What the Betamax Case Teaches Us About Readability

The Betamax SL6500! I totally had this model!!!

Several really smart people in our industry are arguing very publicly right now about a company called Readability and how great and/or evil their service is. One side thinks what Readability does is wrong, and by extension, that the company’s founders are immoral. The other side says Readability is providing a valuable service, and although they may not have gotten everything right yet, their intent is good.

There are two issues at the center of the controversy:

1. When you save a “cleaned” version of an article (e.g. no ads, homogenized layout) to Readability and then try to share it publicly via Readability’s share tools, the shared link is to the Readability version of the article and not the source. When someone clicks over, they don’t even hit the original content creator’s server.

This seems quite bad to me, and it might even be illegal. By facilitating the public retransmission of an author’s content in a format not authorized by the author, it would seem that Readability is committing copyright violation, en masse. When courts ruled in 1984 that it was ok for someone to make a personal copy of a television broadcast using their VCRs, they did not also rule that people (or VCR companies) could then re-transmit that copy to someone else, without commercials, or however else they saw fit.

This issue seems straightforward to me, and as of this writing, the folks at Readability have apparently changed their tune and decided to do the right thing; although I just downloaded a new Readability Chrome extension and I still see the old behavior.

So, that’s it for the first issue. Bad for publishers? Yes. Bad for readers? Only in that it’s bad for publishers.

Update: Rich from Readability tells me that the only reason I’m still seeing this behavior is that I am clicking the link when I’m already signed in to Readability and the item is already in my reading list. I then tested clicking the link from another browser and it indeed went to the original article, albeit framed with a Readability callout on top. I’m fine with this. So, this problem appears to be resolved.

2. Readability collects voluntary fees from its users (suggested amount: $5 per month) and then attempts to redistribute 70% of this revenue back to publishers, providing said publishers have signed up for their service. This is proving controversial because Readability is “collecting fees on behalf of publishers” without their consent, only distributing the fees back to the publishers if they sign up, and deciding themselves what the details of this arrangement are.

I’ve thought about this a bit — as someone who runs a company that also returns revenue back to content creators (90% in our case, with prior consent) — and I think detractors might be looking at this the wrong way. As I see it, Readability has no obligation to return any revenue to publishers. Unless I’m missing something, they are even within their rights to help individual users make offline, ad-free versions of articles for personal use per the same principles in the Betamax case. A VCR allows me to watch a show later, in another context, while skipping the ads, so why shouldn’t Readability allow me to do the same thing?

The anger about the financial side of Readability seems to come from the opinion that the company is “keeping publishers’ money” unless they sign up, but I guess I look at it differently: I don’t think it is the publishers’ money. I think it is Readability’s money. Readability invests the time and resources into developing their service and they are the ones who physically get users to pay a subscription fee. It’s hard to get users to pay for content and they are the ones who are actually doing it. They realize that the popularity of their service is a direct result of content creators’ efforts so they are voluntarily redistributing 70% of it back to publishers in the only way it is feasible to: based on pageviews from publishers who register themselves.

If you are a publisher and you don’t sign up, Readability doesn’t take your money. It’s all accounted for and available to you once you sign up. I’m not even sure if there is an expiration date on this collection, but there should be. If I were Readability, I’d probably put something like a year limit on it such that if it wasn’t claimed within that time period, it would go onto the company’s balance sheet as revenue.

Readability has no universal contract with the publishing industry, nor do they need one; much as the makers of VCRs had no contract with TV or movie studios. When a reader signs up to pay their monthly fee, Readability then has a contract with the reader. That contract does not say “we will use 70% of your fee to pay your favorite publishers”. It says (paraphrased) “we will take your fee, keep 30%, and give the rest of it away to your favorite publishers, as long as they claim it.” The fact that certain publishers may not want to claim this 70% or may take umbrage as to the details of the arrangement does not change the contract between Readability and its customers. It also does not hurt the publisher any more than other competitive services like Instapaper do.

I would feel very differently about this whole case if our fair use laws weren’t as they are today, but courts have told us that “personal archiving” is a legal activity. As such, it’s legal — and perfectly moral — for a company to create a service which makes personal archiving easier whilst charging a monthly fee for it. That Readability sees a future in which personal archiving may hurt publisher revenues and pushes forward an experiment to counteract those effects should be applauded.

Finally, this whole episode is a good reminder that the problems of the publishing industry haven’t gone away just because the world has gone digital. In fact, personal archiving is an example of a way it’s gotten worse. You never needed a “reading layout” with a magazine or a newspaper because they were already optimized for reasonably efficient reading. Now layouts are optimized for “time on site”. You also never needed a separate service to help you “Read Later” a magazine or newspaper because you could, you know, just read it later. As digital publishing continues to try and balance profits with audience satisfaction, you can expect many more debates like this from smart people like Anil, Gruber, and Zeldman. Just as it’s important for us to defend upstarts who fight the status quo, it’s also important to hold them to as high of a standard as we hold ourselves.

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34 Responses:

  1. zwei says:

    Quoting a comment I received on my latest blog post. (from a community liaison on the Readability team) http://zweigand.blogspot.com/2012/03/how-readability-could-nullify-naysay.html

    “One reason there’s a 12-month cut-off for publishers that haven’t signed up is pretty much exactly to be able to give it away and *not* to have it get stuck as in escrow for someone who will never come to collect it.”

    Doesn’t sound like a scumbag company to me. It sounds like they haven’t got everything figured out yet, and are just not ready to talk until they do.

  2. I think what bothers people about #2 is that they’re claiming that they’re collecting on behalf of sites that will never see the money. There’s a real lack of transparency there. This feels very disingenuous. And I thought I read that they fixed #1.

  3. Bob says:

    This whole shebang makes me sleepy.

  4. FYI, the sharing behavior was only a problem on the mobile version of the site.

    On the “standard” version of the site, when you click on a Readability link, you get a “diggbar”-style view of the original page. However, if you’re logged into Readability as a user you’ll get see the Readability-hosted view.

  5. Nick Jones says:

    So, what you’re saying is, Mr. Rogers made Readability possible.

    http://www.mentalfloss.com/blogs/archives/112878

  6. -b- says:

    Ask Readability where they’re opt-out tag was. I asked them months ago in a rant.
    Using your VCR analogy, Google also archives the Internet and also recognizes the disallow call in a robots.txt file….

    What’s more curious to me, socially how we put aesthetics above copyright.
    I called it out then and also why why when Zeldman and Anil are on the board.

    Just last week Pinterest announced an ignore meta tag that stops their scraper from grabbing your content.

    Finally, Safari Reader and Readablity are like ok cause there’s no content repurposing like what Readability does.

    Though I’m pretty sure my VCR didn’t reformat the content. It just recorded it.

  7. JC says:

    The problems I have with Readability are their “forgiveness over permission” model and their subscription fee transparency. A publisher must actively opt-out, there is no permission sought to be this arbitrary middleman between a reader’s good will (monthly subscription fee) and the publisher’s “earmarked” revenue.  A paying subscriber is sold on the fact that their fees are being used to support writers/publishers they read and enjoy, while in reality a publisher may not even be aware someone is collecting money on their behalf and without their permission.

    Readability’s site back in mid-2011 stated (via archieve.org) “70% of all membership fees go directly to the people who make the content.” Many users still tout this as fact. The website and service has since downplayed the 70% figure (it’s no longer prominently displayed on their main page) and also placed the qualifier “earmarked”, which I personally feel is a weasel word akin to “up to”.  Up to 70% of the subscription fees may potentially go to publishers, but as a subscriber, one never truly know how much of it goes where. I don’t know who’s partnered with readability, who gets any of the “earmarked” fees, what publishers are actually aware of readability, or what publishers have opted out. In short, a lack of transparency — saying 70% is “earmarked” gives them a lot of wiggle room to fulfill claims through technicalities but not in spirit.

    The majority of readability’s detractors have no problem with creating a better reading experience or storing articles for later reading. It’s the middleman aspect and lack of transparency with subscription fees that get people upset. 

  8. Chas. Owens says:

    The VCR certainly reformatted the tv show: it allowed you to control time (tv doesn’t). Some higher-end VCRs even had a button that would auto fastword over commercials or between two points you chose.

  9. Gabe says:

    Nice write up. I don’t think argument #2 captures the entire debate though. I think it’s fair to say that Readability is using the sales tactic of paying back publishers to get more customers. It’s using customer guilt over argument #1 to sell more subscriptions. In effect they are claiming to represent the interests of publishers that have never contracted with Readability so that people will feel more comfortable using their service.

    A more appropriate analogy might be to have a charity car wash on behalf of all charities, as long as they contact you and sign up to get their cut. I’m pretty sure that would be illegal in most parts o the US.

  10. heikkipekka says:

    “SHARE WHAT YOU’RE READING. Readability provides built-in native sharing support. You can post a favorite article along with your own comments on Facebook, Twitter or by email to your friends.” (from Readability App Store description)

    Is copying ones text in full to your own site and publishing it illegal? If so how is Readability’s sharing different? Because you use Readability’s site?

    I think fair use would let me copy the whole text in means for academic criticizing, for example. Right? But for just sharing?

    Another thing related to TV broadcasting: in Finland we have online services that record everything that comes out from the free national TV channels (14 in total) and make it available for paid subscribers for a period of time. For example, a company called TVkaista (tvkaista.fi) lets subscribers watch everything from those 14 channels for 4 weeks before those recordings are deleted (all of it can be permanently saved before deleting to a computer or other device, like an iPad or iPhone). They say their online service compares to a legal DVR device at home and their service is just a virtual recorder online but naturally no consumer DVR device can record 14 channels at the same time so it’s controversial issue here. But like Readability with text they copy the content to their own servers, and like old Betamax users they let users control time and skip ads and whatever but not share it publicly.

  11. Joe Clark says:

    You seem to think Readability can be used solely if you pay for it.

  12. Rob says:

    Thanks for the same take on this situation. A good dispassionate response was sorely needed. I think you nailed this issue of linking to original vs reformatted. However I feel you’re off the mark on the subscription issue a bit.

    Readability bills the subscription as a way to pay publishers, not a way support the app. It’s one thing to have a subscription for the app and say “hey, we’re not alone here, we’re going to use some of this money to pay the publishers.” But that’s not what they’re doing. The assumption based on how they present it, is that the money is for the publishers first and foremost, and they take 30% for their own administrative costs. The way it is now, a naive user would expect their money is going to publishers, not waiting to be claimed for a year, then effectively disappearing (if they donate it, great, but the process needs to be much more transparent).

    Those in the Readability camp seem to feel that Readability is getting unfairly painted as having nefarious intent, which may be valid observation, but it’s important to understand that it’s happening because Readability doesn’t present itself in a way that seems completely above board in the first place. If they had used the same business with a different approach I think they would find much less opposition.

  13. Mike D. says:

    zwei: Thanks for the additional info. Sounds good to me.

    Jemaleddin: Would more explicit language about how the system works be enough to quiet this concern for you? In other words, if Readability explained clearly up front that publishers need to sign-up for your money to go to them, would this be enough? Or is even that too big of a jump?

    -b-: I’m sure Readability wouldn’t be against some sort of opt-out tag. They probably just haven’t done it yet. I’m not very bullish on every site having their own opt-out tag format. That doesn’t scale very well.

    Gabe: Yep, that’s a good point. The charity car wash thing works decently as an analogy in theory, but most charity car washes are for one charity so it’s easy for the car washers to make the payment to the charity without much fuss. Readability is dealing with tens of thousands of potential payees so it’s just not plausible to do that.

    heikkipekka: The potentially illegal part is that you are redistributing someone else’s content to another person. Storing your own personal, cleaned copy on Readability’s servers is probably not illegal, but if you then point tens of thousands of people to that copy of the content, that might be against the law.

    Joe: Who, me? No I don’t.

    Rob: I think that’s a great criticism. Perhaps Readability should modify their pitch as you suggest. Should be more like Newman’s Own products, where its obvious you are buying the product and also obvious that the company donates a percentage of profits to good causes.

  14. Phil D. says:

    Great article, I think the VCR comparison is an interesting one for these services. But just one quibble with your statement that Readability might be engaging in possiy illegal conduct. Just because the Supreme Court ruled that you CAN do 1 thing (copy tv programs for personal use) does not automatically mean that you can’t do something else that goes beyond the scope of the decision (redistribute the content in an abbreviated fashion). And even if the Court had addressed that activity, it wouldn’t be binding because that was not the issue being appealed and decided in the case. Just spouting off what I remember from law school anyways. But you have some great point in here, especially about the subscription money being Readability’s entirely. Very interesting

  15. Mike: I’m not sure – I think being upfront about what they’re doing would actually lower the number of people involved. There really is something sketchy about saying, “we’re collecting money for people entirely unaffiliated with this site, who we will not make an effort to contact, and promising to take 30%, but more realistically keeping 70%.” Does that appeal to anyone?

    And given their track record, I don’t feel like I have any reason to believe that they’re acting in good faith.

  16. Mike D. says:

    Phil D.: True, but other courts have held that you can’t rebroadcast content that you don’t have the rights to rebroadcast. This is why ABC, for instance, couldn’t rebroadcast the Final Four in its entirely… just highlights as part of a news program (fair use).

    Jemaleddin: What you describe wouldn’t bother me at all. I understand I am putting what amounts to the cost of a beer down every month to help support Readability and some publishers and so I wouldn’t care so much if not 100% of it went exactly where I’d like it to go. It would all be going to a good place, in my mind.

    (That said… I don’t subscribe to Readability, nor do I use it… I just don’t get a lot of value from it)

  17. Mike: So it wouldn’t bother you, but it also doesn’t appeal to you. Meanwhile the idea appeals to me but keeping 70% bothers me. That really doesn’t sound like a good situation for them. :-)

    [And while Anil was wrong to frame this as an Instapaper vs. Readability spat, for those of us that are aware of the back story (they partnered, the partnership didn’t work out, they split amicably, then Readability created a feature-for-feature competitor and released it for free), it’s hard to imagine thinking of these guys as trustworthy.]

  18. Mike D. says:

    Jemaleddin: Correct. Although I don’t think what Readability is doing is evil, I just am not the type to either save articles for later or clean them for now. That may change, but as of right now, I just don’t do it much. I use Instapaper as my main client to do this, but even then, I probably save one article or so per month. As such, that amount of activity doesn’t push me into the “paying customer” bucket just yet. There is a difference between thinking Readability just isn’t quite worth it yet (for yourself and for audiences as a whole) and thinking they are nefarious. I don’t think they are nefarious… I just think the appeal of their value prop right now is limited. In other words, I wouldn’t be an investor, but I also wouldn’t be a detractor.

  19. Phil D. says:

    I get the rebroadcasting restriction laws, but whether linking to web content is tantamount to airing a tv program would be debatable (you can make a good argument for either side).

    But this is where I have always come down on the issue of Readability:
    If you take Readability and subtract the payments given to publishers, you get Instapaper.

  20. Grover Saunders says:

    While I’m not at all prepared to weigh in on the Readability issue itself (and probably never will, though I can’t see any good reason to assume malice on their part), I’m not sure your comparison to the Betamax decision is accurate. Perhaps you know more about it than I do, but I’m not under the impression that courts have actually acknowledged that creating personal archiving is a legal activity, especially in the Betamax case. My understanding of the Betamax case was that they ruled in favor of Sony not because they decided that recording shows was okay, but that there were significant non-infringing uses that outweighed the infringement.

  21. Mike D. says:

    Phil D.: Agreed on the similarity to Instapaper. Reasonable people should consider them similar products, and as such, competitors.

    Grover: Interesting point. From my reading, it appears a few of the justices were conflicted as to whether use inside the home by the end user to record TV was “fair use” but they were then persuaded to toss that issue aside since the lawsuit wasn’t brought against end users in the first place. Regardless, however, it’s generally accepted today that making a personal copy of something (whether movie, tv show, printed piece) for your own personal use later is “ok”. To your point, I’m not sure where this is codified, but it seems like the de-facto standard.

  22. -b- says:

    @Chas,

    Betamax and VCRS or DVRs record the broadcast signal into a medium that you could do things with, but they didn’t and don’t make it B/W or sepia and 2x fwd’d doesn’t remove the commercials.

  23. Kevin Fox says:

    Mike: “I don’t think it is the publishers’ money. I think it is Readability’s money. Readability invests the time and resources into developing their service and they are the ones who physically get users to pay a subscription fee.”

    Except of course that publishers invest the time and resources into developing content of such high quality that users will pay money simply to have it delivered in a format they prefer.

    As long as servers talk to individual browsers the broadcasting analogy doesn’t hold up. Site owners have a 1:1 relationship with their readers, and choosing to keep their site open so that any reader can get the site’s content does not, in so doing, mean giving up copyright or the ability to prevent others from hosting their content and monetizing it, even if the rehoster graciously offers to cut the publisher in on the deal.

  24. Michael Batz says:

    Interesting analogy, but I think you miss an important point because of how you couch what Readability does.

    I look at it this way: Readability is two things, an ad-stripping text reader app, and a redistribution network.

    The text-reader app is free, and in exchange for providing this reading tool, they take a cut of my donations to publishers. In this respect, they are a middle-man. They tax me 30% for this dual service: they give me a nice interface and they handle the difficult challenge of micro-payments to a bunch of different publishers.

    This is an important point: I’m not giving Readability money to use as they see fit (as you suggest), but rather we have agreed that they will take 30% of what I am donating.

    They market this as 30% us/70% them, so I consider that the terms of our agreement. Oh, but wait, there’s that sneaky word in there: “earmarked.” Hrm. Don’t you think it’s kind of messed up that these issues have been on the table for over a year, yet you still have to postulate what they’re doing with this unclaimed but “earmarked” cash? I mean, come on. It is frankly inexcusable.

    If they had a clear policy with a bunch of conditions that detail what they do and how they end up keeping some greater percent than 30%, then I would insist on open accounting that detailed what percent they actually keep. Am I actually being taxed at 30% or 50% or 80%? This seems important.

    One of the reasons why this matters so much is scale. Let’s talk actual dollars since the abstraction of %s obfuscates the issue. At $1.40 per month in “subscriptions”, they get $5 per year, which is the cost of the Instapaper app. At their recommended $5 subscription rate, they make $18 off of me, which happens to be roughly close to the $17 Marco would make if I bought Instapaper and subscribed ($3/3 months) for a year. At $10/month, they make $36 off me, or wait, maybe they make $60 off me, or $100 off me, since I have no idea what was “earmarked.” Needless to say, I don’t want Readability to make $100 off my $120 donation to content creators.

    That one of their most prominent advisors can pen two thousand words of fanboy this and can’t we all get along that without ONCE ADDRESSING THIS CENTRAL CONCERN tells me everything I need to know.

  25. Mike D. says:

    Kevin: Just because publishers are creating the initial value, that doesn’t mean Readability (and others) can’t create additional value after the fact. Clearly if readers are paying for the service, they believe value has been created. Also, don’t mix issues 1 and 2. I agree that issue 1 is bad… that’s where the broadcasting to others part comes into play. I do not believe that Readability should be able to broadcast a version of someone else’s content to anyone else other than the original saver of the content, for personal use.

    Michael: I agree that the wording of their pitch is problematic. As I mentioned to the commenter above, I would much rather it work more like Newman’s Own. When you buy a Newman’s Own product, you know you are first and foremost buying the product, and then proceeds from the product will then be redistributed fairly amongst x organizations.

  26. Cheap says:

    So on the basis of this argument, I should be able to go to local library, photocopy an entire book, then charge people for the photocopy, and if the publisher or author comes along and asks for it, I can give them 70% and that’s both legal and morally ok?

  27. brad bell says:

    “rebroadcasting restriction laws?”
    When did rebroadcasting become illegal? After the cable industry established themselves? Cable companies are a rebroadcasting industry that worked! Hence the irony of them suing internet TV rebroadcasters to death.

    I pay and use Instapaper daily, whose main purpose is reading on the tube. It’s a metaphorical DVR to overcome network failings. Stripping ads we never see anyway is a matter of bandwidth and storage limitations and good, functional design.

    Wasn’t Readability essentially a tool to help people in their 40s who couldn’t read web pages easily because the type was too damned small, and the designer did not take enough care to ensure embiggening worked right? Years ago I wrote them an emotional fan note of thanks because design fucking matters. The physical world, of course, is a micro-type catastrophe. Readability = reading glasses.

    (I must say #2 seems like an admission of guilt about something not quite defined, a recovered memory from the 20th century perhaps. It undermines the faith of customers, investors, publishers, everybody. It seems crazy and foolish and anachronistic.)

  28. Glenn says:

    I think it’s not that similar to a VCR but closer to a VCR company.

    What I mean is, I think the situation here is closer to, for example a VCR company that pre-recorded your favorite shows for you, edited all the commercials and smoothed over the whole recording to make it seamless.

    Now you’ve stopped paying for cable and just paid for this service.

  29. “Readability has no universal contract with the publishing industry, nor do they need one; much as the makers of VCRs had no contract with TV or movie studios. “

    They actually do – the private copying levy as part of the Fairness in Music Licensing Act. 2% of price of devices and 3% of all media goes back to the content creators. See:

    http://en.wikipedia.org/wiki/Private_copying_levy

  30. Mike D. says:

    Brad: It doesn’t matter when rebroadcasting became illegal. It’s illegal.

    Nik: That’s really interesting! Hadn’t heard of the private copying levy before. I went through USC Chapter 10 though and I don’t see any reference to VCRs. It seems to be aimed at audio recordings. That doesn’t mean it doesn’t apply to video recordings too, somehow, but I just couldn’t find it in the code. Are you aware that it covers VCRs?

  31. So, we’re building a reader. Is it the fact that Readability isn’t using RSS an issue? The permalink cloaking is definitely an issue, but how much of is the reformating-from-the-published page?

    I don’t see #2 as an issue, other than Gruber thinks no one should attempt to collect money on his behalf. Or that he shouldn’t have to sign up to collect free money. Or something.

  32. How come everyone expects everything to be free in this day and age? I’m sure that Readability is there to make money – same as all of us! Isn’t that the whole point?

  33. brad bell says:

    Fadi El-Eter:
    The computer and the network reduce transaction costs to a point approaching zero. People don’t expect to pay analog costs for digital goods.

  34. Arie Putranto says:

    This is all going nowhere. Since one thinks on the Readability’s side, another one thinks on the side of the publisher, and bunch of others takes side.

    I … am not using readability, not being publisher. But I know what I feel when a man take my stuff and make money out of it without my permission, and then another person tells me that it’s not my money.

    I WOULD BE MAD if someone do that. I even could stab someone if that happened in my real life

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