In this guest post Dr Richard Danbury, research associate, University of Cambridge, looks at news business models, and asks ‘Do we need legal interventions to facilitate the production of news?’

I’m not supposed to be in the blame game, but it’s always been at the back of my mind – when did we start doing it? Why did we do it? And – not that I’m searching for a scapegoat, but who did it? It’s a question I can’t help asking, a journalistic poser akin to pondering who cut down the last tree on Easter Island: when the last tree was toppled, the island became deforested – where did they think they’d get their firewood from? The question in journalistic terms is when we started giving news away for free, where did we think the money would come from?

I got one answer earlier this autumn at the CREATe conference, in Glasgow, two days of fascinating interdisciplinary discussion about copyright and the creative industries, when Bill Thompson admitted it was him, he did it in 1996. In the Guardian’s offices. And he ended his account of his conversation with Alan Rusbridger, arguing that material should be posted free at the point of use with prophetic words. He told his editor “Money will come.” At this point Bill paused in his presentation. And then resumed with the words: “they believed me”.

This conversation is heralded by an even earlier progenitor of the news online world. In this great clip for example, from 1981, which tells the story of what was then the ‘newest form of electronic journalism’. From KRON-TV, a San Francisco-focussed channel, It’s worth a watch: complete with early 1980s hair, and the sort of computers you plug into cathode ray TVs, and the sort of modems (remember them? My children don’t) that you insert a telephone into, it tells the story of an early experiment in online news dissemination. It’s shot in that great NTSC format – ‘Never Twice the Same Colour’ as BBC editors used to say.

Bill’s point here is prefigured, fifteen years earlier, by David Cole of the San Francisco Examiner, one of the first hacks to post news online. In his short interview he comes out with the glorious snippet: “we’re not in it to make money – we’re probably not going to lose a lot, but we aren’t going to make much either”.

And that, of course, is the rub. Has it yet been worked out how to make money from online distribution of news? Sort of – by changing business models, perhaps. Or having a close look at Buzzfeed. But not quite.

The problem is well-known, and multi-faceted. It’s well-known, for example, that part of the problem is this issue of giving something away for free that costs money to produce. If your readers or audience can get it for free, why should they pay you for it? You can’t compete, as they say, with free.  (Though sometimes, perhaps, you can.) Clearly, according to the video, this aspect of the problem as posed by online delivery didn’t appear that acute in 1981. This was largely because accessing the news online in 1981 wasn’t free. As the outro in the studio smugly observes, downloading the online newspaper in 1981 took over two hours and cost $5 an hour, and so didn’t pose much competition for the 20 cents paper edition. Not in 1981 it didn’t. But now – well, such smugness went years ago.

But there are other aspects to the problem, and in this respect the 1981 clip carries on giving. At the end of the report the user, Richard Halloran (wonderfully described on screen as “Owns Home Computer”) observes that a benefit of the brave new way of delivering news is that it can be copied.  And here we move away from the problem of giving news away for free, to the problem of copying news. The ability to copy news poses difficulties from those paying money for news to be generated, and hoping to make money from its being distributed. In fact, it’s not the ability to copy news and save it onto a piece of paper, which Mr Halloran sees as the future, but the facility provided by online distribution to copy news quickly, readily, completely and in such a way that further dissemination is easy and of negligible cost. Paper need not come into it.

What’s to be done – if anything – about that? This question – or these questions – are a focus of the AHRC funded research project into how and whether there should be legal interventions to facilitate the production of news, and in particular the preservation of revenue for news producers by use of copyright, in the digital environment.

The project, of which I’m research associate, is being carried out under the joint auspices of Cardiff School of Journalism, Media and Cultural Studies and Cambridge University’s Centre for Intellectual Property and Information Law. It’s overseen by Professors Ian Hargreaves and Lionel Bently. The aim is to try and look at one aspect of this problem of news producing institutions can turn a profit in the online era.

The aspect we’re focussing on is what legal interventions could be employed, and whether they’re merited. The focus is particularly on copyright. The starting point is to research what copyright-based laws have already been used or proposed that are intended to enhance or protect the revenue of news producing institutions.

Some examples: in this country, there’s the example of the “Meltwater” litigation, which has led to, or at least reinforced, the conclusions that headlines and short text extracts may well be subject matter capable of copyright protection. This at first sight may lead to a cause of action, and hence potential revenue, from online news distributors such as Google News and commercial news aggregators such as Meltwater.

The UK litigation was shaped by developments elsewhere, which also affect the possible ability of news producers to make money. Most notably the Meltwater litigation drew on Danish cases which made their way up to the Court of Justice of the European Union, in the Infopaq I and Infopaq II. These cases examined the legality of a media monitoring organisation that scanned newspapers, converted the scans to text and then searched the text. The cases considered the ambit of an EU directive which on some readings provided an exemption to copyright liability – and hence a reason why news institutions should be prevented from deriving revenue for the reuse of the news they produce. The cases are summarised here.

Elsewhere, the German government last year passed a law which provided press publishers with an ancillary right to their product, should it be copied by aggregators. Google seems to have responded by making Google News opt-in, rather than pay publishers a levy. A recent Spanish law, passed in November and in force next year may not fall foul of this, as legislators have drafted it as an inalienable right – the law is discussed here.

What will be the effects of these laws? Clearly, however, this is only one aspect of the issue. Interesting questions remain on the horizon as to whether such interventions are merited, evaluated not only with reference to the jobs that newspapers provide and the revenue they generate for the country, but also with reference to the effect of such interventions on our society. This, of course, is a tricky area. Some may argue that, as the internet has seen the development of a Fifth Estate, an internet-based form of democratic accountability, interventions to protect the Fourth Estate are unnecessary. Others may argue that other effects of the internet, such as the echo-chamber, which unhealthily curtails the stream of information flowing to people in society, and narrows rather than broadens their horizons, mean intervention is indeed necessary. Such arguments are to some extent well-ventilated, such as here and here, and will pose food for thought.

What may be lacking is a consideration of the type of content that copyright might protect, and an evaluation of its effect on society. In other words, perhaps copyright should not be quite as agnostic as it sometimes appears about the nature of the content it protects.

But for the moment we have at least answered a simpler question and discovered one piece of the puzzle, with Bill’s account of the earliest years of Guardian online. Perhaps they were right to believe him. Perhaps money will come.

Richard DanburyRichard Danbury is research associate on the AHRC-funded study: “Appraising Potential Legal Responses to Threats to the Production of News in the Digital Environment”. Contact: / @richarddanbury

More information about the study can be found on project pages at: the Centre for Intellectual Property and Information Law (CIPIL), University of Cambridge; Cardiff School of Journalism, Media and Cultural Studies (JOMEC); and CREATe.

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Update: Google reports (11 December) that as a result of a new Spanish intellectual property law [PDF], it will “shortly have to close Google News in Spain”. In a blog post, Richard Gingras, Head of Google News, says: “This new legislation requires every Spanish publication to charge services like Google News for showing even the smallest snippet from their publications, whether they want to or not. As Google News itself makes no money (we do not show any advertising on the site) this new approach is simply not sustainable. So it’s with real sadness that on 16 December (before the new law comes into effect in January) we’ll remove Spanish publishers from Google News, and close Google News in Spain.” Also see short commentary, with more detail of the Spanish IP law reform, on IPKat here.