Destroying the Village — How not to Save the Newspaper Industry

Dietrich Kappe, Friday, November 27, 2009 @ 5:53 am

photo credit: Ian Muttoo

A whole lot of years ago, maybe back in 1992, I went over to Gary Becker's home to install a gopher client on his mac. I remember it was one of those brick macs, though those were already being supplanted by newer mac models. I also remember making a decision to install an early web browser on his mac, even though there wasn't a whole lot of content there compared to gopher. I talked his ear off about how it was so easy to put in actual links to other documents, sort of like citations that would take you to the other documents instantaneously. I thought at the time that this would change the very nature of how people would read and use written materials. Given how little text was actually online at the time, this seemed pretty far fetched. Witness that I got fired from a project in 1994 for having the temerity to suggest that Ameritech put it's Yellow Pages online. Well, it turns out that I was right.

Fast forward 16 years. Now that same Gary Becker is sharing a blog with the well known Federal Appeals Court judge Richard Posner. In a post from this past June 23rd, Judge Posner takes on the accelerating decline of the newspaper industry and proposes some legal solutions to the crisis. The nutgraph is this:

[I]t is much easier to create a web site and free ride on other sites than to create a print newspaper and free ride on other print newspapers, in part because of the lag in print publication; what is staler than last week's news. 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.

Judge Posner's assessment of the situation and his proposed solution constitute a cognitive, practical and freedom of speech failure.

Cognitive: He Doesn't Know What He's Talking About

Posner's use of the term "free ride" gives you some sense of what he thinks the problem is. The reason that newspapers are failing is because people are reading blogs and other sites that are linking to and paraphrasing the newspaper articles and therefore are getting revenue from the newspaper's work. First, this betrays an ignorance of what the most widely read blogs offer their readers. While there are some posts that link to newspaper articles and other content, most of these top and second level blogs produce their own original content, some of it at a par or even higher level than that of newspapers. Take the example of Talking Points Memo, a blog that has grown into a source for original investigative reporting and original political commentary. Some blogs are now full on political action and fundraising institutions and media criticism organization. Posner blithely paints these with the brush of derivative and worthless me too journalism.

Having disposed of his "me too in pajamas" view of those dern freeriding bloggers, the linking and paraphrasing aspect makes even less sense. First, links drive traffic to a site. Period. End of story. Fewer links mean fewer visits, less ad revenue. Lower google rankings. Less ad revenue. Paraphrasing is a bit different, in that it has more to do with how the newspaper industry has failed to adapt to changing times.

Having spent some ten years working with newspaper web sites, I have a somewhat more skeptical and, dare I say, informed view of the failure of the newspaper industry. Gary Becker may want to share some concepts with Posner, such as barriers to entry. If more people are getting their news online, then the printing and distribution costs that prevented other organizations from entering the news, information and opinion marketplace, are no longer effective barriers to entry. Marketing costs are still there, of course, but they are a far less effective barrier to entry.

So, who has entered, and what has it meant for the newspaper industry?

• Classifieds got coopted early in the history of the web. Chomp. That represented 60% of a newspaper's revenues that are never coming back.
• Opinion journalism is cheap and has been coopted as well. Politico is merely the latest example of mainstream journalists striking out on their own. Chomp. More revenue gone.

While it's clear from their very name that newspapers are based on paper, it's maybe less clear that their very business models and ways of working are built on the weight and cost of paper. In order to be profitable, a newspaper has to have some percentage of it's surface covered with ads. That number has fluctuated over time, but let's pick 70% as a reasonably accurate estimate. If I can sell 100 pages at 70% ad coverage, that's how many pages of news I will have. It doesn't have anything to do with how much news happened that day or how big my newsroom staff is. If I can't sell more than 100 pages of ads, I won't print more news.

On the web the economics are different. The cost to deliver another page view is minimal and I don't have anywhere near 70% of the surface of my site covered in ads. Therefore, the more content I have, the more page views I have, the more money I make. Ideally, I'd want those columnists who are now writing fairly lengthy columns once or twice a week writing lots of little blog posts every day. More page views, more money. Those sites, like google news, that are paraphrasing or abstracting the newspaper articles and linking to them, are merely meeting a reader demand that newspapers cannot or will not meet.

I could go on and on, but let's move to the practicality aspect of the argument.

Practical: It Won't Work

Preventing paraphrasing and linking won't save the newspaper industry because it doesn't address it's fundamental problem. They are losing money not because others are stealing their content but because they are being out-competed by other more nimble organizations. I go to EveryBlock's crime data because they've invented a better mousetrap than either of Chicago's two big newspapers, not because they are stealing content or ideas. If the newspapers are being out-competed on the national level and the local level in specialized areas, will making them a protected class and preventing linking and paraphrasing save them? Clearly no.

Freedom of Speech: He Who Must Not Be Named

A link is a reference to something else. In a web browser, it can be clicked on and that click will take you to that referenced document. Is Posner recommending that we prevent linking or prevent the inclusion of references? Clearly you can't be against references, otherwise meaningful writing, including the practice of journalism, would not be possible.

This is one of those places where technology makes a mockery of the law. New technologies that can let you view the content of referenced articles without the need for a link will make all of these silly ideas around regulating technology appear like the technology ignorant bumblings that they are. Newspapers are but the latest in a long line of dying industries that are trying to lobby and sue their way to survival. The VCR's didn't kill the movie industry, the music download did kill the record store. The newspapers are dying, but there are already replacements, in whole or in part, for what they provide. They are not leaving behind a news vacuum, regardless of what Judge Posner may think reading over his morning New York Times.

Related posts:

1. More Newspaper Industry Musings
2. Everyblock, Another Missed Opportunity for Newspapers
3. NYTimes.com adds Sharing Tools
4. Save That Duck!
5. Again – Advertising and AJAX

Comments (2)

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1. 

   The judge’s got it all wrong. It’s the printed media that is dying. Just that Murdock was too slow in monetizing in new media.
   Today it’s easier to listen or watch podcasts and read blogs than to carry a newspaper or watch the boob tube. The quality of media on the web is far superior. I like reading an article followed by the comments (which are always more interesting). Why read a monologue on the newspaper which is just copied ad hoc from PR releases or from Reuters.
   Court cases and M$ deals will not dictate how I get my news. I’ll just avoid using Bing from here on out because I don’t like to be told what I can and can not consume!

   Comment by Jan, Friday, November 27, 2009 @ 3:51 pm

2. 

   Well said Dietrich. Your point at the end where technology is making a mockery of the law is spot on. We’ve approached in my opinion a strange era where the technology is consistantly moving much faster than the law. As usually seems to happen, the people who understand the technology the least are the ones who make the important decisions regarding it. Thar be dragons ahead methinks.

   Comment by Blake Smith, Wednesday, December 2, 2009 @ 9:29 am

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