Summary:  OK, OK, for those of you who self-identify as members of the digerati, you can file this posting under “Restatement of the Self-Evident.”  However, the always-reliable Pew Internet & American Life Project just released its findings on how Americans get news. http://www.pewinternet.org/Reports/2010/Online-News.aspx.

Most interesting to us are the “social networks” results—meaning the number of people who receive or share news via social networks.  This was barely an “industry” just two years ago.  Equally interesting is the percent of people who access such news via their mobile phones.  And, of course, we were sort of surprised that TV stills ranks as the #1 source.

The Details.

Paraphrasing the results of the study:

  • News from the Internet: Roughly six in ten get their news from online and offline sources combined.
  • #3 with a Bullet: The internet now ranks third behind the TV (local then national) as a news source.
  • Social Networks as News Networks: Three quarters of those who get their news online receive it via email or social media posts and a little more than half forward (or otherwise share) the news in the same fashion.  Moreover, 37% of Internet users have “contributed” to the news—including posts, comments, etc.
  • Portable: 33% of cell phone owners now access news on their cell phones.
  • Personalized: 28% of internet users have customized their home page to include news from sources and on topics that particularly interest them.
  • Clutter Cutters—Brands Matter: Most online users rely on a handful of sources.

So What?

What these results tell us at Global Capital is that the Web now reaches many, many people through multiple platforms and not just through “traditional” news websites accessed by a PC.  That seems to be dropping in popularity in favor of mobile phones and through the user “generated” networks represented by Facebook, Twitter, MySpace, Xing, you name it.

Thus, news travels fast and, in particular, through a network that becomes sort of iteratively self-selecting.  In other words, someone hears about a news event across several platforms, depending upon where they are in their day (and in some cases through multiple platforms at the same time) and then sends it out in one or more of several ways:  to all their friends;  to those who follow them on Twitter;  and to those who are friends on sites such as Facebook.

The platform almost doesn’t matter;  it just matters that it provides them the news (either directly from specified sources or through their social network connections) and that it then lets them forward it and in more than one-third of the cases, comment on it, as well.  Can you say the “Internet?”

One thing seems certain:  Substantial evidence of progress to the goal of:

Any content, anytime, any platform and with any interaction.

Draw your own conclusions, especially the business implications.  They are substantial.

James C. Roberts III is the Managing Partner of Global Capital Law Group and CEO of the strategic consulting firm, Global Capital Strategic Group.  He heads the international, mergers & acquisitions and transactional practices and the industry practices concentrating on digital, media, mobile and cleantech technologies.  He is currently involved in opening the Milan office.  Mr. Roberts speaks English and French and, with any luck, Italian in the distant future.  He received his JD from the University of Chicago Law School, his MA from Stanford University and his BS from the University of California—Berkeley.

The Global Capital firms counsel domestic and international clients on strategic and legal issues inherent in the deployment of intellectual & financial capital—a merger or acquisition, foreign market expansion, a strategic alliance, a digital content license, a mobile deal, foreign and domestic labor and employment policies, starting a new entity or raising capital. Clients range from global Fortune 100 corporations such as Deutsche Bank and News Corporation and its subsidiaries, MySpace.com and Fox Interactive Media, to start-ups.  Industries represented include digital media, Internet, software, medical and biotechnology, nanotechnology, consulting firms, environmental technology, advertising, museums and other cultural institutions and manufacturing.

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Summary:  In what may be a variation on the model of the RIAA campaign against illegal music downloaders, AP has launched an assault on the “free” use of news on the Internet–not just their feeds but, apparently headline links.  A part of this assault is a suit in US district court in New York against All Headline News Corp., a news aggregator.  That court just denied a motion to dismiss the suit, applying the principle of “hot news” to online news for the first time.  One point for AP.  That decision and the legal theories underpinning the “assault” are connected.  Add another point for AP.  (Please note that a copy of this entry can also be found at digitaldumonde.wordpress.com and globalgeneralcounsel.wordpress.com)

AP recently announced that it is fed up with the misuse of its news feeds-an understandable lament given that its customers (newspapers) own AP.  You may be hearing echoes of the famous movie, Network, and they are more than echoes.  At the annual AP board meeting, the chairman, Dean Singleton said “We are mad as hell and are not going to take it anymore.”

We take no position on whether this is a good or bad thing.  Many, many talking heads (“typing hands” for a new name for bloggers?) are decrying what they see as a frontal assault on the doctrine of “fair use.”  We do not see it that way.  We do see it as an opportunity to clarify not only the application of that doctrine online but also a way to discuss, and eventually clarify, the appropriate business models for online news and information.

A Few Details

They plan on policing the misuse of copyrighted material.  How is a matter of speculation.  AP has signed up with Attributor, a company with technology that can track use of digital information (stories and photos) that have a digital “fingerprint.”  Armed with that information, AP could demand some portion of ad revenues from sites using the offending materials in a manner beyond the limits of the “fair use” doctrine.  (You heard it here first, by the way.  We wrote several weeks ago that demands by newspapers for such revenue are not unreasonable as a move to increase revenues for online newspapers.)

Fair Use May Change.

We get it.  We might not support the approach (and we might also support it) but fair use has been strained to, if not beyond, the limits of credulity to justify online use of information created by others, for which the copyrights are also owned by those others.  In these situations-where a legal doctrine lags too far behind market development-the doctrine becomes the focus of legal assaults and the consequences are a changed doctrine.  Regrettably, the public debate on this matter has begun to take on ideological “hate” language that relies more on ad hominem attacks than reasoned analysis and argument (in the “rhetoric” sense of that word).

The First Salvo:  All Headline News.

AP is going after All Headline News, a news aggregator.  They have been accused of stripping attribution (including copyright notice) from AP articles and re-publishing them without any changes whatsoever.  Again, we take no position on what they are doing.  AHS filed a motion to dismiss, which was denied by the district court in an interesting opinion.

Why?  Because the court anchored its action to the “hot news” doctrine from 1918 (an opinion from a case that arose from the start of the business of the real-life model of our favorite film character, Citizen Kane).  There, news that is so “hot” (like breaking news) becomes the quasi-property of the people creating the news stories in the first place.  Whatever your opinions on the doctrine, this is the first time that “hot news” has been applied to the online news world.

So What?

We discern a certain theoretical strategy behind AP’s approach, something that seems to have escaped notice with all the screaming against AP now underway.  In a sense, hot news can become something of an argument against a “fair use” defense.  That is not quite it-but we will leave that sentence in, anyway.  Rather, finding the applicability of the doctrine, the court gave AP the basis for arguing “misappropriation.”  That can become the basis of a legal theory that differs from mere infringement.  In a simple manner, it can be explained that the word is the civil law equivalent of “theft” in the criminal context.  Putting aside discussions of legal theories, strategies and tactics, the opening into this legal argument carries with it the potential of using “freighted” language to use in the PR battles that AP faces and will continue to face.

Information Wants to Be Free??

That rallying cry has energized much of the discourse that coincides with the explosive growth of all things digital.  Whether something as diffuse as “information” can be called something singular in that context is one thing;  whether it can “want” anything is another.  But that’s not our point.

There might be a tectonic shift underway (OK, warning: Now we’re getting really speculative).  Most obviously, the collapse of the newspaper industry alarmed people (OK, primarily the pundits and shareholders and employees but you get the point) enough for alternatives to “free” to be openly discussed as new (or recycled) business models.  At an even more abstract level, the conservative interpretation of the “free” market is now in retreat (rightly or wrongly is not our point), and so also might other ideological positions that tend toward a libertarian bent.

We don’t know.  But we do know that AP has a fight ahead of it–and it is a good fight.  The outcome might not be what AP wants-or what anybody wants-but it will be a changed world because of it.


Summary:  European newspapers are figuring out how to survive–even using an old concept.

We have posted quite a few blogs on newspapers (see others at digitaldumonde.wordpress.com where a different version of this entry is posted).  No, Chicken Little, the sky is not falling in the newspaper world, though it does look a bit cloudy.  Look around you.  Try Europe, for starters.

Premium Services, Not Premium News Access.

One approach is to provide premium services.  In Norway, you can pay a hefty price ($90) to join a weight-loss club that is part of a newspaper website.  Your profile on the site can be updated but only for another fee.

Now, paying to upgrade your profile may be a bit much (unless the weigh-loss membership has not been successful) because of the nearly ubiquitous networking sites, but the point is to offer other services for a fee.

US papers tried this approach but in a different manner:  They charged a premium for access to certain news.  (One site, about which we have written, http://www.globalpost.com, charges a premium for additional news AND access to the editorial meeting, of a sort, and access to the journalists themselves).  Think about other services.

The Old Horse of Repurposing Content

Axel Springer, a large player in the publishing space, revived an old concept, which makes perfect sense:  Write once, distribute many times.  Write the article and post it on multiple sites.  This is the old concept of “repurposing” content for different platforms and different audiences.

Data as a New Source of Revenue

Newspapers make money not be delivering news but by delivering audiences to advertisers.  Few things are better than granular data about audience interests.  The more platforms on which your news is available, the more granular those data.  Advertisers like that.  They will pay for that.

Perhaps losing weight through a club run by a newspapers does not sit well with your idea of reading weighty editorial pronouncements.  But something else might.  Newspapers thinking this way create what their advertisers want:  connections with their potential audiences.

And some of them may lose weight, too.

Oh, and if you want to think about the ramifications for licenses then go to globalgeneralcounsel.wordpress.com.

Why this matters:  traffic=ad revenues.  Scraping gets riskier.

Last month, the New York Times Corporation settled a suit brought by Gatehouse Media Inc., which runs websites for 125 Massachusetts newspapers.  The NYT\’s Boston Globe was essentially scraping the Gatehouse sites.

Technically (and this distinction is important), the Globe site was returning readers TO the page of the article.  Gatehouse complained that readers were bypassing the ads on the home page.  This is interesting.

Intuitively, one would think that a large number of readers who were returned to the Gatehouse site (albeit at a subsidiary page) would in fact go to the gatehouse homepage.  But no, Gatehouse wanted more (rightly or wrongly).  It also turns out that Gatehouse could figure out how to block this process, which probably led to theNYT offering to settle–so as to avoid case law that goes against them.

So what?

Sites regularly scrape or otherwise link to other sites–usually to the subsidiary pages.  We get a lot of people asking of us if they can do it.  Well, this case—though settled and therefore not an opinion for purposes of precedent–suggests (to no one\’s surprise) that doing so will subject you to legal challenge that will cost a lot to defend.

It makes sense, too.  Again, no opinion as to whether it is right or wrong, legal or not, but common sense should tell us that people who own the rights and go to the trouble of posting content where they want it posted should be able to control access to it.

Of course, Google is another matter.

And, by the way, there is already case law in Europe iin support of Gatehouse\’s position, so where it is done will also make a difference.

As of St. Patrick’s Day, much had already been written about the “death” of the Seattle Post-Intelligencer print edition, which the parent company, the Hearst Corporation, shut down on that green day. The paper is now web only, with twenty in the newsroom, down from about 160. This is not the only news about newspapers these days but, to me, what is most important is the content plan of the P-I site. Here’s my take: Little original content (weird). Include existing blogs (good but unstable; if they are that good they will leave for a better gig.) Links to other sites: While many news sites do this, is it really wise? Link to other sources within the Hearst family (see below). Local government officials as columnists: Now there’s a thriller. Snore. Hearst magazine content: This is a good idea. Hearst owns numerous magazines. Repurpose the content AND link to the magazine sites. Keep the traffic in the family. This is probably a good idea. How they will differentiate themselves from the sites of local TV stations remains to be seen. At least the inclusion of commentary may make it fresh. What seems to be missing from the reports of the plans are social networking and UGC functionality. Local Little League teams or AYSO teams should be invitted to create their pages there. It would cost the P-I little to enable such additional pages to be created. In that approach, they could become something of a virtual community center. But whatever direction they take, they should build a brand–or build on the brand they have, which is a pretty good one. And, the good news in all this: the newspaper industry now has a testbed–one of many more to come in the very near future, like the next couple of months, given the terror felt (rightly or wrongly) by newspaper corporate owners. Long live the paper! Full disclosure: a variation on this blog will be (or has been) posted on the blog “Convergent Realities” at http://www.thectcnetwork.org.