exploiting bloggers isn't enough to make local news business attractive

Local news today appears to be an unattractive business.  While Groupon has soared to an estimated valuation of tens billions of dollars in only a couple of years, many local news startups have failed.  Not one has has achieved business success anywhere near that of Groupon.  Offering purchase deals and opportunities, rather than news and advertisements, seems to be the most effective way to gather revenue from local merchants.

TBD, an ambitious local news venture of Allbritton Communications Company, failed even through it succeeded in assembling an impressive DC-area blogger network under amazing terms.  The contract that TBD offered bloggers committed TBD to nothing more than listing the bloggers in its blogger network directory.  In return, TBD asked for rights to the blogger’s content:

you hereby grant to TBD and its affiliates, successors and licensees a non-exclusive, royalty-free, and fully sub-licensable worldwide right and license to use, publish, distribute, perform, display, modify, promote and create derivative works from your Content in any media without compensation to you or any third party.

That seems roughly equivalent to a Creative Commons attribution license, granted just to TBD.  Sharing content under such a Creative Commons license is reasonable and praiseworthy.  But why offer that sort of license to just one commercial news company?

More astonishing was TBD asking bloggers to indemnify it for its use of bloggers’ work.  TBD’s contract with bloggers stated:

You agree to indemnify, defend and hold harmless TBD, its affiliates, and each of their directors, officers, employees, representatives and agents from and against any actions, claims, demands, liabilities, expenses and costs, including reasonable attorneys’ fees, arising out of any third-party claim relating to your breach of any of your representations, warranties or obligations under this Membership Agreement.

The “representations, warranties or obligations under this Membership Agreement” involved judgments about the blogger’s content:

(b) you own all right, title and interest in the Content or otherwise have the right to license the Content to TBD for TBD’s use as contemplated in this Member Agreement;

(c) neither the Content nor your preparation of the Content will be libelous, nor will it violate the right of privacy or publicity of any person;

(d) the Content will not infringe any copyright, trademark, service mark, trade secret, or proprietary rights; and

(e) the Content is in compliance with all applicable local, state, national, and international laws, rules and regulations.

TBD, given its professional news expertise, would seem to be better positioned than a blogger to make these judgments about a blogger’s content before TBD chose to include that content in its news product.  Why would an non-professional blogger take responsibility for these judgments on behalf of TBD?  Why would an individual blogger choose to indemnify a large corporation for third-party claims against that corporation related to those judgments?

Many bloggers accepted TBD’s contract.  That amazes me.  Perhaps bloggers didn’t actually read the contract, or think about it.  Many of those bloggers were unincorporated individuals blogging without any financial compensation.  Yet they personally indemnified a large commercial corporation for its free use of their content.

The local news business has been difficult despite corporations success in exploiting unpaid bloggers.  Although TBD successfully recruited a large network of bloggers, TBD’s original local news business was essentially dead within six months of starting operations.  The Huffington Post was quite successful in aggregating unpaid bloggers’ work, although now it faces some blowback.  AOL is currently investing heavily in Patch and seeking to assemble a large network of bloggers.   Many industry observers question Patch’s prospect for success.  But recruiting many unpaid bloggers to contribute their work probably won’t be a major challenge for Patch.

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