Newspapers Gather In Secret (With An Antitrust Lawyer) To Collude Over Paywalls

from the good-luck dept

You may have noticed a bunch of stories recently about how newspapers should get an antitrust exemption to allow them to collude — working together to all put in place a paywall at the same time. That hasn’t gone anywhere, so apparently the newspapers decided to just go ahead and try to get together quietly themselves without letting anyone know. But, of course, you don’t get a bunch of newspaper execs together without someone either noticing or leaking the news… so it got out. And then the newspapers admitted it with a carefully worded statement about how they got together “to discuss how best to support and preserve the traditions of newsgathering that will serve the American public.” And, yes, they apparently had an antitrust lawyer or two involved.

In the end, though, it won’t matter. If a bunch of newspapers decide to lock up their content, they will only be digging their own graves. Smart newspaper execs will stay away and get all of the traffic. The wire services that compete with the Associated Press (such as Reuters, and CNN’s new wire service) would be well served to put out a press release now hyping up the fact that their content is free. Other, smaller providers of news should trumpet how much they want people to come to them for news instead of paying, and then watch in amusement as the newspapers (whether it’s an antitrust violation or not) discover both their advertising and their subscription money disappear.

Whether it’s antitrust or not, it sure looks like collective suicide.

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Comments on “Newspapers Gather In Secret (With An Antitrust Lawyer) To Collude Over Paywalls”

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54 Comments
John Doe says:

What did the lawyers do?

You would think anti-trust lawyers would have advised them not to collude in the first place. The papers should get their money back as the lawyers didn’t do their jobs. The papers are going to need the money anyway if they put up a pay wall; they sure won’t be getting any of my money.

Anonymous Coward says:

Re: What did the lawyers do?

You would think anti-trust lawyers would have advised them not to collude in the first place. The papers should get their money back as the lawyers didn’t do their jobs.

Nah, they’re just using the cloak of “legal counsel” as cover. The way it works is that if you can hire a lawyer to tell you what you want to hear, then you can use that as a defense in court when you get caught. An example of this is the way the Bush administration got some lawyer(s) to tell them that torture was OK. Now they’re claiming “Hey, the lawyers OK’d it!” Bingo, get out jail free.

Anonymous Coward says:

Re: Re: What did the lawyers do?

OK. Now they’re claiming “Hey, the lawyers OK’d it!” Bingo, get out jail free.
Which seems rather strange if you think about it. If your accountant tells you some shady account manipulations are OK and the revenue services think the accounting was faulty, do you think they are going to say, “Ah, don’t worry about it!” or do you think they will demand the correct amount plus interest charges? If you get legal advice that tells you something is legal when it isn’t, the court should say, “You got bad advice and should sue your lawyer for malpractice, but the fact that you consulted him beforehand indicates you suspected you were at least flirting with illegality. The court finds you guilty. Extenuating circumstances will be considered in sentencing.”

Derek Kerton (profile) says:

Re: Re:

“Well deserved”? That’s over the line.

You shouldn’t suggest or endorse that kind of response, even with a ten foot pole, and 40 weasel words.

Violence is seldom the answer. Very, very, very seldom. Maybe OK if you’re William Wallace, but Ghandi was more successful. Violence is certainly not warranted for douchebags who screw up the entertainment industry.

Do you think your words would have a calming effect on a crazy potential murderer, or an exacerbating effect? When discussing violent reaction, be sure to stay on the right side of that fence.

Anonymous Coward says:

“collude” is a bit of a stretch here.

On that basis, Mike’s “free summit” is collusion by those who want to push free. Every industry convention, meeting, get together, or “where is our industry going” round table is collusion.

The presence of lawyers specialized in that field would more than likely be to make sure that they don’t cross that line. It is pretty much a good idea to do that.

chris (profile) says:

Re: Re:

“collude” is a bit of a stretch here.

On that basis, Mike’s “free summit” is collusion by those who want to push free. Every industry convention, meeting, get together, or “where is our industry going” round table is collusion.

col⋅lude
/kəˈlud/[kuh-lood]
–verb (used without object), -lud⋅ed, -lud⋅ing.
1. to act together through a secret understanding, esp. with evil or harmful intent.

meeting in secret to discuss price fixing… sounds like collusion to me.

Mike Masnick (profile) says:

Re: Re:

On that basis, Mike’s “free summit” is collusion by those who want to push free. Every industry convention, meeting, get together, or “where is our industry going” round table is collusion.

Uh, not quite. A group of competitors gathering to discuss a common strategy? That’s conclusion. A bunch of random individuals and companies interested in new business models? That’s not collusion.

See the difference?

Anonymous Coward says:

Re: Re: Re:

Well, a couple of things here.

First of all, you have to wonder if they are in fact discussing a specific common strategy, or like other businesses, they are discussing ways to work in the digital era.

Second, if they are all part of a new group (say like AP), are they not allowed to work together? After all, it isn’t like they have a monopoly on the news.

Third, and this is very important, are these guys not allowed to discuss their common business together? Even if they do all decide to go to paywalls (stupid derogatory term for a membership / subscription business model), do they have some sort of monopoly? Nope.

If it is such a bad idea, and you think news organizations doing this have a buggy whip mentality, then let them do it and die. If they don’t die, prepare to come back and write a blog entry that describes why you were wrong.

JustMe (profile) says:

#11

No, those are people exercising their first amendment rights.

“…or the right of the people peaceably to assemble…”

Source: http://www.archives.gov/exhibits/charters/bill_of_rights_transcript.html

The difference is that people organizing to discuss a common interest is legal. Business competitors meeting to discuss common strategies is clearly illegal. From TFA, from their own publicity report, they were “the group listened to executives from companies representing various new models for obtaining value from newspaper content online”

“Collusion is an agreement, usually secretive, which occurs between two or more persons to deceive, mislead, or defraud others of their legal rights, or to obtain an objective forbidden by law typically involving fraud or gaining an unfair advantage. It is an agreement among firms to divide the market, set prices, or limit production. It can involve “wage fixing, kickbacks, or misrepresenting the independence of the relationship between the colluding parties.” All acts effected by collusion are considered void.”

Source: http://en.wikipedia.org/wiki/Collusion

I’m sure they didn’t explicitly discuss pricing strategies and stayed on the right side of the law. However, even the meeting itself is troubling.

Anne says:

I don’t understand the widespread objection to newspapers finding a unified one-payer way to charge for their content, both current and archived.

The current mentality seems to be that everything found on the Internet should be free. When it comes to archived content, it took the LA Times years to scan every single news story from 1881-1985 into individual PDF image files, as well as completely indexing the entire system.

Now, I’m not arguing that a paywall is good for business, and perhaps the advertiser-supported open format is better than charging. I just don’t believe that the government (or the general public, for that matter) should be dictating how the newspaper companies run their own businesses.

Mike Masnick (profile) says:

Re: Re:

The current mentality seems to be that everything found on the Internet should be free.

Not should… will. It’s just the basic economics at work.

Now, I’m not arguing that a paywall is good for business, and perhaps the advertiser-supported open format is better than charging. I just don’t believe that the government (or the general public, for that matter) should be dictating how the newspaper companies run their own businesses.

They’re not dictating how the newspapers can run their business. If newspapers want to commit suicide and charge, they’re free to do so. But what they can’t do is meet in secret to all come out with the same price at once…

Anne says:

Re: Search Results?

Some newspapers – such as the Wall Street Journal – send me email newsletters with one line of the story, and if I want to read the whole thing, they expect me to click on a link to pay for the rest of the article.

With the WSJ, all you have to do is copy the title, go over to Google News and paste, and most of the time, that pulls up a free and complete news story. Other newspapers may work the same, but I don’t know, because my employer pays the bill for my online access to everything except the WSJ.

Pwdrskir (profile) says:

Repeating the Past

The current battle the newspapers are waging echoes the New York Typesetter’s Strike of 1978. That strike affected the Post, News and Times, and was all about job security and innovation. From the Time article link below, ?The city’s publishers have been trying for more than 15 years to revamp their antediluvian production methods and eliminate wasteful staffing practices, but the craft unions, fearing job losses and declining membership, have always resisted.? Sounds familiar.

Again from the Time article, “The union argues that innovations at the papers have created a need for more?not fewer?pressmen, and that management’s proposal would eventually cost up to 50% of the membership their jobs?a figure the publishers do not dispute.”

Interesting that the newspapers wanted to innovate in ’78, but they decline in ’09.

http://www.time.com/time/magazine/article/0,9171,919810,00.html

Ugly American says:

Where the 'news' comes from

What most people don’t realize is that newspapers just rewrite news they get off of a handful of newswire providers like AP, Reuters & Bloomberg. They also get propaganda ‘press packs’ from governments, large corps & lobbyists and often print them word for word. Then they take all this junk and mix it up with ads & spin it to their target demographic since most people only want to read/watch things they already agree with instead of objective facts.

You can cut out most of the spin & ads just by going to the news wires directly and reading the facts.

Anonymous Coward says:

I can’t believe what I am reading. No one want’s to pay for anything? All you want is the watered down headlines from a news syndicate?

I agree there has to be some innovation. But I would rather pay a nickel to read a good article and forgo the ads. How do you expect journalism (not the headline, press release for the masses crap) to survive?

I guess none of you read your local paper.

Of course they have to do it all at once. As soon as one charges all of you will go somewhere else.

FTR, I am not associated with any publication in any way.

Anonymous Coward says:

Re: Re:

Agree. I really can’t believe the naivete of most of the other posters here. You know, not *everything* is a conspiracy. RIAA/MPAA, yes, they’re the bad guys, and they deserve to fail. But newspapers are vital to our democracy, and they are truly in deep trouble because the ad-supported model doesn’t work. You want real reporting, someone has to pay for it.

Tgeigs (profile) says:

Re: Re: Re:

“But newspapers are vital to our democracy, and they are truly in deep trouble because the ad-supported model doesn’t work”

What the hell are you talking about? How are newsPAPERS vital to our democracy? Why does the news HAVE to be printed on paper for it to work? Why doesn’t it work if these same exact people put their content on newsSITES instead of newsPAPERS?

And goddamit the ad-revenue model sure as shit worked for the past 200 years. People, please stop pretending that subscription costs have EVER gone to ANYTHING other than the cost of printing and distribution. W/the internet, there IS no cost of printing and distribution.

Anonymous Coward says:

Re: Re: Re: Re:

“How are newsPAPERS vital to our democracy?”

Hmmm..let’s see, where to start? Watergate? Washington Post? You can you see the Drudge Report or Huff Post digging that one up, and having the credibility for the story to stick? Would Woodward and Bernstein have had the resources and support they needed to follow through? Freelance journalism is fine, but there are some cases where you need large organizational backing to pursue a tough story that has implications for society.

Re advertising, the rates for internet advertising are minuscule compared to the rates charged for print. Large news organizations have tried, and so far many have failed to monetize their online component solely w/ advertising.

So, while I personally would like to see Mr. Murdoch thrown under a bus, there are too many important newspapers out there dying, and ponying up 50 cents or whatever to read the newspaper, er, i mean, the daily online edition of what was once a newspaper, seems like a small price to pay.

Dave says:

Burn them to the ground!

That’s terrible!

You know what the newspapers should really be doing instead?

They should find a way to work together and all change their business model so they can survive with the changes on the internet!

And they should maybe hire some anti-trust lawyers so they make sure they’re not doing anything illegal.

Oh… wait… I guess that’s what they WERE doing.

Derek Kerton (profile) says:

Re: Burn them to the ground!

Yes, you’re being sarcastic.

But unless you learn what Anti-trust and collusion mean, you really aren’t going to be very funny on this thread.

When you understand the topic of collusion, this should be a red flag: “to work together and all change their business model”. And yes, that is terrible…even if it would be irrelevant to their toil.

Anonymous Coward says:

Here’s an idea. All the newspapers go out of business. All of a sudden, Google news is empty because they no longer have any sources for stories. Instead of factual news, we are down to reading blogs like this one to find things out.

Imagine how ignorant people would be if their only source of news was Techdirt.

Tgeigs (profile) says:

Re: Re:

“Imagine how ignorant people would be if their only source of news was Techdirt.”

Even pretending for a moment that there weren’t good news blogs that offer independently gathered information, I’ll still take ignorant over purposefully misinformed, or do you think you actually get honest factual news from any major media source today?

Derek Kerton (profile) says:

Re: Re:

In your doomsday scenario, would there be demand for good news content?

Do you think that someone with a clue could build a business to deliver that news content to provide a supply for the demand?

People like you seem to have NO faith whatsoever in a free market, in entrepreneurs, and in economics.

The fact that we already have dozens of examples of these entrepreneurs in action seems to also go under your radar. And yes, Techdirt, HuffPo, and hundreds of others are examples. It won’t be just blogs, either, if that’s what you’re worried about.

Anonymous Coward says:

To the extent that paper is bad for the environment (because it cuts down trees and requires more energy) I’m all for switching to a paperless society. Still, sometimes it’s nice to things on paper, sometimes monitors can be more strenuous on your eyes? With LCD monitors these days that’s not so much an issue anymore though (it was back when everyone had CRT monitors).

Derek Kerton (profile) says:

Re: Re: paywall definition

By no means derogatory. Merely descriptive. A paywall is a tool that can be used well, or used in bad judgement. Just like a screwdriver.

Definition: On a website with some free content, and some paid content, the paywall is the line that divides the two. To cross it, some form of payment is expected.

There are plenty of examples of paywalls that make good sense. Have unique content that is scarce and no direct competitors? Maybe you should use a paywall.

Yeebok (profile) says:

The crux of the problem ..

Is that most papers pretty much copy paste 90% of a story on Reuters or another paper. The similarities between BBC (UK) and News.com (Aus) stories on the same subject are quite scary – same if you compare any 2 news sites.
The papers realise this and they all want to make us pay for their 2 keystroke stories but of course if one puts up a pay to read (PTR) setup, the others will get the traffic that they lose. Last one to put up a PTR wins, almost. However like any company, none of them want to be last to get their part of this “magic profit” so they all decide to do it at the same time. Sorta like lemmings really.
That’s my jaded take on it. The problem is I can manage not reading “the news”, as opposed to “interesting stuff” like I find on this site, which I can’t live without as easily. That doesn’t mean I’d necessarily pay to read here either though. Call me a cheapskate.

Reporter Ed says:

Newspaper wage collusion

Fact is newspaper execs have been breaking anti-trust laws and colluding to keep reporter wages low for 30 years. That’s why the avg. Wage for reporters with Journalism degrees is $34,000 s year compared to an average of $51,000 per year for other jobs professions requiring college degrees. The newspaper cronies also colluded to keep mileage reimbursement at 27 cents per mile, wherebit was when gas was $1.80 per gallon, even though gas is now $4 per gallon and fed mileage rate is 55 cents per mile. The money they have stolen from employees was used to buy chains of papers and now that bad karma isbcomingbback to bite them with newspaper decline and nobody wants to work for these crooks.

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