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News stories glue portfolio managers and analysts to their screens. Each story feeds into a positive or negative bias. What if I could automate that? What if I could read everything as it comes out and sort it according to positive and negative news for a company? I could react systematically, quickly and across more stocks. I might even replace the role of the analyst.
Machine-readable news starts with exactly this economic intuition.
Disaffection with existing quantitative trading signals has brought it to investor attention. Advances in linguistic processing and the steady decline in computing costs have made it better and cheaper than before. And a raft of academic and industry papers have guided the way. Read the rest of this entry »
London Review of Books and a startlingly nice piece on the intersection of news, newspapers, paper news, and technology.
And a quote from the editors at The National Review: observations on aggregation.
There isn’t anything inherently wrong with aggregation. On the contrary—unless we expect readers to get all their news from one publication or, alternatively, spend all day sifting through numerous websites themselves—the Web needs aggregators. And smart aggregation does, in fact, add something to the world by bringing a certain editorial judgment to bear on the selection of pieces.
—The Editors, The National Review, behind a paywall: TNR
From our first day in business, Bloomberg was making news, with numbers
—Mike Bloomberg and a modest ambition
While most news organizations today are listing in the high seas of the digital world, Bloomberg News has proven to be an adventurous and successful competitor. They started with a key asset, the Bloomberg terminal, and a gaping niche – business journalism. As it has grown, it’s become an instrument of recognition for the entire Bloomberg enterprise, a sales tool, and a critical hedge against competition.
Bloomberg seems to have demonstrated that it’s possible to make money from reporting the news. It’s a fierce competitor to the Wall Street Journal, Reuters and other business reporting. It runs a thriving business. But Bloomberg isn’t interested in selling news feeds. Indeed, much of it is given away for free on the web portal. Bloomberg gives it away because it wants to eliminate the profit margin in delivering the news, so it can starve competitors and enhance the value of the terminal. It wants to make the news a commodity.
Bloomberg’s entry into journalism would push traditional news sources to improve their coverage and respond to Bloomberg News. The underlying dataset in the Bloomberg platform gave them a distinct informational advantage over the competition. The information and analytics on financial instruments was just not widely available and not something on which traditional news sources had focused. As Bloomberg says, they were already in the news business – just with numbers. The terminal had become, for example, the de facto source of pricing for US Treasuries and replaced the Federal Reserve’s daily pricing sheet with a Bloomberg terminal at the offices of the AP. Each day, when the AP published the closing Treasury prices, sourced and attributed to Bloomberg, they were effectively running a news story, or an advertisement – take your pick. This unique resource separated them from the competition, gave them pricing power and promoted the terminal – all in one stroke.
Business journalism at the time also lacked the luster of reporting on riots, elections, and wars. Journalism schools didn’t teach business and finance reporting. The mainstream, national press would gloss over financial markets on the way toward bigger stories. As Bloomberg remarks, “Even at the Wall Street Journal, it was rare to find top editors who included among their accomplishments daily stints covering stocks and bonds.” Bloomberg News would enter a seemingly uncontested field. In 1988, Bloomberg marshalled Matt Winkler to enter the fray.
Bloomberg News also provided a much-needed hedge against the possibility of losing key news-suppliers, such as Dow Jones. Bloomberg had already eaten into the Dow Jones Telerate business. While Telerate presented static images of Treasury prices, Bloomberg users were presented with live data on which they could run analytics. When Dow Jones did respond, they pulled the plug on their feeds to Bloomberg, expecting that Bloomberg customers would come back to Telerate and abandon the Bloomberg platform. It turned out that clients found Bloomberg News sufficient: at worst, good enough to get the job done and, at best, invaluable in combination with the underlying dataset. Dow Jones eventually relented six months later and resumed delivering their feeds through the Bloomberg platform. Telerate would later be shut down.
The rapidly growing news enterprise advanced and protected the Bloomberg franchise. It spread the reputation and influence of the Bloomberg organization, and this sold more Bloombergs. More Bloombergs funded more news, and Bloomberg news became increasingly visible beyond the terminal. It worked its way into radio and television first. Then it began traditional print syndication, and syndication brought Bloomberg’s business reporting to the New York Times, among others. With these outlets, the Bloomberg brand became more prominent, more potent. It sold more Bloombergs.
The news division at Bloomberg was never designed to sell the news. It was designed to sell Bloombergs. It started with a market niche and a key asset – business reporting and the terminal. But it rapidly evolved into an important hedge against the risk of key suppliers, such as Dow Jones, cutting off Bloomberg as a customer. When Dow Jones dared to do so, Bloomberg had won. Bloomberg news was good enough to be a substitute or an improvement on most serious business and financial reporting from Reuters, the Wall Street Journal, the FT, the New York Times, and anyone else who might have contact with their customers. Business and financial news reporting, at first an area of distinction for Bloomberg, had become a commodity.
Because Bloomberg doesn’t need to sell the news, those that do are at a disadvantage. They rely on profit margins from distribution, sales and subscriptions to the news. Bloomberg doesn’t. Bloomberg makes money through subscriptions, but they’re subscriptions to the terminal. The news is just another commodity, and it suits Bloomberg just fine to see it have commodity-margins. It just makes the terminal more valuable.
Bruce Sanford and Bruce Brown commented in the WSJ on “Google and the Copyright Wars” (11/12). Many are focused on the status of orphan works in the Google Books project, but Sanford and Brown argue that the idea of fair use and its application by search engines is the controversy’s center, not orphan works. Sanford and Brown would say that a search engine’s use of the web’s content is definite and definitely unfair.
Fair use of a book’s content, a website, or even the news underpins a search engine’s ability to find and deliver websites to users of the internet. Sanford and Brown stake out a position for search engines that is similar to a public library. Just as a library can employ the contents of its archive to establish an index for its patrons, the search engine uses the contents of the internet to establish an index for anyone at all. Sanford and Brown, however, contend that search engines are not libraries, so fair use does not apply.
Sanford and Brown argue that two distinctions separate search engines from the library model. Search engines not only copy text, they reproduce it in their results as snippets. Rights of reproduction are protected for copyright holders. Second, search engines sell advertising, and the sale of advertising is contingent on their ability to copy, store and reproduce copyrighted material. These distinctions, argue Sanford and Brown, disqualify search engines from the safe harbor of any exemption made for libraries. Their remedy: legislation.
The problem is, search engines don’t find safe harbor in the library model, and legislation is not the answer. Yes, a library applies fair use in its practices, and search engines have been compared to them in the past, but not all applications of fair use are found in the confines a library. This may be why they are so quick to demand legislation to expand copyright, even though expanding copyright may drive more business to the lawyers who protect it than the websites involved.
The Ninth Circuit court framed a four factor test for fair use in the case of Perfect 10 v. Google, et al in May 2007. The test would distinguish between copyright infringement and fair use in the case of Google’s use of Perfect 10 material in its search results. The four factors comprise: the purpose and character of the use; the nature of the work, ie fact-based or creative; the amount of the work used; and the effect on the market for the work. None of them invoke the metaphor of the library used by Sanford and Brown.
When Google displayed the Perfect 10 images, the Circuit determined that all four factors weigh in its favor. The images may have been highly original, but the results incorporate “an original work into a new work, namely an electronic reference tool,” and this is highly transformative: “a search engine may be more transformative than a parody because a search engine provides an entirely new use for the original work, while a parody typically has the same entertainment purpose as the original work.” Though Google would use a degraded thumbnail version of the image, its “use of the entire photographic image [is] reasonable in light of the purpose of a search engine.” The Ninth Circuit, therefore, reasoned that Google’s use of Perfect 10 thumbnails would be considered fair use. Though it didn’t provide a decision, it did suffice to vacate Perfect 10’s preliminary injunction against Google.
Sanford and Brown mistake the metaphor of a library as the only example of fair use when alternatives, such as the Ninth Circuit’s opinion, are perfectly acceptable. Perhaps this is why, having fleshed out their metaphor, they seize on legislation as a solution. Indeed, they would have Congress assert, “once the cache is monetized for the benefit of a search engine, the line of copyright infringement is crossed.” Isn’t this a sort of Hail Mary pass to rights-holders?
Legislation could make it illegal to monetize a cache without permission, but it’s not the panacea that Sanford and Brown are driving at. If the legislation mandated payments for rights-holders, it would, but this is probably not a suggestion that would be found in the pages of the Wall Street Journal. More likely, it would not, and it would leave websites in the position of the prisoner’s dilemma. If everyone cooperates and insists on payment, it will be to their mutual advantage, but the search engines direct so much traffic that each website has an incentive to break ranks; hence, everyone reluctantly opts in for fear that they’ll be the lone hold-out. In effect, it’s as though the legislation never happened, with one important distinction: there’s a new law on the books that requires a few good lawyers to understand. Perhaps that’s what’s really driving Sanford and Brown’s comment.
There is an exception, however. Not all players are equal in this game. Some may wager that holding-out is viable regardless of legislation or whether others do. That’s exactly what News Corp has done. They have begun negotiating a possible payment from Microsoft for the exclusive right to index their content. Though derided by many on the internet, should they find an agreement, their example will prove an important experiment in the question of paying for content.
[The portals] have made assumptions about using our content which are wrong, and we are prepared to demand appropriate compensation.
—Tom Curley, President and CEO of the AP, which now comprises 1400 member newspapers, and former publisher of Gannett’s USA Today: via WSJ
This is about what content providers must do in the digital era. That starts with doing a much better job of protecting the content we create
—Tom Curley, AP: via FT
Thomson Reuters and other news agencies have begun working with third-party content identification firms such as Attributor to track the flow of their material across blogs, websites and aggregators. [FT] Any time you talk about a tracking system, the thrust of [the commentary] is about enforcing copyright. But what we hope is the outcome out of this is the ability to enable more licensed uses of content. We want to keep the content open, we don’t want to keep it behind firewalls.
—Jim Kennedy, the AP’s VP of strategic planning: All Things D
What we are building here is a way for good journalism to survive and thrive. The AP news registry will allow our industry to protect its content online, and will assure that we can continue to provide original, independent and authoritative journalism at a time when the world needs it more than ever.
—Dean Singleton, chairman of the AP Board of Directors and vice chairman and CEO of Media News Group Inc, Fair Syndication Consortium and Attributor: via World Editors Forum
Nice container. Because they need it to protect such impressive stories as this.
[The portals] have made assumptions about using our content which are wrong, and we are prepared to demand appropriate compensation.
—WSJ: Tom Curley, President and CEO of the AP, which now comprises 1400 member newspapers, and former publisher of Gannett’s USA Today
This is about what content providers must do in the digital era. That starts with doing a much better job of protecting the content we create
—FT: Tom Curley.
AP, Thomson Reuters and other news agencies have begun working with third-party content identification firms such as Attributor to track the flow of their material across blogs, websites and aggregators. [FT]
Any time you talk about a tracking system, the thrust of [the commentary] is about enforcing copyright. But what we hope is the outcome out of this is the ability to enable more licensed uses of content. We want to keep the content open, we don’t want to keep it behind firewalls.
—All Things D: Jim Kennedy, the AP’s VP of strategic planning
What we are building here is a way for good journalism to survive and thrive. The AP news registry will allow our industry to protect its content online, and will assure that we can continue to provide original, independent and authoritative journalism at a time when the world needs it more than ever.
—World Editors Forum Dean Singleton, chairman of the AP Board of Directors and vice chairman and CEO of MediaNews Group Inc