Fair Use and the Newspaper Industry

Featured image by Peter Lawrence

How are the current interpretation of fair use laws contributing to the rapid decline of the newspaper industry?

Current State

Think about it this way. If I write a popular piece of content, and it goes viral, 90-95% of the views on my content will not be on my site. People will see the title, image, and excerpt of my story on Facebook for example, but never bother to click. They will still engage with the content through discussions about it, but I will get a trickle of the traffic. Facebook will sell ads on their site that is full of professional high quality content that they didn’t write and they never paid for. The same is true for news.google.com, Twitter, Reddit, etc.

As a small time writer, the views are more valuable than the clicks. The attention an individual writer gets will lead to paid opportunities. The content is often a loss leader. As a news publisher, that’s not true though. As someone who sells advertisement, a newspaper needs clicks to make money so the clicks are more valuable than the views (to a certain ratio). The newspaper isn’t creating content to create other opportunities to make money. The content is the money maker. In the current scenario, the newspaper doesn’t get an opportunity to sell adds for %90-95 of its content views, but Facebook, etc. does.

As a side note, because if this phenomenon, newspapers need to get more sensational just to stay in business. Where they may have survived off of 1x views, they need to get 10-20x views to make the same click revenue, because most of the views are happening off their platform.

Copyright exists so that creators of intellectual works can be incentivized for their work through the protection of not having other people straight out copy it. Without copyright, it would be very difficult to make money from most created works. Creating original works is much more expensive than copying them. Society suffers if no copyright laws exist or are enforced.

Fair use exists to define exceptions to the copyright where it benefits society more to allow reasonable exceptions to those protections. Free speech is protected by fair use rules for example. In my opinion, taking away a publisher’s right to control their original photography, titles, and excerpts allows social media and aggregators to make much more money off of content than the original creators. It can be argued that the original creator gets a lot of value out of the publicity of the content, so this usage is fair. The trend of the journalism industry over the last decade provides a lot of evidence that the users of the copyrighted material are getting much more value than the creators though.

Facebook alone takes in 2x the entire newspaper revenue of the United States. United States newspaper revenue has decrease from a peak of around $50 billion in 2005 to less than $8 billion in 2019, and it’s being cut in half every year. It’s rapidly approaching $0.

“Who benefits more” is one of the criteria that helps courts decide where the line between fair use and copyright should be drawn. If the criteria were drawn back a bit to only include the title, then media companies could leverage their intellectual property to tip the profitability scale in their favor.

What are the exact mechanisms the industry should use to profit once they have more control of their content? I think that’s up to them to figure out, but just having the control over their content gives them more options. One possibility, like the music industry has created deals with YouTube to get paid for every use of their intellectual property, the media industry could strike a deal with social media and aggregators for the use of their images and excerpts. The particular how isn’t as important from a policy perspective as the what.

Now the question of, how do you discourage the monopolization of the news industry? That’s a different question altogether. Typically when an industry shrinks, consolidation occurs. Conversely when there is expansion, established players definitely have a growth advantage; however, a lot of new players tend to get motivation to disrupt the industry. Would you rather start a new company in a rapidly growing industry or one that appears to be dying. Simply turning the news industry into a growth industry should eventually allow for disruption. One could argue for government intervention to encourage diversification, but I think that’s more of a political decision.

Further Consideration

A few things that I didn’t address that warrant further exploration. Obviously, the content for social media isn’t limited to just newspaper content. But what percentage of social media consists of links to other pages?

Along this line, if social media and aggregators are pulling in much more revenue than newspapers ever did, they are obviously adding more value some how.

Finally, the numbers for newspaper revenue may be a little disingenuous as some newspaper media has simply transitioned to a format that’s completely online. This revenue would not be considered newspaper revenue even though the newspaper is doing the same kind of stories, just in a more efficient format.

I think the numbers would need to be normalized to consider these factors for an apples to apples comparison.

Legal Background

According to federal copyright law, to determine whether something is copyright infringement or fair use, one must consider four things.

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.

To understand how we got to the current state of affairs, it’s important to consider some key law suits. Financial impact is a key consideration considering tenant 4 of the fair use doctrine. If a fair use decision is shown to have a significant impact on the potential market for or value of the copyrighted work, it should be justification to reverse or refine the decision.

Ticketmaster Corp. v. Tickets.com, Inc. (2000) confirmed that deep linking fair to a specific web page is fair use. Deep linking is the practice of linking to a specific website on a page instead of the main URL. This practice is so common now, it’d be hard to think of a world where deep linking is copyright infringement.

The next case, Kelly v. Arriba Soft (2002/2003) made the use of a photo from the linked content fair use, even if that image was hosted on the linker’s site. This case also affirmed that deep linking was fair use.

In Perfect 10, Inc. v. Amazon.com, Inc, (2007 which also included Google as a defendant), the court ruled that Google’s use of images in a search engine and subsequently showing a thumbnail was fair use, because the creation of a search engine held a higher public interest than the marginal impact on the copyright owners. This created a “highly transformative” test for fair use of web content. Considering the transformative use of copyright material was established in Campbell v. Acuff-Rose Music (1994). The ruling also made clear that the degraded quality of the images (smaller) was a key component in their fair use decision.

Finally, in Goldman v. Breitbart, (2018) the courts demonstrate that they may be willing to reverse trends set by earlier rulings. In this case Jason Goldman’s photo was used on a bunch of news sites through a process called embedding. The news sites used HTML code to embed Goldman’s tweet in their news stories, allowing the news sites to display Goldman’s photo as part of their story. This is still a common practice.

This ruling is significant in that the image was not actually hosted on the news sites, and the company’s appear to be using standard practices from Twitter to embed the tweet. This case is ironic though and again damning for the newspaper industry, as it sets up the precedent that Twitter is allowed to use the news sites title, thumbnail image, and excerpt when display the link in Twitter, but the news sites aren’t in turn allowed to do the same for content posted on Twitter.


10/4/2020: Added the Further Considerations section
10/5/2020: Add the Legal Background section

Opinions expressed on this page are my own and don’t represent the opinions of any other party.