Comments on: The Raging Debate Over The Link Economy

By: The Early 20th Cenury Link Economy « State of the Fourth Estate

The Early 20th Cenury Link Economy « State of the Fourth Estate — Wed, 23 Sep 2009 15:53:04 +0000

[...] political blogs, however, clubland papers could rely on the amplifying effect of a link economy. In The Rise and Fall of the Political Press in Britain, Stephen Koss puts it from the point of [...]

By: jeremy

jeremy — Mon, 17 Aug 2009 20:06:46 +0000

I’d say they’re struggling not because of Google’s enormous advantage, but because consumers no longer want their papers, and to finance their debt and maintain their current staff of journalists they need more than web advertisements can provide.

It sounds to me like consumers do want their papers, or at least what is in their papers. If consumers really didn’t want the product of the newspapers, then this whole issue would go away, because no one would aggregate that content, and no one would consume that content.

So people do want it, non?

By: Daniel Tunkelang

Daniel Tunkelang — Mon, 17 Aug 2009 18:07:12 +0000

Oh, and I’m enjoying this too! As are the lurkers, I hope.

By: Daniel Tunkelang

Daniel Tunkelang — Mon, 17 Aug 2009 18:06:32 +0000

Then I think we agree more than we disagree. For example, they could agree, en masse, to exclude bots–something that doesn’t involve pricing but would get them past their current prisoner’s dilemma. I’m not suggesting they do this, but I want to give a hard-hitting example of the kind of collective bargaining power I’m talking about.

By: ken ellis

ken ellis — Mon, 17 Aug 2009 18:02:35 +0000

My understanding of the law is that they can establish uniform standards, for example linking and excerpting standards more lenient that what Fair Use might provide for. That’s not anti-competitive. But they can’t collectively bargain over dollar amounts or revenue sharing percentages. That to me is a sound general law that protects consumers from artificially high prices and encourages competition. Enjoying the discussion by the way.

By: Daniel Tunkelang

Daniel Tunkelang — Mon, 17 Aug 2009 17:25:53 +0000

Very nuanced. Let me phrase the question differently. Do you think the current broad antitrust regulations prevent–or should prevent–news organizations from colluding / collectively bargaining with aggregators over the terms of how their content is aggregated?

By: ken ellis

ken ellis — Mon, 17 Aug 2009 16:48:37 +0000

If the status quo were the other way around, no, I wouldn’t argue for imposing regulations on news orgs to prevent them from collectively bargaining. I would argue for broad antitrust regulations similar to what we have now, and those would apply to the news industry.

By: Daniel Tunkelang

Daniel Tunkelang — Mon, 17 Aug 2009 15:18:18 +0000

But that’s not here or there. I’m not suggesting that the government regulate Google, but rather that the unregulate the news organizations. Again, I’m making a case for government uninvolvement. Imagine if the status quo were the other way around. Would you argue for imposing regulations on news organizations to prevent them from collectively bargaining?

And yes, I realize I’m using a loaded phrase. But it really does mean the same thing as colluding, acting as a cartel, etc. I don’t think there’s a neutral term.

BTW, I’m not claiming that the news organizations can solve their problems overnight through such a strategy. But I think it would at least level the playing field. Then, as you put it, the marketplace could pick the winners.

By: ken ellis

ken ellis — Mon, 17 Aug 2009 15:15:38 +0000

and by government getting involved, i mean existing antitrust laws kick in, not legislative involvement.

By: ken ellis

ken ellis — Mon, 17 Aug 2009 15:10:57 +0000

Yes, but I’d say they’re struggling not because of Google’s enormous advantage, but because consumers no longer want their papers, and to finance their debt and maintain their current staff of journalists they need more than web advertisements can provide. If Google started to abuse its market position, and say ask publishers to block other aggregators otherwise lose their Google traffic, as Microsoft did with Windows, the government would probably get involved.

By: Daniel Tunkelang

Daniel Tunkelang — Mon, 17 Aug 2009 15:01:51 +0000

So you’re asserting that the burden is on me to justify changing the interventionist status quo to a non-interventionist regime that allows the free play of market forces? Will have to check my Hayek to see if that makes you a classical conservative.

But the case is pretty straightforward. News organizations clearly are not in a position of strong market power–they’re struggling. If they were factory workers in comparable straights, leftists would be calling to allow them to unionize in order to exercise collective bargaining power. Meanwhile a few aggregators have taken gatekeeper roles in the link economy–I’d call it more of an oligarchy than a monopoly, despite Google’s enormous advantage over its rivals. The current regulatory regime takes sides in this market struggle. Why are you in favor of that?

By: ken ellis

ken ellis — Mon, 17 Aug 2009 14:50:40 +0000

I’m not fundamentally opposed to government intervention, but I think the decisions made by the government are frequently sub-optimal. So I’m against what I’d call tinkering. And this would involve another decision — against long-standing antitrust laws that have had a full and rich debate, and that despite their problems I think have been good for the people in a large number of industries. Which is why I say, unless there’s some manifest evil, I don’t want them to do anything. In the case of antitrust, the evils a century ago I think were manifest. Now that I think about it, I guess I should stop saying I have Libertarian leanings and call myself a classical conservative. Oh well.

By: Daniel Tunkelang

Daniel Tunkelang — Mon, 17 Aug 2009 14:02:30 +0000

As you point out, I’m asking for government dis-involvement. Let me turn the question around: why do you think government intervention in the form of the current prohibition on news organizations collectively bargaining with aggregators (a nice spin that “colluding on prices”, eh?) is necessary? I think the burden should call on those who insist on intervention, not those who would remove it. Then, indeed, let the marketplace decide. Right now the marketplace isn’t being given that opportunity.

Actually, the near simultaneous announcements by major news organizations that they are all considering erecting pay walls suggests that they are finding ways around the anti-trust regulations. So maybe the point is moot.

By: ken ellis

ken ellis — Mon, 17 Aug 2009 13:55:41 +0000

I still think the debate doesn’t need to be resolved, and it should be left to the marketplace. Why do you think an anti-trust waiver is important? Is it that you think some sort of government intervention is the only way good journalism will survive? My litmus test for government involvement (or disenvolvement in the case of anti-trust) is usually whether some clear evil needs to be remedied, as with the lack of access to affordable health care for many people.

By: Daniel Tunkelang

Daniel Tunkelang — Mon, 17 Aug 2009 02:44:06 +0000

Yeah, you’re going to institute death panels, and I’m not letting you near my grandma!

But seriously, I don’t think it’s quite that simple. Specifically, the debate about whether to allow news organizations an anti-trust waiver is an important one, and I suspect that it will have a dramatic effect on the marketplace.

By: ken ellis

ken ellis — Mon, 17 Aug 2009 02:29:13 +0000

The great thing is that, unlike health care, the debate doesn’t need to and never will be resolved by advocates for the various positions. Some companies will put up pay walls, some will give it away for free, some will only block aggregators, some will try to negotiate for rev share with aggregators, and plenty will find places in between or new directions. The marketplace will pick the winners.