Fine, Let Newspapers Collude

from the just-get-it-over-with-already dept

We've heard from more than a few journalists over the last few months, thinking that the best way to save the newspaper business is for newspapers to get a special antitrust exemption from Congress that would allow them to collude and all agree to put up paywalls. The latest to join the chorus is Tim Rutten at the LA Times, and it's basically more of the same. For people who are supposed to be great journalists, you'd think they could think more than one move out, and realize what the inevitable response would be to newspapers all ganging up and putting up a paywall. The problem that Rutten, and the others before him, have made is assuming (incorrectly) that if they put up paywalls, people will suddenly, magically, want to pay. This sort of conceit is seen in a poll put together by a Canadian TV producer by the name of Wodek Szemberg. Over the weekend he set up a poll asking people how much they would pay per month for the news they read... and the price starts at $10. As Mathew Ingram pointed out, Szemberg's post is missing zero as an option (I'd argue it's also missing a lot of other numbers -- starting at $10 is incredibly presumptuous). Szemberg responded to this criticism by saying that zero isn't an option because zero will not exist for access to sites. Trust me, for many people, zero will absolutely exist as an option.

It's difficult to think of anything to say to people who think these ways, other than "good luck." The real world doesn't believe in such limitations. If the newspapers collude and come up with a pricing scheme where the lowest option starts at $10 per month -- fine. Just go do it, and then let's see what happens. Because talking about it is getting pretty silly.

But here's my guess as to what happens:

1. Smart news publications break off from the "charge 'em" pack and remain free and/or experiment with more creative business models.
2. Traffic to the paywall sites drops to ridiculously low levels.
3. Those sites realize that the revenue from subscriptions is a blip and barely noticeable.
4. In removing much of the audience, those sites also lose pretty much all leverage with advertisers, and discover that their online ad revenue drops quite a lot as well.
5. Meanwhile, remember those smart publications that didn't join in the suicide party? They're soaking up plenty of traffic, and working hard to provide more value to readers.
6. On top of that, newer startups spring up to fill in the void left by the paywall crew.
7. Smart journalists start jumping ship from the legacy papers behind the paywall to those who actually get them some public recognition (which are a lot more fun anyway).
8. Without competition from, or the legacy business structures of, the paywall newspapers, the smarter publications start bringing in both audience and revenue (not all of it advertising).
9. The paywall crew goes back to complaining to the gov't, though people start to wonder why they're still around, when there's so much useful journalism going out without paywalls.

So, go ahead. Just get it over with, so we can stop writing this post over and over again, and you guys can clear the field for the real innovators.

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Is It An Antitrust Violation To Agree Not To Poach Employees From Competitors?

from the not-entirely-clear dept

The news broke this week that a bunch of big name Silicon Valley companies are under investigation by the Justice Department for their hiring practices and potential antitrust concerns. The specific issue appears to be that the companies may have agreed to not try to poach top execs from certain companies. Apparently there was nothing stopping the employee from getting a job at one of these companies, if they took the initiative -- but the companies wouldn't initiate the attempt. In most cases, the idea was not to poach from partners -- which might just be good business sense (pissing off partners generally isn't a good idea). Where it gets tricky is the accusation that some companies had written agreements not to poach, which could lead to some charges of collusion. Oddly, the NY Times article's title claims that the issue is "unwritten rules" when the details of the article suggest it's not the unwritten, but the written rules that are the problem. There have been studies that suggest that root of Silicon Valley's success was the easy movement of people from job to job -- so if it's true that companies are holding back trying to get the best employees to move around, they may actually be doing a lot more harm to themselves anyway. And, on the whole, it does seem like there's an awful lot of movement between big name companies. Just this week at the Conversational Marketing Summit, one of the speakers had a musical chairs presentation that went on for a long time showing a bunch of execs and how they played musical chairs between Yahoo, Google, Microsoft, AOL, News Corp. and Facebook.

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Newspapers Gather In Secret (With An Antitrust Lawyer) To Collude Over Paywalls

from the good-luck dept

You may have noticed a bunch of stories recently about how newspapers should get an antitrust exemption to allow them to collude -- working together to all put in place a paywall at the same time. That hasn't gone anywhere, so apparently the newspapers decided to just go ahead and try to get together quietly themselves without letting anyone know. But, of course, you don't get a bunch of newspaper execs together without someone either noticing or leaking the news... so it got out. And then the newspapers admitted it with a carefully worded statement about how they got together "to discuss how best to support and preserve the traditions of newsgathering that will serve the American public." And, yes, they apparently had an antitrust lawyer or two involved.

In the end, though, it won't matter. If a bunch of newspapers decide to lock up their content, they will only be digging their own graves. Smart newspaper execs will stay away and get all of the traffic. The wire services that compete with the Associated Press (such as Reuters, and CNN's new wire service) would be well served to put out a press release now hyping up the fact that their content is free. Other, smaller providers of news should trumpet how much they want people to come to them for news instead of paying, and then watch in amusement as the newspapers (whether it's an antitrust violation or not) discover both their advertising and their subscription money disappear.

Whether it's antitrust or not, it sure looks like collective suicide.

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RealNetworks Ups The Ante; Wants To Add Antitrust Charges Against The MPAA

from the your-move dept

With the lawsuit between the movie studios and RealNetworks off to an inauspicious start, it looks like RealNetworks decided to pull out the nuclear option: it's trying to add anti-trust charges against the movie studios to the case. The company claims it's come across evidence that the studios colluded to boycott RealNetworks and its attempt to let people back up their legally obtained movies. It would be interesting to know the details behind the evidence, as it could make the case a lot more exciting pretty quickly.

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UK Officials Accused Of Colluding With Phorm

from the that-would-not-be-good dept

While the US quickly condemned clickstream tracking as a likely violation of privacy, many were quite surprised when UK officials went in the other direction, suggesting that Phorm's tracking was legal. The European Commission was so annoyed by this that it's taking legal action against the UK for privacy violations. But, still, many people are wondering why the UK government said something like Phorm was legal... and now accusations are coming out that it's because UK government officials let Phorm take part in writing the policy. There are a bunch of incriminating emails between the Home Office and Phorm, including one where officials ask Phorm execs if they would be "comforted" by the position the gov't was about to take. In another, the officials ask Phorm to review the document and give feedback, prior to the gov't releasing the actual policy. Talk about regulatory capture... The government, for its part, claims that people are misreading the emails, but it's difficult to see how the emails can be misread when they blatantly ask Phorm to review the document, and inquire whether the company and its partners will be comforted by the ruling.

Update: On top of this, it appears that Phorm is now lashing out at critics, claiming that they're "smear merchants" and "privacy pirates." That sounds convincing...

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When Colluding With A Competitor, Perhaps Don't Send A Direct Email Suggesting You Keep Prices High

from the might-come-back-to-bite-you dept

It's rather rare these days to see collusion lawsuits where there's overt evidence of collusion. Instead, it's usually implicit collusion where a case needs to be made that this is a problem. However, every once in a while you still get those good old fashioned situations where there's evidence of direct price fixing. For example, the Inquirer points us to a case involving questions of collusion in the graphics card market between ATI and NVIDIA, where it appears NVIDIA's VP of marketing sent an email to ATI's president and chief operating officer suggesting that, while the two companies were competitors, they should work more closely to make sure their stock prices each remained high. Apparently, the lawyers in the case tried to hide that document as a "trade secret." If you consider it to be a "trade secret" that the two companies may have been collaborating, then perhaps they have a point. But the judge didn't buy it: "This court is not a wholly-owned subsidiary of your companies. I am against you hiding information from the public."

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Major Labels Under Antitrust Investigation

from the yet-again dept

Apparently the Justice Department is suddenly worried that the four major record labels are colluding in creating a new online music subscription service. The last time this happened was back when the record labels tried to (wait, this sounds familiar) create online music subscription services -- which were universally panned, rarely used and eventually shut down. So, even if the labels are colluding, given their strategic vision, it seems rather unlikely that they're going to leverage their position to dominate the market. They certainly could hold back other services -- but it seems like they've been doing that for years already, just with their own shortsightedness.

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Judge Dismisses LimeWire's Charges Of Antitrust Violations Against RIAA

from the more-evidence-please dept

After being sued by the RIAA, file sharing app provider LimeWire fought back. Beyond claiming that it didn't violate copyright laws (by not "inducing" infringement), the company also countersued, claiming that the RIAA had violated antitrust laws in trying to illegally compete with LimeWire and other file sharing systems. This claim always seemed like a stretch, and apparently a judge agreed, dismissing the antitrust claims, noting that LimeWire failed to provide enough evidence to back up the claim. While it would have been nice to see the RIAA run into trouble on this point, it's true that LimeWire's evidence wasn't particularly strong, so this shouldn't come as a surprise or even be seen as much of a setback. It's just a case where LimeWire reached too far in its lawsuit and a judge quickly saw that.

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