Against Intellectual Monopoly

of the Reuters story with a few hours' delay and
at a substantially lower price. It is possible that, depending on technology,
speed of replication, and stratification of the market for news, a third or
fourth layer of Reuters replicators would appear.
    If this does not sound like a Star Trek story to you, it is simply because we
already witness a very similar arrangement in the market for financial and
most other valuable news. Here, highly impatient customers pay substantial
fees to purchase from Bloomberg, Moody's, or Reuters the real-time news
and quotes. The news and quotes then trickle down from Web sites to cable
televisions, to national newspapers, and so on, until, often a whole day later,
the New York Stock Exchange quotes are published in most newspapers
around the world. In fact, just click on the Yahoo site, or the Reuters site, or
the CNN site before you go to sleep at night. What do you get? You get the
main ingredients of the articles you will read tomorrow morning from your
beloved newspaper. The only difference with the financial news is that, for
"normal" news, people's degree of impatience is a lot lower, which does not
allow Reuters or CNN to charge you a high fee for feeding the news online
before the newspapers publish it. Reuters and CNN, then, must get by with
the revenues they collect from advertisers, or with the smaller fees they
charge other professional news organizations. Still, the news gets collected,
written and distributed, and most journalists, apparently, seem to find the
salary they make in this competitive industry a reasonable compensation
for their creative effort.
    Similar considerations apply to the parroted questions about the highly
paid author, the sleek imitators, and the money-losing publisher standing
stupidly in the middle: the latter would stop standing stupidly in the middle
and would get smart. This is not to say that authors might receive only
a modest amount for their work - for example, Stephen King might not
spend weeks and weekends writing his latest great work if he could sell it for
only a grand total of $19.95. But as we have seen, the evidence of the 9-11 Commission Report suggests he would command a rather higher price than
this.

The Modern American Newspaper
    The very form in which the news is currently distributed is itself a triumph
of competitive innovation. The innovation was that of Benjamin Day, who
in September 1833 started publishing the New York daily Sun, which he
managed to sell at a penny while other newspapers sold at $.05 or $.06.24 His
low price came from two simple innovations: he collected lots of advertising
instead of relying on subscriptions, and his paper was sold on street corners
by armies of newsboys.
    In the current parlance, these are "innovative business methods" and
today they would be patentable. Fortunately for the American newspaper
sector and for millions of American readers, they were not patentable in
1833; Day's innovation spread like fire to the whole country, including in
New York City itself. Yet, despite the competition from his imitators, Day
became one of the most important publishers in the United States and,
by 1840, the Sun and its direct competitor, the Herald, were the two most
popular dailies.
    Notice that Day's innovations were very costly, as he had to change
completely the whole distribution chain for the newspaper and set up and
train an entirely new sales force to acquire advertisements. At the same time,
copying him was only apparently easy: the idea was quite straightforward,
but implementing it was not so cheap. It involved roughly the same set up
costs that the Sun had to face in the first place.
    "And this is where your anti-intellectual property stance is revealed to
be just anti-business!" would-be Bill Gateses are thinking at this point -
but, equally probably, not Bill Gates himself, as our earlier quote of his own
words suggests. You see, without any "intellectual property" protection,
brave inventors will try out expensive new things, while parasitic imitators
will sit out, letting the experiments run their course, and then imitate only
successful practices. In this way, as the RIAA constantly reminds us on its
antipiracy Web site, "The thieves ... go straight to the top and steal the
gold,"" bringing the recording company to economic ruin.
    This argument may sound smart and "oh-so-commonsense" right when
you hear it the first time - but