Could Copyright Change Fix Old Media? David Marburger Q&A

My colleague David Weir at BNET Media recently disagreed strongly with an idea presented by brothers David Marburger, a media lawyer with Baker Hostetler, and Daniel Marburger, a professor of economics at Arkansas State University. The concept is to change copyright law to allow again the use of common law — the basis for tort suits, as one example — in certain areas of the news business. Specifically, they point to certain types of aggregators as businesses that drain part of the economic viability of news creation and distribution, because they can gain full financial benefit of the results without undertaking any of the costs to create the content. I spoke with David Marburger (who gave his permission to make the full paper (economic-analysis) available to BNET readers) about the concept.

But first, it’s important to understand the 1918 U.S. Supreme Court ruling in the International News Service v. Associated Press case. In it, the Court upheld a lower court ruling that William Randolph Hearst’s International News Service could not rewrite stories from the Associated Press and publish them as its own because it was “misappropriation” of the latter’s work and, therefore, unfair competition. When Congress revamped copyright law in 1976, it considered but dropped a provision that would have the theory from this decision.

BNET: What is the central thesis of your paper?

David Marburger: I want the copyright act to restore the common law in unfair competition [for the news business], unfair enrichment in terms of the INS v. AP case. The common law is out there. Libel is common law. All the torts are common law. We call it law because it has a lot of the force of law, but it’s derived exclusively from judicial decisions, where they are not interpreting statutes. Most of what the average citizen encounters in a civil case is common law. First Amendment law is decided as common law [because] they don’t rely or depend on statutes. They use analogical reasoning [reasoning by analogy] based on adversaries who come in prepared and you should reach the following result for these reasons. It cuts right to the chase. People don’t spend a lot of time arguing about what words mean. They argue about whether particular conduct is good or bad. In statute, you spend an enormous amount of dollars arguing what the words mean.

BNET: What is the problem for media companies like newspapers?

News is basically entertainment [in that it is] intellectually stimulating or interesting. That’s about what it was worth to the consumer. You have to bring in readers, but your real paying audience are the advertisers, and the advertisers go where the readers are. It has no utility – it isn’t like a hammer and saw that you buy so you can do stuff at the house with it. If you summarize the stories, we think the likelihood of driving any traffic to the originator is so small s to be laughable. I used to subscribe to the Columbus Dispatch web site. I bagged it after a couple of years. I can get access to similar news without having to pay everything. Even at $4.95 a month, I said this is bologna.

BNET: You are one of the few critics that doesn’t seem to see Google as part of the problem.

DM: Let’s say for example that today, for me to know what all the headlines are in a particular newspaper, I’d pretty much have to buy the newspaper. Then I could peruse the headlines and decide what I wanted to read and what I don’t want to read. With Google, it’s like a TV listing. By giving you a bunch of headlines to peruse and pick from, it substitutes me going to a newspaper machine and buying a copy of that particular newspaper. I can certainly see how Google News can cut down newspaper sales in that sense. I don’t doubt that the impact is there, but my brother and I both believe that is not something that anybody should do something about. On balance, we think that Google news as currently constituted is probably a positive thing. Our thesis is pro free market. We have a paragraph in there that to me is the most important. Normally in a free market economy, if a more efficient producer pushing a less efficient producer out of business, that’s a good thing. This might be a case that Google produces headlines more efficiently than any newspaper.

BNET: And yet you see Yahoo as at least part of the problem, even though it pays sources like AP for content.

DM: I don’t know how much AP is getting to that deal, and how much of the money AP is passing on to the member news organizations. But I do know this: AP’s economic structure causes AP to have an economic motive to undersell its product to Yahoo. That’s because AP doesn’t incur the journalistic expenses of producing a great deal of the content it sells to Yahoo. They do have their own people. But let’s take the [Cleveland] Plain Dealer. It has 300 journalists. That’s the Plain Dealer. You take the journalistic investment of all the metropolitan daily newspapers that are AP members and compare them to the large and substantial investment that AP makes itself. And they all pay AP substantial dollars.

BNET: I’ve long suspected that most people are satisfied with a headline and maybe a sentence or two about most stories, given the low clickthrough rates on links that the web sees in general. If that’s true, then wouldn’t Google be removing more value by far through its listings?

DM: We’re very skeptical that it’s enough [for most people]. If you’re right about that, then you’re also right about Google.