In A Case Of Extremely Bad Logic, Newspapers Following Music Industry To Make Money

June 4, 2009 by  
Filed under Words From The Genius

Over at the Wall Street Journal today, there’s an article about how the newspaper business is looking to create some sort of intermediary (“To Beat Antitrust Rap, Papers Take Cues From Songwriters” by Russell Adams and Shira Ovide), much like ASCAP or BMI for songwriters, that would monitor a paper’s content, and demand license fees from sites that post, repurpose, and otherwise aggregate said content.

The article mentions that one of the biggest obstacles facing the establishment of a third party entity is actually anti-trust law, which prohibits companies from joining forces to price fix and keep competition at bay. Which to me is sort of a loaded issue, because while there’s certainly a case to be made for big media trying to keep the little guy down, the reality is that the bulk of real news is still coming from big media. It just gets filtered down on so many levels, from blogs, to twitter, and so on.

It’s almost impossible to quantify all the sources that are pulling from this one piece of content– some monetizing it via ad supported business models on websites and the like, some not monetizing it all– all while the originator of the content, and the company that underwrites the creation of that content (via paying that writer a salary, or paying a freelancer, and a photographer and so on) not seeing any real hardline benefit from it at all.

Now some may argue that the content just being out there on the web is free marketing and so on, and I could see a case being made for that. But it’s hard to tell the Wall Street Journal or the New York Times that some small time blogger is helping their brand sell papers in the big scheme of things, particularly when the links get posted on so many blogs that it’s hard to tell where it originally came from. Fact is, crediting on aggregation models is not very effective, nor standardized.

And that’s one of the biggest problems facing music publishers. Sure, some sites pay for blanket licenses. The big ones do. Your Imeems and Myspaces and so on. These are big business, and the agreements are often times a lot more complex than people can even realize. It’s not as cut and dry as a simple blanket license. There’s revenue sharing built into the ad component of the site as well. So it’s really not as easy as just paying a license fee and/or royalty for every time the music is played. The newspaper business will have to take that into account as well. Because those licensing fees may pale in comparison to the site’s overall revenue. And then what’s going to happen? The newspapers are going to come back crying for more money. Just like the labels have done with Google/Youtube, saying they’re not getting enough money out of their licensing arrangements.

The bigger issue, I think, is quantifying the type of “legs” that newspaper content has online. How much news really lives online after a couple of days, and furthermore, if the news does live, will anyone pay to see it?

The New York Times used to make the archives of articles available only via purchase. I was one of the unlucky few who had to pay for content at one point in time, whether it was for a college-related assignment or something else. But how many people would do that on a regular basis? Probably very few. Needing to go into the archives is a very selective thing. It’s not every day that a large body of web users need to look at articles from 1958. Which is probably one of the reasons why they eventually abandoned that model and opted to make everything available for free, monetized instead via advertising. Now that advertising hasn’t yielded the desired results, they’re ready to bail.

Point I’m making is, to create a third party to monitor content would be a great idea, and I think it’s needed. Had I included a quote or something from the WSJ article, I’m technically using WSJ content and monetizing it via google ad sense (I don’t make much from that, but just using it as an example), and WSJ sees nothing from that. I’m using their content to create content, and they get nothing back from it (although I am including a link that is sending people directly to their site).

Practicality is the issue, I just don’t know how practical something like this would be, considering just how much content comes from big media on a daily basis, and how much doesn’t get used for anything. I mean, if I had a news aggregation site, would I pay like a yearly fee for a license to everything from WSJ.com, when I may only use 2-3 relevant pieces from them a week? And would they get royalties or something from me? Like, how does this work?

Overall, it just seems like a mess to me. Definitely needed, but the model has to be worked out.

Thoughts?

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  • Brooke Fraser

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5 Responses to “In A Case Of Extremely Bad Logic, Newspapers Following Music Industry To Make Money”
  1. Katie Morse says:

    “…Which is probably one of the reasons why they eventually abandoned that model and opted to make everything available for free, monetized instead via advertising. Now that advertising hasn’t yielded the desired results, they’re ready to bail.”

    This limits monetization opportunities to advertisers only. Why put that limit in place?

    Publishers have moved online and started integrating social aspects into their sites. Commenting, sharing, integrating Facebook Connect, etc. Why not continue that march?

    Full disclosure: My current employer (Ripple6, http://www.ripple6.com) provides a platform to make this happen.

    As a publisher, you can use our technology to expand your reach (syndicate a conversation across multiple sites in real-time), as well as create new ways to monetize (something we call “Brand Communities). I’ll stay away from specifics as that sounds like a sales pitch, but there are options for publishers outside of advertising-based revenue models.

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