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Japan Is an Island (in Online News) April 9, 2010

Posted by Bill Rosenblatt in Japan, Law, Publishing, White Papers.

An interesting article in today’s New York Times discusses the decision of Nikkei, Japan’s leading financial newspaper, to forbid external links to its new website, which requires paid subscription to access.  Apparently anyone who puts links to Nikkei online articles on their own websites without permission could face legal action.

This restriction is not limited to “deep links” to individual articles; it also includes the Nikkei’s home page.

Nikkei has huge circulation — 3 million, compared to the Wall Street Journal’s 2 million.

This decision has provoked some outrage in Japan (a country not particularly noted for public outrage), though not as much as many outside Japan might feel.

Unfortunately, the article missed a critical point about this: Japanese copyright law.  The law does not automatically give one the right to link to a copyrighted web page.  In the UK, so-called deep links are illegal without permission, though links to home pages are allowed.  Deep links are legal in the United States.

Japan is supposedly “behind the times” when it comes to online news content, meaning that not every major news publisher casts their content freely upon the waters in hopes that some revenue (from ads, or whatever else) may wash ashore.  Of course, its copyright law enables publishers like Nikkei to construct their own islands within the Internet — in ways that may make some American or European news publishers jealous.

The law gives Japanese publishers a significant economic advantage online, even if they decide to give their content away.  An interesting whitepaper by Daniel and David Marburger, respectively an economist and a lawyer for the newspaper industry, analyzes how legal deep linking has crippled US news publishers’ ability to make money from ads online.

The Marburgers say that the many news aggregator sites have appeared with headlines, links to stories on publishers’ websites, and lots of advertising; this results in a vast oversupply of inventory which lowers ad rates while shrinking the proportion of ad revenues that go to the actual publishers.  Japanese news publishers, with their ability to quash external links, do not have this problem.

Still, the news publishing industry is finding out that there are many ways to monetize news content, as I explain in my new whitepaper on online content monetization.  Japan will be an interesting place for the rest of the world to watch in this regard.


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