Under Logic Of German 'Pay To Link' Proposal, If A German Publication Wastes My Time, I Can Send Them A Bill
from the logic-failure dept
For quite some time now, we've been following the bizarre effort in Germany to establish "neighboring rights." This was a plan, first floated a few years ago, to force aggregators to pay to link to news sources. This year, that effort has really ramped up. In March, news came out that such a proposal was being written, and the first draft was released in June, horrifying many who actually understand how the internet works. Basically, if you make money (say via some ads on your site) and link to a source with a short excerpt, you would have to pay. This includes those who do so via their own blog or social network site. Quote an article on a Facebook account, which you also use to make some money (say to promote your business) and you may have to pay.As is described in a recent comment from Mathias Schindler, who has been attending the various hearings on these neighboring rights proposals, this appears to be a misguided effort by publishers, who have failed to adapt, to capture revenue from anyone who incidentally profits from the information they provide:
"The publishers argued that the bank consultant was only able to advise his clients because of the journalistic work in the published article. So that means the publisher deserves a fair share of any money made from that scenario. This was the proposal from the start."We've seen this kind of thinking for years, and it really represents a fundamental misunderstanding of economics, driven by a variety of false assumptions, including the idea that the only way to determine value or benefits is through monetary transactions. This is obviously crazy when you put things into context. At the very same time that these publishers are demanding payment to link to their content, they and others are paying search engine optimizers to get more links, recognizing that such traffic is important. Basically, implicitly they recognize that traffic, absent money, is valuable, but they're now trying to add money on top of that.
One of the most misunderstood aspects of economics is the allocation of benefits. It's all too common for certain players in a market to assume that they should accrue money for anyone and everyone who benefits from their work. But that is not only impossible, it would actually massively limit growth. Such "externalities" or "spillovers" (depending on which economist you're talking to) have a major impact on economic growth, which often comes back to help the originator of the work, even if they don't directly receive payments for it. The research of the "new growth" economists over the past couple decades have really zeroed in on how externalities from information, such as third party benefits, are the key ingredient in economic growth. Clamp down on that, and you clamp down on the ingredient needed for economic growth.
Of course, if you want to demonstrate the fallacy of the publishers' argument, it's easy: just flip the situation around. If the publishers truly believe that anyone who uses information found in a publication to profit owes them a cut, then what if information leads to a loss? Say that I rely on information in a German publication to make an investment in a company that goes out of business. Should the publisher now repay me for my losses? Taken to the logical extreme, that's exactly what the publishers appear to be arguing. Take it one step further: let's just say that the article I read in a German publication wastes my time and provides no useful information. My time is valuable, and they've now wasted it. By their own logic, should I not be able to send them an invoice for wasting my time?
Somehow, of course, that flip side of the equation never gets discussed. Because this is not about logic. This is about publishers who don't want to adapt looking for protectionism on the upside only, against actual innovators. That the German government appears to be treating such concepts seriously suggests a significant risk for Germany to end up putting a massive chill on innovation and economic growth, by trying to tax the very beneficial externalities of information in a manner designed solely to protect one side of the market for a group of businesses who are trying to stifle competition and innovation. It's a dangerous move by a government who should be encouraging innovation and growth, not stifling it.
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Filed Under: economics, externalities, germany, pay to link
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Also having links to you only benefits you it seems utterly crazy to try and limit that.
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Like that fire suppession system for submarines that used carbon monoxide or the weird hunk of wood thing that was billed as something for air warfare but just killed it's "pilots"
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Hitler's stealth fighter?
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This argument taken to it's natural end would mean that anyone who does anything beneficial to anyone else should be compensated.
The managers at the publishing companies should be paying residual royalties to the children of the teachers who taught them how to read and write because they clearly profit from being literate.
Heck, children should pay their parents for telling them about the world and should charge them when the parents' teachings turn out to be false.
I'm gonna make so much money off of my parents telling me about Santa Clause and the Easter Bunny...
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Just think about how that would change the world of politics. Any time a politician was mentioned in an article they would get paid by the publisher. You would suddenly see a dramatic decrease in political coverage.
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Could this mean....
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Re: Could this mean....
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Next headline, "Germany cut off from the internet".
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They went after Google and other companies with these insane things, they make YouTube a nightmare for their citizens... the net might need to start seeing stupid as damage and route around it.
Did no one learn anything from the newspapers in Belgium?
They cried and cried Google was stealing money, so Google stopped... then they cried and cried that Google wasn't giving them traffic any longer. It really is time that court insist on actual common sense in these cases, rather than just embracing the idea that because someone on the net makes money they owe a cut to everyone else.
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benefits
I think this flawed principle is central to a lot of misunderstandings and ought to be highlighted more often.
Btw. this idea that the producer of something should be able to reap the full benefits - isn't the logical conclusion of that also that we should give up any attempt at increasing competition since competition leads to lower consumer prices which means that producers receive a lower share of the benefits of their production.
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Origin of the idea...
The Becker-Posner-Blog: The Future of Newspapers
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You show an incredibly level of stupidity here.
If you run a store, and obtain inventory from somewhere, you pay for the inventory and you keep the profits when you sell it. If you sell it for a loss, you don't get a discount on the inventory.
Not everything in life is a perfect two way street. Your argument creates a strawman that makes absolutely no sense.
Sorry Mike, but you are really having a bad week here. Try not to lose it on me, okay?
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So I take the risk and the provider free-rides on me? How bad, let's change the law so I can get a fair share of the provider's revenue. That will save jobs.
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at least the discussions are 'transparent and not limited to just the side that will benefit the most
2)suggests a significant risk for Germany to end up putting a massive chill on innovation and economic growth, by trying to tax the very beneficial externalities of information in a manner designed solely to protect one side of the market for a group of businesses who are trying to stifle competition and innovation
now doesn't that sound very familiar? it's seems exactly what the entertainment industries are trying to do because of their 'failure to adapt' mentality
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Its 'official' debts are around 1/50th of what it really owes, but this has been fudged to prevent mass panic and a general exodus from the Euro.
They feed debts into other departments and expenses systems so it can be ignored when they talk about export/import debt and deficits.
Same pretty much goes for France, the UK and several other major EU countries.
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Have you overlooked a few ?
Hidden debt ... off balance sheet budgets ... unfunded wars
Sounds familiar somehow
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Considering Germany has GEMA I'm not surprised. Hope the Germans resist like the Americans resisted SOPA.
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Considering Germany has GEMA I'm not surprised. Hope the Germans resist like the Americans resisted SOPA.
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What about the right of first sale?
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Do coupon cutters owe the paper a cut of their "savings" ?
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Paying to link
Pro rata of course. And to fairly allocate the remittance, their grade school teachers who taught them how to read, are core to that income stream, so everyone after them should be paying a percentage of what they receive from the publisher. This would recompense the grade school teachers for equipping the publishers for work.
Never mind the accounting nightmare.
IT'S THE PRINCIPLE THAT MATTERS!!!!
Doh.
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Again..
If anything any website that does not want there content linked to they need to put up a big red banner on there home page so that people will know not to waste there time there, not that it will be necessary as those sites will quickly dissapear as nobody sees them on any of there much visited websites.
Just look at reddit as an example of linking, there are times that so much traffic is sent to a site that they cannot cope with the traffic and the site implodes, who would not want this type of traffic to there website. I think that this is being done by people who seriously do not understand the principles of linking and if they get there way and do manage to monetise linking in Germany they are going to have many many news aggregaters refusing to accept links to there content.Germany could in fact become a no go zone for traffic with many sites blocking the ability to link to a German domain.
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Was a delightful source of schadenfreude though.
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