Richard Posner, 7th circuit appellate judge and expert on all things law and economics, recently commented on the impending death of newspapers. His post blames the “free riding” of blogs and other websites for the year-over-year decline of newspaper revenue. Many accuse the web of killing newspapers, but only Posner could come up with an idea to save the news by destroying the internet.
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 is known for having some wildly unconventional ideas. Perhaps his new copyright scheme is just a modest proposal because, if taken at face value, it would destroy the internet as we know it today. Cyberspace is really nothing more than a series of individual pages connected through hyperlinks. A statue requiring websites to obtain advance permission before creating links to other pages would have the immediate effect of destroying every search engine and directory service with the rest of the internet not far behind.
The news industry does not need additional help from copyright to prevent unwanted linking and paraphrasing. Simple technology to prevent linking has existed for years. News organizations may litigate into oblivion any blogger that they feel has quoted a bit too liberally. The tools to free themselves from the clutches of the free-loading blogosphere are readily available; why then, have news organizations not used them? The simple answer: “free-loading bloggers” are not the cause of the death of the newspaper.
The mistake that Posner and others make is to assume that linking and paraphrasing redirects revenue from newspapers. There has never been data to support such an assumption. In fact, the nature of linking suggests the very opposite. One has to look no further than the overwhelming success of Google search for proof: Sergey Brin and Larry Page built Google on the assumption that the more a page was linked to, the greater the relevance of that page. Academics and lawyers should be intimately aware of this phenomenon; the more a paper or case is cited, the more important that reference becomes. A requirement for consent to link to a website’s copyrighted content would be just as backward as needing to ask for permission to cite an academic paper.
Posner characterizes online media as “free” and print media as “paid” content:
News, as well the other information found in newspapers, is available online for nothing, including at the websites of the newspapers themselves, who thus are giving away content. The fact that online viewing is rising as print circulation is falling indicates a shift of consumers from the paid to the free medium.
This is an egregious misconception of the economics of news. Delivery and printing costs far outstrip paltry subscription fees. Newspapers and magazines take a huge loss on every physical issue that they mail out. These costs must then be recuperated through advertising revenue. Consumers “pay” for news with their eyeballs – by viewing the advertisements embedded in these papers. The move of readership from physical papers to online websites is not a transition from “paid” to “free” – it is only a transition from print advertising to digital advertising.
The cost of online delivery is minuscule compared to the cost of physical delivery. If online, per-eyeball, ad rates were equal to print ad rates then newspapers should be gaining more revenue per-online visitor than offline subscriber. (This doesn’t even factor in the family factor: A family of four subscribes to a newspaper and all four read it; the newspaper only gains revenue based on a single circulation. If the family reads the news online, then the website has gained revenue from four sets of eyeballs). Marketers already find online advertising to be highly attractive; it offers better access to analytics, is far more targeted, and offers models that are directly tied to ad performance. Newspapers should be embracing the transition to online news as a chance to ditch expensive and inefficient print infrastructure while also making marketers (the people paying the bills) happy.
Newspapers are failing for a simple reason; they have not adapted their business model to the modern age. Yes, it is true that online advertising rates are lower than their corresponding print rates. Yes, there is greater competition online for advertising dollars. However, these are purely business issues. Newspapers, blinded by their own hubris, didn’t take the internet seriously. They let Craiglist and Ebay eviscerate traditional classifieds sales. They failed to package their products in a way that would attract significant online advertising revenue. Now, when the writing is on the wall, old media becomes increasingly desperate in their bid for survival.
Utilizing copyright law to save print media would have disastrous consequences and, if effective, would only serve to preserve an horribly inefficient industry. It is baffling that Posner, a scholar of the Chicago school of economics, would advocate such a grotesque solution. This is a foreboding sign that William Patry was correct in writing:
Copyright law has abandoned its reason for being: to encourage learning and the creation of new works. Instead, its principal functions now are to preserve existing failed business models, to suppress new business models and technologies, and to obtain, if possible, enormous windfall profits from activity that not only causes no harm, but which is beneficial to copyright owners.
This is the best article yet.
Newspapers cant also add premium content sections on their websites, instead of just relying on advertising. It will be more beneficial for them and more useful than trying to “get rid” or stop the internet.