AP at Meeting Announces Cuts in Fees and New Mobile Initiative

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By: E&P Staff

At the Associated Press?s annual meeting in Washington, D.C. today, President and Ceo Tom Curley announced the development of a new product to deliver news to Apple?s iPhone and other smart phones. The Mobile News Network, which brings together top national and local news from AP members of The AP, is now in testing phase.

The news cooperative also announced a deeper reduction in its newspaper members’ basic service assessments for 2009, totaling up to $21 million — or 10 percent of their total AP service fees.

Plus: Rupert Murdoch, the head of News Corp., has joined the AP board. Murdoch takes the unexpired term of Jay Smith, the president of Cox Newspapers who announced his retirement last week. Sam Zell, the new Tribune Co. chief, was elected to the board (see seperate story).

“The formation of the Mobile News Network positions members to capture opportunities on high-growth mobile platforms,” Curley said in his report to the AP membership at the Walter E. Washington Convention Center in Washington, D.C.

?The Mobile News Network will provide a national platform for smart phone users to access local content from brands they trust,? Curley said. ?Members can participate by providing local news that will appear alongside their logos. Importantly, the network also offers a new outlet for members to sell local advertising to the mobile audience.?

The network will be the first product to be released by the AP?s Digital Cooperative, a program designed to find new digital outlets for the news and information produced by AP members. The network is being tested with a limited number of Digital Cooperative members, and is expected to launch publicly by the summer with a broader participant base.

The $21 million in assessment reductions was outlined by AP Board Chairman Dean Singleton during his own report to the gathering.

He added that just two years ago, these modifications would have been a huge burden to the AP because it would have consumed all of the organization?s free cash flow. Now, these alterations will affect about 25% of cash flow, Singleton said, mainly because the AP has diversified its member set.

Newspapers represent about 28% of the revenue and in 2009 it?s expected to represent less than 25%.

An AP press release on the details follows.

The Member Choice pricing and content packaging program approved by the board in January would have represented an estimated discount of $5.6 million year to the members. ?But I?m pleased to report that we?re more than doubling that return,? Singleton announced, indicating that the board agreed during a weekend meeting to expand the program so that it would now achieve an expected $14 million.

When coupled with a previously announced discount on basic text services of 5 percent for those members that join the Digital Cooperative, designed to save member papers up to $7 million, the expected savings in 2009 would now rise to $21 million.

?We also are simplifying and broadening access to AP content,? he added. All PhotoStream subscribers will gain unlimited access to the archives for no additional fees in 2009, when AP will also end the premium charges for its print and online Money & Markets stock market data and market insight content.

?In short, you get access to nearly all AP content for any product in your market for less money, and you now have the ability to customize what content is most relevant for your market,? Singleton said.

The pricing reduction for 2009 follows two years in which AP’s board announced no increase in basic service assessments. Singleton said the board has been able “to deliver these adjustments only because AP successfully has controlled costs while growing revenue and modernizing its technical infrastructure.”

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