The more likely economic salvation of newspapers will come from Web ingenuity, married to new business strategies and revenue sources. In this respect, the immensely lucrative search engine companies that now provide newspapers with both digital readers and online revenue are something of a mixed blessing. “Some day,” says Tom Rosenstiel of the Project for Excellence, “the lawyers for The New York Times and for Google are just going to fight it out.”
An eternity ago in the Internet era, in 1997, Microsoft tried to launch its own version of a digital daily, called Sidewalk. Newspapers, sensing the threat, declined to cooperate with it, and Sidewalk bombed. Yahoo has also experimented, not very successfully, with generating original content. If you go to its site, you can find Yahoo’s own war correspondent, Kevin Sites, showing you some of his video scoops, and inviting you to become a Yahoo freelance. Google, by contrast, declares that it is not in the business of competing with journalists, and that it scrupulously respects copyrights. “We are an engineering company, not a content company,” says Google vice president David Eun, adding that Google not only provides new revenues but can teach newspapers how to optimize their Web strategies.
As both a source and a diversion of ad revenues and readers alike, Google is both competitor and partner to publishing companies. One executive I interviewed termed Google a “frenemy.” Another called the process “co-opetition.” Looking down the road, there are other “frenemies.” Mochila.com is a fast-growing Web syndicator of content to newspapers. The idea is that with newspapers squeezed and laying off producers of newsroom content, Mochila can license high-quality content from freelancers and offer it to newspapers, and perhaps eventually to consumers. The content also comes bundled with ads sold by Mochila, and the revenue is split with newspapers. This is also a delicate balancing act. The cheaper content and new revenues are found money. But if newspapers increasingly become purveyors of freelance content, they lose their distinctive franchise. And all those intermediaries are more claimants on the ad revenue pot.
In the U.S., Google’s core search engine business is protected from lawsuits by the doctrine of fair use. In Europe, however, where there is no legal doctrine of fair use, Agence France-Presse sued Google for copyright infringement. And The Associated Press worked out a deal last year with Google: the details are secret, but the deal seems to have Google breaking its usual precedent of not paying for content. Owners of copyrighted video content have been pushing back against search-engine companies. And Google’s ambitious effort to launch Google Books will test just how far the fair use doctrine stretches (See “Copyright Jungle,” CJR, September/October 2006). Should Google’s plan be constrained—either by litigation, by a precedent-setting royalty deal with book publishers, or by Congress—newspapers could be indirect beneficiaries.
An analogy is the saga of Napster and iTunes. As recently as 2001, it looked as if that genie was irrevocably out of the bottle. “File-sharing” programs like Napster had created a loophole that allowed free distribution of copyrighted music recordings. But the recording industry, sensing the stakes, marshaled its nerve and its lawyers. They successfully sued and shut down Napster as an illicit pirate-enabler. Apple then stepped forward with some of the most ingenious hardware and software of the Internet age—the must-have iPod and iTunes. Soon, delighted teenagers (and adults) were re-trained to pay for their music, this time at 99 cents a song. There is still a huge amount of decentralized file-sharing, but it is now at an economically bearable scale.
But if newspapers hope to collect royalties on arguably pirated content, the genie is much further out of the bottle than it was for record producers. Google is a far bigger player than Napster and it has hooked newspapers with ad partnerships. The public is accustomed to getting nearly all of its Web content free, and there is fierce opposition to a cable-TV model in which users would pay different amounts for different levels of content.