AP Freezes Rates, Proposes Fee Changes

By: The Associated Press will freeze its basic rates for newspaper and broadcast members for a second year in a row in 2008 and is proposing changes that would allow them to customize the news services they receive, the CEO of the news cooperative said Monday.

Tom Curley, in a speech at the AP's annual meeting in New York, said the AP is "keenly aware of the challenges facing members," referring to the sluggish advertising and circulation trends at newspapers as readers turn in greater numbers to the Internet.

With that in mind, Curley said the news cooperative's board has agreed to continue a freeze of basic assessments for AP's member organizations. Those charges rose an average of 2.7 percent per year between 2002 and 2006.

The AP's net income fell 28.5 percent to $13.3 million in 2006, according to the news cooperative's annual financial statement. Revenue rose 3.9 percent to $679.8 million.

As newspapers focus increasingly on locally relevant news, Curley said the AP is proposing changes that would allow members to subscribe to a core package of breaking news and then add other news packages. Currently, it offers broader packages of news defined mainly by the volume of news delivered -- small, medium or large.

Under the proposed restructuring that would take effect in 2009, members would have access to a core breaking news service that would include, for example, news from a neighboring state that might not otherwise be available. Members also would be able to add extra content such as analytical stories and premium tiers of news in categories such as sports, lifestyle, business and entertainment.

The new system would allow news organizations to make individual purchases of stories and photos as needed, something that's not currently offered. Curley noted in his speech that some members do not want to pay for certain kinds of AP news content that they don't use.

AP's board of directors must approve the changes before they could take effect. AP management will present details to the board at its next meeting in July. News organizations would have to subscribe to the core breaking news service in order to buy the premium tiers or individual stories.

In addition, Curley said, the AP is developing a database that would allow member organizations to share their news content among themselves or with other parties. The program will begin this summer with a test group, and will likely be available to the full membership of the news cooperative in early 2008.

Jim Kennedy, director of strategic planning at the AP, said in an interview that the test group would consist of about 30 newspapers, many of whom are members of a consortium with the Internet company Yahoo Inc. to share help-wanted job listings and eventually news stories.

Kennedy said the service, which would likely have a fee associated with it, would take in news from members, apply data tags to it such as business, sports and entertainment, as well as company names, names of politicians or sports figures, and then create output feeds to distribute the content.

The system would rely on Really Simple Syndication feeds, a form of online distribution, to take the news content in and send it out, either to other news organizations, online distributors, or even the newspapers' own Web sites.

Kennedy said the database, which is an extension of a technology already being used internally at the AP, has been in the works for several years and was not directly in response to the deals struck between newspapers and Yahoo beginning last year.

Curley said in his speech that the database would allow news members to make their stories easier to find on the Internet, allowing articles from newspapers to be organized into categories, indexed for search and supplied with links to related stories.

With that infrastrucutre in place, he said, "That means we won't have to rely on the distributors -- like the search giants -- for more than distribution. Indeed, restoring control over the news content will be the overarching principle that drives our efforts."

With print advertising eroding, newspapers have been trying to find ways to increase traffic and advertising dollars to their Web sites.

The AP and other news services have clashed previously with Google Inc., saying the Internet search company improperly used news content without their permission. AP and Google settled their dispute last summer, reaching a deal under which Google will pay AP for use of stories and photographs. The French news agency Agence France-Press also has reached a deal with Google, although an association of Belgian newspapers is still fighting with Google over links to articles on their sites.

Overall, AP's revenue is growing at a rate of 6 percent despite the assessment freeze, Curley said. Member assessments make up about 30 percent of AP's total revenue, while digital sales are approaching 20 percent.

Curley made the remarks at the AP's annual meeting, which was being held in conjunction with the annual convention of the Newspaper Association of America.

The Associated Press is a not-for-profit cooperative owned by its member newspapers and broadcasters, a global network providing coverage of news, sports, business, entertainment, politics and technology in all media formats.