With the Newspaper Licensing Agency introducing a licensing fee for businesses to copy and use newspaper web content, we ask, is it fair?:

Defending the scheme is David Pugh, managing director of the NLA. He’ll be up against Kevin Taylor, president of the Chartered Institute of Public Relations in our regular 35 Debate. 

Dear Kevin,
As you know, the Newspaper Licensing Agency is making two changes from January next year – we are going to introduce licences for the use by businesses of newspaper web content; and we are going to launch eClips Web, a feed of newspaper content which will create a better service for media monitoring companies (and their clients).

The licensing changes will only affect the business end of the market. Or to put it another way, you will need a licence if you provide or receive professional, paid-for cuttings of newspaper web content. Individual use will remain free: this is not about sending the odd link to a friend or colleague, which we encourage.

Newspapers have invested heavily in their websites and paid-for monitoring of them is growing as a result. Over 30% of newspaper web content is only published online, so it’s no surprise clients need to monitor them in addition to the print versions. Until now, professional web monitoring services and their clients have been using this copyrighted material for commercial gain, usually without paying the owners of that content – they will shortly have a licence which means that they will put money back into the newspapers they are using.

We are investing £2 million in eClips Web. This will be a feed of newspaper web content, taken directly from their production systems, which we’ll provide to cuttings agencies. It will mean web monitoring will really improve: becoming faster, richer and fnially ofering a permanent archive. You might remember the difference to print monitoring that eClips made when we introduced it – and how much the market has improved and grown over the last three years. We’re hopeful our web initiative will do the same.
Yours,
David

Dear David,
I’ll start from a position of sympathy. I want to see a flourishing newspaper industry. I also understand that quality costs money and the newspaper industry funding model is struggling. To do my bit, I still buy a quality daily newspaper, and I’d rather buy an evening paper than pick up a free one.

I’ll also have some sympathy with you about the unevenness of a playing field that says the physical cuttings agencies pay NLA fees but not the online referral agencies – a loophole you are seeking to close.

But there has to be a ‘however’, and it is a big one. The world has changed from the era where newspapers were genuinely losing potential income from actual paper sales and required compensation in the form of payments for clippings. The newspaper industry is built on advertising and revenues other than sales of the product. In online terms, papers are getting increasingly innovative about the ways they build revenue around their web sites and the lifeblood of that new model is visitor numbers, unique hits, how often people come and how long they stay.

I can think of no other organisation that would charge you for improving the lifeblood of their business. Member schemes usually involve a reward, not a fee. Added to which, the content is provided – in virtually all cases – at no charge. I find it hard to accept that my members should pay fees for increasing the readership of content that is available free of charge.

Of course, newspapers could seek to charge for that content and build valuable databases of readers. That might be a more sensible funding model. Charging one person for information that is free to everyone else doesn’t seem to make quite as much sense.
Best,
Kevin

Kevin
I’m glad you still buy newspapers – so do I, and 11 million other people every day!

You put forward an interesting argument but you’re onflating two separate markets – the private and commercial use of newspapers’ content. The ‘eyeballs and clicks’ strategy employed by most newspapers is aimed at private use. We are not seeking to license this. Indeed, we are keen to encourage linking and sharing of links among the 78 million individuals who read UK papers online.

The NLA will be licensing the commercial media monitoring market. This model is not about visitor numbers and advertising. Indeed, PRs, in-house comms teams and other users of web monitoring agencies account for considerably less than 1% of newspapers’ total traffic.

You say content is provided at no charge – this is true if you access it at source - but we estimate that the web monitoring industry earns well over £10 million per year from providing professional customers with alerting and research services using newspapers publishers’ content that they have copied. So the commercial market is prepared to pay for ‘free’ content. All we are asking for is a fair price – around 10% - for the publishers. The fees we raise will be reinvested by publishers in more content and by the NLA in developing the eClips Web service.

I’m sure in a year or so this will seem like a strange debate to be having. The PR industry was suspicious when we announced eClips in 2006 – but it’s now been adopted by all the major press cuttings agencies and supplies over 90% of digital press cuttings to PR professionals. I’m sure your members will in time welcome the effect of eClips Web. PRs will get the speed, permanence, AVE and data they need and publishers will continue to invest in the web. Everybody wins.
Regards,
David

“All we are asking for is a fair price. The fees will be reinvested by publishers in more content and by the NLA in developing the eClips Web service”

David,
You say you’re targeting the commercial media monitoring market. I recognise the inequality in the ways different media monitoring agencies are treated – although I would, of course, remove the inequality by removing all the charges.

But your new licences will not just apply, as you claim, to media monitoring companies. The consultancies and organisations receiving the links will also be subjected to licence fees and – in some cases – fees per link forwarded as well.

In fact, the burden of the charges you plan to levy on the web monitors will not fall on them but on their customers – many of them local authorities funded by ordinary taxpayers.

Here’s a scenario: a web monitoring company forwards links from a national newspaper website about new environmental planning laws to a PR consultancy which in turn forwards the links to its client which happens to be a local authority. The monitoring company will pay fees to the NLA. The PR consultancy will also pay fees, as will the local authority whose bill might be quite substantial if they in turn make the link available to all their relevant staff and councillors.

Of course, the monitoring company will increase its fees to allow for the new licence. The PR consultancy will pass those increases on, and might also try to recover its own increased fees as well. This means the people most hit are the local authority – which has to pay its own licence fees, and probably those of the two suppliers. From the public purse. The ratepayers and taxpayers.

Meanwhile, the NLA picks up three sets of licence fees for a piece of web content that the owner of that content provided to readers free of charge. That’s not fair, reasonable or justified.
Regards,
Kevin

Kevin
The NLA will be licensing aggregators, agencies and client organisations according to their level of use of monitoring services, charging fair prices – and offering options for the client or agency to pay fees, on a variable or fixed price basis. All of this is detailed at our microsite: www.nla-web.co.uk which includes a fee calculator.

Taking the scenario in your note: a web aggregator will not necessarily pass their licensing charges on to their clients in a competitive market  but if they do, we would expect that they would amount to considerably less than £100 per client per year. The cost for a PR consultancy to systematically send newspaper web content to a client will be £14.50 per client email address per year – which means that 95% of PR agencies that send digital cuttings today would see a licensing increase of less than £100 to add national newspaper web content next year.

And for the client, if all email recipients are already paid for by the PR agency, there need be no further charges. I hope you agree it is fair that clients, consultancies and media monitoring agencies pay according to their level of use – and that these are low charges.

The test of our initiative will be its effect on the media monitoring market: we want to encourage growth through simple licensing and investment in Clips Web that will enable your members to monitor web as efficiently and effectively as they can monitor newspapers’ print editions today. I also anticipate that the wider media landscape will change a great deal in the next year – and that as a result, the notion of ‘free’ web content for businesses will seem as strange as free electricity!
Regards,
David

“I wish I lived in the same world as you, where a supplier whose overheads are increased by a third party doesn’t seek to recoup those costs.”

David,
Thanks for confirming that under your plans it will be possible for three organisations - monitoring company, PR consultancy and client - to be liable for fees for a web link that any business or consumer could access directly free of charge.

Incidentally, I wish I lived in the same world as you, where a supplier whose overheads are increased by a third party doesn’t seek to recoup those costs. The service we pay for is the searching and presentation. We are happy to pay for that service – and indeed to pay the NLA for such a service “direct from the publishers” so to speak. However, paying a tax to the NLA for having the temerity to buy that service from someone else is wrong.

It’s interesting that Google is not included in your licence plans. Google uses newspaper content for its own business purposes and sells advertising alongside that content – sound like a familiar model? Now, if material from your publishers is truly covered by copyright law and can’t be used for “business purposes”, then you can’t pick and choose to whom that law applies – ie, apply it to the PR industry because it can’t afford the legal challenge but declare Google exempt.

Of course, publishers need to make money from content and can do so indirectly through advertising, or directly by charging. An indirect tax on selected other businesses hiding behind a strange interpretation of copyright law is not acceptable. This month I awarded the CIPR President’s medal to Sir Tim Berners-Lee, inventor of the World Wide Web. Sir Tim gave his invention to the world copyright free, because he wanted nothing to stand in the way of businesses and consumers using his invention. I wonder what he thinks about a back-door tax on free material.
David, please reconsider your plans.
Kevin