Time for a Royalty System for Aggregators?

As the demand for digital news -- via aggregation -- continues to increase, the supply is decreasing. Maybe we should charge companies that aggregate content to reinvigorate the industry.

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Reuters

After years of reeling from the impact of Internet-based competition on revenues, major news organizations are embarked on a variety of initiatives they hope (or better yet, expect) will finally recoup some of what has been lost. For anyone in the field, there is a growing vocabulary for strategists to master: paywalls, metering, micropayments, and mobile subscriptions, among others. With so much energy and enterprise devoted to reversing the downward spiral, there is a reasonable chance that 2012 could mark the start of a turnaround for some companies.

Rick Edmonds of the Poynter Institute, who is a particularly astute follower of trends, alerted me to an impressive new venture called NewsRight that is backed financially by the Associated Press and twenty-eight other news organizations, including The New York Times Co., The Washington Post Co., The McClatchy Co., Hearst Newspapers, and Germany's Axel Springer Group. The initial objective is to license content from leading news gatherers that is now being used (pilfered is the operative term) by aggregators who have paying customers or sell advertising on their sites but do not flow any money back to the content originators. The Associated Press began to establish what it called the News Registry in 2009 to track the unauthorized use of its output across the Internet. NewsRight is a substantial expansion of that project, with the ambitious goal of providing high-quality content but collecting fair payment in return.

After leaving ABC News, where he had been president for almost fourteen years, David Westin was recruited last spring to serve as chief executive of what came to be called NewsRight, bringing together aformidable group of investors and refining the technical and business framework for the partnership. Westin was trained as a lawyer (he was a Supreme Court clerk) and has been joined in top management by the AP's experienced general counsel, Sri Kasi, who had been instrumental in shaping the tracking concept for the news agency. So far, about $30 million has been raised from the backers, and thirty additional companies have agreed to provide content, making a total of over 800 news sites thatwill be part of this vast cross-section of material -- the use of which NewsRight will closely monitor.

In his report for Poynter on NewsRight, Edmonds concludes,

the venture will likely be greeted with derision or yawns by the digital intelligentsia, who has long decided that fences around content are retro and futile with the Internet providing users so many avenues to free news access. But we are about to have a real-world test of that proposition, where even middling success would count as a big win for the legacy companies who have long wanted to be paid more and more broadly for the news content they originate.

That judgment clearly poses a substantial challenge for Westin, who navigated an extraordinarily complex set of problems in his tenure at ABC News with what was said to be diplomatic skill and fortitude. Nonetheless, while there, he had to make sweeping staffing reductions to meet budgetary demands, a painful decision for even the most-skilled executives. Recognizing the consequences of those cuts, Westin came to NewsRight determined that additional revenues will help to underwrite the reporting that is the indispensable asset of the participating news organizations.

Presented by

Peter Osnos is a contributing writer for The Atlantic. He is the founder and editor at large of PublicAffairs books and a media fellow at the Century Foundation.

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