Google and survival of the fittest

Is Google out to destroy everyone's livelihood or is it just a savvy new-age company hurrying older business models to their inevitable doom? It depends on who you ask: musicians, media moguls, libraries and newspapers on one side--or bloggers on the other.

First, British musician Billy Bragg tussled with Google over music videos played via YouTube. Rather than pay royalties each time a music video is played on YouTube, Google decided to remove the videos and save some money--and grief. In a letter to The Times, Bragg, along with former Bee Gees member Robin Gibb, producer Pete Waterman and others, argued that Google should reinstate the music and pay the royalties, "which are a vital income source for all professional creators and must be preserved to ensure a continued vibrant music industry."

Next, News Corp. chief Rupert Murdoch tried to rally media groups to ban together against Google and its efforts "to steal all our copyrights." At issue is Google Search and especially Google News, which crawls and categorizes news stories, an enterprise Murdoch claims is unfairly profiting from the work of traditional media companies. While Google claims it supports copyright, since it only reprints headlines and a few lines of copy, Murdoch seems to think Google owes media publishers a bit more financial compensation--especially now that Google runs ads against Google News searches.

And then, it was the book publishers and libraries' turn. While Google settled a lawsuit in October brought by publishers and authors over its book scanning project, the deal still awaits final court approval, and a host of interested parties are jumping into the discussion. These include Robert Darnton, director of Harvard University's library system, who warns in a New York Review of Books essay:

After reading the settlement and letting its terms sink in—no easy task, as it runs to 134 pages and 15 appendices of legalese—one is likely to be dumbfounded: here is a proposal that could result in the world's largest library. It would, to be sure, be a digital library, but it could dwarf the Library of Congress and all the national libraries of Europe. Moreover, in pursuing the terms of the settlement with the authors and publishers, Google could also become the world's largest book business—not a chain of stores but an electronic supply service that could out-Amazon Amazon.

Darnton's issue is that with so much at stake, Google should be providing a bit more compensation to the authors and publishers from whose work it stands to profit.

And finally, the newspapers chimed in. The U.K. Guardian's Henry Porter labeled Google an "amoral menace," not only for its shabby treatment of Bragg but also for its wanton exploitation of the newspaper business. As he says:

Google is in the final analysis a parasite that creates nothing, merely offering little aggregation, lists and the ordering of information generated by people who have invested their capital, skill and time.

So in the space of a couple of days, Google was attacked by a variety of stakeholders, all of whom are unhappy about how Google seems to be profiting mightily from their labors without providing due recompense. But is that really fair?

Not at all, says blogger Michael Arrington at TechCrunch. The musicians, newspapers and publishers are the ones who need to wake up and make some changes:

What Porter and Bragg want is a subsidy from Google. A sort of welfare tax on a profitable company so that they can continue to draw the paychecks they've become accustomed to. That isn't going to happen, and all this hand wringing isn't helping to move their respective industries toward a successful business model. They either need to adapt or die. And they're choosing a very noisy and annoying death.

Arrington, a blogger who's embraced the digital age, may bit a bit biased. But he also may have a point. As Dirk Smillie says in Forbes, the argument is reminiscent of recent problems between the AP and newspapers. Newspapers need the AP to cover the stories they can't, but they are finding it more difficult to pay the AP for its services, especially as subscriptions and print ads decline. Seeing the writing on the wall, the AP diversified in the '90s into more lucrative initiatives, like broadcast video and online. The result is that the AP is better insulated from the vagaries of the traditional newspaper business--whlie the newspapers need the AP, the AP doesn't need the newspapers as much.

The same is true of Google. The segments complaining the loudest about Google--the musicians, the book publishers, the newspaper industry--are those who need Google the most, as their traditional distribution outlets have withered and the age of digital information and distribution (via sites like Google) has soared in importance.

Smillie quotes the Dallas Morning News' Anthony Moor, who suggests newspapers band together and turn off their sites to search for a week as a way to strong-arm Google into giving better terms. But perhaps they'd be wiser to figure out how to diversify (like the AP, which hasn't cut its staff since 2000) and better embrace the digital model.

In the end, it's survival of the fittest. And Google can't be the only business destined to thrive in the new environment.

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