Tuesday, June 30, 2009

The Marburger Proposal to "Save Newspapers" Round up and Initial Thoughts

Connie Schultz began what is rapidly becoming a national conversation about the economic future of newspapers with her Sunday column about a proposal by the brothers Marburger. Daniel is an economist at Arkansas State University, David is a partner at Baker Hostetler who represents newspapers, including the PD.

You can find a pdf of the proposal on the "blog" version of the column.

The default blogger reaction has been to hate on this mercilessly. Of course any time Connie Schultz ventures anywhere near blog world, Tim Russo's melon explodes, so the Marburger plan has taken over #JamesRenner among Russo Trending Topics. But other negative reaction has been nearly as intemperate from Jeff Jarvis, Anastasia at ODB, Mediactive, you get the idea. Some reaction has been a bit more measured and some has been borderline positive, but overall, it hasn't gone well.

I also have problems with the proposal, but since the haters have had their vein-bulging, spit-flying fun, I will try to break things down a little more soberly. Not as much fun, I know, but the proposal raises real issues that merit serious discussion. And let's face it, I'm generally the wet blanket at the hater party.

So. Let's start with what the proposal is. And isn't.

Aggregation Aggravation.

The Marburger proposal takes aim at news aggregators, in particular those they call "parasitic aggregators." The Marburgers begin with the assumption that some news aggregators summarize and rewrite reporting from online newspaper sites, and by doing so skim some would-be visitors to the site that did the actual reporting to put that information online. Whether this actually happens is highly questionable, but let's leave it for now. I know you want to stop and yell and scream about strawman scenarios, but seriously, let's lay this out before we pick it apart.

The problem is that copyright protection traditionally protects expression, not information. So while it would violate copyright to simply reproduce news stories verbatim, it does not violate copyright to write up the information into a new story.

So assuming aggregators are actually taking eyes away from newspaper site, they are doing so using the work product of newspaper reporters. The Marbugers spend a large chunk of their 51 pages making the case that because doing journalism is labor intensive and expensive and aggregating is relatively cheap, that aggregators work at a comparative advantage that will eventually drive newspapers under.

While the argument that aggregators are cheaper to run than news sites is well-established, the authors also claim that the loss of traffic to aggregators is a big reason newspapers cannot monitize their website traffic. This part of the argument they extrapolate from their talk of aggregators. It is entirely data-free. Indeed, to preview one blanket criticism of the paper, the authors engage largely in thought experiments to establish propositions that should be testable by examining actual data.

The Unjust Enrichment Solution.

In the early days of the teletype (1918) the AP successfully sued to prevent a competitor from rewriting its stories and selling them to newspapers. The case went all the way up to the U.S. Supreme Court and according to the Marburgers (I haven't researched it directly yet) won under a theory of unjust enrichment pursuant to what was then called Federal common law. The Court has since declared that there is in fact no Federal common law and that instead, a Federal court not deciding a case under a Federal statute has to choose some state's common law under which to decide. Bear that in mind when we talk about problems with the proposal, a post or two down the line.

Unjust enrichment is a well-established common law doctrine. Basically it means you can't profit from someone else's work. In law school we mostly study it under contract law. If two parties do not agree to a contract but one mistakenly starts doing work, the party that profits from that work can't refuse to pay because the contract wasn't finalized.

After the AP case, the particular strain of unjust enrichment enshrined there was referred to as the "hot news" doctrine. Importantly, the doctrine limited the use of information contained in a "hot" news story, but did not prevent enterprising reporters tipped off by a story from going out and doing their own reporting on it.

Problem is copyright law is a federal statute and federal laws generally preempt state laws. During a 1980s rewrite of copyright laws, Congress explicitly stated that state law remedies for copyright violation are preempted; copyright is the exclusive remedy for violations.

The Marburger proposal reverses that decision. Copyright law would be rewritten to allow state law claims for unjust enrichment. The individual states would then thrash out what constitutes unjust enrichment, what the remedies are and so forth. While commentators have called it an expansion or tightening of copyright, it isn't. It is more of copyright-plus regime, where the plus is the "hot news" unjust enrichment doctrine.

The Marburger proposal is neither benign toward First Amendment freedoms, nor the total squelching of those freedoms some critics have claimed. It is not the information land grab some have predicted, but it does expand rights to control of information under very limited circumstances. In sum, the proposal will benefit newspapers and put some burdens on other content providers, though the extent of those burdens would have to be hashed out in court.

Given the problems/burdens attendent in the proposal, my biggest problem with it is that it will not work. We'll take that up in the next post.


Gloria Ferris said...

Thanks for the reasoned arguments, Pho. I too don't think it will work, but am waiting for your next post. At first, I wasn't too concerned because personally I am not an aggregator, and usually, only use a newspaper article to begin an opinion piece, and then, I remembered that now as federal law is written there are caveats tucked in to nooks and crannies. Besides, I don't think the new world is waiting on bated breath for cheap advertising. it is as annoying as hell. They are looking too much at the bottom line short term money angle the times are a'changin'.

Jeff Hershberger said...

This is a nice overview, thanks. I'd heard peripherally that there was some debate going on, but you've shed some light on where it came from.

From my point of view, I don't think society needs newspapers in the form of dead trees dieseled to driveways. I do think society needs investigative reporting. I doubt the Marburger proposal is the right way to preserve that, but I sure am glad people are finally talking about outside-the-box solutions.