The decision by the Court of Justice of the European Union in Nils Svensson and Others v Retriever Sverige AB (Case C-466/12) that a web site which uses hyperlinks to direct readers to content on other sites does not infringe copyright provided the content is already freely available may have considerable implications for the news media. This article looks at some of the possible implications for news organisations and argues that Svensson, instead of broadening access to news for online readers, may well prove to be one more weight tipping the balance towards paywalls and restricted access.
Background to the case
The claimants in the case are all journalists whose articles appeared on the Goteborgs-Posten newspaper’s web site. Retriever Sverige is a company which provides links to newspaper sites for clients without permission.
The case revolved around four questions which were referred to the CJEU.[1]
The first question asked whether the provision of hyperlinks to a copyrighted work by someone other than the copyright holder constituted a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society.
The other two questions asked whether it would make a difference if the work in question was already freely accessible online or was provided online but with some sort of existing restriction and whether any distinction should be made in how the links worked. Did they send the reader to a new web site or did they retrieve and display the work on the same site?
The final question asked whether a Member State could provide additional protection to authors by extending the meaning of ‘communication to the public’ beyond the definition given in Article 3(1).
In its ruling the court decided that ‘that the provision on a web site of clickable links to works freely available on another web site does not constitute an ‘act of communication to the public’, as referred to in Article 3(1) of Directive 2001/29/EC .[2]
Secondly, Article 3(1) ‘must be interpreted as precluding a Member State from giving wider protection to copyright holders by laying down that the concept of communication to the public includes a wider range of activities than those referred to in that provision.’[3]
The fact that individuals wish to add links to news content on their web sites, or share links to articles with friends and colleagues, isn’t the main problem for the media. It is when a larger site specifically sets out to attract clients by providing links to news on a large scale that problems arise.
First, links will go directly to content and not to the site’s homepage where much of the advertising may be located.[4]
There is also the fear that such a web site will attract readers away from the news sites, but far more importantly, that advertisers, looking to get the most for their money, will see these link sites as an attractive alternative to traditional news sites. For one thing link sites generally have few overheads as they do not need to pay staff to provide original content. They are therefore able to offer premium advertising rates, something the newspapers with their larger staffs and far greater overheads cannot compete with.
It is the advertising revenue which is key.
Media strategy
Sales of newspapers are not sufficient to maintain a modern newspaper. It is the revenue from advertising that sustains it, in some cases making up as much as 80% of revenue. In recent years this revenue has been falling, driven in large part by the evolution of the Internet and the way readers can access and consume news.
To counter this, the media have looked a ways to increase, or at the very least, maintain, their revenues.[5] Broadly the strategies that have evolved take one of two basic forms – a paywall or free access online to all the newspaper’s content.
The paywall requires readers to subscribe to the web site by paying a fee which then allows them to access the newspaper’s content.
Free access is just that. The newspaper essentially produces a mirror of its print edition online and readers can access and read whatever content they want.
Each strategy has its pros and cons.
For the paywall, requiring readers to subscribe brings in revenue which can offset lost advertising revenue, and hold on to loyal readers.[6] It also allows the newspaper to provide potential advertisers with specific information on numbers of readers and reader demographics. This is important to advertisers who prefer readers who stay to browse, and who are therefore potentially exposed to more advertising on the site.
The problem with the paywall model lies in trying to convince readers to pay for something that they can obtain for free elsewhere. To date newspapers that have chosen paywalls have shown very mixed results.[7] While some now have more subscribers to their online editions than they have to their print editions, others have failed to attract sufficient numbers of subscribers to compensate for lost ad revenue.[8]
In some cases this has led to news organisations altering their policy[9] and reverting to free access, or at least partially free.[10]
Those that have chosen free access have seen readership levels maintained or even substantially increased.[11] However, ad revenue has not grown proportionally or at all, and bounce rates, readers who arrive at a web site but don’t stay to access content, can be high, which has brought the whole strategy into question.
The ups and downs that the media have experienced with these strategies have led to some experimenting with mixed formats. This involves providing some free content to draw a reader into the site, but hiding the premium content, full stories, features, analysis and so on, behind a paywall. Readers then have to pay if they want the full content.
Another strategy, still very much in its infancy, is to require readers to first view a video containing advertising. Once they have watched the full video (no cheating by fast forwarding or skipping ahead), they will be able to access the full content of the site without having to pay any fees or subscribing – a so-called soft paywall.[12] How successful this strategy will be remains to be seen.
Conclusion
Coming at a time when news organisations are already facing enormous problems trying to develop an online strategy to protect their revenues, the Svensson case effectively opens the door to companies that wish to profit from setting up web sites which provide readers with content through links. It is not alone in doing so. Other cases in other jurisdictions have led to similar judgments concerning the use of links.[13] It is safe to assume that each of these cases has been carefully watched and evaluated by an already jittery news media.
And it is not just the possibility cases like Svensson afford for new sites to open offering links. It is the possibility that web sites which currently pay to use content from newspapers and news agencies may decide that dropping the content and simply offering links is a better alternative financially.
Certainly it is early days to draw too much doom and gloom from the decision; it will have to be tested in other courts. But one thing that is reasonably certain is that news organisations will have taken note; for those who are still debating how best to move forward online, it may well prove to be one more weight tipping the balance towards paywalls.
Some might consider this as not necessarily a bad thing, arguing that any regulation of links would stifle freedom of expression and freedom to conduct business.[14] While this may be true for businesses, the growth of sites offering a range of stories and news analysis and comment does not necessarily serve readers. The quality of these sites varies considerably, from the professional to the downright ludicrous, and for some readers it is not always easy to differentiate. This may be especially true for readers in countries where the news is heavily controlled by the government. Many of them look to freely accessible sites to provide them with the information they do not get at home. These readers are also rarely in a position to be able to afford, let alone have a means of paying for, subscriptions.
A wide range of freely available, quality news content is essential to disseminate facts and to dispel propaganda. Traditional news organisations are not the only way to do this, but they are an extremely important way of doing so. It is essential that the law helps to achieve this goal. The decision in Svensson does not and the sooner it can be challenged in other courts the better.
Justin Dear is Head of Online News Desk (Asia-Pacific) for AFP and specializes in criminal and media law issues
[1] For a very good summary of the background to the case and the questions referred, see Arnold J in Paramount Home Entertainment International Ltd & Ors v British Sky Broadcasting Ltd & Ors [2013] EWHC 3479 (Ch) (13 November 2013). http://www.bailii.org/ew/cases/EWHC/Ch/2013/3479.html
[2] Judgement of the Court (Fourth Chamber), Case C-466/12, 13 February 2014, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0466:EN:HTML#Footnote*
[3] Ibid (42)[2]
[4] De Beer.J. , and Burri.M. (2013) ‘ Transatlantic Copyright Comparisons: Making Available via Hyperlinks in the European Union and Canada.’ NCCR Trade Regulation. March, 03, 2014. http://www.wti.org/fileadmin/user_upload/nccr-trade.ch/wp3/Making_Available_via_Hyperlinking.pdf 12/03/14
[5] Ingram. M. March 21, 2013. ‘The Monetization Dilemma for Media Paywalls: On One Side Advertising On the Other Paid Content’ http://paidcontent.org/2013/03/21/the-monetization-dilemma-for-media-paywalls-on-one-side-advertising-on-the-other/P
[6] Bloomberg TV. http://www.bloomberg.com/video/when-does-a-newspaper-pay-wall-work-x3jwlPrbTC2scQ6ucanJdw.html
[7] Preston. P. March, 02, 2014. ‘Paywalls or Not? It’s as easy as ABC.’ The Observer http://www.theguardian.com/media/paywalls
[8] Lee. E, November, 14, 2013. ‘The Year of the Paywall.’ Bloomberg Business Week, http://www.businessweek.com/articles/2013-11-14/2014-outlook-online-publishers-paywall-strategy
[9] Sebastian. M.; October, 01, 2013. ‘Dallas Morning News Kills Paywall, Pares Ads price.’ Advertising Age http://adage.com/article/media/dallas-morning-news-kills-paywall-pares-ads-a-price/244485/
[10] Greenslade Blog. March, 05, 2014. ‘Boston Globe lowers its paywall to build on ‘success’ when it was up.’ http://www.theguardian.com/media/greenslade/2014/mar/05/boston-globe-paywalls
[11] Preston. P. December, 22, 2013. ‘Farewell 2013, the year of living with uncertainty.’ http://www.theguardian.com/media/2013/dec/22/farewell-2013-year-of-uncertainty
[12] Shayon. S. (2013) ‘Publishers Way In on Soft and Hard paywalls for Online Content’ BRANDCHANNEL, http://www.brandchannel.com/home/post/2013/07/12/Publisher-Paywalls-071213.aspx
[13] See for example in Canada Warman v Fournier, 2012 FC 803, 104 CPR (4th) 21; Crookes v Newton, [2011] SCC 47, [2011] SCR 269, at [26], [30] (in a case concerning hyperlinks and defamation): In Germany, Paperboy, Case I ZR 259/00 (17 July 2003) [2005] ECDR (7) 67, 77 and for the US Peter S. Menell, In Search of Copyright’s Lost Ark: Interpreting the Right to Distribute in the Internet Age, 59 J. Copyright Soc’y U.S.A. 1 (2011).
[14] European Copyright Society. Opinion on The Reference to the CJEU in Case C-466/12 Svensson, http://www.ivir.nl/news/European_Copyright_Society_Opinion_on_Svensson.pdf
