It is generally accepted wisdom that if you do not want something to be noticed you can best announce it on a Friday afternoon. Presenting a study right before the start of the summer holidays is a variation of this. Seen in this light, it is a bit unfortunate that the Spanish Association of Publishers of Periodical Publications (AEEPP) decided to release a study on the impact of the Spanish ancillary copyright on the 9th of July when half of Europe was already in (pre)vacation mode (which is why we are covering the study 3 months after its release—for your post vacation enjoyment).
Spain’s ancillary copyright law came into effect on January 1, 2015, after extensive lobbying by the Association of Publishers of Spanish Newspapers and in spite of opposition from other industry players and civil society groups (including us) who were concerned that the new rights would have a negative impact on media diversity and the ability to access news and other information. As a first casualty of the new, unwaivable right, Google closed its Google News service in Spain.
The new study, which was commissioned by the AEEPP and carried out by NERA consulting, confirms most of the concerns raised by opponents of the ancillary right. Based on comScore data for the first 3 months of 2015 the study finds that the closing of Google News (and a number of smaller news aggregation services) that followed the introduction of the new law has led to a (predictable) decline of internet traffic directed at Spanish newspapers: Traffic to newspaper sites has dropped more than 6% on average and 14% for small publications.
The comScore data is in line with previous studies that have found that the effect of news aggregators on online news sites is a positive one. They have a “market expansion effect”, driving visitors to news websites that would otherwise not end up there. According to multiple studies analyzed as part of the NERA/AEEPP study, the “expansion effect” clearly outweighs the “substitution effect” of news aggregators (the fact that some users of news aggregators are satisfied with the information provided by the aggregators and do not end up visiting the websites of the original publications). The implications of this for the online news market are evident:
The negative impact on the newspaper sector is straightforward: the fee will result in the removal of an important method of attracting readers, which will result in decreased advertising revenues. The evidence available shows that the impact on traffic in the short term has been negative, and that small publications have been most affected
But it is not only the online news sector (which was at least partially in favor of the new ancillary copyright) that is negatively affected by the new law. According to the analysis presented in the study there are also serious negative consequences for news aggregators and other information intermediaries, including:
Barriers to innovation. There are a variety of innovative news aggregators that, compile customized services related to the users’ activity on platforms such as social networks, or that have focused on content aggregation projects for mobile phones, whose development is being hindered. […] Potential developments, such as automatic source readers or algorithmic aggregators designed to deliver dynamic content, will also be negatively impacted.
Regulatory uncertainty and right to quote. The modification of the law has generated regulatory uncertainty that has already affected the plans of many firms in the sector. […] Similarly, the new legislation infringes on the right to use Creative Commons-licensed content, as well as the right to quote.
The negative impact on the “right to quote” and on the ability to release and use information under Creative Commons licenses was one of our main concerns when the plans for the Spanish ancillary copyright first surfaced. This study confirms our concerns that as a side effect of attempting to protect the business models of a few publishing houses the new law limits the abilities of spanish citizens and businesses to freely share information and to contribute to the commons. Unfortunately, these are not the only negative effects on news consumers that NERA has identified. As a result of the Spanish law news consumers also face…
… Less variety of content and innovation penetration. The new legislation is detrimental to consumers because it reduces content variety and impedes the ability of innovation to penetrate the market. Consumers also have less access to information, to new products and services from aggregators, and to content from media outlets.
All in all the NERA/AEEPP study shows a fairly damning picture of the effects of the recent law, which will hopefully be noticed by those who are pushing for the introduction of an ancillary copyright at the EU level. It is clear that simply inventing new rights out of thin air is not a very effective way to support press publishers and maintain media diversity. It may actually have the opposite effect.
With regard to the situation in Spain it remains to be seen whether the consequences of the new law are bad enough to convince the legislature to repeal it. History shows that IP rights almost never get abolished once they are introduced- no matter how ineffective they are in achieving their original objective. Such an outcome therefore seems not very likely-Database Directive, anyone?