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Video, Foreign Expansion Eyed

NewsRight May Avoid PIPA/SOPA-Like Furor Through Web Licensing, CEO Says

An online news company may avoid the public furor that two piracy bills saw last month by signing licensing deals with major websites that aggregate content, its CEO told old- and new-media executives and lobbyists in Washington. NewsRight’s David Westin said the debate over the Stop Online Piracy Act and the PROTECT IP Act -- which led the bills to be put on hold -- doesn’t apply to his company. That’s because the consortium of 29 media companies hopes to pursue contracts with websites and not seek legislation or file lawsuits to get content aggregators to stop carrying news without paying the creators. Westin said last month that he wouldn’t “rule out” litigation (CD Jan 10 p8). Claims that SOPA or PIPA would lead to censorship were overblown, Westin told a Media Institute luncheon Wednesday.

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Westin remains optimistic he can persuade Web players to license the latest versions of articles from major media companies and the consumer-data and other user metrics that NewsRight also tracks, he said during a Q-and-A. The company has no deals yet, and is in “negotiations with several aggregators right now” that Westin wouldn’t name. “We are having very constructive talks” and he’s “hopeful” of reaching accords. The former president of ABC News noted that about 29 companies back NewsRight. He said international expansion and the inclusion of video and other content in licensing deals may eventually occur, but not right now.

The quality of TV news continues to vary, on TV stations and on broadcast and cable network newscasts, Westin said. Some is “fabulous,” he said. “You can find on any day some magnificent news being done and other news that just makes me cringe,” he continued. “It’s the news organizations’ obligation to present to people” news of high quality, but consumers also have to demand it, Westin said: “The news organizations do respond to some extent to what people are reacting to,” and that may mean covering TV star Kim Kardashian.

The TV news business isn’t in much better shape than newspapers, with the first medium having shed nearly as many employees in recent years as dailies and both mediums grappling with their content being distributed for free by companies that don’t produce it, Westin said in his speech. Those economics are unsustainable over the long run, and there’s an over-supply of news distributors and a dwindling number of organizations -- mainly TV and papers -- that produce original and significant work, he said. Westin touched on some themes of the report on the future of the media industry done by Steve Waldman in the summer under the auspices of FCC Chairman Julius Genachowski. Both Westin and the report, for instance, pointed to a study of Baltimore showing that most news there originated from the market’s paper and TV stations.

TV is doing “a bit better” business-wise than papers, “but it’s troubling as well,” Westin said. Cable news channels, News Corp.’s Fox especially, have generally been profitable, but only “through a series of staff cuts, and increased advertising rates,” he said. Growth in news consumption “is all in digital” and down or little changed in other areas, he said: Digital “trend lines indicate it will overtake television as well.” That “more people are getting more news from more sources” is “not great,” because that represents investments in distribution and not in content creation, Westin said.

"We'll never get to a point of health in the news industry” if news creators have to compete with distributors who get their product for free, Westin said. “We all benefit from news aggregation. News aggregation is a big business -- it’s here to stay,” he said: “The question is, is there a way for the mainstream news providers” to keep spending on original content and work with aggregators “to make this work for both of us.” Many “of the new Internet companies that we all know and may have to resort to don’t have to invest” much in news production, so for many “the net cost to them of that content is exactly zero,” Westin said.

There’s an “opportunity” now to strike “successful” deals between NewsRight, adding about a member a month, and websites “under existing laws,” Westin said. He seeks “reasonable business agreements with reasonable people” at Web companies. “We want to eliminate some of the free ride that some people have had on the very substantial but diminishing investment in original news content,” he added. The company offers websites legal access to the complete versions of news via a feed without having to search it out online, and data about its usage, Westin said. “My position is let’s not take that to court,” he said of creators’ rights, “and we can eliminate that risk” to aggregators.

Taking care to make no stance on PIPA and SOPA, Westin believes “piracy is a real issue, however it’s dealt with,” and hopes “all parties can come together” in a “reasonable manner” to resolve it, he said: “I was concerned about the implication of censorship” among some foes of the legislation, “because at least from my seat, it looked like a really serious commercial dispute” and not a First Amendment issue. “There may be things I should have learned” from the PIPA and SOPA debate, “but the basic approach long predated that” of NewsRight’s strategy, he said. “We can work under existing law, I believe.” His “preferred route is a business arrangement,” because “my past background has taught me that either legislation or litigation” takes a lot of time, and “we don’t have a lot of time here,” he said. “I'm worried that more damage will have been done to original news reporting.”