Content Discontent

The Internet and globalization are creating new battle lines between producers and distributors of content.

If anything illustrates the tension between the creators and distributors of “content” in our innovation-driven economy, it is the aftermath of June’s U.S. Supreme Court decision in New York Times v. Tasini-the David-and-Goliath case in which a small and determined band of freelance writers prevailed over a powerful group of well-heeled publishers.

I’ll give the particulars in a moment, but what’s notable here is that new realities-read the Internet, telecommunications and globalization-have spawned unrest in the fundamentally symbiotic relationship between “content” creators and distributors almost everywhere you look. Screenwriters and actors have been fighting the Hollywood studios. Musicians and record labels have wrangled over Napster. Even the antiglobalization demonstrators in Seattle, Quebec City and Genoa, Italy, underscore the fact that many of today’s hottest and most confusing debates hinge on who should control-and profit from-the content that drives an ever growing piece of the world economy.

“Content”: in the modern lexicon, the term denotes everything from the information delivered daily to our doors on newsprint to the multimedia clips streamed over the Internet; from the music carried on the airwaves to the interactive software on CD-ROMs. This so-called content is produced by an increasingly broad and diverse segment of the economy, including not just writers and artists, but also software programmers and other high-tech researchers who create new intellectual property.

And here’s the most interesting part. Time and again, the distributors-such as publishers, broadcasters and record labels-recoil in the face of technological advances that could diminish their role. As a result, the distributors find themselves blocking developments and standing at odds with content creators. Think of the way the record labels opted to shut down the wildly popular Napster rather than forge a way to take advantage of the new means to distribute music online.

I feel certain that the “new realities” will ultimately favor content creators. After all, content distribution has become easier, more direct and more immediate than ever. Distributors will come out the losers unless they take an enlightened approach to profit sharing with creators in the new media.

If the Tasini case is any indication, however, the transition is likely to be stormy.

The story starts in 1993, when 11 freelance writers, including Jonathan Tasini, president of the National Writers Union, brought a lawsuit charging that publishers-including the parent companies of the New York Times, Newsday and Time-had illegally resold their work to LexisNexis and other databases without the writers’ permission. The writers were outraged to find their articles appearing in online databases even though they had never given their permission or received any recompense for the republication of their works.

This spring, the Supreme Court by a seven-to-two margin affirmed the unanimous U.S. Court of Appeals verdict that the publishers had acted unlawfully. The writers, it ruled, should retain the rights to control online republication of their work unless they chose to explicitly sign these rights away by contract. Currently, most standard writers’ contracts sell only so-called first-serial rights for an article’s one-time use.

But most telling is what happened next. The National Writers Union called upon publishers to negotiate a settlement on how to cut writers more fairly into any profits earned from the online dissemination of their work. Instead, the New York Times Company, for one, opted to fight its freelancers over the matter. Litigious throughout, the publisher announced it would remove the disputed works-some 115,000 articles by 27,000 writers-from distribution online. The Times is forcing all current writers to sign away their online rights. And, along with other publishers, Times management is lobbying Congress to amend copyright law to retroactively eradicate any financial liability to compensate authors for past copyright violations.

So now, the writers are forced back into court, this time bringing a class action lawsuit against the Times Company and other publishers to win compensation and to get them to comply with the law. In my view, even if the Times and other publishers do yank the articles in question, they have still already profited illegally from the articles’ online dissemination and are thus likely to lose the new legal case against them.

Not only do the writers have the law on their side, the National Writers Union has launched a software system that automatically registers copyrighted works and tracks their resale online, receiving payments from participating publishers and paying writers a share of each transaction. All writers can utilize this Publication Rights Clearinghouse. The effort illustrates that the technology for profit sharing is by no means an insurmountable obstacle, as the Times might like to claim.

Enough. It is time for the New York Times Company and other large publishers to negotiate an equitable solution that recognizes the extent to which they depend on and profit from the work of independent creators of “content.” The central question is: when will they and other content distributors get the message?

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