AP, 28 news orgs launch NewsRight to collect licensing fees from aggregators

After three full years of preparation, the Associated Press and 28 other news organizations begin today an ambitious venture to license original news content and collect royalties from aggregators.

Variously known as the News Registry and News Licensing Group during its development, the freestanding business begins offering customers content licenses with a new corporate name, NewsRight.

There is plenty that is complex about the venture, but CEO David Westin told me in a phone interview over the holidays that the three keys to success are simple.

"First, we need as broad support within the industry as possible," he said. "That's what makes it more efficient from the customer's view (than negotiating license agreements individually)." With the 28 co-investors, 30 additional participating companies and more than 800 sites (nearly all U.S. newspaper-based for right now), Westin said, NewsRight begins operations with a "substantial catalogue" to offer.

Steps two and three will unwind slowly, perhaps over a period of several more years.  "We hope to alter behavior in the marketplace," Westin said. "Will aggregators embrace it" as a package solution to getting content legally and compensating those who gather it? If so, Westin continued, the final question becomes "how much value can we generate and return to the producers?"

Should NewsRight catch on big, as it founders hope, the industry will have in place a second leg to a paid digital content strategy. Paywalls and bundled print/digital subscriptions had a snowballing adoption curve in 2011 that will continue into this year. The New York Times metered model and its variations essentially ask heavy direct users of news websites to pay some of the cost of generating content.

NewsRight aims to apply the same strategy to aggregators, targeting those who make heavy (and commercial) use of content originated elsewhere. They are being asked to become payers rather than free riders.

But success is by no means assured, Westin concedes. There are established competitors, principally the non-profit Copyright Clearance Center, that have for decades been collecting royalties from universities and corporations for reuse of material. CCC represents a wide range of publishers, including some newspapers.

Other newer companies, notably Attributor, track the use of digitally published content by aggregators. Attributor counts the AP and many other of the news organizations as clients. Its services include the option of asking unauthorized contributors to pay up.

And many newspaper organizations, Westin said, have existing licensing agreements with Google, Yahoo and other big aggregators.

NewsRight is not demanding exclusivity. So it will begin operations alongside this loosely-knit system rather than necessarily as a substitute. Also, Westin said, each organization determines which portion of its content it seeks to license rather than following any rules set by NewsRight.

So what will NewsRight have going for it?

With Associated Press stories and content from a Who's Who of newspapers, it will represent a significant one-stop shopping opportunity for aggregators willing to pay.

When I spoke with Fred Haber, general counsel of CCC a year ago, he explained that their system depends on voluntary compliance. There are any number of institutions and businesses willing to avoid legal hassles or an appearance of unethical practice by paying when asked.

For the business to work, it needs both a mass of those customers and a mass of content producers, together with a smooth-running collection mechanism. Rights clearance then provides significant efficiency for both the customers and content providers (as opposed, for instance, to a university library seeking permission each time it wants to make 25 photocopies of a scholarly journal article).

The same principles will apply for NewsRight. Text stories from newspaper organizations (which own the AP co-operative) are the logical place to start, Westin said. But if successful, NewsRight will expand to licensing photos and video as well, and the content of broadcast, website and international clients.

The venture, while spun off from AP as an independent business in mid-2011, is housed at the wire service's headquarters in New York City. It begins with just 11 employees, Westin said, half tech, half legal and management. The first salesperson will begin work this week.

The 11 include some high-level hires. Westin had long experience as a communications lawyer in Washington and spent a more than a decade as president of ABC News. AP has also donated general counsel Sri Kasi to the start-up.

There is a second product offering besides licensing. The anticipated volume of stories tracked and aggregation uses identified will generate a rich volume of data that can be purchased as analytics. Westin said that news outlets, marketing and public relations firms may want such data to analyze the volume of pickups, level of reader interest and shelf life of given stories.

Drawing on his editing time at ABC, Westin said that editors can be helped by identifying spikes in attention to running stories, deciding when to continue with follow-ups and when to wind down coverage. A public relations firm working with a corporation experiencing negative coverage, for another example, would have a similar interest in detailed story tracking across all the nooks and crannies of the Internet.

The analytics can break down readership by headline-only, short summary or deep exploration of an article. The data is available quickly but not instantaneously, Westin said. "Four hours seems to be the magic number."

Years in the making

The AP has had its eye on protecting content at least since 2006. When I did a pair of stories then on changes at the wire service, Jim Kennedy, director of strategic planning, mentioned that experiments were under way to "watermark" AP stories so as to facilitate tracking of unauthorized use.

Interest reached a crescendo when the Associated Press and Newspaper Association of America met jointly in San Diego in spring 2009. There was much talk at the time of suing Google and Rupert Murdoch  was thundering against rogue aggregators "stealing our content." AP Chairman William Dean Singleton of MediaNews, said in a convention speech, “We can no longer stand by and watch others walk off with our work under misguided legal theories.”

While lawsuits and threats of lawsuits will eventually be part of the NewsRight playbook (as they are at CCC), the final shape of the venture as it opens for business is much more diplomatic and technology-driven.

Tom Curley, AP's CEO, has been among the strongest proponents of the licensing inititative and has made it the centerpiece of his presentations to industry groups for several years. In a panel at Poynter in fall 2010, he joked that it must be really important since it had been widely ignored by writers on media business.

AP is the single largest investor but has a minority stake. A breakdown of ownership shares, the cost of development and operations, and the fee structure for licensing and the analytics are all being kept confidential for now.

The 28 partner organizations include the New York Times Co. and Washington Post Co., McClatchy and most mid-sized newspaper chains, public and private. Poynter's Times Publishing Company is among the investors and the chairman of the NewsRight board is Bob Nutting, CEO and President of Ogden Newspapers.  One of the hopes is that the participating organizations will have a stronger negotiating position with aggregators than they do now handling rights licensing independently.

Business Wire is on board as a non-newspaper voice and German publisher Axel Springer is as well for an international perspective.

There are a few notable names missing from the roster too -- Gannett, Tribune, Cox and News Corp. When I mentioned those, Westin quickly said that negotiations are ongoing with all four to bring them aboard as participants if not investors.

In fact, he added, while the tracking technology and royalty collection is complex, the many launch delays had everything to do with company-by-company business issues.

Once past the general principle of getting compensation, Westin said, companies needed some time to pull together all that they were doing in tracking aggregation and licensing, then needed more time to figure out whether and how NewsRight participation might help generate reuse income.

The venture will likely be greeted with derision or yawns by the digital intelligentsia, who have long decided that fences around content are retro and futile with the Internet providing users so many avenues to free news access.

But we are about to have a real-world test of that proposition, where even middling success would count as a big win for the legacy companies who have long wanted to be paid more and more broadly for the news content they originate.


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