Friday, February 04, 2005

The problems of the wholesale news biz

Having worked for AP for 18 years, I have a pretty good understanding of the wholesale news business. And I know the struggles AP is going through reinventing its business model to stay relevant.

Reuters pulled back from the direct sale of its wire stories, and John Battelle at Searchblog has an insightful interview with Reuters CEO Tom Glocer about the wholesale news biz and where Reuters is going. One of his insights is that wholesale news is stagnant at best:

The only way you really make money in media is either to produce finished, branded content -- a television show, a newspaper, whatever -- or to own the means of distribution, like Comcast (CMCSK). If you can do both, like Time Warner (TWX), even better. We had neither. Our wholesale media business is nice, but it's $300 million a year and there's no growth. We grew to $6 billion in revenue on the backs of our financial services business, where we have a finished product and control the means of distribution -- the 327,000 terminals we sell to subscribers.
So where is Reuters headed? Think broadband video ... (read more)


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