I linked the news today, oh boy

newspapersI’m assuming a judge and scholar as smart as Richard Posner of the Seventh Circuit Court of Appeals doesn’t really believe copyright law should be extended to cover the paraphrasing of news reports without the permission of the copyright owner, as he seemed to suggest in a recent blog post (h/t TechCrunch). Instead, I’ll assume he simply meant to be provocative.

Posner’s subject was the parlous condition of the newspaper business in this twilight of the print era. After surveying the declines in hardcopy readership and ad revenue, and the baleful effects of cuts in the ranks of professional journalist (I feel your pain), he comes to this conclusion:

Imagine if the New York Times migrated entirely to the World Wide Web. Could it support, out of advertising and subscriber revenues, as large a news-gathering apparatus as it does today? This seems unlikely, because it is much easier to create a web site and free ride on other sites than to create a print newspaper and free ride on other print newspapers, in part because of the lag in print publication; what is staler than last week’s news. Expanding copyright law to bar online access to copyrighted materials without the copyright holder’s consent, or to bar linking to or paraphrasing copyrighted materials without the copyright holder’s consent, might be necessary to keep free riding on content financed by online newspapers from so impairing the incentive to create costly news-gathering operations that news services like Reuters and the Associated Press would become the only professional, nongovernmental sources of news and opinion.

Others have already discussed the obvious First Amendment problems with this suggestion (the reason I think Posner is not really serious), as well as Posner’s  misdiagnosisof all that ails the newspaper business (he doesn’t even mention the impact of Craigslist, which has nothing to do with free-riding on copyrighted content). I would raise another objection: his assumption that news-gathering must necessarily be financed by newspapers.

A big part of the problem facing traditional news organizations today, I would argue, stems from the vertical integration of news gathering and news distribution — the fact that newspaper companies still produce, well, newspapers.

As Posner correctly points out, the bulk of a newspaper’s fixed costs are on the news-gathering side — the salaries of reporters, editors and columnists — while all of the revenue comes from the distribution side, in the form of advertising sales and subscription fees. As newspapers lose their monopolies on distribution — and the monopoly ad rates that came with them — it’s increasingly difficult to sustain the cost side of the business.

Posner’s solution — like that of many in the traditional news business — is to pass new laws or implement new policies to try to reinforce news organizations’ fading distribution monopolies. Even if that were legally and constitutionally possible, however, it’s unlikely to work as a practical matter. Given the effectively limitless amount of ad-space inventory available on the Web, publishers are never likely to get the sort of CPMs that sustained the print newspaper and magazine business, regardless of any content exclusivity or distribution monopoly.

printing-pressWhat might work, however, is seperating the distinct functions of news gathering and news dissemination, and then creating a market by which news gatherers — either through agencies or directly — could sell their product to news packagers and distributors. Let the New York Times newsroom sell its product to any outlet willing to pay the price; let the New York Times newspaper and Web site purchase, package and present content as it sees fit, from whatever source is offering it, whether the Times newsroom, Dow Jones or Twitter.

For the packagers/distributors — what today we would call publishers — content would become a variable cost determined by how much they purchased and how widely they disseminated it. Content would not be exclusive, of course, but as a practical matter it isn’t exclusive now. Success or failure would depend on how well publishers served a particular audience — whether general or specialized — by sifting, curating and presenting a relevant package of news, whether in print or online, whether licensed, self-produced or free (e.g. from non-professional sources).

News gatherers, for their part, would no longer face the dilemma of giving their product away for free since they would not be distributing content directly. The costs of gathering and editing the news would be defrayed directly, by charging publishers for it, and again, revenues would increase as the content is more widely distributed. Brand name news organizations like the New York Times would thrive as their content was most in demand while others would have to work harder to compete. Some news-gathering organizations would be generalized, others would be specialized.

I’m under no illusion that the news business is going to resemble my scenario anytime soon, although parts of it are already developing. Nico Pitney’s work for the Huffington Post  herding together fragmentary reports from multiple sources out of Iran during the recent protests there into a coherent, running narrative is an excellent recent example of how packagers can add value without directly fronting the cost of news gathering (Note to self: figure out how to do paid subscriptions on Twitter and then send professional Twitter Corps to breaking news events).

The point is, what the news business is in need of today is not more property rights, as Posner would have it. It’s in need of fundamental restructuring and the development of new tools to enable new types of commerce around news gathering and news dissemination.

The goal should be to protect and promote quality journalism, not to protect today’s newspaper companies.