Sunday, October 26, 2008

AP backflip reax

As noted here and elsewhere, AP did a big backflip last week, essentially capitulating to the steady drumbeat of unhappy newspaper execs and cancellation notices. It will throw open all its copy to members, instead of having a premium level, and it will trim $9 million more from members' assessments.

Some interesting reactions have followed.

Staci Kramer at interviewed AP execs Sue Cross, senior VP of global media, and Tom Brettingen, chief revenue officer (disclosure, I worked with Cross at AP in Ohio). Some key things I found:
  • The cancellation notices were not the reason for this move. "Putting in a cancellation notice to give the paper a chance to leave has always been a way to get our attention," Brettingen said. Yeah, OK. We'll let that go with only this comment: It usually was done quietly and without the members shouting at AP execs, threatening lawsuits publicly and threatening to create alternative distribution systems to undermine the wire service. So I guess you take your pick here; either the execs are saying "boy, are we really oblivious" or "boy, are we lying through our teeth." (And Brettingen says he doesn't expect those notices to stop - AP has awakened the sleeping bear, folks. Someone is going to get clawed, and it's likely to be AP employees because as the pair note later in the interview, layoffs probably are coming.)
  • Cross hears two major threads: members who don’t want to have to make choices and members who want a minimal amount at a lower rate. But, she says, “Keep in mind the philosophy: [Members] all share equally in the costs of the reporting regardless of how much you use.” One of the questions that will have to be considered in the review: Does AP still function like a cooperative? Let me answer that for you. No, not really. Hasn't for a decade or more. And here's a news flash -- many of the members no longer want to share equally in the reporting. That's why AP has always shuddered at the term "a la carte." The way AP is structured, the reporting requires rather large cross-subsidies. Those were OK when the economy was strong and the bigger papers were willing to pony up. No longer.
  • The comments that follow from "Managing Editor" are just as interesting:
    • Cut my rates at least 30 percent. That is what we are being asked to do across the board and what we are asking from other vendors. The bulk of the AP report is now on every Web site in the world so it just isn’t as valuable as it once was. (And that is the core conundrum AP faces.)
    • Before you cut a single reporter, cut the scores of supervisors, managers, directors, VPs and SVPs in NYC. (Ah yes, there used to be a time when news editors reported to bureau chiefs who reported to the president of the AP. Looking at the AP org. chart now looks more like the Pentagon. Since AP has an exec editor, for instance, what exactly is it that Cross does?)
    • Give me a handful of stories I can use each day that have NOT been on the Internet all day long.
But the money quote is in a separate paidcontent article and comes from Rufus Woods, editor of Washington state's Wenatchee World:
“They’ve burned a lot of bridges with newspapers who are now hell bent on determining what value AP brings to them and not paying a penny more… The Wenatchee World strategy in these turbulent times is to become a more local paper and that means AP is vastly less valuable to us. That’s the bottom line. ... Whether AP can mend fences, rebuild trust and respond to member concerns remains to be seen.”
The fun is just beginning down in Hell's Kitchen.



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