NEWS GROUP OPEN NEW ONLINE FRONT / THE FINANCIAL TIMES ( RECOMMENDED READING )

News groups open new online front

By Andrew Edgecliffe-Johnson and Kenneth Li in New York

Published: December 1 2009 13:02

The US news industry opened a new front on Monday in its battle to find a better online business model, with the publication of a study intended to arm publishers in their attempts to make allies out of former foes such as Google, Yahoo and AOL.

The Fair Syndication Consortium, a group of more than 1,500 newspaper publishers, said a month-long study of how news spread across the internet found that the average American newspaper story was being copied 4.4 times in full or in part by unauthorised websites.

The study of 101,000 articles published by 157 newspapers found that more than 75,000 sites reused 112,000 almost exact copies without authorisation, and a further 520,000 articles in part. The problem was most serious for large national publishers, with 15 unathorised reuses on average.

The study, conducted by Attributor, a content tracking business, will form a critical part of upcoming negotiations between the news industry and online advertising networks, Jim Pitkow, Attributor’s chief executive, told the Financial Times.

Under the Digital Millennium Copyright Act, publishers can already force ad networks to ensure that unauthorised stories alongside which their advertising appears are taken down, although few such requests are made.

But publishers are eager to try a different approach, which would allow them to claw back the ad revenues being made by sites that are distributing their content without the authorisation of a traditional syndication agreement.

Their starting point is to try to avoid the mistake of the music industry, which lost consumers’ sympathy for its struggles to create a viable digital business model when it started suing illegal file-sharers.

“We want to lower the barriers for people who want to do the right thing to be able to do the right thing,” Mr Pitkow said.

The consortium, which is led by Attributor, is planning to allow the unauthorised stories to stay up, avoiding any disruption to bloggers and readers, but to push for a share of the sites’ revenues.

But rather than seeking small payments from each of the tens of thousands of sites involved, the publishers plan to lean on the handful of large advertising networks that account for most of the sites’ revenues. They plan to push the ad networks to divert revenue from the sale of ads alongside their stories back to the creators of that content.

The pitch to ad networks, Mr Pitkow said, is that the alternatives – unauthorised sites being forced to take such stories down and publishers charging for access to their own sites – would result in fewer stories for their advertising to run alongside. “If everything goes behind a pay wall, you’ll have less inventory,” he explained.

The strategy contrasts with Rupert Murdoch’s discussions about the possibility of an exclusive deal with Microsoft’s Bing search engine that could see titles from his News Corp media empire, such as the Wall Street Journal and New York Post, disappear from Google’s search results.

Google, alongside Yahoo and AOL, is among the largest online ad network owners, and the approach taken by the Fair Syndication Consortium – of which News Corp is not a part – would make such search engines partners in the search for online revenue.

The study found Google accounted for 53 per cent of the advertising being run alongside unlicensed stories, while Yahoo accounted for a further 19 per cent. Bloggers, often the primary target of publishers’ anger about how their stories are disseminated online, accounted for less than 10 per cent of the unauthorised reuse.

The consortium’s study did not estimate what the unlicensed content in its latest study might be worth, but a study it conducted with just 25 large US publishers in January estimated they were missing out on a possible $250m.

Mr Pitkow predicted that the first two quarters of 2010 would see “action” from ad networks.

But he added that publishers have a broader mission in mind: dramatically expanding the scope of their syndication efforts, which currently rely on individual negotiations with print or online partners, by creating an automated, self-service and “frictionless” marketplace.

If they succeed, he said: “We can do for syndication what AdSense [Google’s ad serving application] did for advertising.”

Copyright The Financial Times Limited 2009.