Associated Press CEO Tom Curley said that the organisation is hoping to locate new sources of revenue and better licensing deals to make up for reduced income from newspapers and broadcasters in an interview after a meeting with employees on Tuesday. He also discussed initiatives to protect online content, according to a press release.
Although Curley did not offer details, he said that the AP expects its revenue to fall this year and next. The AP is lowering its fees for newspapers and broadcasters by a total of $45 million this year, following a reduction of $30 million this year. Such concessions reflect the need to take into account newspapers' and broadcasters' increasing financial difficulties. As a first step to survive with falling revenue, the organisation is planning to eliminate about 10% of its payroll costs by the end of the year through attrition and early retirement offers, and "hasn't ruled out layoffs."
With regards to new income, Curley identified new licensing contracts with the AP's largest Internet customers as his top priority. The AP made a licensing deal with Google in 2006 which allows Google News to host AP content, as it now does with several other wire services, and the current contract expires at the end of the year. Renegotiation could be tricky, and it is possibly the most important deal.
Conflict between Google and publishers has been growing in recent months over Google's practice of displaying headlines and story snippets and because of the fact that ad networks run by Google and others make it easy for websites that might have misappropriated newspaper content to profit from ads shown alongside. The AP is determined to track its online content more thoroughly.
Curley also mentioned that the AP might start charging readers for some content online and via mobile devices. It is also hoping to attract more revenue from advertising, via a collection of "landing pages" which would be organised by topic and would bring together the AP's top stories on an issue with those of newspapers and broadcasters, aiming to point readers to the most authoritative local sources of news.
This shifting business model, towards depending more directly on advertising and consumers for revenue, would herald a significant change for the AP, said the press release. The cooperative has traditionally generated the majority of its income from selling its material to other media. The landing pages also signal an increase in the organisation's direct contact with its readers, which has so far been limited in the absence of a consumer website.
Source: AP press release