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Tuesday, June 17, 2008
I've tried to remain low-key about the Associated Press action against the Drudge Retort, a parody of the famous Drudge Report political Web site, but given the furor out there I think that a post on the topic is worthwhile. The AP has raised "takedown requests" claiming violations of the Digital Millennium Copyright Act (DMCA) and other laws in unlicensed use of its content in seven of the Drudge Retort's blog post. Not only is the Drudge Retort being challenged on its own use of AP's content but as well for people in comments sections that quote paragraphs from AP content. The Drudge Retort's Rogers Cadenhead commented on the takedown letter on his own weblog and provided a summary of each of the takedown requests, citing the examples.

Similar to the lawsuit raised by AP against Moreover for their use of AP headlines and ledes to provide links to AP content the concern of AP seems to center on the use of headlines and ledes as copyrighted content. Unlike the AP/Moreover suit, though, this takedown letter focuses on only seven items rather than a bulk use of AP headlines and ledes. And unlike the AP/Moreover suit, some of the headlines on the Drudge Retort site were not AP headlines but headlines rewritten by the site's staff. Also notable was that the sections of text from AP stories were quite small. In all of the sections posted by the Drudge Retort itself they were either just a lede sentence or a lede plus a quote from someone at a public event.

The Drudge Report appears to have complied with the takedown order and AP's Jim Kennedy promises guidelines for bloggers using AP content, but awareness of it spread quickly through social bookmarking services and weblogs and has ignited a widespread reaction from major bloggers and mainstream commentators. TechCrunch's Michael Arrington offered one of the stronger statements, claiming that his prominent weblog would no longer reference AP content. Others were more inflamed in their rhetoric, including this gem from Matthew Ingram:
I don’t want to be accused of succumbing to Godwin’s Law, but I would argue that a dialogue with the AP has about as much chance of being “constructive” as Chamberlain’s discussions with Hitler over the fate of eastern Europe.
The New York Times' Saul Hansell tries to steer a calm course through the AP challenge in their Bits blog but in the era of sub-millisecond delays of information transition used to power most large-scale trading of financial securities his citation of the century-old "Hot News" New York statute is shaky at best. If someone is linking to a story that's already minutes, hours or days old on the Web, much less in investment banks, how "hot" can that news be? And since to get the story in full one must still go to the licensed source, the licensed source is going to benefit financially from more public awareness of their having a story available.

The clear benefit of inbound links and short, fair use-style citations can be seen in the impact that social bookmarking has had on AP licensors. Looking at the data at right from Compete.com, news Web sites that are major licensors of AP content do not appear to have been harmed by the growth of social bookmarking sites such as Digg, which provide similar small snippets of content and headlines from AP and other sources. In fact, one could argue by such a trend that much of the growth at news sites in recent years has been due to the attention that weblogs and social bookmarking sites have paid to their content. Social media is the news world's best friend at this point, providing an editorial capability that curates high-value content from professional media organizations that would otherwise be ignored.

But the real point seems to be whether AP can gain financially from this exercise. Facing a dwindling number of mainstream media companies available to purchase its content AP its struggling to come up with a way to build a broader base of revenues in an environment in which their audience has become a far greater source of content curation than their traditional client base. Whatever the validity of AP's legal citations - they seem to be to be quite weak and awaiting only a decent lawyer in opposition to them to have them swept away - they are alienating the very marketplace that is driving growth for their existing licensors at a time when that marketplace needs AP content less than ever before. It is all too unfortunately like the RIAA-led lawsuits against consumers of online music, which have done little to change the fate of music publishers who have lacked a coherent marketing strategy to deal with the power of online music consumers to drive both tastes and sales.

As valuable as AP content may be, for most news stories that people will link to and comment upon online there are readily available substitutes from other wire services. AP's position as a service bureau complicates their ability to counter the power of proprietary wire services such as Reuters and Agence France-Presse, but clearly the problem is one of having only so many popularly-tracked newsworthy events to cover that will result in real "hot news" that others lack. In the meantime weblogs and other emerging publishing outlets are creating new sources of news and newsworthy opinions that could be syndicated by AP into their distribution network far more aggressively.

From a marketing perspective the real issue for AP, like the music business, seems to be far less about protecting an existing product line and far more about what needs to be done to rethink both the product line and the marketing rationale for the core product. Instead of resorting to lawsuits and takedown letters as a primary strategy to enforce the value of AP content on the Web, tactics that could create both legal confusion and a potential dilution of the value of the AP brand in the eyes of consumers, AP needs a "win-win" strategy that looks upon the drivers of economic value in online publishing more realistically - and that begins to incorporate new sources of content worth distributing to its worldwide subscribers and more valuable services.

A more refreshing approach to the opportunities available from social media is definitely in order. Simple example: instead of thinking about charging people for using AP headlines, why not PAY people for the click-throughs that they bring to subscriber content and charge higher rates to subscribers for the service? Hmm, maybe those bloggers are pretty good folks after all.
In the meantime, perhaps that nice linear relationship between social media growth and sites using AP content may not be looking so linear for a while.

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By John Blossom - posted at 10:55 AM
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Wednesday, March 14, 2007
paidContent.org has a good summary of the meat of Viacom's new lawsuit against Google claiming that the thousands of video clips being posted to Google's YouTube service are violating the 1998 Digital Millenium Copyright Act. A good analysis by CNET of exactly what in the DMCA is germane in this suit points out that the thin ice that Google is treading upon is the alleged encouraging of mass infringement of copyright - in spite of very specific statements in its terms and conditions to the contrary. Financial analyst Henry Blodget notes in his blog that most of this is about heavy-handed deal-making and the ultimate failure of Google to come to terms with Viacom in recent discussions over content use and licensing.

While the legal precedents are not strongly in favor of Viacom's view of this suit there are some important twists to consider. Though there is no user-driven revenue model for Google via YouTube as of yet it could be argued that Google is engaging in trade practices similar to what supermarkets have used oftentimes to penetrate new markets. In years past a chain wanting to dominate a given market would lower to cost of its goods to the point of losing money in that market's stores to force competitors to lose business - and eventually fold. Viacom's claim is in essence that Google set up a store and stocked stolen goods similar to their competitors and made them available at deep discounts - say, in this instance, for free. If this can be argued successfully in the courtroom Viacom has a leg to stand on.

But this argument falls apart from a few angles. First, it's a little ironic that Viacom is claiming in a USD 1 billion suit that Google is using DMCA-sanctioned "takedown" of copyrighted content is a heavy-handed tool to buy them time in negotiating licensing deals. Other media companies have managed to come to commercial terms with Google for the use of copyrighted content on YouTube: what makes Google more "evil" in its relationships with Viacom? These precedent deals for YouTube usage can be used effectively in a suit as examples that Google does indeed want to license copyrighted content lawfully.

Equally important is the question of whether Viacom has demonstrated that it has in fact tried to protect the value of its copyrighted content from duplication. If video clips are as easily "borrowed" by audiences as apples from an unattended fruit stand then the "stolen markets" issue is not easily argued - willful neglect could be argued fairly easily by the Google side. Had these clips been behind a firewall or in a DRM wrapper that Google had cracked directly, the DMCA angle on this suit would hold much more water. As it is, Viacom has no effective technology that prevents audiences from "borrowing" its online content.

The real cloud hanging over this suit, though, is the pending legislation in the U.S. Congress to revise the DMCA to allow for more generous terms of use for copyrighted content by individuals. Viacom could in theory win its courtroom battle but find itself losing the war as new laws are passed making the laws far more in line with current practice via YouTube and other social media portals. It is this pending legislation as much as any real licensing issues that are probably behind Viacom's move to sue Google. After all, if you're going to have Congressional hearings on fair use as a part of that legislation, Viacom testifying to Congress as a major suit-bringer has a more serious heft to it.

All of this boils down to one key factor: Viacom and many other media companies have given little or no thought as to how to make content automatically monetizable through social media services such as YouTube. Yes, Viacom, your copyright has been abused by some posters on YouTube, and yes, you shouldn't have to ask Google after the fact for documentation showing where content was in fact being abused, but why are companies like Viacom failing to implement tools and policies to help monetize their content more effectively? Consider Viacom's suit perhaps the last loud "bang" of anti-Google legal maneuvers - due in large part to Google's having anticipated the needs of video producers far more effectively than any other major content outlet. The case could break the other way but for today I'd bet on Google continuing its push towards video posting as it awaits reasonable action being taken by courts to validate its thinking about what makes a successful content play in today's New Aggregation.

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By John Blossom - posted at 2:01 AM
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