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Protecting News We Give Away

The Associated Press has launched a much-publicized effort to stop unauthorized use of its news reports on the Internet. Journalism’s bigger problem, however, is that most people can get all the news they want, free, from authorized sources.

The AP plans to launch a news registry to track how its content is used online. Under the new system, all AP articles will go out with a digital “wrapper,” invisible to the ordinary reader, that will contain important rights information about the story, including the author, the headline, and the terms of use associated with it. The “wrapper” also will enable The AP to keep track of exactly where its articles are showing up.

Initially, the registry will include only text directly from The AP, but, eventually, if all goes according to plan, the registry will expand to cover AP member newspapers and will include photos and videos in addition to text.

As The AP stressed in an explanation of the new system on its website, getting good stories is not cheap. The announcement pointedly refers to The Associated Press as “a not-for-profit news cooperative that spends hundreds of millions of dollars every year gathering and sharing news of public interest from around the world.” The subtext is “And we don’t spend all that money so other people can enrich themselves off our work.” Once its tracking software is in place, The AP will be able to take legal action against sites that use its articles without permission.

But The AP is being vague about the details of its plan. On its official website, it focuses on the most clear-cut cases of sites that simply reprint articles and collect ad revenue by using content they haven’t paid for. But, in an interview with The New York Times, Tom Curley, chief executive and president of The AP, said the organization also would crack down on use as minimal as a headline with a link to the article. This would put The AP at odds with search engines such as Google and Yahoo, as well as with news aggregators and blogs.

The news service clearly has a right to expect payment when someone displays an entire AP article. The new system might put a stop to that sort of chiseling. However, The AP will likely have a tougher legal fight if it demands to be paid for the sorts of things search engines do.

The doctrine of “fair use” allows brief quotations of copyrighted material in a separate work. A book’s title is subject to copyright, but a library’s card catalog does not infringe the copyright merely by citing the book’s title. The search engines will argue that they are a modern-day card catalog. The fact that this “card catalog” also sells billions of dollars in adjacent advertising seems to annoy The AP but may not be meaningful to the courts.

Newspapers and broadcasters pay The AP for its news reports, which they publish under license in combination with their own content. The legal principle of “first sale” holds that the purchaser of a copyrighted work is the owner of that work and has the right to re-sell what it owns. This is how used bookstores can legally operate. Software makers have argued, with mixed success, that they “license,” rather than sell, their copyrighted intellectual property and that, therefore, the first-sale doctrine does not apply. The AP might rely on similar licensing terms to prohibit news organizations from giving away its reports on their web sites. But The AP is owned by its 1,400 U.S. member newspapers, so that might be a difficult battle for the news service to fight.

A start-up company called Attributor has another approach. Targeting major news organizations, Attributor offers to track down unlicensed copies of articles and get part of the ad revenues from sites hosting such content for the articles’ rightful owners. Attributor hopes to work with ad placement companies in order to have a portion of the ad revenue flow directly to the owner of the content adjacent to the ad instead of to the owner of the site.

Jim Pitkow, chief executive of Attributor, says that his approach will benefit everyone by allowing for the wide distribution and use of news stories, while still ensuring that enough money reaches the original sources so they can continue to pay reporters.

Which brings us to the real economic problem in the news industry. Somebody has to pay to create the content. That somebody could be an advertiser, a consumer, or a third party such as the government (as in the case of the BBC) or a donor (as with American public broadcasting)

News organizations have had little luck attracting paid subscribers to their web sites. Instead, they try to draw an audience by giving away free content, and then they use the audience to attract advertisers. The recession has brought a significant drop in advertising sales, however, while at the same time the huge number of online news sites chasing advertisers creates a glut of supply and a drop in ad rates. The industry is being squeezed by its own business model.

As the various parties fight over just who should pay, how much they should pay and how those payments should be made, there is likely to be plenty of news about the news.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s most recent book, The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book, Looking Ahead: Life, Family, Wealth and Business After 55.

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