Spain takes a Pay-per-View Approach with News
http://gizmodo.com/spains-new-google-tax-could-be-bad-for-everyone-1652899707
This article discusses the Spanish governments recent decision to place a tax on Google’s linking service. Dubbed “canon AEDE”, or google tax, this new law requires Google News (and other news aggregators like Yahoo News, Facebook, etc.) to pay news sites for each link they provide to their content. This law is mostly the result of lobbying by Spanish newspapers, who blame Google and companies like it for decreased revenues. It has been met with a large outcry, and condemned as a law “not for the citizens, but for a few politicians and companies”. The author of the article suggests that this legislation could lead to the shutdown of Google News in Spain, which may ultimately have negative effects on the companies who lobbied to get the tax in place (as many of them get a lot of traffic from hubs like Google News).
This article has great applications to topics covered in Networks. For example, the move by the news companies to tax websites like Google News can be compared to the network traffic problems discussed in class. These older newspapers function as the original roads to the destination of current news. Google News acts as the new road in this situation, connecting people to these newspapers at a cheaper cost. With consumer trying to maximize his own payoff and get news the cheapest/easiest way possible, they all flock to Google News, decreasing the use of the traditional news outlets, which decreases profits for the newspaper companies. The new tax acts essentially as a toll, but rather than it being on the consumer pursuing the news (or the driver in the network traffic problem), it is on the news aggregators (or the owners of the new, faster road in the traffic problem).With this new tax, the decreased revenue stream of the old paths is subsidized by the fee charged on the new paths (Google News and the like), helping the news companies maintain profitability. The ethics of this toll are questionable however, as the tax effectively acts as a crutch for the newspaper companies, allowing them to still make money with their old system rather than producing new innovations for their business strategy to stay profitable.