March 11, 2012
Germany Trying to Cut Publishers In on Web Profits
By ERIC PFANNER
PARIS — In a move aimed at helping newspapers generate new revenue from struggling online operations, the German government intends to require search engines and other Internet companies to pay publishers whose content they highlight.
The German governing coalition, led by Chancellor Angela Merkel’s Christian Democratic Union, said last week that it planned to introduce legislation to create a new kind of copyright for online publishers. Under the proposal, Internet aggregators and search engines would have to pay the publishers if they wanted to display all or parts of their articles — even small snippets like those that are shown in search links.
The proposal was cheered by German publishers, who complain that Internet companies like Google have profited hugely from their content, while generating only scraps of digital revenue.
“In the digital age, such a right is essential to protect the joint efforts of journalists and publishers,” the Federation of German Newspaper Publishers said, adding that it was “an essential measure for the maintenance of an independent, privately financed news media.”
But the announcement set off howls of protest from Internet companies and bloggers, who said the proposal could threaten free speech and stunt the development of the digital economy in Germany.
“I fear that such a regulation would slow down the development of the Internet because it creates additional costs and leads to inefficiencies,” Eric E. Schmidt, executive chairman of Google, told the news agency DPA during a visit to the CeBIT technology fair in Hanover, Germany, last week. “The Internet is an important component of Germany’s economic success. That’s why one has to be careful with such changes.”
Mr. Schmidt did not give specific examples, but analysts have suggested that some news aggregators might simply shut down their operations in Germany, rather than pay the fees.
The proposal, in an announcement of the coalition’s legislative agenda, follows intense lobbying by publishers, after the idea was initially put forward several years ago.
The plan authorizes ministers to draft a bill, which is expected to go to the Bundestag, the lower house of Parliament, this summer.
The coalition document says Internet companies, including search engines and news aggregators, would have to pay publishers a fee “for the dissemination of press products (like newspaper articles).” The fees would be gathered and distributed by a collecting society, like those that disseminate royalties to authors and composers. Content would be protected for one year. “In this way, publishers would share in the profits that commercial Internet services have been making with the unpaid use of publishers’ products,” the paper says.
The proposal addresses a debate that has raged since the early days of the Internet: Who benefits more from digital links and the traffic they generate — search engines, aggregators and other online hubs, or the sites that produce the content?
Google does not sell advertising on its German news aggregation service, which displays snippets of articles and links to the originating sites. But the company earns billions of euros from advertising on its search engine and other services.
Most German newspaper publishers, on the other hand, generate only minuscule revenue online from advertising or other sources, like so-called pay walls around their content.
Mathias Döpfner, chief executive of the largest German newspaper publisher, Axel Springer, said last week, as the company announced financial results, that the measure would have a “negligible” effect initially, but could grow into a “significant” source of revenue over the middle to long term.
Analysts are skeptical about whether the fees could ever replace the revenue lost from declines in print advertising.
Details like pricing have yet to be worked out. Publishers say they want a variable-rate system under which the use of full articles would incur a higher fee than the display of a short phrase, like the kind that is typically embedded in search links.
Opponents of the plan say that granting copyright protection to fragments like “International survey: Merkel leads ranking of European politicians — 40 minutes ago,” as the Google search link to one German news story read Friday, could restrict free speech. It might also be cumbersome, they add, to determine which sites should pay and which ones should benefit from the new protection.
“Could every blog register with the collecting society that is to be founded?” wrote Thierry Chervel, co-founder of Perlentaucher, a German cultural Web site. “If so, wouldn’t the financial benefit from the ancillary copyright be rather meager for the newspapers?”
Another question is what to do about journalists, who want a share of any remuneration from the planned fees. Under German copyright law, journalists retain a so-called author’s right, giving them control over uses of their articles after they have been published.
Publishers say these issues will be cleared up when the legislation is drafted in full. Freedom of speech would be protected, they insist, because certain uses, like journalistic citations from other news articles, would be exempt. The coalition document says private Internet users would not have to pay any fees.
Germany is not the only place where publishers are seeking new tools in the struggle to extract revenue from aggregators.
In the United States, a number of publishers, including The New York Times Co., recently joined together to introduce a system called NewsRight, which tracks the unpaid online use of their articles and seeks to turn aggregators into licensed, paying customers.
The German proposal goes further in taking aim at the use of snippets, not just full articles. If it works, publishers say, it could help swing the balance of power in the digital world in their direction.
“There is no other developed country that has given publishers this kind of right against aggregators,” said Christoph Keese, president of public affairs at Axel Springer and co-chairman of a copyright committee of German publishers. “This could be a benchmark.”
http://www.nytimes.com/2012/03/12/bu...b-profits.html
German Government Neo-Luddism
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Originally Posted by Dreadnaught
(SOPA anyone? Before you ask, I did check out what was in that bill before jumping on the anti-SOPA bandwagon). That said, I think the law is a bad idea, mostly because it seems rather arbitrary at what are newspapers and what aren't.
I think they deserve more criticism than other governments because this is the first (and, as far as I know, only) governing coalition to propose this. Coupled with a number of other Web/content policies plus their status as a battleground for electronics manufacturers to sue each other, I think they are truly unique at this time.
