites from giving away your copyrighted content for free.
The simple fact is that copyright law, as ancient and as well established a doctrine as it would seem to be, isn’t stopping the millions of digital publishers who either don’t know or don’t care that a creator has rights to such intellectual property as a news story, a magazine feature, a book, a song, a picture, or a video clip. Indeed, a fair number of thriving online ventures have been built by artfully, and quite lawfully, aggregating content authored by someone else.
The problem of misappropriated content probably started a few hours after Guttenberg pulled the first proofs off his converted wine press. But the dismay among publishers over poached content seems to have risen in recent years in inverse proportion to the nearly 50 percent drop in newspaper advertising since 2005.
Mad as hell and not willing to take it anymore, some publishers have subscribed to services such as Attributor, which scours the Web for misappropriated content and then asks offenders to kindly stop doing it. If poachers persist, Attributor invokes provisions of the Digital Millennium Copyright Act that give a publisher the right to tell banner-ad services to stop feeding ads to copyright violators and to tell search engines to stop linking to unauthorized articles.
While Attributor says its approach has worked in certain controlled circumstances, its efforts do not appear to be making a significant dent in the aggregate amount of unauthorized content flooding the Web.
Taking things to the next level, some publishers have engaged services such as Righthaven, which sues copyright violators not only for financial redress but also to demonstrate to would-be pirates how painful — and expensive — it would be for them to be on the wrong end of an infringement action.
This approach suffered a setback in March when a federal district judge in Oregon ruled that a nonprofit organization did nothing wrong when it reprinted on its website all 33 paragraphs of a copyrighted article from the Las Vegas Review-Journal. How could this be?
Because it was “fair use,” said U.S. District Court Judge James C. Mahan. Fair use is a somewhat squishy concept that permits copyrighted content to be used without permission from — or compensation to — the creator, if a limited amount of copyrighted material is used in a so-called transformative way. Thus, a magazine could quote excerpts from a book in an article about the author. Or, a video clip could be used to illustrate a point in an online movie review.
Because the article was published by the Oregon nonprofit for teaching purposes, Judge Mahan ruled its use to be “transformative.” Even though the article was copyrighted, he added, its use did not economically harm the newspaper because it was not published for commercial purposes.
Further, said Judge Mahan in a written opinion (http://tinyurl.com/orefairuse) issued in late April, “an informational work” such as a news story “readily lends itself to a productive use by others and, thus, deserves less protection than a creative work of entertainment.”
Because the burden of proof and initial cost of litigation are borne by the publisher alleging a copyright violation, the Oregon ruling tilts the cost-benefit analysis more steeply than ever against publishers. Unless a publisher is confident she can prove a sufficiently large economic loss to recover adequate damages from a copyright cheat, she won’t spend the money to sue him.
The more publishers decide it isn’t worth chasing copyright violators, the bolder online poachers will get. The easier it is to find free news outside paywalls, the harder it will be to sell the content behind them.
Alan D. Mutter is a journalist, who became a Silicon Valley CEO and today provides strategic consulting to media companies. His blog, Reflections of a Newsosaur, is at Newsosaur.Blogspot.com.