Copyright troll Righthaven's epic blunder: a lawsuit targeting Ars

Sometimes I find the copyright follies amusing, sometimes not. Its important to understand that when an organism is dying it has no compunctions about killing nearby organisms if, for some reason, it feels that its actions my lead to it not dying. Sort of like when a person loses their balance on a balcony, and in their panic grabs the person next to them and they both get pulled over and fall to an untimely end.

As I am fond of telling people, the news business is alive and vital and healthy, the news paper business is dying like cold blooded reptile in an ice age. Why the discrepancy?

News is, at its heart, and information business. Data is collected, it's analyzed and digested, then presented as editorial for consumption. You can think of this as a value chain where raw data costs $x to acquire, people (or algorithms in some cases) cost $y to convert that data into news, and it costs $z to reproduce and distribute that news to consumers. Consumers pay for the information either directly (via subscription) or indirectly (by tolerating being marketed to) or doubly indirectly (by giving up demographic data which will be later used to market to them). Sometimes its a combination of all three.

Take the revenue (ads and demographics have to be converted to $ first but they all convert) per reader, multiply by the number of readers, subtract off the cost and voila, your gross margin. Lop off of that what you will for recurring costs and presto you're a news business. If the remaining margin is greater than 0 your a profitable news business, if its less than 0 you are a dying news business. Newspapers are generally lumped into the latter category.

Newspapers are carrying a lot of costs they don't need to carry (printing, newsprint, delivery services). There was a perceptive write up about how the New York times would save money if it sent everyone a Kindle and just stopped printing the paper [1]. In fact it could send all of its subscribers a free Kindle, cut the cost of a subscription, and make more per issue than they currently make. Its not a question of 'making it up in volume' its about 'the cost of goods has just dropped 42%.'

Papers are an old old institution. As institutions they don't accept wholesale change to their business model (even if it means survival). They have both a strong cash base generally and political base. So rather than move past the Asteroid strike/Ice Age and join the Web 2.0 mammals on the other side, they are flailing away in their newsprint and india ink tar pits. People walking by the tar pits have to watch out for them grabbing them in an effort to keep from dying, to bad they are already dead.

[1] http://www.businessinsider.com/2009/1/printing-the-nyt-costs...