For whom the net tolls
Rupert Murdoch wants to remake the web as a toll both, with him in the collector's seat, but the net won't shift to his will
What, exactly, is Rupert Murdoch thinking? First, he announces that all of Newscorp's websites will erect paywalls like the one employed by the Wall Street Journal (however, Rupert managed to get the details of the WSJ's wall wrong – no matter, he's a "big picture" guy). Then, he announced that Google and other search engines were "plagiarists" who "rip off" Newscorp's content, and that once the paywalls are up (a date that keeps slipping farther into the future, almost as though the best IT people work for someone who's not Rupert "I Hate the Net" Murdoch!) he'll be blocking Google and the other "parasites" from his sites, making all of Newscorp's properties invisible to search engines. Then, as a kind of loonie cherry atop a banana split with extra crazy sauce, Rupert announces that "fair use is illegal" and he'll be abolishing it shortly.
What is he thinking? We'll never know, of course, but I have a theory.
First, the business of blocking search engines. Rupert has got dealmaker's flu, a bug he acquired when he bought MySpace and sold the exclusive right to index it to Google. This had the temporary effect of making Rupert look like a technology genius, as Google's putative payout for this right made the MySpace deal instantly profitable, at least on paper; meanwhile, MySpace's star was in decline, thanks to competition from Facebook, Twitter and a million me-too social networking tools.
It also put ideas into Rupert's head.
You can practically see the maths on the blackboard behind his eyelids: Exclusive deals + paywalls = money.
I think that Rupert is betting that one of Google's badly trailing competitors can be coaxed into paying for the right to index all of Newscorp's online stuff, if that right is exclusive. Rupert is thinking that a company such as Microsoft will be willing to pay to shore up its also-ran search tool, Bing, by buying the right to index the fraction of a fraction of a sliver of a crumb of the internet that Newscorp owns.
They'll be able to advertise: "We have Rupert's pages and Google doesn't, so search with us!" (Actually, they'll have to advertise: "We have Rupert's pages and Google doesn't, except MySpace, which Google has.")
Or maybe not – MySpace isn't delivering the traffic Rupert guaranteed Google in his little deal, and Google may bail if there's a likely sucker on the line.
Maybe the target isn't Microsoft. Maybe it's some gullible startup that's even now walking up and down Sand Hill Road, the heart of Venture Capital Country in Silicon Valley, showing off a PowerPoint deck whose entire message can be summarised as: "You give us a heptillion dollars, we'll do exclusive search deals with Rupert and the other media behemoths, and we'll freeze Google out." I'd be surprised if such a pitch sold, though. What's the liquidity event that would return some profit to the VC? It's not going to be an IPO, not in today's regulatory climate. It'd have to be an acquisition, and the two most likely targets would be Google and Newscorp.
Now, what about fair use being illegal? At a guess, I'd say that some Richelieu figure in Newscorp's legal department has been passing some evil whispers to Rupert about international copyright law. Specifically, about the Berne Convention – a centuries-old copyright accord that's been integrated into many other trade agreements, including the World Trade Organisation (WTO), and its "three-step test" for whether a copyright exemption is legal.
Copyright exemptions are all the rights that copyright gives to the public, not to creators or publishers, and "three-steps" describes the principles that Berne signatory countries must look to when crafting their own copyright exemptions.
Three steps limits copyright exemptions to:
1. certain special cases …
2. which do not conflict with a normal exploitation of the work; and …
3. do not unreasonably prejudice the legitimate interests of the rights holder.
Now, arguably, many countries fair dealing or fair use rules don't meet these criteria (the US rules on VCRs, book lending, cable TV, jukeboxes, radio plays, and a hundred other cases are favourite villains in these discussions; but many European rules are also difficult to cram into the three-steps frame). And I've certainly heard many corporate law mover-shakers announce that with the right lawsuit, you could get trade courts to force this country or that country to get rid of its fair dealing or fair use provisions.
But this view of international copyright lacks an appreciation of the subtleties of international trade, namely: big, powerful countries can ignore trade courts and treaty rules when it's in their interest to do so, because no one can afford to stop trading with them.
The US gets $1 trillion added to its GDP every year thanks to liberal fair use rules. If the WTO says that it has to ban video recorders or eliminate compulsory licenses on music compositions (or shut down search engines!), it will just ignore the WTO. The US is an old hand at ignoring the United Nations. The US owes billions to the UN in back-dues and shows no signs of repaying it. The fact that the WTO looks upon the US with disapproval will cause precisely nothing to happen in the American legislative branch.
And, if the WTO tries to get other countries to embargo the US, it will quickly learn that China and other factory states can't afford to stop shipping plastic gewgaws, pocket-sized electronics, and cheap textiles to America. And furthermore, other countries can't afford to boycott China – because those countries can't afford to allow a plastic gewgaw and cheap textile gap to emerge with America.
Of course, the elimination of fair use would present many problems to Newscorp – because, as with all media companies, Newscorp relies heavily on copyright exemptions to produce its own programming. I'm sure that if there's a lawyer who's put this idea into Rupert's head that she knows this, but I'm likewise sure that she's perfectly willing to expand the legal department to the thousands of lawyers it would take to negotiate permission for all those uses if fair use goes away. Especially if all those lawyers report to her.
That's my theory: Rupert isn't a technophobic loon who will send his empire to the bottom of the ocean while waging war on search engines. Instead, he's an out-of-touch moustache-twirler who's set his sights on remaking the web as a toll booth (with him in the collector's seat), and his plan hinges on a touchingly naive approach to geopolitics. Either way, old Rupert shows every sign of degenerating into a colourful Howard Hughes figure in a housecoat, demanding that reality shift to his will.
Cory Doctorow
Tuesday 10 November 2009 13.17 GMT
guardian.co.uk © Guardian News and Media Limited 2009
Rupert Murdoch wants to remake the web as a toll both, with him in the collector's seat, but the net won't shift to his will
What, exactly, is Rupert Murdoch thinking? First, he announces that all of Newscorp's websites will erect paywalls like the one employed by the Wall Street Journal (however, Rupert managed to get the details of the WSJ's wall wrong – no matter, he's a "big picture" guy). Then, he announced that Google and other search engines were "plagiarists" who "rip off" Newscorp's content, and that once the paywalls are up (a date that keeps slipping farther into the future, almost as though the best IT people work for someone who's not Rupert "I Hate the Net" Murdoch!) he'll be blocking Google and the other "parasites" from his sites, making all of Newscorp's properties invisible to search engines. Then, as a kind of loonie cherry atop a banana split with extra crazy sauce, Rupert announces that "fair use is illegal" and he'll be abolishing it shortly.
What is he thinking? We'll never know, of course, but I have a theory.
First, the business of blocking search engines. Rupert has got dealmaker's flu, a bug he acquired when he bought MySpace and sold the exclusive right to index it to Google. This had the temporary effect of making Rupert look like a technology genius, as Google's putative payout for this right made the MySpace deal instantly profitable, at least on paper; meanwhile, MySpace's star was in decline, thanks to competition from Facebook, Twitter and a million me-too social networking tools.
It also put ideas into Rupert's head.
You can practically see the maths on the blackboard behind his eyelids: Exclusive deals + paywalls = money.
I think that Rupert is betting that one of Google's badly trailing competitors can be coaxed into paying for the right to index all of Newscorp's online stuff, if that right is exclusive. Rupert is thinking that a company such as Microsoft will be willing to pay to shore up its also-ran search tool, Bing, by buying the right to index the fraction of a fraction of a sliver of a crumb of the internet that Newscorp owns.
They'll be able to advertise: "We have Rupert's pages and Google doesn't, so search with us!" (Actually, they'll have to advertise: "We have Rupert's pages and Google doesn't, except MySpace, which Google has.")
Or maybe not – MySpace isn't delivering the traffic Rupert guaranteed Google in his little deal, and Google may bail if there's a likely sucker on the line.
Maybe the target isn't Microsoft. Maybe it's some gullible startup that's even now walking up and down Sand Hill Road, the heart of Venture Capital Country in Silicon Valley, showing off a PowerPoint deck whose entire message can be summarised as: "You give us a heptillion dollars, we'll do exclusive search deals with Rupert and the other media behemoths, and we'll freeze Google out." I'd be surprised if such a pitch sold, though. What's the liquidity event that would return some profit to the VC? It's not going to be an IPO, not in today's regulatory climate. It'd have to be an acquisition, and the two most likely targets would be Google and Newscorp.
Now, what about fair use being illegal? At a guess, I'd say that some Richelieu figure in Newscorp's legal department has been passing some evil whispers to Rupert about international copyright law. Specifically, about the Berne Convention – a centuries-old copyright accord that's been integrated into many other trade agreements, including the World Trade Organisation (WTO), and its "three-step test" for whether a copyright exemption is legal.
Copyright exemptions are all the rights that copyright gives to the public, not to creators or publishers, and "three-steps" describes the principles that Berne signatory countries must look to when crafting their own copyright exemptions.
Three steps limits copyright exemptions to:
1. certain special cases …
2. which do not conflict with a normal exploitation of the work; and …
3. do not unreasonably prejudice the legitimate interests of the rights holder.
Now, arguably, many countries fair dealing or fair use rules don't meet these criteria (the US rules on VCRs, book lending, cable TV, jukeboxes, radio plays, and a hundred other cases are favourite villains in these discussions; but many European rules are also difficult to cram into the three-steps frame). And I've certainly heard many corporate law mover-shakers announce that with the right lawsuit, you could get trade courts to force this country or that country to get rid of its fair dealing or fair use provisions.
But this view of international copyright lacks an appreciation of the subtleties of international trade, namely: big, powerful countries can ignore trade courts and treaty rules when it's in their interest to do so, because no one can afford to stop trading with them.
The US gets $1 trillion added to its GDP every year thanks to liberal fair use rules. If the WTO says that it has to ban video recorders or eliminate compulsory licenses on music compositions (or shut down search engines!), it will just ignore the WTO. The US is an old hand at ignoring the United Nations. The US owes billions to the UN in back-dues and shows no signs of repaying it. The fact that the WTO looks upon the US with disapproval will cause precisely nothing to happen in the American legislative branch.
And, if the WTO tries to get other countries to embargo the US, it will quickly learn that China and other factory states can't afford to stop shipping plastic gewgaws, pocket-sized electronics, and cheap textiles to America. And furthermore, other countries can't afford to boycott China – because those countries can't afford to allow a plastic gewgaw and cheap textile gap to emerge with America.
Of course, the elimination of fair use would present many problems to Newscorp – because, as with all media companies, Newscorp relies heavily on copyright exemptions to produce its own programming. I'm sure that if there's a lawyer who's put this idea into Rupert's head that she knows this, but I'm likewise sure that she's perfectly willing to expand the legal department to the thousands of lawyers it would take to negotiate permission for all those uses if fair use goes away. Especially if all those lawyers report to her.
That's my theory: Rupert isn't a technophobic loon who will send his empire to the bottom of the ocean while waging war on search engines. Instead, he's an out-of-touch moustache-twirler who's set his sights on remaking the web as a toll booth (with him in the collector's seat), and his plan hinges on a touchingly naive approach to geopolitics. Either way, old Rupert shows every sign of degenerating into a colourful Howard Hughes figure in a housecoat, demanding that reality shift to his will.
Cory Doctorow
Tuesday 10 November 2009 13.17 GMT
guardian.co.uk © Guardian News and Media Limited 2009
