Thursday, November 8, 2012

Publishers abroad take on Google News, demand compensation


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They say you should never take on people who spill ink by the barrel, but your odds are better when you traffic in terabytes of data. In the United States, Google and big media went at it for several years over Google Newsand Google won, taking its argument for a free and open Internet all the way to the bank.

It's a little counterintuitive, but large newspapers believed that Google was hurting them by generating a page of links - with headlines and a short summary - to articles that the newspapers had paid to create. Publishers said that what was supposed to be an index of the news had become the news, and was a disincentive for people to click through to the source.
US publishers eventually decided that the only thing worse than being aggregated by Google News was not being aggregated at all, but the fight has been joined anew in other countries by publishers who argue that the giant US search company is picking their pockets every time it links to articles.

There's a large boycott under way in Brazil, punishing legislation is gaining momentum in Germany, and there is talk of a similar effort in France.

You wouldn't know it by speaking to Eric Schmidt, Google's executive chairman. He takes the challenges to Google News seriously - he just returned from talks with President Francois Hollande of France - but he sounded sanguine on a phone call from Chicago.

"We had some good discussions and I would expect that we will reach some kind of agreement by the end of the year," he said.

Don't expect that agreement to acknowledge the principle of ancillary copyright, which has been pushed in Germany and elsewhere. It suggests that Google and others should pay for featuring headlines and the first few lines of an article, while Google asserts that this constitutes fair use.

In France and Germany, publishers have found willing partners in their national governments as they try to put the squeeze on Google. It probably won't work no matter who is doing the squeezing, because while the rhetoric from Google is always friendly, its position is always firm.

"Whenever you are dealing with government, you want to be very clear about what you will do and will not do," Schmidt said. "And we don't want to pay for content that we do not host. We are very clear on that."

Back in this hemisphere, more than 150 newspapers in Brazil decided in 2011 to unilaterally pull themselves out of Google News, including many of the largest papers in the country. The debate blew up again at a conference in Brazil last month in which representatives from Google and the country's newspapers had a heated argument over how just how fair "fair use" is. Again, Schmidt was hardly frantic about it.

"That's a fine choice," he said. "Publishers are free to do as they wish, and there is plenty of competition for news in that country, so we are not overly concerned."

There are a few reasons Google remains calm amid a storm of pushback. According to Google, its search engine delivers 4 billion clicks a month to news media outlets, 1 billion of which come from Google News. That's a lot of leverage.
Publishers elsewhere have monitored the woes of US newspapers with a great deal of interest. German and Brazilian publishers are in good shape - French newspapers less so - and they still have a hold

on their customers and their business models. They'd like to keep it that way.

"German publishers are in a much stronger position than their American counterparts. They watched the decline in American publishing and they are trying to fortify their lines while they can," said Wolfgang Blau, editor-in-chief of Zeit Online in Germany, saying that legacy publishers would rather change the subject than their business model. "It's a lost battle really, but for the time being, Google is an easy target."

In an email, Mathias Dopfner, chief executive of AxelBSE 4.80 % Springer, the largest newspaper publisher in Germany, said publishers everywhere needed to protect themselves in order to thrive.

"We foster aggregation wherever we can," he wrote. "But we cannot accept commercial aggregation of our content at the price of zero," he said. He added, "Even excerpts of stories harm our business because people tend to not click through to the original sites if aggregated news overviews become too comprehensive." (Europe has historically had very strong copyright protections, and the US standard of fair use is less common there.)

Other jurisdictions also have flexibility that US publications don't. If all the publishers in the United States banded together to block Google, as in Brazil, they would be in court faster than you could say the Sherman Act. And while Washington faced a Web-enabled protest when it tried to assist the entertainment industry with anti-piracy legislation, German and French publishers have a much closer - some would say symbiotic - relationship with the government.

The pushback against Google is strong because the stakes are high. English-language sites like The Financial Times, The Guardian and The New York Times can generate global audiences and perhaps end up thriving in a digital era. But news rendered in Portuguese, French and German has a far more limited horizon. And because Google used the flexibility of the European Union to establish a division in the low-tax environment of Ireland, the billions spent on ads in France and Germany are not being taxed by those jurisdictions.

Schmidt called that "a very separate issue" and said Google was in "full compliance with the letter and spirit of the law. We are doing very well in terms of market share, but that doesn't mean that we are doing anything wrong." He added, "Newspapers have a very real problem and we care about what happens to them. But they need to monetize the clicks we send them in a way that ensures their future."

For a company in the middle of a many-front war, Google is confident because much of the world is on its side. It is a very large chunk of the Web, one that users have come to believe will provide friction-free access to much of the information on the planet.

Because of its size, Google has become a convenient pinata, but hitting it with sticks probably won't yield a mother lode of shared revenue. In the end, it doesn't matter what the publishers and their allies in government think is the right thing to do.

"There is no way that you can treat it as a product that you can protect with the same restrictions you had in previous ecosystems," said Rosental Alves, the former executive editor of Jornal do Brasil and now a professor of journalism at the University of Texas. "Information is liquid and unstoppable." 

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