Tuesday, July 6, 2010

Copyright: "Protection" for Whom?

One of my future classmates shared an article about a discussion document floated by the Federal Trade Commission (FTC) considering extension of copyright protection for news agencies.

Media organisations would have the exclusive right, for a predetermined period, to publish their material online. The draft also considers curtailing fair use, the legal principle that allows search engines to reproduce headlines and links, so long as the use is selective and transformative (as with a list of search results). Jeff Jarvis, who teaches journalism students to become entrepreneurs at New York’s City University, says this sounds like an attempt to protect newspapers more than journalism.

Why do news corporations merit such protection? I understand the Econ 101 explanation for copyright laws (and wrote a cringeworthy paper on the subject in high school). It boils down to incentivizing production of intangibles by lending them some of the properties of tangibles (i.e. excludability) to address some of the causes of market failure (i.e. freeriding).

Copyright laws, like any other laws, restrict the freedom of society, and therefore can only be justified if they also protect society. That was the original intent of copyright law-- to protect society from the underproduction of socially beneficial works. The Copyright Clause in the U.S. Constitution authorizes Congress "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." So the purpose was promoting science and useful arts, while the method was granting exclusive rights. But the rhetoric has changed. What was once the method is taken for the purpose. For example, Ayn Rand advocates copyrights as protecting "a man’s right to the product of his mind" (rather than a society's right to progress). And what about these newspaper "protections" being considered? Are they protecting society from harmful underproduction?

First, let me note some distinctions to bear in mind. There are products associated with news, but news is not a product. News itself--what happens in the world--is the story of humanity and is not subject to markets, nor, a fortiori, to market failure. Newspapers and newspaper delivery, for instance are products (the first a good, the second a service). More generally, communication of the news is a product, often entailing a combination of goods and services. Underproduced communication of the news would indeed be a social harm.

Communicating the news once required access to a printing press and physical delivery of newspapers. A journalist alone could not very practically communicate the news, given the high capital requirements and distribution costs. News corporations formed out of practical necessity, and coordinated the efforts of journalists, editors, photographers, printers, etc. to produce a periodical that could then be mass delivered. Physical limitations on communicative materials also required the news media to play a gatekeeping role, determining what news was fit to print in the limited space and also maintaining some semblance of credibility. So communicating the news required corporations, and corporations require incentives.

But now, a journalist (or anyone with knowledge of a news occurrence) does have a practical way of communicating the news. The capital requirements for communication are drastically different with the Internet. The coordinating role played by news corporations is no longer as necessary. Many functions of traditional news corporations can be crowdsourced now that traditional barriers to collaboration such as time and geography have been overcome. The need for mass media brands to signal credibility is reduced now that authors can easily link to other articles, multimedia, and primary sources, and people can comment directly on articles and discuss dubious claims, and even award reputation points. Plus the general public is better equipped to check credibility for themselves (as I did, for example, by finding FTC documents after reading the first news article), especially as digital literacy rises.

Lower news communication costs, by challenging mass media hegemony, have enabled niche news production. This actually increases news coverage for everyone, and additionally can bring hope of social justice to sparse populations or interest groups who have traditionally been ignored by the mass media. The example I have in mind is people with rare types of disabilities. In place of gatekeeping, a number of sites have taken to gatewatching, helping audiences navigate the vastness of news channels. Gatewatchers publicize, rather than publish, news, by providing headlines, summaries, and links to stories they deem relevant or noteworthy. Gatewatching also occurs when we "like" or "digg" articles, link to them in our blogs, and share them on our social networking sites (like when Daniel called my attention to the article on copyrighting).

In another age, government intervention via copyright law did mitigate underproduction of news communication. But the proposed strengthening of copyright laws is unneccessary, as news communication is at no risk of being underproduced. In fact, if the government is going to intervene, better to do so by increasing broadband access than by propping up newspaper corporations.


  1. A few thoughts...

    A) Most journalism is crap, IMO. Three issues. Most journalists are n > 1 (often n >> 1) degrees separated from the stories they report. More critically, few journalists have subject matter expertise in their subjects, which means they end up missing key points (at best) or misinforming (at worst). And of course, journalists have personal biases.

    The consumer of news has a problem: how to distinguish good reporting from bad. It's an instance of asymmetric information - the journalist knows more about the quality of her reporting than she typically lets on to the reader (lest she sacrifice credibility).

    Screening is costly, thus most readers screen at a high level, like a daily or weekly. If you're really committed, you might pay attention to who wrote the article or even read multiple takes on the same story. Or you can check the comments, reputation points, like you mentioned in your post. But each successive step gets more and more expensive.

    Ideally, consumers would get their information directly from the source, like you did by looking up the FTC report. But unfortunately, that's also pretty costly - it takes time, literacy, etc. Hence there's still demand for journalism because it ultimately reduces the cost of acquiring information.

    Back to the problem: What's the best way to ensure consumers get good reporting? Beats me. Maybe the best thing is to shift the industry from newspapers to the crowd. But I'm not convinced. What incentive will the crowd on the scene have to report if they can't claim the fruits of their labor? What incentive will trained experts like science writers have to translate research to layman's terms? Altruism?

    Copyright protection (a) gives incentives for producers to sell a good product, and (b) lowers the cost of consuming (screening) the news by pooling the reporting with more and/or higher quality inputs. (Think about the Android app market, as an example. From my experience, the avg. quality of paid apps is significantly higher than the quality of free apps. If my demand is inelastic, if I really need an app to do X regardless of price, I'll usually just skip the free apps and look at paid apps.)

    As many problems as NY Times and its brethren have, I still think they're light years ahead of the publicly licensed news I've seen. Besides, crowdsourced news can - and already does - coexist alongside traditional publishers.

    B) Private property is one of the cornerstones of this country. Why should a publisher not have full rights over the distribution of its product?

  2. (Responding to A)

    New media has the potential, if not yet fully realized, to address the issue that "Most journalists are n > 1 (often n >> 1) degrees separated from the stories they report" by empowering the general public to report what they directly see and experience. Before the rise of the big news corporations, news journalism production was ultra-local. Digital networked media can give us the best of both worlds-- the local and the aggregated global.

    Regarding subject-matter expertise, my first reaction is to point to BioMed Central which is pioneering a model for open access academic publishing, sustainable without copyrights and restricting access.That "screening is costly" implies an opportunity for technological innovation. Screening is already getting much less costly. I rarely have to physically go to the library. Google Alerts, RSS feeds, all sorts of Apps, etc. are being created to make screening faster, cheaper, and easier. The market structure for these (free vs. paid apps, advertising or not, etc.) also needs to be innovative. There is a demand, surely, for credibility and expertise. If we protect old market structures, we restrict the kind of innovation for new ones. And while "crowdsourced news can - and already does - coexist alongside traditional publishers," why should new laws favor and prop up the traditional publishers?

    Incentives for the crowd...That's what I really want to understand better. There's this cool storyfrom Australia: "The National Library’s newspaper digitisation program began two years ago, using Optical Character Recognition software to automatically convert old newspaper images into digital text. Although this is the latest technology, the small fonts and uneven printing of many of the newspaper pages made conversion difficult and not always accurate. Enter online users from all over Australia who were keen to help by correcting the text. More than 5000 online users have corrected text...From a stay-at-home mum with a special interest in family history to a retired couple keen on shipping, the correctors have provided enormous assistance to the program, with some spending up to 45 hours a week correcting text."

    Why do people mark places on Google Maps, write consumer reviews, contribute open source code, or edit Wikipedia? There are a lot of reasons, but I think something about the idea of a commons resonates with humanity, even if it doesn't mesh with the market model based on individual rational actors. The (physical) commons used to be such a part of community life. Now, lacking that, people have this opportunity to participate in creative commons, or information commons, and to economists' amazement they are grasping that opportunity. So I think we, starting off in economics now, are in a very cool position :)

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  4. (Responding to B)

    "Private property is one of the cornerstones of this country." At least after European germs wiped out those "pesky collectivist natives"?

    The Declaration of Colonial Rights included the phrase "life, liberty and property,"
    changed to "Life, Liberty and the pursuit of Happiness" in the Declaration of Independence. Adam Ferguson's "An Essay on the History of Civil Society," first published in 1767, has a chapter called "On Happiness" that is still very relevant today (and uses the phrase pursuit of happiness). Ferguson was part of a commission to mediate between the American colonies and the British government, so the Founding Fathers would have been aware of his views, which held the pursuit of happiness as very distinct from the pursuit of property.

    "Happiness is not that state of repose, or that imaginary freedom from care, which at a distance is so frequent an object of desire, but with its approach brings a tedium, or a languor, more unsupportable than pain itself …it arises more from the pursuit, than from the attainment of any end whatever; and in every new situation to which we arrive, even in the course of a prosperous life, it depends more on the degree in which our minds are properly employed, than in does on the circumstances in which we are destined to act...

    If, in reality, courage and a heart devoted to the good of mankind are the constituents of human felicity, the kindness which is done infers a happiness in the person from whom it proceeds, not in him on whom it is bestowed; and the greatest good which men possessed of fortitude and generosity can procure to their fellow creatures is a participation of this happy character. If this be the good of the individual, it is likewise that of mankind..."

    Employing our minds, avoiding languor, partly motivate crowdsourcing. In the same chapter, Ferguson describes “that habit of the soul by which we consider ourselves as but a part of some beloved community, and as but individual members of some society, whose general welfare is to us the supreme object of zeal, and the great rule of our conduct. This affection is a principle of candour, which knows no partial distinctions, and is confined to no bounds; it may extend its effects beyond our personal acquaintance; it may, in the mind, and in thought, at least, make us feel a relation to the universe, and to the whole creation of God.” This also is about the appeal of the commons. And is one of the cornerstones of this country.