Are News Agencies Necessary Any More?

Philip Stone May 2, 2005

The announcement by the Associated Press (AP) that is going to start charging its traditional media subscribers to use AP material on the Internet has had at least one startling result -- one of America’s largest media organizations has asked out loud whether the AP, in its current format, is past its sell-by date.
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The truth is, one could make a good argument that with the advent of global and local news available on the Internet in real-time much of the reason for a news agency’s purpose for being is gone. And as one who has worked for news agencies for some 30 years this writer knows most of the ands, ifs, and buts to rebut hat argument, but, bottom line, times have changed and the agencies, to survive, need to change, too.

In fact, if this writer were to start a traditional newspaper today – or even better an Internet newspaper -- he would have no problem at all filling it with all the international, national, and local news desired simply taking it from the Internet – we’ll leave ethics of doing that to another discussion. And instead of paying for a high-priced news pictures subscription mostly for pictures that are not wanted, it’s easy enough these days to buy just the pictures one wants on a piecemeal basis, buying from the lowest priced bidder.

Thus when the general manager of print web operations for E.W. Scripps, and the company’s newspaper division editorial director, join to write a hard-hitting provocative piece for the Online Journalism Review published by the Annenbergh School of Journalism at the University of Southern California that the AP needs to turn itself into a “Napster” model it’s worth taking a closer look at what they are asking for.

They argue that the AP is no longer a true cooperative.  “AP started as a cooperative. Today, it is a cooperative in name only,” they wrote.

Their idea is really very simple, similar to music download sites. The members list all of the text, pictures, graphics, video they have, making it all available to all other members of the password-protected peer-to-peer web network. The more members put into the system the more they can take out. There is a payment scheme for those who take out more than they put in.

The authors list many of the pitfalls in making such a system successful, and there are many, but they have ready answers and the fact is if they got really serious about this it would work.

They suggest a start-up consortium with some of the smaller corporate media groups and independent newspapers and they say they are willing to host the first meeting. Getting that far would be a victory in itself.

There already exist models to prove such a system works in the real world. In France, for instance, the Maxppp company has gone up against the mighty Agence France Presse (AFP) on its home turf and set up just such a peer-to-peer network for regional news pictures. The regional newspapers contribute their own pictures to the network so that a newspaper in Nice, for instance, could find a picture of an event in Normandy, and vice versa. It has been very successful and is being extended to other countries.

And it works on an international basis. Maxppp, for instance, has signed with Zuma Press in the US so the two organizations share their pictures. No reason why that type of expansion could not continue.

While saying it plans to keep its expensive satellite delivery system active for some years to come, The AP, meanwhile, is readying a web-based digital platform to be introduced later in the year. It will allow members to basically customize the various AP services, together with various sophisticated search functions.

News agencies are reacting to the digital world in different ways. Reuters and AFP have long charged their traditional subscribers and others for using their news and pictures on web sites. The AP announcement that it will start doing the same January 1, 2006, was logical, especially given continuing annual losses, but since AP is owned by its newspaper owners and this means added expense for them it could not have been an easy project to get past its board.

Reuters, a traditional media wholesaler, has been changing its web strategy over the past couple of years. It is now looking to make as much if not more money from retail than from its wholesale business by operating its own news web sites around the world supported by advertising sold by its own sales teams. It has actually withdrawn from some web news contracts to give more exclusivity to the content on its own sites.

AFP remains very much in the web wholesale business, and given the nature of its ownership, that is very unlikely to change. To protect its position of selling its news as a wholesaler, it has sued Google for making AFP news available on its site without payment. In reaction Google has agreed to remove the AFP copy, and that in turn has opened a big debate whether it is good or bad for news organizations to be on Google without payment. What’s more important – the money or the exposure? In AFP’s case, it doesn’t neded the exposure; it does need the money.

News agencies have been slow to react to changes in the newspaper industry. In Europe, as more and more newspapers have switched to tabloid it means they need far shorter stories. They also need more stories that appeal to women (who particularly like tabloids over broadsheets) and they need more soft news stories that can attract back the young reader who deserted the newspaper for the Internet.

Was Scripps just firing a shot across the AP bow or it is serious about finding an alternative? Perhaps there is some poetic justice to this – it was, after all, the E.W. Scripps Company that owned UPI until it sold it in the 1980s. If it still had UPI it could have put into practice what it is preaching.

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No AP assessment in 2007 for members; 5% for non-members - July 24, 2006

The Associated Press board has decreed a zero rate increase for AP domestic newspaper and broadcast members in 2007, the first time since 1971 that the AP board has not voted in an annual increase of its general assessment. Rate increases over the past 10 years have averaged 2.7%.

But non-members receiving AP services don’t get away so lightly. They get hit with a 5% levy as will those members who subscribe to certain premium products and selected special services.

One Possible Result of the OJR article – No Separate Assessment for Online Use - August 18, 2005

After the publicity of the Online Journalism Review article, the subject of AP’s sell-by date seemingly disappeared into an abyss, as if caught up within the Bermuda Triangle. Not a trace on that subject has been heard since.

But the article may have had its desired effect. It complained bitterly that AP was increasing its cost of service by charging a separate license fee for online use of its material by its members. In August the AP announced its assessment for 2006 and NO separate assessment for online use was instituted.

The AP said it had rolled that separate assessment into its general assessment, which for 2006 would be 2.2%, the lowest for 19 years. The AP did not say what its assessment would have been if it had not rolled in the online assessment, but most pundits believe it would have still been 2.2%.

Thus the AP has established the principle that it has the right to license its material for online use but, this time around at least, it seems not to be charging its members thereon.