By Michelle Neeley

In a field that is struggling to continue to maintain profits, weekly business newspapers are thriving and continuing to grow.

For example, the 40 weekly business newspapers that American City Business Journals publishes across the United States have a unique niche and audience that allow them to take creative risks in order to continue bringing in profits and expanding the company, while daily papers across the country are limited and sometimes forced to downsize.

“The first insult that came to daily papers was the deterioration of the classified ad business. For many dailies, that used to be about half of their revenue and Craigslist and other sites just killed it,” Emory Thomas, chief content officer of ACBJ, said. “We were never reliant on classified ads — we had some categories of smaller niche ads, but really they were not like the classified listings that daily papers had.”

Free from a huge loss in classified ad revenue, ACBJ was able to take more risks and innovate to adapt to the increasingly digital-centric world.

Local business journals are not faced with the same challenges as local daily papers because they have a unique niche in the market that actually has the potential to help reader make profits.

“The concept is pretty much the same for everybody; you provide the local markets with local business news,” Chris Katterjohn, former publisher of the independent Indianapolis Business Journal, said. “The coverage that businesses get in local daily newspapers is pretty negative.”

Since business journals are aware of their audience and what their audience reads their publication for, they are able to cater the information they provide to that specific audience.

“In some ways, the world favors more focused publishers. It’s hard to be all things to all people,” Thomas said of business journals.

The typical audience of a business journal is also a factor in the success of a journal. The average print reader of an ACBJ paper is college educated with an average income of $279,000, ACBJ manager of editorial operations, Beth Hunt said in a lecture at UNC-CH.

Readers of business journals learn about other businesses in their area and are able to connect with companies and individuals that would be advantageous to work with.

“There is an explicit utility to using a business journal. It’s not just for the general sense of personal edification, it is really a truly useful, practical tool for your business,” Thomas said. “You can literally make money by using this publication to the fullest. It is well worth the investment you put into it.”

The readers of ACBJ papers are also worth writing for — advertisers want to advertise in ACBJ publications because of the wealthy readers, Hunt said. An average subscription to an ACBJ publication costs from about $90 to $120 per year, which is a small price to pay compared with the potential profit that readers can gain from the information they obtain from the publication.

The value of ACBJ’s readers causes the organization to uphold a high standard of excellence to maintain its appeal.

“Whatever you choose to publish about, you better be the very best, because if you’re fourth best, there is zero reason for anybody to come to you,” Thomas said.

Independent business journals also find the value of wealthy readers worth working tirelessly for. Charlie Crumpley, editor of the Los Angeles Business Journal, said that his publication’s strategy is to cover stories that have not been covered anywhere else.

“It is very important for our readers, when they pick up the paper, not to say, ‘Oh I’ve seen this story elsewhere,’” Crumpley said.

Crumpley has the view that business journals are supplemental reads, and because they augment what the reader already knows, the journal needs to maintain its relevance by not repeating anything that the reader might already know.

Hunt said that readers of ACBJ publications also want news that they cannot get anywhere else, and far enough before an average consumer to be able to do something constructive and profitable with the information. They look for market intelligence and other information that will help them run their businesses better and creatively. In the digital platform, career advice is most profitable, Hunt said. This could be reflected by the fact that a younger demographic is more likely to use the digital product and people who are not yet established in their careers might seek advice.

Even though the younger demographic may not be as desirable to advertisers, ACBJ still sees the worth in gaining their readership.

The company is committed to being relevant to all potential readers of the journals. In an article on TalkingBizNews.com, the CEO of American City Business Journals, Whit Shaw, said that while the company does not plan to ignore the needs of their traditionally print-preferring audience, they are committed to “reaching out to [their] next audience with content that resonates in their lives.”

In order to continue to attract future and current wealthy and prominent readers, ACBJ is implementing a new “digital first” strategy.

In the early 2000s, American City Business Journals launched daily e-mail newsletters, beginning what would become an investment in what they would do digitally in the future, Thomas said. ACBJ has more than 32 million e-mail newsletter subscribers today.

“Some of the most prominent and constant exposure that we have of our brand to our readers is through the e-mail newsletters as opposed to our print publication,” Thomas said.

The exposure that the e-mails provide has helped the company to build substantial digital revenue, even though the newsletters themselves are free.

News journals that are unaffiliated with American City Business Journals have also found success in sending out daily e-mails to their subscribers. Katterjohn said that the Indianapolis paper also began sending out popular e-mail newsletters in the early 2000s and has several thousand subscribers.

About a year and a half ago, American City Business Journals started to restructure the organization with a focus on a digital-first strategy of publishing. It is committed to being digitally excellent by breaking new news online and allowing its print product to be an extension of what was already covered digitally. This allows journalists to pursue deeper, more long-form styles of storytelling in the print products.

“They realize that they have already broken the news on their website or in e-mails so maybe they don’t need to reprint it in their print publication,” Katterjohn said of ACBJ’s new strategy.

Thomas said that the transition to a primarily digital publication was non-negotiable.

“The world is digital, if we are not excellent digitally, then we’re toast,” Thomas said.

The company has restructured all of their newsrooms and product. They developed a very detailed playbook of the steps the company needs to take in order to make their transition, Thomas said.

“[The playbook] dictates everything from what our page ones look like to what the ingredients of out print product are and what the purpose, focus and voice of our e-mail products are,” Thomas said.

Thomas said that the change has reinvigorated the company’s newsrooms.

“It’s really critical to be multi-platform — that’s essential. If you aren’t all those places, somebody else will be, and it’s not simple because each one of these places takes a bit of a different focus, a slightly different voice and a slightly different tactic to communicate to the audience,” Thomas said.

He said that reporters must use all the tools available to them and work their beats in such a way that readers will not feel like they know enough about something until they read what you have to say about it. No reporter can write exclusively for print, in order to be as relevant to their readership as possible they need to do digital work as well.

“You can’t be relevant to your readership if you are not digitally good,” Thomas said.

The transition to a digital first strategy is not simple, and many publications are constrained by limited resources. A complete overhaul in the current way of doing things is not always realistic for all publications, including daily papers. They may be led to put what resources they have into maintaining what they have experienced success from in the past, rather than taking a risk by moving ahead of the times.

The scale of American City Business Journals gives it an advantage over independent publications, but some independent publications thrive without the restrictions that come with a top-down structure.

Katterjohn said he believes that ACBJ papers have an advantage in terms of controlling cost, but independently owned journals have the freedom to tailor their format and content to the particular market they serve.

“If we wanted to do something we just did it,” Katterjohn said of the freedom and creativity that came with working for an independent business journal.

“I’m not sure how much leeway or liberty that ACBJ allows the publisher in each market to do things; I think it is probably a little more restricted than the individual papers that are not owned by them,” Katterjohn said.

Thomas said that ACBJ’s scale is also an advantage because each journal is directly linked to other branches of ACBJ in cities across the country that can help them to better cover a topic that is not completely exclusive to that particular area.

Business journals, ACBJ affiliated and otherwise, also have a distinct advantage against traditional daily newspapers in the growing popularity — and profitability — of their social events.

“There is so much digital, so much going on. There is so much impetus for people to sit on their butts in their office and get all their information. Their interpersonal interaction is being lost,” Katterjohn said.

The community that events foster between business people within a particular area is valuable to the individuals that attend the events, and also very profitable for the business journals that put on the events.

Beth Hunt said that 15 percent of ACBJ’s revenue comes from its events. Other than the advantage of direct monetary gain from events, the events also have indirect benefits. Influential business leaders gather for the events for the opportunity to network, and those relationships help to bolster the loyalty and intensity of the audience.

Journalists are also given the opportunity to use the events to build their sourcing networks, leading to better relationships between businesses and business journals. The people written about are the same people who read the publication, who are the same people who advertise in the publication, Hunt said. The journals need to work to continue to please that group of people, but the complication that other publications face from having several different groups to satisfy is eliminated.

Because business journals have a specific focus on a particular demographic, they are able to be more tenacious in reaching them.

“It is important to be relevant and present in all the places that readers are,” said Thomas. “Print is only one of the places only some of our readers are, so if we’re not in people’s in-boxes, on people’s phones, on people’s computer desk at work, in the middle of people’s cities in ballrooms- then every one of those would be a missed opportunity for being relevant to the audience.”

Hunt emphasized the importance of maintaining good relationships between businesses and business journals.

“If we are going to effectively cover the business community, we need to become part of it.”

Michelle Neeley is a sophomore business journalism student at UNC-Chapel Hill. 

By Chelsey Dulaney

In financial journalism, a minute is a lifetime.

Scoops are measured in milliseconds, and each one that passes can mean the difference between being at the front of a market-moving trend or behind it. Traders and investors are willing to pay a premium for news that can make them money.

In January, Dow Jones & Co. filed a “hot news” misappropriation lawsuit against Real-Time Analysis & News, Ltd., commonly known as Ransquawk, to protect this type of exclusive, market-moving content. The suit claims that Ransquawk — a London-based “squawking” service that broadcasts news to its subscribers through audio and text — systematically republished headlines from Dow Jones’ exclusive DJX feed, often within seconds of them being posted. According to the suit, this has allowed Ransquawk to free-ride off the work of Dow Jones reporters and threatened the company’s subscriber base.

The suit, which Ransquawk has not responded to, puts the parent company of The Wall Street Journal among a growing number of news providers that have turned to the hot news doctrine in recent years to protect their content. Though not considered groundbreaking by most legal experts, the case could set an important precedent for how courts interpret the 96-year-old hot news doctrine, which experts say must eventually be weighed — and likely constrained — against the First Amendment.

A league of their own

Dow Jones is part of an elite group of financial news services that specialize in actionable, market-moving news.

Bloomberg and Reuters are considered Dow Jones’ top competitors. The three news services compete to be the newswire of choice for financial firms, traders and investors, who are willing to pay a premium to stay ahead of market-moving news. Speed and accuracy are paramount.

“Traders want instantly actionable news,” said Charles Glasser, a media law and journalism consultant who worked as global media council to Bloomberg News for 14 years. “The heart of the business today, for Bloomberg, for Dow Jones, for Reuters…is instantly actionable bites. That’s the value that Dow Jones is trying to protect.”

Online aggregators and social media platforms have begun to eat away at that value.

“The landscape of business news has changed a lot,” Glasser said. “Free, low-cost websites are really succeeding.”

Though journalism ethics and internal codes of ethics usually prohibit the copying of stories, headlines and other content without clear attribution, it is not illegal in some cases since facts are not protected by copyright.

Some news aggregators, such as DrudgeReport.com, republish headlines and content verbatim on their own sites with a link to the original story. Others, such as Gawker or The Huffington Post, rewrite the content just enough so that it isn’t considered copyright infringement.

“Financial news sources have an uphill battle with aggregators,” Glasser said. “They wrestle with it every week. That means that the news organization’s work is being taken and they are being deprived of unique visits.”

The proliferation of Twitter as a type of newswire has also had an impact.

Glasser said when he worked at Bloomberg News, reporters could not tweet out important, market-moving news until it had been sent out to paying subscribers on the terminal.

In an age where news is broken on Twitter and can be retweeted and shared instantly by anyone, exclusivity is hard to preserve.

“I think all it does is compress time, which makes it more pressing,” said Eric David, a Raleigh-based attorney for Brooks Pierce who specializes in First Amendment issues. “The value of that [news] is even more now because people can get it on Twitter. I think there’s a lot of pressure on Bloomberg, Dow Jones and other wires where people are paying for speed when they can they just get it on Twitter.”

A World War I doctrine

The hot news doctrine was first established in the 1918 Supreme Court case International News Service v. Associated Press. The Associated Press claimed in the suit that International News Service had republished its World War I wire reports without attribution. The court ruled in favor of AP.

Because the content republished was primarily factual and not copyrightable (copyright law protects the original, creative expression of news, not the facts themselves), the Court established the “hot news” doctrine. Hot news misappropriation gives news organizations quasi-property rights over time-sensitive news that organizations have put time, labor and money into generating.

For the past 80 years, the doctrine has been mostly dormant. But as online publishing platforms have made it easy for anyone to take and republish information to an audience, news organizations have turned to the doctrine to protect their time-sensitive content when copyright infringement isn’t applicable.

“Content protection is not an easy thing to do in this age of easy copying and pasting,” said Jason Conti, deputy general counsel for Dow Jones. “We’ve got to protect our content.”

The Dow Jones lawsuit

Dow Jones filed the complaint against Ransquawk on January 9 after first sending a cease and desist letter in November.

In a response to the cease and desist, Ransquawk denied taking any content from the DJX wire. In the letter, Ransquawk said that it accessed the content through Twitter, communications with Dow Jones journalists, and services that subscribe to Dow Jones newswires, among other sources. Ransquawk does not attribute the stories because it cannot verify that they came from Dow Jones, the letter states.

Dow Jones is seeking an injunction against Ransquawk and $5 million in damages. That figure is based on how much Ransquawk would have paid for access to the content, Conti said. Dow Jones monitored Ransquawk’s feed in October and November and found dozens of instances where Ransquawk squawked or republished Dow Jones headlines within seconds of them being sent out over DJX. Conti said Ransquawk has taken Dow Jones’ content as late as April 16.

Ransquawk has not yet responded to the suit, and the 21-day period in which they had to respond expired Feb. 7. Dow Jones filed a motion for a default judgement on April 23 — a move that would essentially allow Dow Jones to win the case by default. Given the compensation and injunction Dow Jones is asking for, Conti said winning won’t be that easy.

“A judge won’t just rubber stamp that,” he said. “We have to work for that.”

A hearing for oral arguments in the case is set for May 14 in New York court. MacRae & Co LLP, the London-based law firm representing Ransquawk, did not return requests for comment on whether they intend to appear in court or respond to the Dow Jones motion.

Confusion in the courts

Because hot news misappropriation has been used so infrequently in the past 100 years, courts have differed in their interpretation of the doctrine.

“The problem with the hot news doctrine is that we’re not exactly sure what it is because it’s been so poorly defined,” said David Greene, a senior staff attorney at the digital freedom nonprofit Electronic Frontier Foundation. “What courts seemed to be focused on is the monopoly use of information for a limited period of time.”

Plaintiffs in hot news cases have typically had to prove five things in court: that the plaintiff generates the information being taken at a cost; that the information is time-sensitive; that the use of the information constitutes free-riding; that the two parties are in direct competition; and that the ability of parties to free-ride on the content reduces the incentive to produce it.

For Dow Jones, the trouble will likely come with proving free-riding and a reduced incentive to produce the content.

“It’s a pretty tough test,” said David, of Brooks Pierce. “Does it so undercut Dow Jones ability to do business that they cannot operate?”

Given the speed at which financial news moves, Glasser said Dow Jones might also have trouble proving that the time periods in which the content was republished — ranging from two seconds to three minutes — matters.

“Dow Jones, to me, is going to have a little bit of an uphill climb to show that the time lag of Ransquawk was so significant that it cut into business,” said Glasser.

‘Within an inch of its life’

Since 2008, there has been an uptick in hot news cases, many involving financial news sources.

“The hot news misappropriation doctrine is most applicable to financial news because unlike any other subject area, the immediacy of the news is deeply entwined in its commercial value,” Glasser said.

Dow Jones has filed several hot news and copyright cases in recent years, mostly in situations where republishing Dow Jones’ content had become a business model for the sites.

“I think repurposing of content happens a fair amount, mostly in a one-off sense. That happens all over the internet,” said Conti. “Dow Jones closely monitors the misuse of our content, but tends to focus litigation on those who systematically repurpose our content as part of their business model.”

In 2010, Briefing.com paid Dow Jones a “signficant amount” and admitted liability for violating both copyright and hot news misappropriation rights. The market coverage site took content from hundreds of Dow Jones articles and systematically republished time-sensitive headlines. In 2012, Cision also paid Dow Jones a “significant amount” for taking copyrighted content.

Most legal experts look to the 2010 Barclays v. TheFlyOnTheWall.com case for legal precedent in hot news cases. In the suit, a group of investment banks — including Merrill Lynch, Morgan Stanley and Lehman Brothers — claimed that TheFlyOnTheWall.com violated the hot news doctrine by republishing the firms’ analyst research. The federal court sided with the banks and ordered that TheFlyOnTheWall.com delay reporting the information. However, the decision was later reversed in federal appellate court, and the hot news doctrine was narrowed to “within an inch of its life,” said Corynne McSherry, an Electronic Frontier Foundation attorney, at the time of the ruling.

The court ruled that the defendant’s use of the content must truly constitute free-riding — TheFlyOnTheWall.com was collecting and disseminating firms’ research, not trying to claim them as its own. Whether the use of the content is unfair or impacts the plaintiff’s business model isn’t enough to prove misappropriation, the court also said in its decision.

“The adoption of a new technology that injures or destroys present business models is   commonplace. Whether fair or not, that cannot, without more, be prevented by application of the misappropriation tort,” the decision states.

A day of reckoning

Most defendants in hot news cases have argued that the information was not copyrightable, but few have invoked the First Amendment.

David said the unequivocal right to free speech and information should be considered in these cases.

“There’s going to be a reckoning at some point. I don’t think hot news can survive. At some point, it’s going to be constrained,” he said. “They don’t own the facts. They might own the mechanism to get the facts to the market fastest. It just seems like, from an equitable perspective, once they’ve put the news out, they’ve put it out. Anyone can do with it what they want.”

Glasser said a win for Dow Jones could also restrict access to financial information for everyday investors, putting them at a disadvantage.

“If the court upholds the hot news misappropriation doctrine as tightly as Dow Jones is asking, will mom and dad be at a disadvantage compared to the guy at Goldman Sachs who can afford a Bloomberg terminal?” Glasser asked.

Greene said he thinks hot news should be looked at as a part of copyright law — not an independent doctrine. This would mean plaintiffs would have to first prove copyright infringement, and hot news misappropriation would be a subsequent part of that suit.

“I think that news organizations can maintain ownership over original creative work,” Greene said. “I don’t think that news organizations can maintain ownership over facts, even if they have expended considerable resources into those facts.”

Greene said the hot news doctrine in itself is an infringement on First Amendment rights — a conflict that must eventually be reconciled by the courts.

“We think the doctrine itself has some potential to inhibit the dissemination of highly newsworthy news. Typically in the First Amendment you have the ability to transmit information freely. The hot news doctrine in its form is always a restriction on that right,” Greene said. “I agree that the ability to disseminate information quickly is forcing wire services to rethink their economic model. I agree with that. I disagree that it justifies changing the First Amendment.”

Dulaney is a senior business journalism student at UNC-Chapel Hill who will intern for The Wall Street Journal during the summer of 2014. She previously interned for Bloomberg News.