Newspapers Gather In Secret (With An Antitrust Lawyer) To Collude Over Paywalls

from the good-luck dept

Fri, May 29th 2009 5:22am — Mike Masnick

You may have noticed a bunch of stories recently about how newspapers should get an antitrust exemption to allow them to collude -- working together to all put in place a paywall at the same time. That hasn't gone anywhere, so apparently the newspapers decided to just go ahead and try to get together quietly themselves without letting anyone know. But, of course, you don't get a bunch of newspaper execs together without someone either noticing or leaking the news... so it got out. And then the newspapers admitted it with a carefully worded statement about how they got together "to discuss how best to support and preserve the traditions of newsgathering that will serve the American public." And, yes, they apparently had an antitrust lawyer or two involved.

In the end, though, it won't matter. If a bunch of newspapers decide to lock up their content, they will only be digging their own graves. Smart newspaper execs will stay away and get all of the traffic. The wire services that compete with the Associated Press (such as Reuters, and CNN's new wire service) would be well served to put out a press release now hyping up the fact that their content is free. Other, smaller providers of news should trumpet how much they want people to come to them for news instead of paying, and then watch in amusement as the newspapers (whether it's an antitrust violation or not) discover both their advertising and their subscription money disappear.

Whether it's antitrust or not, it sure looks like collective suicide.

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Filed Under: antitrust, collusion, newspapers, paywalls

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Killer_Tofu (profile), 29 May 2009 @ 5:43am

About Time
Finally those who are unwilling to adapt are going to commit the awesome acts that will hasten their demise.
The sooner we get rid of these backwards thinking papers, the better. It will open up more space for those who care about the people and are forward thinking.
Adapt or die.
They made their choice: die.
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Anonymous Coward, 29 May 2009 @ 6:01am

use a paywall, DIE

plain and simple!
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John Doe, 29 May 2009 @ 6:07am

What did the lawyers do?
You would think anti-trust lawyers would have advised them not to collude in the first place. The papers should get their money back as the lawyers didn't do their jobs. The papers are going to need the money anyway if they put up a pay wall; they sure won't be getting any of my money.
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Designerfx (profile), 29 May 2009 @ 6:18am

I agree, speed up the process. We've been hoping the RIAA/MPAA would do the same, and they have been. People are steps and steps closer to having some kook go over the deep end and turn it into well deserved violence against the RIAA/MPAA heads at this point, as the collective damage to our society has no form of reparation.
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Tgeigs (profile), 29 May 2009 @ 6:53am

Name Game
"Newspapers Gather In Secret"

This group needs a good, old fashioned conspiracy name. The "Paperburgs"? The "Newseratti"? "Murdoch & Friends"?
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Tgeigs (profile), 29 May 2009 @ 6:54am

Re: What did the lawyers do?
"You would think anti-trust lawyers would have advised them not to collude in the first place"

You don't know enough lawyers, or at least business lawyers. They won't advise them not to collude, they'll advise the HOW to collude and not get caught.
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technomage (profile), 29 May 2009 @ 7:03am

Re: Re: What did the lawyers do?
Well, not get caught right away, as they usually have a relative that is in criminal law to get them out of any wrongdoing when they do get caught. The greased bills make their rounds.
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Daemon_ZOGG, 29 May 2009 @ 7:10am

Newspapers Gather In Secret (With An Antitrust Lawyer) To Collude Over Paywalls
One more dinosaur for the EXTINCTION List!

One group of dinosaur already on the list includes:
riaa/mpaa (and its international affilates)

Yeah, that hole just keeps getting deeper and deeper and...
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Marcel de Jong (profile), 29 May 2009 @ 7:31am

Meh, if these papers so desperately want to go for broke, others will take their place.

Others that are flexible in this digital age, run by hopefully more competent people, with a forward view.

We don't have to bail out the newspaper industry, because I doubt journalism will die.
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Marcel de Jong (profile), 29 May 2009 @ 7:32am

Re: Name Game
How about Deep Shit?
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Anonymous Coward, 29 May 2009 @ 7:32am

"collude" is a bit of a stretch here.

On that basis, Mike's "free summit" is collusion by those who want to push free. Every industry convention, meeting, get together, or "where is our industry going" round table is collusion.

The presence of lawyers specialized in that field would more than likely be to make sure that they don't cross that line. It is pretty much a good idea to do that.
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JustMe (profile), 29 May 2009 @ 7:50am

Re: #11
No, those are people exercising their first amendment rights.

"...or the right of the people peaceably to assemble..."

Source: http://www.archives.gov/exhibits/charters/bill_of_rights_transcript.html

The difference is that people organizing to discuss a common interest is legal. Business competitors meeting to discuss common strategies is clearly illegal. From TFA, from their own publicity report, they were "the group listened to executives from companies representing various new models for obtaining value from newspaper content online"

"Collusion is an agreement, usually secretive, which occurs between two or more persons to deceive, mislead, or defraud others of their legal rights, or to obtain an objective forbidden by law typically involving fraud or gaining an unfair advantage. It is an agreement among firms to divide the market, set prices, or limit production. It can involve "wage fixing, kickbacks, or misrepresenting the independence of the relationship between the colluding parties." All acts effected by collusion are considered void."

Source: http://en.wikipedia.org/wiki/Collusion

I'm sure they didn't explicitly discuss pricing strategies and stayed on the right side of the law. However, even the meeting itself is troubling.
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ppentz, 29 May 2009 @ 8:09am

Let them do it
Let them put up a pay wall and see how great it works. Then we can put this whole pay wall crap to bed once and for all, or at least until some "genius" forgets this experience in a few years and tries it again. But at least we'll have a few years of peace.
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Overcast (profile), 29 May 2009 @ 8:12am

Let them do that - it's a golden opportunity for the right entrepreneurs.
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chris (profile), 29 May 2009 @ 8:18am

Re:
"collude" is a bit of a stretch here.

On that basis, Mike's "free summit" is collusion by those who want to push free. Every industry convention, meeting, get together, or "where is our industry going" round table is collusion.

col⋅lude
/kəˈlud/[kuh-lood]
–verb (used without object), -lud⋅ed, -lud⋅ing.
1. to act together through a secret understanding, esp. with evil or harmful intent.

meeting in secret to discuss price fixing... sounds like collusion to me.
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Anne, 29 May 2009 @ 8:53am

I don't understand the widespread objection to newspapers finding a unified one-payer way to charge for their content, both current and archived.

The current mentality seems to be that everything found on the Internet should be free. When it comes to archived content, it took the LA Times years to scan every single news story from 1881-1985 into individual PDF image files, as well as completely indexing the entire system.

Now, I'm not arguing that a paywall is good for business, and perhaps the advertiser-supported open format is better than charging. I just don't believe that the government (or the general public, for that matter) should be dictating how the newspaper companies run their own businesses.
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Justin, 29 May 2009 @ 8:59am

really sad
It is really sad that in this country when your choices are update your business to meet customer demand, antitrust practices or collusion. That companies through some money at a lawmaker to make dumbass laws that restrict innovation and customer user
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Anonymous Coward, 29 May 2009 @ 9:08am

corruption
So execs from an industry get together for a secret meeting which may or may not be legal. Sounds like a news worthy story about possible corruption to me. You know...the kind of stories that will destroy democracy if the newspapers aren't around to expose.
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Simon (profile), 29 May 2009 @ 9:10am

Search Results?
What would happen to their Google rankings? Would they not become impossible to index?
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Anne, 29 May 2009 @ 9:23am

Re: Search Results?
Some newspapers - such as the Wall Street Journal - send me email newsletters with one line of the story, and if I want to read the whole thing, they expect me to click on a link to pay for the rest of the article.

With the WSJ, all you have to do is copy the title, go over to Google News and paste, and most of the time, that pulls up a free and complete news story. Other newspapers may work the same, but I don't know, because my employer pays the bill for my online access to everything except the WSJ.
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Mike Masnick (profile), 29 May 2009 @ 9:48am

Re:
On that basis, Mike's "free summit" is collusion by those who want to push free. Every industry convention, meeting, get together, or "where is our industry going" round table is collusion.

Uh, not quite. A group of competitors gathering to discuss a common strategy? That's conclusion. A bunch of random individuals and companies interested in new business models? That's not collusion.

See the difference?
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Mike Masnick (profile), 29 May 2009 @ 9:50am

Re:
The current mentality seems to be that everything found on the Internet should be free.

Not should... will. It's just the basic economics at work.

Now, I'm not arguing that a paywall is good for business, and perhaps the advertiser-supported open format is better than charging. I just don't believe that the government (or the general public, for that matter) should be dictating how the newspaper companies run their own businesses.

They're not dictating how the newspapers can run their business. If newspapers want to commit suicide and charge, they're free to do so. But what they can't do is meet in secret to all come out with the same price at once...
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Givesgoodemail, 29 May 2009 @ 9:59am

There's a solution, and it's as close as...
...here through here.
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Anonymous Coward, 29 May 2009 @ 10:11am

Re: What did the lawyers do?
You would think anti-trust lawyers would have advised them not to collude in the first place. The papers should get their money back as the lawyers didn't do their jobs.

Nah, they're just using the cloak of "legal counsel" as cover. The way it works is that if you can hire a lawyer to tell you what you want to hear, then you can use that as a defense in court when you get caught. An example of this is the way the Bush administration got some lawyer(s) to tell them that torture was OK. Now they're claiming "Hey, the lawyers OK'd it!" Bingo, get out jail free.
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Anonymous Coward, 29 May 2009 @ 10:16am

Re: Re: #11
I'm sure they didn't explicitly discuss pricing strategies

Oh no? What's your source?
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Anonymous Coward, 29 May 2009 @ 10:34am

Re: Re:
Well, a couple of things here.

First of all, you have to wonder if they are in fact discussing a specific common strategy, or like other businesses, they are discussing ways to work in the digital era.

Second, if they are all part of a new group (say like AP), are they not allowed to work together? After all, it isn't like they have a monopoly on the news.

Third, and this is very important, are these guys not allowed to discuss their common business together? Even if they do all decide to go to paywalls (stupid derogatory term for a membership / subscription business model), do they have some sort of monopoly? Nope.

If it is such a bad idea, and you think news organizations doing this have a buggy whip mentality, then let them do it and die. If they don't die, prepare to come back and write a blog entry that describes why you were wrong.
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Pwdrskir (profile), 29 May 2009 @ 10:42am

Repeating the Past
The current battle the newspapers are waging echoes the New York Typesetter's Strike of 1978. That strike affected the Post, News and Times, and was all about job security and innovation. From the Time article link below, �The city's publishers have been trying for more than 15 years to revamp their antediluvian production methods and eliminate wasteful staffing practices, but the craft unions, fearing job losses and declining membership, have always resisted.� Sounds familiar.

Again from the Time article, "The union argues that innovations at the papers have created a need for more�not fewer�pressmen, and that management's proposal would eventually cost up to 50% of the membership their jobs�a figure the publishers do not dispute."

Interesting that the newspapers wanted to innovate in '78, but they decline in '09.

http://www.time.com/time/magazine/article/0,9171,919810,00.html
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Anonymous Coward, 29 May 2009 @ 11:17am

It would be nice if you defined what a "paywall" is.
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Ugly American, 29 May 2009 @ 11:28am

Where the 'news' comes from
What most people don't realize is that newspapers just rewrite news they get off of a handful of newswire providers like AP, Reuters & Bloomberg. They also get propaganda 'press packs' from governments, large corps & lobbyists and often print them word for word. Then they take all this junk and mix it up with ads & spin it to their target demographic since most people only want to read/watch things they already agree with instead of objective facts.

You can cut out most of the spin & ads just by going to the news wires directly and reading the facts.
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Tgeigs (profile), 29 May 2009 @ 11:35am

Re: Re:
"A group of competitors gathering to discuss a common strategy? That's conclusion."

Hahaha, typo for truth of the day.

It is conclusion, of their industry...
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Pedro Fortuny Ayuso, 29 May 2009 @ 11:35am

Re: Re: "will" be free?
Does not look like, cf. iTunes. But I may be wrong and people are not willing to pay for music they can find for free on the Internet?
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Anonymous Coward, 29 May 2009 @ 11:54am

Re: Re: What did the lawyers do?
OK. Now they're claiming "Hey, the lawyers OK'd it!" Bingo, get out jail free.
Which seems rather strange if you think about it. If your accountant tells you some shady account manipulations are OK and the revenue services think the accounting was faulty, do you think they are going to say, "Ah, don't worry about it!" or do you think they will demand the correct amount plus interest charges? If you get legal advice that tells you something is legal when it isn't, the court should say, "You got bad advice and should sue your lawyer for malpractice, but the fact that you consulted him beforehand indicates you suspected you were at least flirting with illegality. The court finds you guilty. Extenuating circumstances will be considered in sentencing."
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Anonymous Coward, 29 May 2009 @ 11:56am

I can't believe what I am reading. No one want's to pay for anything? All you want is the watered down headlines from a news syndicate?

I agree there has to be some innovation. But I would rather pay a nickel to read a good article and forgo the ads. How do you expect journalism (not the headline, press release for the masses crap) to survive?

I guess none of you read your local paper.

Of course they have to do it all at once. As soon as one charges all of you will go somewhere else.

FTR, I am not associated with any publication in any way.
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Dave, 29 May 2009 @ 12:09pm

Burn them to the ground!
That's terrible!

You know what the newspapers should really be doing instead?

They should find a way to work together and all change their business model so they can survive with the changes on the internet!

And they should maybe hire some anti-trust lawyers so they make sure they're not doing anything illegal.

Oh... wait... I guess that's what they WERE doing.
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virtualadrian, 29 May 2009 @ 12:36pm

Re: What did the lawyers do?
Attorneys will never advise their clients to do the right thing since it may cost them the account or the money. There are very few if any that may do that.
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Anonymous Coward, 29 May 2009 @ 12:39pm

Re:
Agree. I really can't believe the naivete of most of the other posters here. You know, not *everything* is a conspiracy. RIAA/MPAA, yes, they're the bad guys, and they deserve to fail. But newspapers are vital to our democracy, and they are truly in deep trouble because the ad-supported model doesn't work. You want real reporting, someone has to pay for it.
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Tgeigs (profile), 29 May 2009 @ 1:03pm

Re: Re:
"But newspapers are vital to our democracy, and they are truly in deep trouble because the ad-supported model doesn't work"

What the hell are you talking about? How are newsPAPERS vital to our democracy? Why does the news HAVE to be printed on paper for it to work? Why doesn't it work if these same exact people put their content on newsSITES instead of newsPAPERS?

And goddamit the ad-revenue model sure as shit worked for the past 200 years. People, please stop pretending that subscription costs have EVER gone to ANYTHING other than the cost of printing and distribution. W/the internet, there IS no cost of printing and distribution.
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JohnRaven,CHT,CSH (profile), 29 May 2009 @ 1:24pm

Cool-Aid time...
It's Cool-Aid time for the AP.
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Brinticus, 29 May 2009 @ 1:59pm

newspapers
The VCR morphed into the DVD, and then into .mp3 files. Manufacturers followed suit. But I've never seen an industry so resist taking up the next logical step of news delivery technology. I supposed it shows how in-grown the whole newspaper world is.
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Anonymous Coward, 29 May 2009 @ 2:22pm

Here's an idea. All the newspapers go out of business. All of a sudden, Google news is empty because they no longer have any sources for stories. Instead of factual news, we are down to reading blogs like this one to find things out.

Imagine how ignorant people would be if their only source of news was Techdirt.
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Tgeigs (profile), 29 May 2009 @ 2:30pm

Re:
"Imagine how ignorant people would be if their only source of news was Techdirt."

Even pretending for a moment that there weren't good news blogs that offer independently gathered information, I'll still take ignorant over purposefully misinformed, or do you think you actually get honest factual news from any major media source today?
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Anonymous Coward, 29 May 2009 @ 2:43pm

To the extent that paper is bad for the environment (because it cuts down trees and requires more energy) I'm all for switching to a paperless society. Still, sometimes it's nice to things on paper, sometimes monitors can be more strenuous on your eyes? With LCD monitors these days that's not so much an issue anymore though (it was back when everyone had CRT monitors).
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Anonymous Coward, 29 May 2009 @ 2:58pm

paywall definition
A Pay Wall blocks access to a webpage with a window requiring payment. (wiki)
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Anonymous Coward, 29 May 2009 @ 4:38pm

Re: paywall definition
really just a subscription, membership, or micro pay arrangement.

The term paywall is a derogatory term used by the "free" supporters to deride any system that requires a membership to access.
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Anonymous Coward, 30 May 2009 @ 12:28am

Re: Re: paywall definition
The term paywall is a derogatory term...

Only if you're ashamed of what it means. Shoe fit?
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Anonymous Coward, 30 May 2009 @ 4:14am

PAY AND THERE IS NO WALL,

I say don't pay and the whole building comes down!

:)
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Anonymous Coward, 30 May 2009 @ 8:27am

Re: Re: Re:
"How are newsPAPERS vital to our democracy?"

Hmmm..let's see, where to start? Watergate? Washington Post? You can you see the Drudge Report or Huff Post digging that one up, and having the credibility for the story to stick? Would Woodward and Bernstein have had the resources and support they needed to follow through? Freelance journalism is fine, but there are some cases where you need large organizational backing to pursue a tough story that has implications for society.

Re advertising, the rates for internet advertising are minuscule compared to the rates charged for print. Large news organizations have tried, and so far many have failed to monetize their online component solely w/ advertising.

So, while I personally would like to see Mr. Murdoch thrown under a bus, there are too many important newspapers out there dying, and ponying up 50 cents or whatever to read the newspaper, er, i mean, the daily online edition of what was once a newspaper, seems like a small price to pay.
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Derek Kerton (profile), 30 May 2009 @ 11:31am

Re:
"Well deserved"? That's over the line.

You shouldn't suggest or endorse that kind of response, even with a ten foot pole, and 40 weasel words.

Violence is seldom the answer. Very, very, very seldom. Maybe OK if you're William Wallace, but Ghandi was more successful. Violence is certainly not warranted for douchebags who screw up the entertainment industry.

Do you think your words would have a calming effect on a crazy potential murderer, or an exacerbating effect? When discussing violent reaction, be sure to stay on the right side of that fence.
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Derek Kerton (profile), 30 May 2009 @ 11:43am

Re: Burn them to the ground!
Yes, you're being sarcastic.

But unless you learn what Anti-trust and collusion mean, you really aren't going to be very funny on this thread.

When you understand the topic of collusion, this should be a red flag: "to work together and all change their business model". And yes, that is terrible...even if it would be irrelevant to their toil.
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Derek Kerton (profile), 30 May 2009 @ 11:47am

Re:
In your doomsday scenario, would there be demand for good news content?

Do you think that someone with a clue could build a business to deliver that news content to provide a supply for the demand?

People like you seem to have NO faith whatsoever in a free market, in entrepreneurs, and in economics.

The fact that we already have dozens of examples of these entrepreneurs in action seems to also go under your radar. And yes, Techdirt, HuffPo, and hundreds of others are examples. It won't be just blogs, either, if that's what you're worried about.
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Derek Kerton (profile), 30 May 2009 @ 11:55am

Re: Re: paywall definition
By no means derogatory. Merely descriptive. A paywall is a tool that can be used well, or used in bad judgement. Just like a screwdriver.

Definition: On a website with some free content, and some paid content, the paywall is the line that divides the two. To cross it, some form of payment is expected.

There are plenty of examples of paywalls that make good sense. Have unique content that is scarce and no direct competitors? Maybe you should use a paywall.
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Yeebok (profile), 3 Jun 2009 @ 12:30am

The crux of the problem ..
Is that most papers pretty much copy paste 90% of a story on Reuters or another paper. The similarities between BBC (UK) and News.com (Aus) stories on the same subject are quite scary - same if you compare any 2 news sites.
The papers realise this and they all want to make us pay for their 2 keystroke stories but of course if one puts up a pay to read (PTR) setup, the others will get the traffic that they lose. Last one to put up a PTR wins, almost. However like any company, none of them want to be last to get their part of this "magic profit" so they all decide to do it at the same time. Sorta like lemmings really.
That's my jaded take on it. The problem is I can manage not reading "the news", as opposed to "interesting stuff" like I find on this site, which I can't live without as easily. That doesn't mean I'd necessarily pay to read here either though. Call me a cheapskate.
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Yeebok (profile), 3 Jun 2009 @ 12:33am

of course ..
If they hadn't ever put their content online for free in the first place maybe it would have some value nowadays, too ..
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Reporter Ed, 20 Nov 2011 @ 5:51pm

Newspaper wage collusion
Fact is newspaper execs have been breaking anti-trust laws and colluding to keep reporter wages low for 30 years. That's why the avg. Wage for reporters with Journalism degrees is $34,000 s year compared to an average of $51,000 per year for other jobs professions requiring college degrees. The newspaper cronies also colluded to keep mileage reimbursement at 27 cents per mile, wherebit was when gas was $1.80 per gallon, even though gas is now $4 per gallon and fed mileage rate is 55 cents per mile. The money they have stolen from employees was used to buy chains of papers and now that bad karma isbcomingbback to bite them with newspaper decline and nobody wants to work for these crooks.
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