You have probably never heard the term “Leistungsschutzrecht” before. And rightly so, because it is one of the most stupid concepts ever invented. It describes a new law currently discussed in Germany which will “protect” publisher from being robbed by Google. And although I’m referring to Germany in particular, such laws are debated all over Europe at the moment. This demonstrates once again that both the European economy and European politics is ruled by people that have absolutely no clue about the Internet, the social and economic changes it brings and that it affects our lives the same way the steam engine or letterpress did. Genie is out of the bottle, and it won’t go back.
Sorry, I got carried away, you notice that I have some strong thoughts about the Leistungschutzrecht. Back to the main topic of this article:
What is a Leistungsschutzrecht anyway?
Basically, publishers in Germany are complaining that Google is stealing their content. How can Google steal content from publishers you might ask? Do they sneak into their office at night and grab unpublished and highly valuable material from the desk? Well, the publisher mainly refer to Google News and state that by displaying short snippets of their articles (and in that course linking back to the publishers site one immediately wants to add), Google earns gazillions of Euros while the poor publishers don’t see a dime. And since Google won’t stop to do so, we need a new law that regulates this thing, and bring all Google managers behind bars. The law says that if you want to display (or cite) even a very small portion of a text that some other company published, you’ll have to pay. Well, first you have to ask for allowance, and then you’ll have to pay. The law initially did not mention Google or search engines at all. Politicians were constantly saying that this new law had nothing to do with Google in particular, and that it’s only aim is to get the publishers their fair share of the business. But silently everyone knew where this law originated from. Publishers are angry that they don’t know how to monetize their content, and instead of thinking about new business models they simply blame an external force – which is Google.
Next there was an outcry amongst bloggers in Germany. They feared that they cannot cite or link articles anymore without taking the risk of being sued. This would go against freedom of speech and opinions would be dictated again by a few key players in the publishing domain. Services like news-aggregators would become nearly illegal, or the companies offering these services would have to talk to and pay all publishers in Germany.
So the law was changed, and despite all that has been said before now the true background of it became obvious. In the new version, only search engines are mentioned. There you go!
Why is it nonsense?
Much has been written, many discussions took place, but publishers still insist they are constantly robbed by Google. The fact that they can easily stop Google from indexing their content (robots.txt, anyone?) and that publisher get a huge percentage of their traffic from Google (which they can then monetize) is ignored. I don’t want to repeat the discussion here, but one thing really strikes me: Whenever an industry is threatened by technologcial, societal or political changes, they cry for new laws to protect their cozy little world, ignoring completely that change is inevitable. Listen: It’s not the Internet that is threatening the publishers. The Internet is just a platform. It’s the change in consumers habits, needs and wishes that is changing. The consumers are the readers of the newspapers and magazines, the people that pay publishers directly and indirectly. And, surprise surprise, many of these customers do not care about a printed paper that is delivered right to their door every morning anymore. They do not want this product or service anymore. What they want is information that is accessible where and when they want. Not printed, but digital. I don’t want old newspapers to pile up in my kitchen until I have the nerve to throw them away. Customers want magazines that take full advantage of modern devices like the iPad or the Kindle, mix text with images and videos, and cross-link between articles. That’s what they want. And now the fun part begins: The publishers do not give a damn about what customers want. They want to protect their old and now broken business model, telling everyone that only printed journalism is good journalism. Since when is the medium that transports information decisive for the quality of the information? It’s just pure nonsense. And I’m telling you: A company that ignores what the customers want or care about is doomed to fail. It’s as simple as that.
A look back
Demanding new and more rigorous laws when technology and customer demands change is not new. When talking about changes that digitization brings, the reaction of the publishers is very similar to that of the music industry. A couple of years back, with the arrival of MP3, also here customer habits changed. Music was suddenly consumed in non-physical form, since it is easier to store, easier to transport, easier to categorize and thus easier to find. MP3s would’nt get scratched and, agreed, you could copy and share files more easily than physical disks. The music industry totally ignored the chage in consumer habit and whined about their content being shared illegally and for free. But what they did not see (or did see, but did not mention) is the fact that music was shared ever since. Hell, when I was young we traded tapes, copied records and compiled our own mix-tapes like anything else. So this was not the main problem of the music industry. The problem was that even those who wanted to buy MP3s legally could not find any suitable service for this. The music industry simply did not offer it. It was Steve Jobs that realized that there will always be two different parties buying and consuming music.
Those which much time and less money. The typical kid or student that loves music, but cannot afford to buy all the records she wants to listen to. This group will always trade music, be it on tape, CD or as MP3. Like we did in our childhood. And here the reasoning of the music industry is broke: If you would shut down all sharing platforms tomorrow, the music industry would not earn one dime more than today. The reason is that the funds of these kids is limited. They would simply not buy the music they can now download for free today. The reaction would be non-consumption. Music these days competes with all sorts of other products for these group, for example computer games. There is only a certain amount of money that they can spent.
The second group is the more interesting one. This group has less time, but more money. If you have a job and work 40-50 hours per week you know what I mean. You do not want to spend your evenings searching the internet for a free copy of a certain album, only to realize after the download has finished that the album is incomplete, has a poor quality, or, sometimes, you just have been Rickrolled. I for myself still consume a lot music, but I rather spent a couple of Euro and be sure that I get what I want quickly and seamless, than to waste my time looking for a free download.
And now guess who is making money with music downloads. Not the music industry, but Apple. The music industry actually hates Apple, since Apple is now able to dictate the prices and conditions under which music in the iTunes store is sold. So, the big question is: How could it happen that the very core of an industries business, selling music, was taken over by a company operating in a completely different domain. Short answer: The music industry denied the changes in customer needs and habits and wanted to stick with their previous business model. They tried to protect it by laws and lawsuits, but failed miserably. The other company sensed an opportunity in these changes, and answered with a new and innovative business model, tailored to customers needs. Guess who won.
Yes, I say that history is repeating. The mistakes of the music industry have been repeated by the movie industry, and now the publishers follow. I’m always blown away by the incapability of industries to learn from past mistakes. Probably the root cause is that humans fear change rather than embrace it, and have a tendency to stick with what has worked in the past. I might add that the music industry lobbied against the introduction of the MC decades back, with quite the same arguments. Tapes will kill the record sales and thus the music industry will vanish. Have they? No.
Wishes and predictions
OK, after ranting against several industries in this article, what do I predict – or wish? My first wish is that when this new law becomes effective, Google will simply delist all German publishers from their index. The thing is that the publisher gain a lot more from Google News than they lose. If Google does not deliver traffic anymore, page impressions and therefore ad impressions will decrease substantially, and publishers will not be able to monetize their online presence as they do now. Then I wish that a new breed of managers will arise in the publishing industry who are not afraid of change, understand the digital domain, seek new opportunities and come up with interesting new business models. But I think the latter really is just wishful thinking.