All Out Of Ideas, Legacy News Providers Ask US Gov't For The Right To Collude Against Google & Facebook

from the failure-to-adapt dept

About a month ago, Buzzfeed's founder and CEO, Jonah Peretti summed up my feelings about watching old news media organizations running around everywhere blaming Google and Facebook for their own failure to innovate:

“A lot of the traditional media players are opportunistically attacking Facebook and Google because Facebook and Google have figured out a better model for delivering information and entertaining people which is real-time, personalised, shareable and global – all these things that you can't do in broadcast and print,” he says.

“These traditional media companies have had decades of massive cashflow and they decided to stockpile that instead of investing in digital. They just kept managing earnings on their traditional businesses even though we have known for 20-plus years that the internet was going to be a big thing and now all these things have unfolded, with some surprises but in a way that was not that hard to predict. Now we are at the point where Facebook’s and Google's revenues are starting to be a substantial portion of the pie, they are attacking them, saying it is unfair.

“The truth is that Facebook and Google have always taken a long term perspective – so has Netflix, so has Amazon – that the internet would win out in the end. A lot of the big media companies always took a quarter-to-quarter perspective, a maximise earnings perspective, and that has resulted in them being in a tough position and so they attack Facebook and Google because of it.”

This is, more or less, what we've been arguing for nearly two decades. There are a ton of opportunities for these companies if they actually embraced digital -- but they did so in drips and drabs and often stupidly chasing fads, rather than actually figuring out how to deliver content that people actually wanted in a way they wanted it. So, for the past few years, they've focused on whining about how it's so gosh darn unfair that the companies who did figure it out -- Google and Facebook -- are now making lots of money.

And... now those legacy firms are seeking the nuclear option. The News Media Alliance -- formerly the Newspaper Association of America -- has spent the last few years pushing bad idea after bad idea to try to "save" the news organizations that failed to actually innovate (for example: asking Trump to whittle away fair use). We mocked the fair use proposal as complete nonsense, but in order to make it happen, the News Media Alliance is... asking the government for a special exception to antitrust law to allow its members to collude against Google and Facebook... and to generally make the internet less interesting and more expensive.

Today, the News Media Alliance – representing almost 2,000 news organizations – called on Congress to allow publishers to negotiate collectively with dominant online platforms. The objective is to permit publishers to have concrete discussions with the two dominant distributors of online news content, Google and Facebook, on business model solutions to secure the long-term availability of local journalism produced by America’s newsrooms.

Supposedly there are three goals here: to get greater copyright control over news and to create a snippet tax, to force Google and Facebook to work with news organizations on some sort of subscription program, and to get "a fair share" of revenue and user data. None of these make much sense. As Matt Schruers at the Disruptive Competition Project points out, all three of these goals have issues:

Let’s consider those three objectives: IP protection, subscriptions, and a “fair share” of revenue and data. First, news publishers do not need an antitrust exemption to lobby for more IP protection; federal law already allows it. (As I’ve noted before, News Corp. is already quite fond of doing so.)

Second, Google and Facebook are already pursuing new strategies for supporting subscriptions. The NMA proposal, however, suggests a collective turn to subscription models, removing consumers’ ability to choose among products with different business models, including ad-supported ones. Individual newspapers should have the freedom to experiment, pursuing the model best suited to their business. Consumers are best served when they can choose between competing models.

Third, Chavern wants a “fair share of revenue and data.” In pursuit of this, the NMA would make an end-run around copyright law’s fair use doctrine, which permits the indexing of content, so as to force digital services to pay for the privilege of sending traffic to their sites. As I discuss below, news publishers have tried this in Europe. It hasn’t gone well.

There are lots of other problems here as well. As Mathew Ingram pointed out, there's tremendous hubris in the NMA members thinking that they're the only ones producing quality journalism:

This sense of entitlement is at the core of what the NMA is proposing. In effect, it is suggesting that mainstream newspaper companies are the only entities capable of producing quality journalism, and therefore they deserve a get-out-of-jail-free card so they can engage in what amounts to collusion. And they are hoping Congress will see Google and Facebook as the enemy.

Here’s a thought: What if these newspaper companies had spent a little more time trying to compete over the past decade or so, instead of relying on their historic market control to keep their profits rolling in? What if more had tried to improve their websites and their mobile versions, so that users wouldn’t install ad blockers, or turn to other solutions like Facebook Instant Articles?

Every single competitive threat the newspaper industry has faced, from Craigslist to Facebook, has been visible long before it decimated the industry’s profits, and most of the newspapers in the NMA did little or nothing to deal with them until it was too late.

Indeed, some more local news organizations are already pushing back against the NMA's plans. The Local Media Consortium, which admits some overlap with NMA members, points out that this whole thing seems like the wrong approach:

First, Chavern’s position ignores the LMC’s work during the last four years forging partnerships essential to us as providers of quality local content and local business solutions. Those partnerships align the news industry – print, broadcast and ultimately digital – with tech companies in a symbiotic relationship. The LMC has provided revenue opportunities for all levels of local media – and we’ve done that while leveraging our scale to garner both the attention and respect of the tech platforms. We have built partnerships based on shared value, not entitlement.

Second, I am concerned about the mixed messages the NMA’s stance is creating within the industry and our own LMC membership. The NMA board includes several members of the LMC, and these board members may not be fully aware of our relationship with tech companies. Chavern’s op-ed suggests a lack of knowledge of the tens of millions of dollars our partnership with Google has netted the industry, or the inroads we have made influencing innovation with Google, Facebook, Apple and Yahoo

That is, the LMC is looking at new tech and innovation as an opportunity. The NMA, on the other hand, seems to be looking at it as the enemy. This is a fairly typical response for legacy industries who failed to adapt, then flail about wildly against those who succeeded, but it's never good for consumers (there's a reason we don't allow collusion to happen after all...).

Rafat Ali probably summed all of this up best:

Look, I get it. Google and Facebook are big and successful and making lots of money. And because these news organizations failed to do much to adapt (or, at best, made superficial embraces of digital), they're pissed and they blame Google and Facebook for their own failures (not unlike the recording and film industries). But that misses the point. There's a reason why this happened, and we shouldn't have the US government reward those who didn't innovate by taxing those who did. The end result would be bad for the public. It would be bad for innovation.

And, sure, I'm saying this as a news publication that is concerned about Google and Facebook's power in the market -- but it's on me to figure out how to adapt and leverage the benefits that platforms like that (and others) bring. Not to go running to the government seeking to collude with others and to cement weak business models in place. Frankly, for companies seeking to blame others rather than their own failures, it's probably best that they go out of business sooner, rather than later. Clear the field for others who are willing to innovate and embrace technology, rather than whine about it.

Filed Under: antitrust, collusion, competition, innovation, news, newspapers
Companies: facebook, google, news media alliance, newspaper association of america, nma

Short Sighted Newspaper Association Asks Trump To Whittle Down Fair Use, Because It Hates Google

from the this-is-really-dumb dept

Sometimes you wonder just how ridiculous some legacy industries can be. The latest is the News Media Alliance, which is apparently the new name of what was the Newspaper Association of America. Just a few months ago, we were mocking that organization's ridiculous proposal that readers of newspaper websites should be forced to allow invasive ad trackers, and that adblockers shouldn't be allowed. And believe it or not, now the group has even worse suggestions. It has sent a "white paper" to Donald Trump with the types of things it's looking for from a Trump administration. The white paper is really just a 3 page memo dressed up slightly with the term "white paper" at the top -- as opposed to a carefully developed plan.

But the really ridiculous bit is that these media publications -- who regularly rely on fair use, are asking Trump to dump fair use:

Strong copyright protection is needed. Newspaper content makes up approximately two-thirds of the content on news aggregation platforms such as Google News, but many of these relatively new players in the digital ecosystem build audiences and generate revenue from newspaper content with little if any revenue coming back to those who have invested in creating the original content. Today, the news media industry invests roughly $5 billion each year in long-form investigative journalism. Our nation’s copyright laws must be structured and implemented in a way that allows for a return on this massive investment. Today, outdated interpretations of copyright laws mean that the industry is currently forced to give away much of its product for free. The government needs to put in place copyright protections that allow news organizations and other content creators to fairly benefit from their critical efforts and investments.

“Fair use” should be reoriented toward its original meaning. Under current copyright law, a person that does not own a copyright may still use a copyrighted work if it is consistent with the “fair use” factors, which assess: (1) the purpose and character of the use, (2) the nature of the copyrighted work, (3) the amount and substantiality of the portion taken, and (4) the effect upon the potential market. The courts, unfortunately, have dramatically weakened this test by finding a fair use any time a new use could be seen as “transformative.” This test has undermined the integrity of the long-established fair use factors. As part of any Copyright Act rewrite, we support refocusing the fair-use test on its original purpose to prevent courts from undermining the Constitution’s encouragement of compensation to entities that generate creativity and productivity.

This is dumb on so many levels. First, the claim that newspapers don't get any revenue from the likes of Google is ridiculous, when you consider how much they whine and freak out if Google removes them from search. They get revenue in the form of traffic from aggregators. If they're bad at monetizing it, that's one thing, but that's not the aggregators' fault.

Second, copyright laws should never be designed with the idea of making sure it enables recouping an investment. Because copyright is not the business model. Copyright is a mechanism that creates a business model, and that business model may or may not be successful. Just saying you invest $5 billion and therefore copyright needs to cover that nut makes no sense. I could just as easily claim that I'm going to invest $5 billion in improving Techdirt -- and therefore Trump needs to make sure that there's a business model to allow me to recoup that? No, that's crazy. It's not the government's job to make sure your own bad business decisions still pay off.

Third: the media attacking fair use is insane. Newspapers regularly rely on fair use in their reporting, and the group is shooting itself in the foot in asking Trump to take away that tool. This is especially true given that Trump himself has insisted he wants to "open up our libel laws" with the specific aim of harming newspapers. Remember, this is the context in which he said he was going to open up such laws:

If I become President, oh, are they going to have problems. They're going to have such problems.

... One of the things I'm going to do if I win, and I hope we do and we're certainly leading. I'm going to open up our libel laws so when they write purposely negative and horrible and false articles, we can sue them and win lots of money. We're going to open up those libel laws. So when The New York Times writes a hit piece which is a total disgrace or when The Washington Post, which is there for other reasons, writes a hit piece, we can sue them and win money instead of having no chance of winning because they're totally protected.

.... So we're going to open up those libel laws, folks, and we're going to have people sue you like you've never got sued before...

While he was specifically talking about libel laws, as we've seen over and over again, copyright is an amazing tool for censorship as well. In fact, the Supreme Court itself has noted that fair use is the necessary "safety valve" on copyright's free speech stifling powers. So for newspapers to basically gift wrap to Trump a way in which he can pull back a tool that protects their free speech -- just as he's been promising to attack their free speech -- is ludicrous.

About the only saving grace in all of this is that Trump acts as if he hates the big newspapers so much, that perhaps he'll have no desire to make them happy by following through on this idiotic suggestion.

In the meantime, if you work for a news organization that is a member of the News Media Alliance, maybe ask them why they're undermining a core principle of free speech in asking for fair use to be limited?

Filed Under: aggregation, business models, copyright, donald trump, fair use, free speech, news, newspapers
Companies: google, news media alliance, newspaper association of america

Newspaper Association Of America Complains That Comedian John Oliver Failed To Solve Newspaper Biz Model Problem

from the maybe-your-priorities-are-a-little-off dept

You may have seen that on Sunday, John Oliver's main bit this week was about the collapse of the local newspaper business. It's a pretty typical John Oliver piece -- and definitely on a topic that we've discussed many times in the past -- media business models. However, we didn't see much of a need to write about it... until the Newspaper Association of America decided to whine about it, mainly complaining that Oliver (1) didn't offer any solutions and (2) mocked companies that are trying, no matter how ridiculous their efforts are:

However, other than encouraging people to "pay for" more news, he doesn't offer any answers. More particularly, he spends most of the piece making fun of publishers who are just trying to figure it out. Whatever you think of the name "tronc" and that company's announced growth strategy, at least they are trying new things and trying to figure out how to create great news journalism in the digital era. John Oliver doesn't seem to have any better ideas.

The fact is that we are in a transitional phase within the entire industry. People want, need and consume more hard news than they ever have. The core demand for the product isn't decreasing at all, and based upon that we will find our way to the far shore where the industry is thriving and growing once again. But in the meantime, there is going to be a lot of experimentation and evaluation of new business models. Some experiments will work and some won't, and our VP of Innovation, Michael MaLoon is committed to keeping you up-to-date on what is happening on that front. But making fun of experiments and pining away for days when classified ads and near-monopolistic positions in local ad markets funded journalism is pointless and ultimately harmful.

I would just ask Mr. Oliver to spend more time talking about what the future of news could be, and less time poking fun at publishers who are trying to get there.

This is pretty ridiculous. First of all, much of the mocking was over the Tribune Company's ridiculous rebranding as "tronc," and specifically the absolutely ridiculous "tronc employee video" the company put together, that I still am partially convinced is a parody of the kind of idiocy big newspapers put out these days to pretend they get technology. "Artificial intelligence!" "The future of journalism!" "Tech startup culture!" "Evolving, changing -- the fun part!" "Optimization group!" "Feed it into a funnel and then optimize it!" "Maximize all the time." "Monetize video!" "The role of tronc is to transform journalism -- from pixels to Pulitzers." I mean, the video is inherently mockable. It's cringeworthy bad. I would have been disappointed if Oliver hadn't included it in his story. It's that bad.

And, really, despite the fact that we -- among many others -- have argued that Oliver and his team do real journalism at times -- at its core, his show is about comedy. Of course he's going to mock stupid stuff. Why shouldn't he? Expecting him to offer a "solution" is pretty silly. Whining about a comedian making fun of your failures to actually truly evolve seems like it should be fairly low down on the list of things the NAA should be focused on these days. If it's looking to comedians for solutions, and complaining when they don't provide any, perhaps the NAA itself should be spending a bit more time exploring how its members can evolve and adapt.

Filed Under: business models, complaints, john oliver, newspapers
Companies: naa, newspaper association of america

Newspaper Association Kills Off Print Magazine -- Goes Online Only

from the that-seems-ironic... dept

The Newspaper Association of America, who just recently has been out pushing the value of a print product as opposed to an online-only product, seems to not be taking its own advice. According to Romenesko, the NAA has not only laid off nearly 50% of its staff, but it's also switching its own print magazine to an online-only production. Seems difficult to take the group seriously when it claims print is somehow fundamentally a better product, doesn't it?

Filed Under: newspapers, online, print
Companies: newspaper association of america