The role of the Associated Press in the paid online content debate: past and present

As Farhi sees it, the presence of the AP in the digital world, with the extensive coverage produced by its 3,000 journalists in 243 bureaus around the world, has been a major factor in the industry's inability to start charging for content. "Why buy a copy of the New York Times, or bother going to its Web site, when the AP's versions of the same national and international events are available just about everywhere?" he asks.

So he moves on to contemplate what would have happened if the AP had not started distributing its content to "digital upstarts that have contributed to the demise of the traditional media" but had limited its news service to its newspaper owners and its radio and TV clients? Jim Brady, who worked for AOL before moving to run WashingtonPost.com, thinks newspapers "would have had a better chance if it had."

Walter E. Hussman Jr., who owns and publishes the Arkansas Democrat-Gazette, opposed the practice when he became a member of the AP's board in 2000, and said that "there was a lot of debate on the board at the time." But by then it was too late as the AP board had already decided to sell news to Yahoo, its first Internet customer that did not charge subscription fees. So from that point on, AP news was actually free for anybody with the Internet to access. Jim Kennedy, AP's vice president and director of strategic planning, argues that the AP resisted selling to open sites for years, but as Reuters began to establish a significant online presence, it did not seem worth resisting.

So from the AP's point of view, Reuters, AFP or a smaller agency would have stepped in had the AP "refused to play." The board felt that it would lose revenue and market share if it did not start serving this growing web market. And indeed, digital clients are now one of the AP's largest revenue sources: fees from online customers now total about 17 percent of the AP's income from all sources. Jay Smith, a former member of the AP board, argues that these funds have helped the AP to substantially reduce its charges to members, so are good for newspaper owners.

Some newspaper executives have complained that the wire is "devoting too much of its attention to serving the digital giants that compete with newspapers" and neglecting state and regional news, that would help smaller newspapers distinguish themselves from websites with a national or international focus. The AP does not sell its state and local wires to purely digital outfits, but a small percentage of content does end up in the mix that is licensed to portals.

Criticisms of the AP's high fees, its electronic tagging system and mobile Internet service as well as its role as an online rival have grown within the last year. A number of publishers, such as the Tribune Co., have given notice that they intend to drop the service. A group of Ohio editors formed a cooperative to share articles in an attempt to replace the service, complaining that the AP is moving away from its traditional role of producing routine, breaking news articles and trying to include more features and analysis.

It is not justifiable to place too much blame on the AP for newspapers' current reduced income. For a start, as Farhi points out, there is also the view that "selling AP content was no worse than what newspapers themselves gave away online," in terms of making news into a commodity that people are not prepared to pay for. But what is clear is that any attempt to make online news paid for in the future will have to involve collaboration with the AP and other wire services, to ensure that they do not provide free competition.

And indeed Tom Curley, president and CEO of the Associated Press, believes that "free is not a business model" and has started talking with newspapers about developing a cooperative system for online news whereby users would have access to a wide variety of sites for a single payment, and revenue would be divided proportionally among the member news organisations. Jay Smith believes that the AP could succeed in building some kind of pay wall: "it has the size and scope to take on complex and expensive technology issues" and is a "pivot point around which newspapers can work to develop special, customized content that can, indeed, be sold at a premium price to interested audiences." Can (and will) the AP save newspapers by helping bring in essential revenue?

Source: American Journalism Review