October 2001

Content Discontent

The Internet and globalization are creating new battle lines between producers and distributors of content.

By Seth Shulman

If anything illustrates the tension between the creators and distributors of "content" in our innovation-driven economy, it is the aftermath of June's U.S. Supreme Court decision in New York Times v. Tasini-the David-and-Goliath case in which a small and determined band of freelance writers prevailed over a powerful group of well-heeled publishers.

I'll give the particulars in a moment, but what's notable here is that new realities-read the Internet, telecommunications and globalization-have spawned unrest in the fundamentally symbiotic relationship between "content" creators and distributors almost everywhere you look. Screenwriters and actors have been fighting the Hollywood studios. Musicians and record labels have wrangled over Napster. Even the antiglobalization demonstrators in Seattle, Quebec City and Genoa, Italy, underscore the fact that many of today's hottest and most confusing debates hinge on who should control-and profit from-the content that drives an ever growing piece of the world economy.

"Content": in the modern lexicon, the term denotes everything from the information delivered daily to our doors on newsprint to the multimedia clips streamed over the Internet; from the music carried on the airwaves to the interactive software on CD-ROMs. This so-called content is produced by an increasingly broad and diverse segment of the economy, including not just writers and artists, but also software programmers and other high-tech researchers who create new intellectual property.

And here's the most interesting part. Time and again, the distributors-such as publishers, broadcasters and record labels-recoil in the face of technological advances that could diminish their role. As a result, the distributors find themselves blocking developments and standing at odds with content creators. Think of the way the record labels opted to shut down the wildly popular Napster rather than forge a way to take advantage of the new means to distribute music online.

I feel certain that the "new realities" will ultimately favor content creators. After all, content distribution has become easier, more direct and more immediate than ever. Distributors will come out the losers unless they take an enlightened approach to profit sharing with creators in the new media.

If the Tasini case is any indication, however, the transition is likely to be stormy.

The story starts in 1993, when 11 freelance writers, including Jonathan Tasini, president of the National Writers Union, brought a lawsuit charging that publishers-including the parent companies of the New York Times, Newsday and Time-had illegally resold their work to LexisNexis and other databases without the writers' permission. The writers were outraged to find their articles appearing in online databases even though they had never given their permission or received any recompense for the republication of their works.