Wolff: Maybe Murdoch should sue

From the early days of the commercial Internet, Rupert Murdoch has expressed his frustration and anger over the disingenuousness that has allowed, under the guise of freedom and innovation, a widespread appropriation of otherwise protected content. Once, to no practical effect, he threatened to block Google’s crawlers from searching and indexing his newspapers. Later, he put up one of the industry’s most solid pay walls -- impeding his own traffic without raising meaningful subscription income.

In a recent speech in Australia, as I noted in my last column, the CEO of Murdoch’s newspaper company, Robert Thomson, harshly castigated the major digital platforms and labeled Google a “pirate” --  which, I suggested, sounded like a prelude to a Murdoch law suit.

That prompted quite an outpouring from people in both the tech and media businesses, asking, “Do you really think he will?”

The answer is, I have no idea. Except that when you, or your highest executives, publicly accuse someone of massive copyright infringements, how can you not take action? And, too, from Murdoch’s perspective, there seems little to lose.

On the one hand, you have a traditional newspaper industry that has, in a few year’s time, lost more than half of its value, with the decline continuing. On the other, you have a “digital first” movement that, at best, accepts the idea of a defenestrated news business.

In this, Murdoch, at 84, has sometimes seemed like a Shakespearean, or ridiculous, figure -- railing against what he cannot change.

And yet, this is a curious and maybe opportune moment. The digital upstarts that have undermined the entrenched old-line incumbents are now themselves scarily entrenched and hegemonic. In many parts of the world, the tide is turning against them. Google, like Microsoft before it, is now squarely in the cross hairs of European courts and regulators. Indeed, there are any number of jurisdictions in the world where a copyright suit against Google and Facebook might be a plausible and popular action.

There may not be a better moment  -- or put another way, this may be the last moment -- to challenge the assumptions that have shifted power in the information business and gutted the economics of many content creators.

It’s a Murdoch sort of moment.

In 1986, after several decades in which British newspaper unions took power from owners and management, flattening the industry, Murdoch, in the dead of night, moved all of his papers from unionized Fleet Street in London to a protected enclave up the river in Wapping. In one of the most bitter industrial disputes of the era, he shut out the printers union. Although reviled then by the left and the liberal media, he is now widely regarded as having saved British newspapers for another generation.

This may, too, be a moment in which the Murdoch world view could be a bracing tonic. The unsentimental Murdoch sees the world as a struggle among more and less powerful entities. The technology community, in part through artful mythmaking, has made its rise and dominance seem, not unlike those of the British labor unions of the 1970s, to be about the common good. Murdoch’s reduction of the world to wholly competitive forces calls reasonable phooey on the virtuousness of engulf-and-devour tech platforms.

Google and Facebook, controlling 52% of the digital advertising market, profit from other people’s content and pay nothing for it, offering a perfect example of the public policy reasons for copyright protection -- without it, copyright holders can't economically exist. Under the guise of new cultural norms and advancements in technology, the indexing and sharing platforms effectively became radio stations playing recordings without have to pay ASCAP, the 100-year-old organization that collects royalties for content owners.

And yet, at the same time as Google and Facebook staunchly resist making payments to copyright holders, significant music and video licensing fees have been wrestled out of YouTube (a Google subsidiary); this year, Netflix will pay Hollywood and the television industry $3 billion in content fees; Spotify, the digital platform, pays 70% of its revenues to music labels.

Why haven’t newspapers been able to share in this increasingly lucrative game?

Partly because the horse has already bolted from the barn.

In this, Google and Facebook, demonstrating the age-old business truth that you most reliably make money off of people who are dumber than you, are not so much criminals as lucky beneficiaries of the incredible stupidity of a publishing industry that willingly gave its property away. And, too, there is the cat-that-ate-the-canary beauty of technology that provides a workaround to intellectual property protections -- a little can be stolen from everybody that ads up to a vast amount (the nature of a search engine) and everybody can share, therefore nobody is guilty of stealing (a social network).

Google says, with seeming reasonableness, that if you don’t like the system, feel free to pull your content out of our index -- knowing that, however bleak the new business reality, nobody is going to turn down traffic, the crumbs left on the table. Likewise, Facebook could willingly forsake The New York Times and its members’ ability to share it, without a tremor, or much notice, from its billion users.

There is just no leverage left.

Except perhaps Murdoch’s willfulness. Is there one more battle here? The ultimate one. News Corp. has more than a billion dollars in the bank. What better investment might a newspaper company make than in a multi-jurisdictional, tidal wave, 11-figure, treble damage lawsuit that -- eventually joined by all the world’s publishers -- might level the balance between creators and distributors?

Digital technology has created a climate of invincibility and awe and a kind of Stockholm Syndrome that has overwhelmed the publishing industry.

Likely there is only one old man who is immune to that.