Tuesday, June 30, 2009

Judge Richard Posner's misguided view of the Internet and newspapers



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Judge Richard Posner teamed with University of Chicago economist Gary Becker to create The Becker-Posner Blog where the two Yoda-like oracles weigh in on the economic issues of the day. Now, the two new bloggers are no slouches: Gary Becker's contribution to economic thought is something I learned at Berkeley: "Human Capital Theory" or the idea that our age, education, and other factors combine to determine our economic income over time. Judge Posner's a famous legal figure, and currently a lecturer at the University of Chicago and on the United States Court of Appeals for the Seventh Circuit in Chicago. Both of them are conservative thinkers, so having an intellectual curiosity about those some of us call "Neoconservatives", I was drawn to read what they're distributing. This subject on "the future of newspapers."

Note: I'm Neoliberal.

Posner's right about the future of news -- sort of

First, The Judge gives a good explanation of what's happening with newspaper revenues, but his discussion of the system behind this decline assumes the importance of newspapers. This is the problem with what I call "thinking within your own age group" because while Posner has a blog and is using it, he fails to mention "blogs" at all in his post and blogging is considered by some to be a "young person's game." Using the term "websites" is incomplete because websites don't allow for the installation and updating of information as fast as blogs do. Blogs are much of the reason newspapers are getting hammered by losses in ad revenues as the money has moved to online information sources. Technorati.com's recent blog study estimated that blogs have a mean annual revenue of $6,000, with $75,000 for those with over 100,000 unique visitors per month. Given that bloggers make money via variations in ad revenue payments, that's money which went to newspapers before the emergence of blogs.

Thus, even with newspapers concentrating online efforts on their own websites, competing with blogs is still a problem: for example, 4 of the top 10 entertainment websites are blogs, including TMZ.com, which turns around news and updates its blog much faster than its old media-on-the-web competitors. Judge Posner does not discuss blogs like TMZ, and seems to imply that all original content comes from traditional news outlets, but the success and operation of TMZ, and ProFootballTalk.com, which I see as the TMZ of the NFL, proves that blogs create their own news from their own sources separate from, say, the New York Times, which Posner uses as an example what to do to save newspapers.

This is where Posner makes a total error in thinking when he writes:

Expanding copyright law to bar online access to copyrighted materials without the copyright holder's consent, or to bar linking to or paraphrasing copyrighted materials without the copyright holder's consent, might be necessary to keep free riding on content financed by online newspapers from so impairing the incentive to create costly news-gathering operations that news services like Reuters and the Associated Press would become the only professional, nongovernmental sources of news and opinion. (my emphasis)

In this Judge Posner thinks only Reuters and the Associated Press are "the only professional, nongovernmental sources of news and opinion." That's what he wrote. Let's think about that. To be "professional is to get paid for doing a job" as a professional blogger does and as the blogger's not associated with the government, they are nongovernmental.

I think you see where I'm going with this: enter TMZ.com, which is a "professional, nongovernmental source of news and opinion" that has been first with many news stories. Posner might say, "Well, TMZ can also protect its news via copywrite" - true, but given the expansion of blogs and videos and the rise of citizen journalism, the number of outlets producing original stories is expanding dramatically, which increases the chance that TMZ's efforts to protect its news from being linked to would become useless if consumers can go elsewhere for similar news. If there's another blogger making a call to the same news source even to confirm what that person read on TMZ.com, then the game's over, and that happens all the time. And with this process, the demand for that item of information from that single source is reduced.

Judge Posner needs to code a website

The other problem with Judge Posner's idea is it goes against the process of attracting the "in-bound links" a website or blog needs to maintain a high "page rank" and be placed higher in a search for "Michael Jackson's will". No one will link to the NY Times if they fear a lawsuit coming their way; better to go elsewhere to get the information and let the Times suffer from the lack of link traffic. If Judge Posner understood how to write the code for a website from scratch, he'd have been sensitive to the basic practices of "search engine optimization," and jettisoned his own idea.

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