First, stop the lawyers

There’s some dangerously wrong-headed lobbying from media lawyers in today’s Washington Post arguing for new laws to protect old media from new technology. Bruce Sanford and Bruce Brown of Baker Hostetler argue that Congress should:

* Change copyright law so that “the taking of entire Web pages by search engines, which is what powers their search functions, is not fair use but infringement.” This would be downright suicide for not only the media companies that I assume are their clients but for every business that wants to be discovered on the web. Not being able to analyze an entire page would mean that search engines could not reliably send searchers (aka customers) to relevant pages and that would mean that the owners of those pages would not be discovered. It would tear about the very essence of the web. This is so dangerously ignorant of the architecture of our new world and how it operates as to be stunning. It also is ignorant of the new link economy of the web. Why the hell do they think that companies hire SEO firms – so that Google will do a better job of analyzing all their content. (Who hires these people?)

* Enact as law the “hot news” doctrine to protect against “taking the guts of the content.” Today, you can’t protect knowledge. The fact that, for example, GM has cut 1,100 dealers is just a fact and it is spread – all the more efficiently online – via conversation. You can’t sue me for learning that in a newspaper and repeating it. That is key to the functioning of a community, a market, and a democracy. But these guys are following an effort by the Associated Press to call on the so-called hot-news doctrine to argue this knowledge is somehow theirs. Once again, this exposes shocking ignorance of the speed of the knowledge economy. Bloomberg and Reuters understand this: If they can deliver knowledge faster to their clients so they can exploit that knowledge more quickly than others, then they have value. That is, indeed, hot news. But they are well aware that the unique value of that heat expires in moments – seconds – and once knowledge is known, it is a commodity. But these lawyers want to make business by getting Congress to extend copyright to enable publishers to sue for compensation of sites that practice what they call “linkspoitation” (that is, putting ads around links, which could be defined as every decent commercial page on the internet). How long, I’d ask them, is news hot? A minute? A day? A week? How long before others may repeat that knowledge? Incredible, eh?

* Use “tax policy” (that is, tax dollars – i.e., our money) to “promote the press.” Which press, gentlemen? The press you represent or the press we the people are creating? We out here don’t actually need such a subsidy because we’ve been smart enough to take advantage of the new, free press and we are not saddled with the costs of an old press. Why should we then have to subsidize the market failure and anti-strategic stubbornness of the owners of those old presses? “Congress,” they write, “could provide incentives for placing ads with content creators (not with Craigslist).” That’s just plain payola. They also want “allowances for immediate write-offs (rather than capitalization) for all expenses related to news production.” Except we in the new press don’t have capital expenses for presses and buildings and trucks. Can we write off our PJs?

* Give news companies antitrust exemption so they may collude and form cartels to wall off their content and fix prices together. “As noted in the Kerry hearing,” the lawyers write, “publishers need collective pricing policies for their Web sites to finally break out of the expectation of free content that is afflicting the industry. Antitrust immunity is necessary because most individual news sites can’t go it alone by walling off their content for fees — readers will simply jump to sites that are still free.” That’s called capitalism, gentlemen. The market. I’d rather protect that open market than the failed monopolists who are finally losing control of it.

* They also want to take off ownership restrictions on media companies. There, we don’t disagree. Let the dinosaurs huddle together against the cold wind of change if they want. Well, except such a strategy of consolidation hasn’t worked so well for Tribune Company or McClatchy or Clear Channel or Time Warner or The New York Times Company, has it? (Is anybody hiring this firm for business strategic advice?)

Add it all up and their lobbying is ignorant of the architecture and workings of the internet economy and, for short-term gain for dying companies, willfully destructive to fundamental principles of the law.

Somebody stop these guys.

* * *

In the comments under the Washington Post piece, Dale Harrison makes a great response, which I’ll quote almost in full (hoping he doesn’t sue me):

This is a shockingly misguided analysis and set of recommendations!

A lesson worth remembering is at the turn of the 20th century people had a transportation problem…and the solution turned out not to be a “faster horse”…but a Ford.

And one should note that the Ford didn’t arise out of the “Horse Industry Revitalization Act”.

I think the future of the media business will look as different as Ford and Toyota’s operations look from horse traders and blacksmiths.

Imagine what the passage of such ill-conceived legislation would have done to the car industry a century ago.

It would have strangled the nascent auto industry at birth, postponing it’s inevitable rise while sheltering a dying industry, only postponing it’s inevitable demise…doing great damage to both. Newspapers need to be encouraged to adapt to the future, not retreat behind legislative walls hoping the future will go away.

The newspaper industry’s troubles go to the very core of their historical business model.

What’s historically given value to editorial content is the relative scarcity of distribution versus readers. Newspapers have historically enjoyed natural localized economic monopolies that allowed each of them to exercise monopoly control over the amount of content (and advertising) they allowed into their local marketplaces.

Monopoly constraint of distribution and supply will always lead to prices (and profits) significantly above open market rates. Newspapers then built costly organizational structures commensurate with that stream of monopoly profits (think AT&T in the 1970’s).

The dynamics of content replication and distribution on the Internet destroys this artificial constraint of distribution and re-aligns advertising (and subscription) prices back down to competitive open market rates. The often heard complaint of Internet ad rates being “too low” is inverted…the real issue is that traditional ad rates have been artificially boosted for enough decades for participants to assume this represents the long-term norm.

An individual reader now has access to essentially an infinite amount of content on any given topic or story. All those silos of isolated editorial content have been dumped into the giant Internet bucket. Once there, any given piece of content can be infinitely replicated and re-distributed to thousands of sites at zero marginal costs. This breaks the back of old media’s monopoly control of distribution and supply.

The core problem for the newspapers is that in a world of infinite supply, the ability to monetize the value in any piece of editorial content will be driven to zero… infinite supply pushes price levels to zero!

What this implies is that no one can marshal enough market power to monetize the value of content in the face of such an infinite supply and such massively fragmented distribution. Pay-walls, lawsuits and ill conceived legislation won’t allow the monopoly conditions to be re-constructed.

There are certainly ways to make online news profitable…and many of us are working to develop such approaches…but I can assure you they don’t involve inventing a “faster horse”…

* * *

In Twitter, Howard Weaver asks an excellent question: Wonder who hired them? If newspapers are lobbying Congress, that lobbying should be – must be – transparent.

  • Rob Levine

    >>>We out here don’t actually need such a subsidy because we’ve been smart enough to take advantage of the new, free press and we are not saddled with the costs of an old press. Why should we then have to subsidize the market failure and anti-strategic stubbornness of the owners of those old presses?

    How many of “you” in the new press are really making money? Seriously: Tell me how many of these small organizations can do the kind of reporting that newspapers do, generate jobs for Americans – no volunteers for millionaires like Arianna uses – and still turn a profit. I’m all ears!

    • http://www.buzzmachine.com Jeff Jarvis

      Very soon, the web will be seen to be creating more jobs every month than newspapers are lopping off. Many of those lopped off are now trying to start businesses on the web. I hope to help the companies that will help them do it. Watch the New Business Models for News Project as we progress.

      • Rob Levine

        >>>Very soon, the web will be seen to be creating more jobs every month than newspapers are lopping off.

        First, you changed the topic – how many companies on the Internet are doing reporting an making a profit? Second, this is either a fantasy or a fallacy. Craigslist, as large as it is, employs 30 people. Google employs fewer people per dollar of revenue than any company of size in the U.S.

        And need I remind anyone here how much you admire Google?

        • http://www.buzzmachine.com Jeff Jarvis

          Rob,

          Would you care to identify yourself? I’d appreciate the context.

        • http://www.gnip.com Eric Marcoullier

          This Rob Levine (http://mediatransparency.org/authorprofile.php?authorID=3) seems to be the likely guy, although the number of outbound links on Cursor.org to both tradition and new media sites makes me wonder if this is either a) the wrong guy or b) an impersonation attempt.

          Fingers crossed that Rob owns up to his identity so that we have better guidance on how to evaluate his comments.

      • Dale Harrison

        @ Rob Levine:

        The creation of companies and jobs with ever increasing Labor Productivity (Revenue/Headcount) is one of the key metrics for a growing and wealth-creating economy.

        Replacing less productive jobs with more productive jobs is the essence of “creative destruction” and it ultimately makes us all more prosperous. This is a positive signal that the economy and technology is moving in the correct direction.

        I realize that the pain of such creative destruction is not always shared evenly, but without it we would still be medieval serfs tilling the soil around our Lord’s manor…

    • Greg

      Techcrunch
      Gigaom
      Technologizer
      Ars Technica
      Engadget
      Engadget Mobile
      Engadget HD
      Gizmodo
      Boy Genius Report
      Torrant Freak
      Read Write Web
      Mashable
      The Business Insider

      • http://www.ferodynamics.com/ Ferodynamics

        You can add me to that list.

        Go ahead, stop indexing the newspapers.

        Goodbye papers, pass the Pagerank on your way out.

        Finish your withering in isolation, under the weight of your debts, behind your paywalls. Rot in your posh offices.

        The web ran just fine without newspapers since the early 1990s. We don’t need newspapers here, we don’t necessarily need Google either.

        What we do need is support for open communication, facilitated by XHTML, CSS, WordPress, Linux, Apache, MySQL, PHP, and everything leading up to that point: RBBS, Hayes command set, Xmodem, Zmodem, Frontdoor, packet radio, etc.

        You see, dear newspapers, your doom was decided over 30 years ago, before my USR HST started collecting dust in my closet, before I received my first Internet advertising check for nineteen cents (in 1994) which I’ll have framed one of these days.

        Newspapers. You’re so obsolete, I’m not even addressing you directly, I’m addressing you from a blog lamenting your ghost of an industry that won’t exist a few years from now, propped up by old advertising habits about to reach a forced retirement.

      • http://twitter.com/kawika Kawika Holbrook

        @Greg, your list — a good one — is almost all tech related. Talking Points Memo, a political blog with original reporting, is also profitable. That said, I think tech and politics may comprise the mass of moneymakers for the time being. Not that news organizations can avoid what Jarvis’ talking about, but Levine’s point — I think — still stands. Not many companies are making a profit with original reporting. Then again, that doesn’t mean newspapers deserve a taxpayer-funded cartel. “News” and “paper” don’t have to go hand in glove — and may not be able to even with government intervention.

    • Dale Harrison

      This is asking an apple and oranges questions. One cannot compare the equilibrium state of a mature industry to the decidedly non-equilibrium state of a nascent fast-growing new industry still in its experimental development stage.

      In 1909 there were significantly more highly skilled blacksmiths and farriers with incomes significantly above those of the assembly line workers in Detroit.

      Over time, both wage rates and employment numbers inverted as the automobile industry found it footing and matured.

      The story of new media will be a high-tech 21st century replay of that history…

      • http://www.ferodynamics.com/ Ferodynamics

        “nascent fast-growing new industry”

        You could say it was new if I was editing this at 240cps with ANSI location codes, with MNP5 compression. But even then it wasn’t like I etched the circuit board with a butter knife in my basement. That’s when it was new, before you could go to JCPenny and buy a TI 99/4a off the shelf.

        FYI: The alphabet isn’t a new invention either, which I’m using right now! I know, it’s amazing.

    • http://www.sunvalleyonline.com Dave Chase

      Rob – We’re one such site (http://www.sunvalleyonline.com). We’re profitable (though barely in this tough market) covering local news and info about our community and giving the local paper a run for its money using a “pro-am” model (paid journalists + “amateur” contributions). We have a small team and also get lots of community contribution. If you extrapolate our job creation to a national level, it would be ~75,000 jobs.

      Not counted in that number are the “amateurs” who make contributions and it helps support their other roles. It turns out that many of these “amateurs” actually know a lot more about their topic than the “pros”. One example: We have a local Nature Conservancy-like org. They have a scientist on staff who has forgotten more about riparian habitat than the best journalist in town knows about riparian habitat. When we had floods, the article he wrote was superior to anything I’d seen our local generalist journalists had done on the topic. These folks publish on our site as they have a need to educate and advocate around their field of expertise. It’s not a journalism job per se but their contributions help our readership understand topics in a way that our traditional journalists couldn’t and helps their organizations remain economically viable (read: create/preserve science jobs in this example).

    • Conal

      I’m astounded that you haven’t yet come across any investigative journalists amongst the blogosphere! You must live in a hole in the ground!

      And who cares, by the way, if they aren’t huge media conglomerates making big profits? I for one do not.

      In any case, the idea that US newspapers can be revitalised by the US Congress imposing mandatory copyright fees on Google is so stupid it’s laughable. It is a fantasy!

      If US newspaper websites cannot be crawled by Google except at high financial and administrative cost, then Google will not index those sites, their readership will plummet still further and they will all go out of business immediately. Hint: they have news websites in OTHER COUNTRIES.

      No, the cold truth is that the market value of news has crashed, and it will not get back up again. Get used to it.

    • Ron Goodwyne

      @Rob Levine

      While this may be an interesting question, it has no bearing on the topic at hand. “The press” whether in the form of newspapers or online does not exist to create jobs. Job creation is a wonderful thing but no company exists to create jobs and it is not the job of Congress or the government in general to ensure that a particular industry is profitable or that it creates jobs. Indeed, were it not for government coercion in the form of union support the auto industry might still be profitable. If no one ever made a dime doing journalism online it wouldn’t change the arguments. But the fact is, if no one can make money doing it online then it will go away entirely, leaving a vacuum to be filled by print once again. Since that isn’t happening your implication doesn’t appear to withstand scrutiny

    • http://www.creditcards.com Daniel P. Ray

      I left the print world to become an online journalist 10 years ago, and couldn’t be happier about the decision. Mr. Levine, you don’t seem to have looked around very thoroughly. I can give you two examples from my personal experience. Both at my former employer, Bankrate.com, and at my current one, CreditCards.com I have hired — and yes, paid good salaries to — talented reporters and editors who do real reporting, write real stories and get to tell them in ways that my dead trees brethren could only dream of. And yes, both are very profitable companies.

  • http://www.our-hometown.com Stephen Larson

    The proposal to require granting of permission for other than personal use rather than the current “opt out” arrangement is reasonable and I’m sure most everyone will grant permission. The “robot.txt” protocol for granting permission is already in place, however, that protocol should be extended to allow for a time limit on how long the permission is granted for.

    • http://www.our-hometown.com Stephen Larson

      I neglected to day that if the “robot.txt” file does not exist, then permission should not be considered granted as I believe it is considered to be now.

      • solak

        Anyone concerned enough to want to protect their content should be willing to research the technology to implement that protection. The default should remain as it is: free access to all human-readable content by all search engines. If I can read it online, I want the search engines to be able to find it for me.

    • http://www.buzzmachine.com Jeff Jarvis

      Oh, come on, on its face requiring contact for every use is not just a chill but a deepfreeze.

    • Dominic Young

      The robots.txt protocol has been extended, by a project called ACAP (Automated Content Access Protocol). ACAP was written as, effectively, an amendment to robots.txt largely at the request of Google – who have not yet implemented it. If and when they do, publishers of any online content will have more control of the rules for which machines can access their content and how – then we’ll be able to see if a new market, and new dynamics, will emerge.

  • http://journalismschool.wordpress.com/ Chris Anderson

    From their bios:

    “Mr. Sanford is general counsel to the Society of Professional Journalists, the largest and oldest organization of journalists in the United States, and he has represented most of the leading national news media and book publishers including the E.W. Scripps Co., Tribune Co., The Hearst Corporation, ABC, NBC, Fox Television, AOL/Time Warner, National Geographic, Random House, Simon & Schuster and Bertelsmann, A.G.”

    So hes basically an industry lawyer, pure and simple. And Bruce D. Brown appears to be his sidekick.

    I think this need to be made crystal clear: these arguments, and the ones like them, do not reflect ignorance of the current structure of the internet. These are not stupid guys. Rather, they are deeply aware of the current structure of the web and want to change it, through lobbying and public policy, in order to benefit different sectors and industries than the ones who are benefiting from the current structure. The only good thing about all this is that we may be finally getting over the notion that the web is somehow a “natural” phenomenon, that it exists sui generis, independent of regulation or policy. Now, we simply have to decide which Internet we want.

    (I will say, as a side note, its pretty pathetic watching the members of the so-called fourth estate run screaming to the third estate in order to save their bacon. It would be interesting so see the rhetorical gymnastics required in order to present a so-called ‘independent press’ as a government watchdog if they were basically to be grated new life by government fiat.)

    • invitedmedia

      i love it when people like chris anderson take a minute to size up those fronting these (and other) types of arguments. thanks.

      i noted elsewhere that the company who insists they are a true bidder for gannett’s tucson property just received a going concern statement from their auditors, at least 2 delisting notices from the amex (or sec), said they raised their bid to $500,000 yet today’s ap wire story says it was originally $250,000 raised to $400,000, etc.

      i’m gonna side with the gannett spokesperson after reading this stuff– “ultimately, no buyer emerged” she said.

      that’s being rather generous.

      • Rob Levine

        >>>Rather, they are deeply aware of the current structure of the web and want to change it, through lobbying and public policy, in order to benefit different sectors and industries than the ones who are benefiting from the current structure.

        Indeed. Much as Google and the telcos have tried to change the Web, through lobbying and public policy, in order to benefit themselves. And, gosh it’s funny how the EFF’s definition of the public interest tends to have so much in common with Google’s!

        I don’t think I’m on your side on this, but I’m happy to see that someone is at least looking at it rationally.

  • http://tek-tips.nethawk.net Rob

    It’s been our experience, the last twelve years, that the market will make the decisions about publishing permissions, but they will make those decisions without the benefit of an understanding of the consequences. Content, right now feral, may continue to remain unbranded for the most part. The biggest publishing demand is for synthesizing content. If any single entity gets to dictate how information is accepted, how it is indexed, what the parameters and protocols will be, it is Google who will decide. Google may be the only brand when it’s all done.

  • http://www.ondotgov.com Gwynne Kostin

    Am dumbstruck and can be no more articulate than saying WTF?? on “owning” a piece of news. If AP prints it, they own it by calling it “hot news?” AP doesn’t MAKE the news, they report it. Sounds like some crazy derivative right. So does GM, in this example, give up their rights to the “hot news” when AP reports it?

    We are in transformative times, and there will be many people struggling to maintain what they know, the status quo. We have seen how well this has worked for the traditional record industry.

  • http://medialdigital.wordpress.com/ Ulrike Langer

    I agree with Chris Anderson that these lawyers and advisers know very well what they are doing: It’s called lobbying. The same procedure is happening in Germany, although none of our dailies have yet seen a double digit annual decline, nor has any of them folded due to lack of revenue. But the lobbyists are busy behind the scenes, nevertheless. Under discussion are: 1. being exempt from national VAT, 2. print getting a share of the radio and TV tax (yes, we are taxed for public television and radio, although it’s not officially called a tax) or invention of a new tax called ”culture flat rate”. That would be imposed on every device that is able to access the web and on every internet provider contract. It’s amazing what these people will come up with when they have realized their old business models aren’t working anymore, so someone should pay to make up for their lack of vision.

  • http://surveys.cvent.com Sherrie Mersdorf

    I think it’s so silly that the “old media” needs to be “protected” from technology. Why should they be protected? Why do entire industries feel like they should get special protection all of a sudden? Grow up, get over yourself, and figure out a way to be a viable, profitable (or nonprofit if that’s what you’d prefer) organization. Are “old workers” being protected from “technology” is someone else going out of their way to help them keep up? Unless I missed something, they’re not. It’s the individual’s job to keep up, so why isn’t it the organization’s job to keep up?

  • http://thenoisychannel.com/ Daniel Tunkelang

    Jeff, for once I mostly agree with you. The copyright changes make no sense–especially considering that most sites indexed by search engines *want* to be so indexed. One could make the argument that indexing should be opt-in rather than opt-out, but it seems a bit late for that. And I’m glad you agree on lifting ownership restrictions.

    But I disagree with you on one point: I’m surprised you don’t take the additional step of agreeing that news companies should be given antitrust exemption. To the best of my knowledge, you don’t believe that Google should be regulated, despite it serving as a gateway to much of the world’s information for much of the world’s–and, in particular, much of the United States’s–population. Why shouldn’t the news companies be allowed to work together in order to counterbalance Google’s market power?

    • http://www.buzzmachine.com Jeff Jarvis

      I”m not for antitrust exemption to collude on pricing. I’m OK with their being able to combine.

      • http://thenoisychannel.com/ Daniel Tunkelang

        I’m not an expert on antitrust law, but I don’t see much of a difference. If companies combine, then they collude on everything, including pricing. My point is that the news companies should be allowed to act in such a way as to get them out of their current prisoners’ dilemma, where no individual news company (except for the WSJ) dares to jump off of the free, ad-supported content model because a they’re not allowed to make decisions in concert. Even if news companies were allowed to act in concert, anyone who wants to give away news for free could still do so.

        Please explain why you are against this. Isn’t this a true market approach? After all, anyone can set up their own news organization–it’s not like the existing companies have impenetrable barriers to entry. If anyone has a near-monopoly right now, it’s Google, with 73% of search traffic. Shouldn’t the little guys–in this case, the news companies–be allowed to co-operate (or collude, if you prefer the more loaded term) to have comparable market power?

      • Conal

        Daniel, if anyone who wants to give away news for free can still do so, then make no mistake – some will want to do so! The more news distributors who defect from the status quo to a pay-per-view model, the more profitable the ad-supported “giveaway” model will become.

        So combination will not solve their problem.

        To solve their problem they would have to take the decidedly non-free-market approach of restricting publication of “hot news”. But I don’t see that that would be enough to save the dinosaurs either, and frankly I don’t see how they can make that one fly anyway, in a global context.

      • http://thenoisychannel.com/ Daniel Tunkelang

        Conal, so are you agreeing that the antitrust regulation of the news companies is unnecessary, and that there is no harm in allowing them to collude on pricing?

        The hot news doctrine is different issue–is I understand it correctly, it is an attempt to overextend copyright. Here I am inclined to agree with Jeff that it goes too far, trying to make knowledge itself copyrightable.

      • Conal

        Daniel: No I don’t agree it would be harmless.

        Give them an inch and they’ll take a mile. If they’re allowed to avoid competition they’ll only fight for exclusive ownership of newsworthy events (“hot news”). Worst case; they get what they ask for. Why allow their delusion to drag the whole sorry affair out? Better they bite the bullet now and make the necessary changes. Otherwise there’s a greater risk that the residual value in those media organisations will be squandered.

      • http://thenoisychannel.com/ Daniel Tunkelang

        Now I’m confused. The purpose of antitrust law, as I understand it, is to prevent anyone or any collective from amassing so much market power that competition suffers. Is there a real threat that news organizations, by working together, will do so? That was surely a threat in the past, but hardly seems to be a threat today.

        If anything, the more serious anti-competitive threat to would be Google, with its 73% market share. Indeed, I’ve witnessed the chilling effect that Google’s power has on both old companies and startups. I’m not suggesting that Google’s behavior falls afoul of antitrust law. But I do think the government regulation of news companies may be an approach that no longer makes sense in a Google world.

        In any case, this has *nothing* to do with the misguided “hot news” doctrine.

      • Conal

        Daniel, look at it this way: for purely technological reasons the value of their generic news product has fallen – for good! Subscription prices and ad revenue are falling. Their is going to be a shakeout, however it happens. If the number of “generic news” outlets falls sufficiently, their ad revenues will be spread thickly enough to make the remaining outlets profitable.

        But I think their agenda is somewhat different – they want to combine not against their remaining competitors, but against consumers. They (Murdoch for example) want to make consumers pay for news, like they used to (partly) do for newspapers. This is a fools’ game, but I believe they are in fact fools (like the authors of this Washington Post nonsense). So long as there are defectors from the user-pays model, they can’t really win. That’s why this strategy makes sense only as part of a corporatist anti-free speech agenda exemplified by their proposed attacks on news aggregators, the outrageous “hot news” doctrine, etc. which basically amount to the news media relying directly on state power.

        As Francine Hardaway points out below, they are stuck with assets which have, objectively, fallen in value, yet they are not reconciled to that loss, and imagine they can prop up that value through the power of the state.

        The more that newspapers continue to face the discipline of competition, the more chance the shakeout can proceed without this crypto-fascist scenario materialising.

  • http://twitter.com/kevinheisler Kevin Heisler

    Hi Jeff,

    Surely The Washington Post can appreciate the irony of the B-H law firm, foes of FDR, the New Deal and the TVA, arguing for a non-profit news industry. That Baker-Hostetler brags about representing MLB in the steroid investigations is probably more than most investigative reporters at the Washington Post would care to know about their publisher.

    Wouldn’t it be more efficient if Baker Hostetler lobbied their clients to spend more money advertising in newspapers?

    Here are the clients that the law firm lists on its website:

    ABC, Inc. Bayer Corp. Boeing Cardinal Health, Inc. CNL Colgate-Palmolive Co. Corning EDS ExxonMobil Thermo Fisher Scientific
    Ford Gruner + Jahr HCA Hyatt IBM KeyCorp KLM Major League Baseball
    Microsoft Corp. Morgan Stanley Schlumberger Sprint Nextel State Farm
    The E.W. Scripps Co. The Progressive Corp. Trammell Crow Co. Verizon Wachovia

    The CEOs of those firms, with perhaps the exception of EW Scripps, would throw Baker-Hostetler out on its proverbial ear if the burden of increasing ad spend in newspapers fell to the boardroom rather than the halls of Congress.

  • http://www.techcrunch.com michael arrington

    sounds like they’re mirroring the music industry just as the music industry is pulling their head out of their ass.

  • http://www.freepress.net Timothy Karr

    I dug into Sanford and Brown’s client histories via the Baker Hostetler Web site and elsewhere. It reads like a who’s who of conglomerated media. Here’s my analysis: http://twurl.nl/l3zw6v

    Both Brown and Sanford are nostalgic for the corporate media oligarchs that predated the Internet. This fantasy is so far removed from the contours of today’s media landscape that it’s easy to think of these two lawyers as antiquated barristers who rely on secretaries to print and hand deliver their email.

    They aren’t, and that’s what’s scary.

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  • http://daggle.com Danny Sullivan

    Robots.txt is an efficient system that’s existed fir more than a decade for publishers to prevent search engines from accessing their content. We hardly need some new law to enact what’s already in place.

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  • http://Everything-Everywhere.com/ Gary Arndt

    Google should call their bluff.

    They should call a press conference and say if any newspaper will come forward and back up what this attorney said, that they feel that indexing their site is infringement of copyright, they will immediately remove any and all mention of them from all Google search results.

    Of course no one would do it. This isn’t about infringement, this is about trying to shakedown Google for money. The fact is, there are hundreds of news sources out there all reporting on the same thing, and if one is removed from Google the rest will all just move up a notch and it will drive more traffic to them.

    All the while they are complaining about infringement, they are complaining about smaller blogs and news outlets getting ranked ahead of them. You can’t have it both ways. They are bitter that they no longer have a monopoly on the news anymore.

    Let them have an antitrust exemption. Who cares. It wont help them if they don’t have a good business model, and competitive pressures will only make trying to raise prices push more advertisers to the web.

    • Peter

      I think Google needs to take a scortched-earth approach to lawsuits – delisting folks sueing Google until the lawsuit is settled. Include it in the terms-of-use so that it isn’t a surprise.

      I agree with you that newspapers have a failed business model. Their model has been that advertising makes up the vast majority of income (more than 80% in some cases is advertising, vs subscription and stand sales). Craigslist is one of the biggest threats to the classified section, and when counties are able to post legal notices on web pages instead of paying for pages and pages of notices in local papers, the papers scream bloody murder.

  • http://blog.stealthmode.com francine hardaway

    I agree wih Arrington above. BUT to add to it…my daughter-in-law and four friends (two of whom just won Pulitzers the week after the East Valley Tribune (AZ) laid them off) just started an online vehicle called The Arizona Guardian to track AZ state government. They have been in business for three months, and already have a larger than expected following, although they aren’t quite making what they wish. It’s the usual problem: people want it free. Some lobbyists, however, have been willing to subscribe.

    All the reporter/partners want to do is pay the bills and be a government watchdog for a legislature that is a laughing stock. They are terrified of being entrepreneurs, however, because they all have families. Every so often I go down to their basement office and give them a pep talk about how they are at the inflection point in new delivery and they should stay strong — they WILL make it, because this problem of how to fund news WILL be addressed. I use the music industry as my example, as Mike does.

    Fortunately, Mary K and her friends don’t have a big burn. But these media lobbyists have committed the cardinal sin of incurring overhead — buildings, presses, etc. That’s what they are trying to protect. I don’t think this argument, at bottom, is about intellectual property; it’s about assets. The reporters, like the musicians, are unwitting tools in the fight to protect physical assets, even though the reporters don’t own the assets.

    You might as well call the attorneys “estate planning attorneys” as “media lawyers.”

    • http://due-diligence.typepad.com Tim Oren

      I think you’re on to something about the assets argument, and can take it one step further: If the physical plant including presses, office real state, and (even more) the acquired ‘goodwill’ were all marked to market the leverage ratios on the newspapers’ books would be truly horrendous. That could well trigger default provisions on outstanding loans and bonds, and certainly preclude access to further financing at any but desperation terms.

      The real issue is what is ‘market’. It’s one thing if you can continue to argue that there’s a viable subscription-based hard copy business model, and maybe, just maybe, the government will step in to bail it out. It’s quite another thing if it’s obvious to a prudent observer that the legacy business model is no longer viable, even as an end-of-life cash cow. In the latter case, most of those assets should be valued at zero or scrap at best. And the offices will end up on the already-imploding commercial real estate market.

  • http://blog.hact.net Aaron Huslage

    These media lobbyists ignore the technological solutions to the problems they say they want to solve. Any website can easily prevent a search engine from indexing their site with a very simple file called robots.txt. Any website can also redirect search engines to another place to index content, thus preventing them from “taking entire web pages” into their index. In short, there are technological solutions to the issues that these lobbyists bring up. Their lack of knowledge, understanding or their overall blindness to these solutions begs the question of what they really want.

    They don’t want technological solutions to what are essentially technological issues. They want to stay the same and return profits to their previously obscene levels. They don’t want to change. This phenomenon, while not new in corporate culture, has become all too prominent for large companies all over the world.

    Companies are no longer built to survive, but generate instant short-term gains for shareholders. These shareholders will continue to extract “value” from these companies until there isn’t anything left to extract. Anything that in any way minimizes short-term value gain is anathema and must be mitigated in any way possible, typically through the legal system. In the end, these companies will die or be forced into some sort of zombie state that makes them more irrelevant than they already are.

    Media companies should listen to the people telling them that they are going to die. They should decide that long-term sustainability is better than any short-term “fix” and revamp themselves into something useful. There is too much real human value out there that is being wasted at the hands of those who see them as short-term assets.

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  • Rob Levine

    Since there’s so much talk about lawyers, I’d like to point out that Google faced some of these issues in a Belgian court – and lost. Don’t know much about Belgian law, but I’m surprised none of you “experts” mentioned it.

    Also, @ Arrington,
    >>>sounds like they’re mirroring the music industry just as the music industry is pulling their head out of their ass.

    If you can extricate your own big head from your equally large behind long enough to grab a glimpse at the sales charts, you’d see that two of the top five albums last year were barely available online. (AC/DC wasn’t; Kid Rock was, only on Rhapsody, which paid an advance to get it.)

    • invitedmedia

      my question is: who the hell buys ALBUMS online?

      we generally like to buy by the piece.

      nice try though.

      • Rob Levine

        Just to be clear, albums in this case refers to album-equivalent sales, as counted by Nielsen SoundScan, where 10 tracks counts as one album. So these acts were 2 of the 5 top sellers of _music_ in 2008.

        “We” may like to buy by the piece but “they” like to sell by the album. And they made more money by doing so. You may not like that, but it’s an indisputable fact. Incidentally, despite the underreported speculation of bloggers, AC/DC has not suffered more piracy as a result of keeping its music off legal download stores; according to Big Champagne its music is pirated _less_ than that of Led Zeppelin, which it handily outsells.

      • invitedmedia

        (hopefully this formats under rob levine’s reply to my earlier question)

        well, “they” like to sell by the album is losing in that report, rob–

        album sales are down -14% yoy per soundscan 2008

        at the same time, “we” like to buy by the piece gained +27%.

        those trendlines do not bolster your case.

        here’s a bit of a timely analogy– the 789 chrysler dealers who are being chucked by the corporation have on-lot nearly 44,000 cars to peddle.

        that’s the difference between being pressed, assembled, shipped and sitting “on the shelf” somewhere vs. on demand.

        i swear there will come a day (soon) when you’ll order your car online equipped with only the options you want (by the piece) vs. the “album” version sitting in huge #’s on dealership lots the country over.

      • Paul Evans

        “It was a grand year for the music business in 2008, at least according to one statistic in the Nielsen Company’s annual report. Total music sales topped 1.5 billion units, a record since Nielsen SoundScan sales tracking began in the early 1990s.

        “Good news, right? Well, according to Nielsen, more than 1 billion of that total were digital sales of individual tracks, which typically sell for 99 cents each. Sales of much more expensive albums, the traditional backbone of the music business came in at 428 million, a 14 percent decline from 2007 – and that wasn’t a very good year.”

        http://www.ocregister.com/articles/which-singers-sold-2271030-the-best-in

        So the moral of this story would be that in order to sell people albums — forcing them to buy tracks they don’t want in order to get those that they do want — you simply refuse to sell the separate tracks. What is the natural outcome of this? Piracy and lower sales.

        Record companies acknowledge their revenues are slipping (http://76.74.24.142/1D212C0E-408B-F730-65A0-C0F5871C369D.pdf) and the RIAA (recording industry trade association) estimates that for every 5 online sales 95 units are pirated. So while I understand record companies want to sell albums, I don’t think that is a good business strategy any more.

  • http://twitter.com/moon paul

    I want a Law to save Jazz

    • http://www.badooble.com Badooble

      How about the Ragtime Revitalization Act!?

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  • Rob Levine

    @ Eric, I think Jeff was asking the _other_ Rob to identify himself.

    I’m, well, Rob Levine – I teach with Jeff at CUNY (and I should make clear that I like and respect him, even though I rarely, if ever, agree with him) and since October I’ve been the editor of Billboard. Before that I was a freelance writer for various newspapers and magazines – my byline is Robert Levine.

    I’m curious why you’d think I need to “own up” to my identity, since I haven’t done anything wrong. If I were shy about my opinions, I wouldn’t post them under my own name.

    @ invtited, the trends you mention do not allow artists or labels to make much money. By bucking the trends, AC/DC, Kid Rock and the Beatles make enormous amounts of money. You may like this or not, but their strategy has helped them profit. There’s a larger point here about doing what’s best for you and not digital media companies that have their own interests at heart – hence my comment about Mr. Arrington’s head, his behind, and the need to extract the former from the latter.

    • http://www.buzzmachine.com Jeff Jarvis

      Rob,
      What I meant is to identify your background for the benefit of readers of the comments. I think people find it helpful. Folks here know that Bob Wyman, for example, is a tech entrepreneur of long-standing who now works for Google. They know more than they likely care to about me. It’s not so much a matter of transparency as it is of context for your remarks. So thanks.

      • Rob Levine

        Ah, OK. Sorry I misunderstood.

        In that case, I should make clear that I have an obvious bias: As someone who wrote for newspapers (mostly the New York Times) and enjoyed it, I have some interest in their health (although I’m not writing for any now). When I was a freelancer, I was constantly frustrated that both my ideas and often my exact text were constantly stolen. (You can question my terminology about ideas, but I’d often see entire articles reprinted on Web sites, which is both _clearly_ illegal and morally indefensible.)

        As the editor of Billboard, my livelihood depends on the music business – less than you’d think on the major labels, more than you’d think on tech startups and mostly on other parts of the business entirely (concerts, etc.). But my analysis of Kid Rock and AC/DC is based on indisputable facts, available to anyone who cares to look.

        • http://www.buzzmachine.com Jeff Jarvis

          Perfect, thanks!

    • invitedmedia

      rob, thanks.

      • http://abriefhistory.org Bradley J. Fikes

        But my analysis of Kid Rock and AC/DC is based on indisputable facts, available to anyone who cares to look.

        Cherry-picking a couple of examples as if they refuted the larger trend toward digital music proves nothing, except that you’re too invested in the old system to accept change.

        And that you’re bitter against people like Arrington who are part of that change.

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  • Rob Levine

    >>>Cherry-picking a couple of examples as if they refuted the larger trend toward digital music proves nothing, except that you’re too invested in the old system to accept change.
    And that you’re bitter against people like Arrington who are part of that change.

    Please read more carefully – I NEVER said there’s not a trend toward digital music! I simply said that some bands _may be_ better off bucking that trend. If you’d care to share a contrary example, I’m all ears. But insulting me just makes it seem like you’re out of ideas.

    Incidentally, I’m not the slightest bit bitter at Arrington – I would never want to do what he does, at least partly because it doesn’t seem to make him very happy. I just think he’s self-important and ignorant about some of the traditional media businesses he writes about.

    • http://abriefhistory.org Bradley J. Fikes

      I simply said that some bands _may be_ better off bucking that trend.

      No, you didn’t. You said:

      By bucking the trends, AC/DC, Kid Rock and the Beatles make enormous amounts of money. You may like this or not, but their strategy has helped them profit.

      No “may be”, that was an absolute statement.

      The Beatles is sui generis, and achieved iconic status long before digital music arrived. Same with AC/DC. Kid Rock emerged when digital music was still in its infancy as a mass phenomenon. They have lots of legacy fans. Now if a new group had rocketed to big sales without a major digital presence, you’d have a stronger point.

      Your revised statement is more defensible, but doesn’t say very much. If the secret to making big sales outside of digital is to have already been a megaband with legacy fans, that’s not very helpful to bands arising in the age of digital music. But maybe you have some examples pertinent to those bands. If so, let’s hear them.

      And if insulting you means I’m out of ideas, ponder what your insult to Arrington says about you.

    • Dale Harrison

      The music industry example is not so different from the newspaper business. Bands such as AD/DC and the Beatles are uniquely able to exercise control over the distribution of their individual works. This power makes them exceptions to the broader trends.

      The core issue is that 20 years ago distribution could exercise overwhelming market power. That market power forced artist, writers, advertisers and audiences into the back seat…leading to lower prices paid to content producers and higher prices paid by advertisers and audiences…and above-market profits flowing to the record companies, the newspapers, etc.

      One of the hallmarks of an industry where distribution has excessive market power is the tendency to bundle low-value and high-value products into a single package and price based on the high-value components. The album, the newspaper, the TV channel are all examples of this type of bundling and pricing behavior.

      It’s not based on consumer choice and it doesn’t serve the needs of advertisers or subscribers…it a pure exercise in market power on the part of those that control distribution.

      Technological changes have re-written the equation…and underlying consumer choice is now surfacing as tectonic shifts in consumer behavior. The track, the individual article, the individual TV show have become the default unit of consumption. By having each unit of consumption fairly priced by the market, the excess profits flow out the industry into other parts of the economy.

      It’s important to note that this consumer dis-satisfaction has always been there; it just couldn’t be acted upon. The changes in technology simply allows people to act on the repressed consumer sentiment that’s always existed.

      Like the French aristocracy that fled abroad in the 1790’s, there are ways to shield oneself from the effects of what’s happening…but the lesson of history is when the will of the Third Estate is unleashed, it ultimately trumps the power and wishes of the First and Second Estates.

      It seems the Fourth Estate has yet to learn those lessons of history…

      Dale Harrison
      dale.harrison@inforda.com

      • Dale Harrison

        One last thought…this isn’t just about the Internet or Google. It’s a reflection of technology democratizing choice and allowing repressed consumer behavior to surface.

        One has only to look back at the great media disruptor of 1980’s…the TV Remote Control.

        It lowered the cost for individuals to act out the wishes inside their heads…and the effects on the TV industry are still rippling through time to this day.

        Google and the Internet is just a really big version of the TV Remote control…

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  • Rob Levine

    @ Bradley, I said _some bands may_, while the Beatles, Kid Rock and AC/DC _definitely did_. No conflict. I think Zeppelin, the Stones and other bands should have stayed offline as well. As far as new bands, none have tried it. I hope some do.
    >>>And if insulting you means I’m out of ideas, ponder what your insult to Arrington says about you.
    It means I don’t suffer fools gladly.

    @ Dale,
    >>>It’s important to note that this consumer dis-satisfaction has always been there; it just couldn’t be acted upon.

    If this is true, why do most blogs get their news from old media? In most cases, they just rephrase it. Jeff just _argued for their right to rephrase it!_ If they were genuinely dissatisfied with the reporting of the MSM, they would do more than critique it. So far, few blogs do.

    As far as music, the “repressed consumer sentiment” amounts to nothing more than the fact that people want everything for free. That’s why there are laws. We haven’t yet been able to enact laws here to protect intellectual property, but I hope we will. France just did.

    Mr. Arrington constantly argues that information wants to be free. But if I took his writing and sold ads against it, I suspect he’d feel differently. It seems that the information that wants to be free is always the information that belongs to someone else.

    • http://abriefhistory.org Bradley J. Fikes

      As far as new bands, none have tried it. I hope some do.
      Then give these new bands specific pointers on how they can be more successful with off-line sales than with online sales. Tailor your advice to the overwhelming majority of bands who are not megastars. The megastars don’t need advice.

      If this is true, why do most blogs get their news from old media? In most cases, they just rephrase it.

      That’s an old chestnut, particularly ill-timed with MoDo’s plagiarism of a blog. See: http://tinyurl.com/o6kaeu

      Beyond that, it is also very common — as the Dowd/Marshall episode illustrates — for traditional media outlets and establishment journalists to use and even copy content produced online and then present it as their own, typically without credit. Many, many reporters, television news producers and the like read online political commentary and blogs and routinely take things they find there.

    • Dale Harrison

      @Levine,

      It’s important to separate consumer behavior from producer behavior…my argument about how content is consumed rather than produced.

      You’ve staked out what is clearly the morally defensible position and its interesting to see what morally dubious contortions people are taking as they attempt to refute your position. Your position is absolutely correct…but I’m not certain that it points to way to workable solutions.

      When I talk about consumer sentiment and behavior, I’m attempting to take a realpolitik approach.

      The law serves two very different purposes. One is to signal society’s moral position and the other is to codify and channel pre-existing behavior. The 18th Amendment (enacting prohibition) in an example of the first; the 21th Amendment (repealing prohibition) is an example of the second.

      The law tends to be a weak protection against the tide of sufficiently widespread consumer sentiment and behavior (think marijuana). People really want to be moral and lawful…so long as it doesn’t significantly restrict what they otherwise really want to do.

      My core argument is that a Business Model that relies on legal and moral muscle to alter or control widespread behavior and sentiment will be significantly LESS successful than a Business Model that accepts consumer behavior as fact and chooses to follow. As with the oak and the willow analogy…in the strong wind of consumer sentiment, the oak will crack and fall and the willow will bend and survive.

      The past decade of frustration the music industry has faced should be some indication. If there’s one lesson iTunes has taught us, its that a business model that allows people to stay within the law without having to fundamentally alter their baseline behavior will be fantastically successful. That’s truly the win-win position. Unfortunately, if history (and current behavior) is any guide, it seem unlikely the newspaper business will be capable of developing such a solution.

      The realpolitik position is value neutral…its simply an observation that successful business is more about following the stampeding herd than shouting at the herd for stampeding…

      Dale Harrison
      dale.harrison@inforda.com

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  • Robert Levine

    >>>Then give these new bands specific pointers on how they can be more successful with off-line sales than with online sales. Tailor your advice to the overwhelming majority of bands who are not megastars. The megastars don’t need advice.

    Funny how no one says that when they celebrate the “daring” of cyberscabs like Radiohead and NIN, whose strategies would be equally ineffective had they not been on major labels! My advice: Release deluxe editions that can be sold at a premium (Steven WIlson does a great job with this), include video content that’s more difficult to steal and make an artfully produced album that will sound lousy on MP3. Also: spam file-sharing services with viruses.

    >>>If this is true, why do most blogs get their news from old media? In most cases, they just rephrase it.
    That’s an old chestnut, particularly ill-timed with MoDo’s plagiarism of a blog. See: http://tinyurl.com/o6kaeu

    It is _routine_ for blogs to take news from old media. It is _rare_ for old media to take news from blogs. When old media does this, they own up to their mistakes. When bloggers do this, they enlist Jeff to insist on their right to do just that. Or didn’t you read what you’re commenting on?

  • http://www.familygreenberg.com/index2.php Brian Greenberg

    Interesting conversation, folks. A few quick observations, if I may:

    – No one has yet mentioned the irony of Mr. Jarvis kicking off this discussion by quoting from the Washington Post in the first place.

    – Those arguing for newspapers are really arguing for primary source journalism, which typically exists (almost entirely) within newspapers today. The infrastructure costs that are weighing the papers down right now are working to the advantage of the primary source journalists. How many bloggers get a seat in the White House Briefing Room? Access to interview a corporate CEO (especially when the purpose is to investigate corruption or wrongdoing?)

    – My personal (unsupported) theory of music is that good music will sell better than bad music. If someone could do today what the Beatles did in the 60s, they’d sell a billion songs whether they were online or not. This discussion is OK around the fringes, but quality trumps distribution. Whether the same is true of journalism is, perhaps, a question for this group to ponder…

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  • http://due-diligence.typepad.com Tim Oren

    The lobbyists and the executives employing them should think twice about these tactics. I’ve written elsewhere about the financial crisis facing the industry due to the need to roll over large chunks of debt this year and next. Note that the mighty NYT was reduced to taking funds on rather exorbitant terms from Carlos Slim in order to do a roll over, since it can no longer access the public markets. Others are worse off.

    Now consider the fate of recent private investors in troubled businesses that are ‘politically favored’ by the government. How did the 2008 investors in Fannie Mae preferred stock make out? Think the senior Chrysler debt holders are happy? Have some soon-to-be-bankrupt GM bonds?

    If the Obama administration or Congress start doing ‘favors’ for the newspapers, there will be a bill to be paid. Current precedent shows that it will be passed on to private investors to the extent possible. The market is not ignorant of the fact, and if the industry is not redlined already, it will be as soon as moves of the sort described are seriously considered.

    Putting out these trail balloons shows that those funding the lobbyists are either not thinking it through, or are in desperation because they’ve already found out that even hot-money private investors aren’t going to take their IOUs any more.

  • http://abriefhistory.org/ Bradley J. Fikes

    My advice: Release deluxe editions that can be sold at a premium (Steven WIlson does a great job with this), include video content that’s more difficult to steal and make an artfully produced album that will sound lousy on MP3. Also: spam file-sharing services with viruses.

    What you have done is describe goals, but not told bands how to get there. That is the consistent flaw in all you’ve said. It might be good for the Beatles or AC/DC, but they’re not the bands who need help. Let’s take a look at your suggestions:

    — Release deluxe editions sold at a premium?
    You’re assuming the band has already got enough of a draw to accomplish this. The problem is, how do these bands build up the buzz to get to that point? Video content is always nice, if there’s already a fan base. (I have video DVDs of several bands, for example). But you don’t say how to get to there from here.

    — Make an “artfully produced” album that sounds lousy on MP3? Technologically, just how do you do this? Do you have an example in mind? And what about the negative reaction from fans who want to listen on their MP3 players? (They’ll hack it, btw).
    — Spam file-sharing services with viruses?
    That’s been done for years. It hasn’t worked.

    It is _routine_ for blogs to take news from old media. It is _rare_ for old media to take news from blogs.
    Assertion is not proof. Reporters prowl blogs all the time to get ideas. Maybe you don’t, but a sample of one isn’t much.

    If you are going to tell new bands to shun digital, you’re going to have to do more than toss around obvious observations and rant about online thieves.

    Your self-interest here is plain; online music threatens your livelihood. I’m sorry about that, but the world isn’t going to change course just because you and music industry executives don’t like it.

  • Robert Levine

    >>>Release deluxe editions sold at a premium?
    You’re assuming the band has already got enough of a draw to accomplish this. The problem is, how do these bands build up the buzz to get to that point?

    Untrue. Plenty of small bands have put out well-designed packages and benefited from them. Mark Olson is one.

    >>>Make an “artfully produced” album that sounds lousy on MP3? Technologically, just how do you do this? Do you have an example in mind?

    Yes: Use reverb. The new U2 sounds terribly in lossy formats. They should have promoted this fact.

    >>>Spam file-sharing services with viruses?
    That’s been done for years. It hasn’t worked.

    No , since it’s illegal in the U.S. to distribute viruses. I would set up an offshore corporation to do this. If pirates can shop for courts, so can artists.

    >>>It is _routine_ for blogs to take news from old media. It is _rare_ for old media to take news from blogs.
    Assertion is not proof. Reporters prowl blogs all the time to get ideas. Maybe you don’t, but a sample of one isn’t much.

    You can’t possibly really believe that old media takes more from blogs than blogs do from old media, so I’m going to just ignore this. Again, see the original post . . .

    >>>Your self-interest here is plain; online music threatens your livelihood. I’m sorry about that, but the world isn’t going to change course just because you and music industry executives don’t like it.

    Online music doesn’t threaten my livelihood at all – Billboard actually gets quite a few ads from digital companies and our conference business is thriving. We’re doing fine. (Indeed, I do quite well _because_ I’m not online. Most online writing jobs pay really poorly.

    What I object to , however, is the assertion that only I have a self-interest. Fact is _everyone_ does.
    -YouTube want to use copyrighted copy, so they lobby to undermine copyright
    -Telcos want to be held harmless for copyright violations, so they lobbied for the “safe harbor” provision of the DMCA
    -People don’t want to pay for stuff, so they invent ridiculous theories on why it’s OK to steal it.
    -Jeff wants to promote his consulting business, so he makes dire pronouncements about the newspaper business. (Not saying they’re not true, just that he doesn’t hesitate to point them out.)

    _Everyone_ has a bias. I’m open about mine: I hate when people steal my creative work. This actually doesn’t cost me money – I just hate it on principle.

    Look: There are dozens of arguments you could make against what I said, and Chris Anderson, Jeff and others have made some smart ones (and I appreciate that). But you haven’t said anything of any real substance. Please tell me how _you_ would make money in the music business.

    • http://abriefhistory.org/ Bradley J. Fikes

      Please tell me how _you_ would make money in the music business.

      You’re the one who said he knew. Your reverb/U2 example, assuming it’s correct, has the same flaw as your other examples: they’re not applicable to a new band without a large existing following that can take such a risk.

      And when a technological fix is found for the reverb problem — and you know it will be — what then?

      This is part of your larger habit of assuming without showing how it’s done:

      You’re assuming the band has already got enough of a draw to accomplish this. The problem is, how do these bands build up the buzz to get to that point?

      Untrue. Plenty of small bands have put out well-designed packages and benefited from them. Mark Olson is one.

      And Mark Olson MP3s are available on Amazon.com. Your answer is irrelevant to the question of how to get success by staying offline.

      You can’t possibly really believe that old media takes more from blogs than blogs do from old media, so I’m going to just ignore this. Again, see the original post . . .

      Strawman. I said:
      Assertion is not proof. Reporters prowl blogs all the time to get ideas. Maybe you don’t, but a sample of one isn’t much.

      Just show me some examples of bands or artists whose careers begun in this century, who stayed offline and achieved some measure of success. Then you’ll have a story worth telling.

    • Paul Evans

      Do you mean Mark Olson formerly of the Jayhawks? I would be more interested in hearing how some band just getting started can do well selling a deluxe boxed set or how — if they aren’t online — they might go about even getting discovered. I was a music reviewer in the early 1980s. I talked to loads of bands scraping together pennies for studio time, to knock out a demo, to burn a few LPs. I talked to record company A&R guys who were so inundated with unsolicited tapes that they threw many of them a way after listening for 15-30 seconds.

      Today new bands can build a following online without the ridiculous expense from just a few decades ago. Then, if they are any good, they can find an audience without record companies or even the need to release an album. Nevershoutnever! comes to mind.

      Personally, I don’t care what record companies should or shouldn’t do to survive. They will do what they will and survive or not. I am personally invested in what happens to newspapers — because I work for one. If I thought what they were attempting to do would work, I probably wouldn’t care if it met my ideals for the fourth estate. I would just be happy I would keep my job. Thing is, I don’t think they will work. It seems fairly clear that what they are doing will accelerate their decline at least in the near term and only result in survival for the AC/DCs of journalism (eg Washington Post, New York Times and Wall Street Journal). I think that is unfortunate for a whole bunch of reasons, but the biggest one at the moment has to do with me paying my mortgage.

      • http://abriefhistory.org Bradley J. Fikes

        Paul Evans,
        Yes, that is the Mark Olson I presumed Rob and you meant: http://tinyurl.com/pjtee3 I’m sure there’s other digital stores on the various online sites.

        Back to Rob:
        Yes, I believe in buying music, not violating copyright. I just prefer to get it online. I used to belong to eMusic, and may again at some point. Now I prefer to buy from Amazon.com because there is no recurring fee.

        It’s the music I’m interested in, not the physical container. Do you really think I’m going to forsake my MP3 player for a CD player, and carry around tons of CDs?

        I know the shift in buying online poses a great challenge for music companies. But if your answer is to inconvenience the customers, you’re going to lose.

        There was something else you said that bears examining (my emphasis):

        Online music doesn’t threaten my livelihood at all – Billboard actually gets quite a few ads from digital companies and our conference business is thriving. We’re doing fine. (Indeed, I do quite well _because_ I’m not online. Most online writing jobs pay really poorly.

        So you personally do “quite well” because you’re not online?

        Well, what do you call this?

        And how about this?

        So if your point is so valid, why don’t you lead by example and take Billboard offline?

  • Rob Levine

    Hi Paul, I’m familiar with your work, which I like.

    I don’t have a specific vested interest in the survival of the major labels. HOWEVER, I think our mutual interest in the survival of newspapers implies that to some extent. If intellectual property is protected and respected online, then record labels and newspapers will survive, albeit in smaller, more modest formd. If it’s not, I think we’ll have all sorts of problems as a society that have little to do with newspapers OR record companies – most importantly a startling trade deficit (IP represents 5 percent of U.S. GDP and more of our exports) and a poorer culture. I would not want to live in a world where every book was based on a lecture series.

    >>>>>>I talked to record company A&R guys who were so inundated with unsolicited tapes that they threw many of them a way after listening for 15-30 seconds.

    As you seem to suggest, the problem isn’t the tapes – it’s the innundation! The Web won’t solve that! As a medium, the Web tends to reward not quality but self-promotion. The bands that explode on MySpace aren’t necessarily the best but the ones that spend the most time emailing with fans. That’s nifty. But many of the artists I like are ones who aren’t very personable – Bob Dylan, Elvis Costello, Eminem. As much as the present A&R system is badly broken, I would hate to see it replaced by an online popularity contest with points awarded for congeniality.

    Lastly, I was talking about Mark Olson. I’m not aware of any artist who’s broken without being online. I don’t think anyone has tried and failed, either, so there’s no data. I’d like to see an artist release an album solely on vinyl, then sue any site that put it up in European court by asserting his “moral right” – a well-established legal concept in most European countries that we sadly don’t have here in the U.S.

    But I will say that most of the artists who say they’ve exploded online have exaggerated the importance of the Internet to their careers, sometimes deliberately to play to the mob. Lilly Allen had a famous father, so she didn’t come out of nowhere. Both she and the Arctic Monkeys quickly signed deals, the former with a major. Boxer Rebellion, the UK iTunes sensation, had professional management and sought a label deal a soon as their albums started selling. The biggest U.S. MySpace discovery is probably Hollywood Undead; their career went nowhere on the MySpace label and they’re now doing far better at A&M/Octone, a division of a major.

    Simply put, it’s hard to find a band that has had a significant career by relying only, or largely, on the Internet. That may change. But it hasn’t yet.

  • Rob Levine

    @ Bradley
    >>>So you personally do “quite well” because you’re not online?
    So if your point is so valid, why don’t you lead by example and take Billboard offline?

    I should say that I don’t work for an online publication- I should have been more specific. Obviously, much of what Billboard does is online.

    How much of Billboard to put online is not my decision, of course – I’m the editor, not the publisher. Like every other publication, we’re struggling with these issues. I don’t have all the answers, and I don’t think anyone does.

    However, the magazine brings in far more revenue. And much of the revenue we do collect online comes from charging readers to view some content. Our solution has been to offer basics online for free and more articles in the mag and behind a pay wall. Think of the free site as a paperback and the magazine as a hardcover. While I’m not sure it’s the answer, I think it makes sense. What doesn’t make sense to me is how the NY Times makes the online experience _better_ than the print one by adding video, etc. While we’re pulling readers to a higher-margin product, they’re pushing them to a lower-margin product. I can’t understand that.

    I’m certainly not getting rich – believe me. But so far online sites don’t seem to pay very well. Few of them offer opportunities to take the time to understand complex issues. (Some do, and some newspapers stink, but print encourages a kind of thoroughness that the Web does not.) And most bloggers seem require a sort of factory mentality where one’s productivity is measured in the number of posts rather than their quality. I would rather be judged by the character of my content than by the content of my character.

    • http://www.buzzmachine.com Jeff Jarvis

      The Times is meeting new readers where they are, online. It is pushing readers to the future. In the longrun, print is only a cost burden. See the Globe.

      If I were you, I’d study IDG, which years ago made the transition from being a print to being a digital company. Gains in digital revenue long ago surpassed losses in print. Now, they say, print is a burden. http://buzzmachine.com/2008/05/05/print-sucks/

      Makes sense to me.

    • http://abriefhistory.org Bradley J. Fikes

      Rob,
      That is a fair answer. The newspaper I work for is also a print/online hybrid. And we certainly don’t claim to have the answer to this online conundrum. This is a transition period . . . to what, I wish I knew.

      What doesn’t make sense to me is how the NY Times makes the online experience _better_ than the print one by adding video, etc. While we’re pulling readers to a higher-margin product, they’re pushing them to a lower-margin product. I can’t understand that.

      I think of video and other Web extras as experimentation. This was never possible for a newspaper to do before. Presumably, if these extras are compelling enough, they should be able to bring in revenue, somehow. If they turn out to be uneconomical in the long run, they ought to be dropped. Video might make more sense for a television Web site, which already has the expertise.

      In the short and long term, newspapers need to learn how to sell online advertising, to train their account executives. They should be taking a cue from how Google does it. Google’s ads are mostly text-based, and not the in-your-face variety readers hate.

      If I were running the NYT, I’d put it on an emergency budget right now, to stop the bleeding. Being in hock for a quarter billion on very onerous terms to Carlos Slim doesn’t look very promising.

      • Dale Harrison

        >> In the short and long term, newspapers need
        >> to learn how to sell online advertising, to train
        >> their account executives.

        Much of my ad spend has been with print publishers that also maintained online properties. We designed our campaigns to track response by placement (including print) and the online placements were significantly more valuable for us.

        But when the account execs called on us, we had to practically beg them to talk about their online properties. They were completely focused on print placement and shockingly uninformed, even dis-interested in discussing online.

        As a result we could typically negotiate terms for online placement that were much better than it should have been. I’ve suggested to at least one publisher they should consider running a specialized sales team for online.

        I think the investment would pay off in higher rates and better educated clients. From an organizational standpoint, such a split sales team would likely not be tenable.

        Dale Harrison

  • Paul Evans

    >>Hi Paul, I’m familiar with your work, which I like.

    Judy Tenuta once told me that although I was sweet her heart was promised to Bobby Vinton. And even though my name may sound familiar, I didn’t write a number one single for The Polish Prince. Perhaps if I had, the Domestic Goddess would be mine.

  • Rob Levine

    >>>In the longrun, print is only a cost burden. See the Globe.

    You could call it a cost burden or you could call it a revenue multiplier. If the Times Web site draws people who didn’t previously read it, they’d need to draw a ton of them. If the Times Web site draws people who stop reading the paper, as it seems to, they’ve just made those readers worth about 1/10 of what they were before. If that’s the future, I’d nudge readers toward the past while I made plans for the future.

    Also, I always hear you talk about how print is doomed. But with a few exceptions online publications aren’t exactly thriving. Online, much was made of the closing of Portfolio (bloggers seem to like nothing so much as seeing others brought down to their level). Less was made of layoffs at Wired.com – where “free” may not work quite so well after all. And there have been online news reports – unconfirmed, naturally, as most such reports are – that Paidcontent has seen better days. And online CPMs continue to fall . . .

  • Paul Evans

    >>If the Times Web site draws people who stop reading the paper, as it seems to, they’ve just made those readers worth about 1/10 of what they were before. If that’s the future, I’d nudge readers toward the past while I made plans for the future.

    One can always nudge in whatever direction one wishes. The question is whether the readers will go along. Truth is The Times has been fairly forward thinking — for newspapers. Once the economic downturn has passed, they will find a level and likely see revenues grow as they adapt to the market and the market adapts to what remains. They are a singularity and will survive.

    For many other newspapers the time for making plans is gone. Attempts to nudge people will simply drive them away, hastening market decline and forestalling adaptation or innovation. For many US newspaper the opportunity to lock in the past has passed. Likewise they now lack the capital and patience to wait for the future (whatever it may bring). We can discuss the whys and wherefores, even point fingers at who is to blame (I heard someone at my establishment doling out some responsibility to our host — JJ — because he was consulting at our place as it went to hell). But that is unlikely to change the reality that many large and mid-size metros are simply doomed at this point. What will replace them may still have a print component, but will be predominantly online. Those entities will be built on the economy and advertising that comes after.

    As an aside, a colleague and I observed that the top pay for new hires at our place is now less than the starting pay we were offered when we came on board two decades ago.

    I may not entirely like what comes next. It may lack the size, scope, benefits and (possibly) ideals that I have come to a) depend on and b) love. But that won’t really matter. In most respects, what comes next is a fait accompli at this point. All the posturing by lawyers and politicians, and hand-wringing by newspaper owners and publishers won’t really make a difference — except in the noise level.

  • Peter

    Newspapers have an overinflated sense of their own worth. One example here in Denver is the Denver News Agency (1/2 of the DNA, the Rocky Mountain News, just stopped printing this year). FasTracks is the latest light rail expansion project here in the Denver metro area. The Denver News Agency has a printing facility that is along the planned route of one of the lines. They’re trying to hold the public transport agency hostage by demanding $700,000,000 to move the facility and “let” eminent domain proceed. Neither state nor federal law allows the public transport agency (RTD) to pay more than the real cost of the property which is closer to $15,000,000. In consequence, the local newspapers have taken a hostile stand towards public transportation until their temper tantrum is resolved in their favor.

  • Rob Levine

    >>>As an aside, a colleague and I observed that the top pay for new hires at our place is now less than the starting pay we were offered when we came on board two decades ago.

    And yet there’s plenty of money to pay managers and consultants!

    Salaries are falling mostly because of scabs – bloggers, as some people call them. Instead of encouraging people to write for free, we should be pointing out that they are undermining the value of our work. Don’t encourage them. Don’t hire them. And, above all, don’t let them pretend they’re the future of the Democratic party.

    • Paul Evans

      >>Salaries are falling mostly because of scabs – bloggers, as some people call them. Instead of encouraging people to write for free, we should be pointing out that they are undermining the value of our work. Don’t encourage them. Don’t hire them. And, above all, don’t let them pretend they’re the future of the Democratic party.

      I get where you’re coming from and also think the economics of blogging (at least for most bloggers) doesn’t really pay. But bloggers didn’t cause the problem, they are simply a product. The internet caused the problem — if you want to view it in those terms — both by allowing everyone to have a printing press and putting a different (lower) value on advertising (some would argue it is a more realistic/measurable value). If you want to be mad at something, be mad at the internet. If not for it, everything in the newspaper industry would be fine.

  • Rob Levine

    >>>www.businessweek.com/technology/content/may2009/tc20090518_532031.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis

    And another potential blog business model bites the dust. Here’s hoping they look into Arrington’s investment portfolio!

    • http://www.buzzmachine.com Jeff Jarvis

      I’m a long-time hater of Pay Per Post.

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  • Steve

    Good ridance to newspapers, why waste all that paper when people at most read 3 articles and then toss it.

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