Publishers Should Have Seen It Coming.

by Frank Bilotto

I’ve known Paul Gerbino for 25 years. Our very first conversation was an argument about taxonomies. Since then, we haven’t agreed on any subject. The significant majority of the arguments have been about content, but we’ve argued about everything, even taboo subjects like politics and religion. I cannot recall a conversation where we ever concluded that we were in agreement. So, imagine my surprise this week, when Paul and I talked about publishers’ recent concern about AI technologies deliberately scraping content from publishers. Don’t tell him I said so, but Paul actually got it right. Paul said that publishers are up in arms now, but stealing content via scraping is as old as the internet itself.  So, why are publishers reacting to this latest version of scraping like it’s a new phenomenon?

I’ll ask for your forgiveness in advance for not limiting myself to the textbook definition of scraping, because I have personal involvement with content stealing. In fact, I was a co-conspirator in what is the largest conspiracy in the history of content stealing, and probably the conspiracy that involved the most co-conspirators in the history of the world. If you’re old enough, you were probably one of us. And if you have any integrity at all, you’ll admit that while you tried to rationalize it, you knew exactly what you were doing.

Does the name Napster ring a bell? For any of you that had Napster, you know that you downloaded every song that you could think of. I downloaded everything from the 20th century. I started with Irving Berlin and worked my way through to Mariah Carey (in case you’re wondering that’s 1900 – 1999). Before Napster was shut down, I downloaded more than 5,000 songs. It would have been more, but my computer exhausted its storage.

I knew at the time that I was stealing content. Sure, they called it “file sharing”. The explanations were convoluted to allow us all to want to believe that what we were doing was not theft. Do you remember some of the reasoning? Napster is merely the internet version of listening to your friend’s albums in his bedroom, or it’s the same as buying an album and recording the songs on tape in a sequence that you prefer more. But at the time we all knew this was much different. I had the music in my computer for my use at any time, and I didn’t pay for any of it. Everyone who used Napster knew this was stealing music, including you. But we all rationalized it to suit our own desires. While the arguments we’ve been hearing from AI companies over the past year are not exactly the same, they are just as insincere. 

It wasn’t until December 1999, when the Recording Industry Association of America filed a lawsuit against Napster for facilitating widespread copyright infringement that eventually shut down the service in 2001. The lawsuit alleged that Napster allowed users to share copyrighted music without permission from the rights holders. The court agreed that Napster had contributed to copyright infringement by providing the means for users to share music files illegally. 

Napster was shut down, but that wasn’t the end of the story. Although Napster failed as a company, it succeeded in completely changing the music business. If publishers want a crystal ball, they need look no further than the recording industry today. It’s not the record labels making money from the music, it’s iTunes, Amazon, Youtube and Spotify. I’m still dumbfounded as to why the labels didn’t create their own digital distribution networks, or why they don’t do it now. 

Today the music industry is upside down. Before the internet, artists played concerts to sell records. Now, artists make recordings to sell concert tickets. For the first concert I ever saw, my mother paid $4 for a ticket for me to see the Jackson 5.  At that time, their singles sold for .99 cents.  More than fifty years later, you can still buy a single song for .99 cents, or subscribe to all the music in all of recorded history for the cost of just 10 singles per month. But if your kid went to see the recent Taylor Swift tour, chances are you paid more than $1,000. (That’s not just inflation.)

Today, as I’ve written about before, AI companies are positioning themselves to make the most money from content created by publishers, just like Napster positioned the technologies that followed to make the most money from music. “The handwriting is on the wall,” is an understatement. What is even worse in this case is that unlike the record business, which never saw it coming, publishers have had 25 years to see it coming. 

Frank Bilotto is a licensed attorney with over 25 years of experience in commercializing intellectual property. He was instrumental in creating The World Reporter in 1999, an alliance of 10,000 daily newspapers, and the first such content alliance in the digital content space. He’s negotiated more than 1,000 intellectual property licenses with the world’s largest organizations, including Comcast, Google, BBC, NewsCorp, Gannett, ESPN, NBC, CBS, ATT, Dow Jones, Thomson Reuters, Facebook, Microsoft, Nike, Adidas, Hewlett Packard, Knight Ridder, Capitol Records, MGM and Paramount. Frank’s passion outside of content licensing is trying to love his neighbor as himself. (Unfortunately, he fails too often.)

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