Friday, June 20, 2008

AP Steps in it, continued ...

Well, no surprise. After all the vitriol spilled over AP's take-down notices to the Drudge Retort, and its promise to clarify what it thought was a reasonable guideline for bloggers (which produced its own set of mirth since suggesting parts of the blogger community follow guidelines is like asking water to not seep into the cracks) -- AP has punted.

Not my words, but those of Saul Hansell, who has been covering the issue for the New York Times.

As I said in my previous post (link above), this is no surprise. AP, and especially its corporate relations department, has always had a bit of a fortress mentality. Part of it is deeply cultural -- it was pride, almost a mantra, that it stayed in the background and let its members do the publishing and the speechifyin'. The Internet has changed that, but many of my old friends still in AP say not much has changed otherwise, except more layers of bureaucracy.

The uproar over this isn't likely to go away for a while -- and it leaves the AP's flank exposed. Oh sure, you might not read much about it after a while. But the wire service has really managed to p-o the people who count, those who have the technical expertise to take the tools that exist and create new ones to gut what's left of the AP's communications oligopoly.

While you think AP is a news cooperative, truth be told it really, until the dawn of the Internet, was a huge private telecommunications company with its own leased circuits and transponders. Much as McDonald's, underneath the hood is a real estate company as much as it is fast food, so the AP was built not so much on the idea of news but on the scarcity of the communications needed to transmit it. (Let me quickly add this is not to denigrate the work I and others did and that many former colleagues and new APers still do. We loved it. We did it well. But looking at it with a steely eye, it is NOT the brick on which the AP was built; it was only the mortar that helped hold it together.)

AP is now in a race against its likely death or serious dismemberment unless it can figure out how to completely redo its business model. (Kind of like newspapers, yes?)

You might argue that AP's strength is in its overseas bureaus, that no domestic based network of bloggers, freelancers, shrinking newspapers or whatever can match that. You'd be right. And the point is? Talk about your Pyrrhic victories. Because once AP sells that news to Yahoo or Google (or both) why does anyone else need it? There might be some products that can be sliced out of it -- a faster headline delivery for traders who can make money on a couple of seconds' lead, for example. And there might be a few specialty sites that want it, or a video component, but beyond that?

Well, what about its domestic report? AP is still the only news organization with offices in every state capital. It's the only one that offers that kind of comprehensive coverage. Again, though, the market for statehouse news continues shrinking (wrongly so in my opinion) and there are competitors, such as the S.C. Statehouse Report (not to mention all those veteran journalists getting laid off in state capitals). And the state reports, even more so than international, have long depended on member stories for about half of their content.* If the members, as they are in Ohio, and aided by the now-roused digiterati, figure out easy ways to get around AP, it would be crippling.

AP already is moving to consolidate editing at a few regional hubs to save money and, supposedly, to better coordinate multimedia efforts. We'll see.

But what AP is left with, if it is to survive as robustly as possible, is creating content others don't have. And to keep the value of that content, it needs to seek to control it. (It also has to finesse the issue of competing with its members.) That control replaces the control it had over the transmission. But content creation is an expensive business -- the loss-leader really. It was the unstated but understood subsidy provided by the copy shared free from members (some would argue that they actually willingly paid for the privilege to share it in order to get that wider report) that financed much of the rest.

And AP can't control that content, not to the extent it needs to. That's been the elephant in the room no one has really wanted to talk about. Now people are talking about it. (And troll the blogs and you will also pick up a definite whiff of hatred toward AP as monolithic -- generally read that as liberal -- news. As much as anything, that is worrisome; the AP's great stock in trade was its culture of neither fear nor favor; I can't think of another group of newspeople who played it "just the facts ma'am" straight.)

This past week may well be looked back on as the first large chip to come out of a business model that has been riddled with microfissures ever since PM newspapers started disappearing, depriving AP of a sure source of news for the next day's morning papers. The AP is rushing like hell to try to replace the revenue generated from its plunging newspaper segment. It's a race -- the same one hundreds of newspapers are in, although AP doesn't have to make 15% profits (not yet, at least; the option of taking it private still seeps out of Tenth Avenue from time to time).

You'll see if you look closely at AP's announcements (click on the AP label on this post for some I've commented on) that "news" is seldom in the vocabulary anymore. Now it's about "content verticals," which is why sports and entertainment, for instance, were moved under what effectively is a sales operation.

Steve Boriss has an interesting take on it -- that AP's moves against the Drudge Retort were as much a shot across the bow of any newspapers that might want to defect as they were a warning to the blogosphere.

AP is now in a difficult position; from a corporate survival position, it probably needs to bring more infringement actions. From a public relations position, everything it does is now going to be scrutinized. This is not good for a company that likes to operate largely low-key. (First suggestion -- get a corporate relations department that actually understands corporate relations, not the art of "no comment" -- or as Hansell wrote: Paul Colford, the A.P. director of media relations, declined to discuss the matter at all. He said that Tom Curley, The A.P.’s chief executive, would also not discuss the matter, nor would anyone else at the organization. And no, going around the country having Curley make speeches is not an alternative.)

The AP probably isn't going away; bloggers aren't either. But in what may end up being delicious irony, UPI, the beleaguered one-time wire-service competitor, may actually be better positioned in this digital world. Now a branch of the Moon-Unification Church conglomerate, it has refocused to the Web (it basically had no other choice), unabashedly rewriting short, Web-centric stories from local papers (with full credit), and saving its meager resources for analysis.
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*More than a few reporters at member papers over the years denounced the AP as "stealing" their stories. That meme has shown up again in the blogs and comment this past week. Not true. (As distinguished from when AP takes content off a nonaffiliated sites). Their papers gave their stories away. It was the deal with AP - its contracts specified that members must share spot news and similar stories within a certain radius. And as much as those reporters might be angry, they were doing work for hire, and their papers could do with it what they wanted.

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