AP - a cancellation letter

I missed this when it first came out. Here's a typical cancellation letter to the AP - from the Cedar Rapids Gazette. Interesting, Steve Buttry is about as much an ink-stained wretch as they come, but he's also been one of the most forward-thinking, having most recently run a lot of the training at the American Press Institute.

Meanwhile, the link blogging service Publishing2 says it's going to try to put together and alternative wire service focused more on "context." Matt Thompson, a Reynolds Institute fellow at Missouri, is looking into that, too. It all gets back to the same thing I've repeatedly said -- news is not the same as journalism. The former is a commodity. Whether there is a business model for the latter remains to be seen.

September 18, 2008

Tom Curley
Associated Press
450 W. 33rd St.
New York, NY 10001

Carol Riha
Associated Press
505 5th Ave. Suite 1000
Des Moines, IA 50309

Tom and Carol,

I am sorry to inform you that The Gazette has decided to give notice that we will be withdrawing from the Associated Press.

As you know, The Gazette has a long relationship with AP, including Joe Hladky’s recent service on your board. We do not make this move lightly. We do make this move hoping that you will make enough changes to your services and rates that we can reverse our decision before it takes effect.

Perhaps the moves you have made to sell AP content widely across the Internet were necessary decisions as you seek to adapt and prosper in the digital age. But those moves certainly have contributed to devaluing your content to members. In our view (and in the view of other editors I have talked to), the value of the state report for Iowa has also declined, further eroding the value of AP’s services. I can provide details if you wish, but the overview, from our night sports editor, Dale Jones, is that we receive “a generally skimpy report compared to what it once was.”

I should add that your metadata service plans certainly add value. We don’t yet know how much value that will have, but tagging content to deliver exactly what users want is an important part of our plans. We see exciting possibilities in this service, but they do not outweigh our concerns.

We have enough other challenges and priorities that if your 2009 rates were reasonable, we might have accepted the developments that decreased the AP’s value to us, viewing the metadata service as offsetting the areas where we are disappointed. But I was flabbergasted to learn that AP will charge us 10 percent more next year to receive the content we are currently using. If we participate fully in the Digital Cooperative initiative, we can reduce our increase in rates to 6 percent. Or we can forgo considerable content that we are currently using and cut our increase to 3 percent (a 1 percent cut with the Digital Cooperative discount). This was sold to us as a decrease in rates and for The Gazette, it simply isn’t.

You know that the industry that owns the AP and remains a major source of AP content and revenue is facing unprecedented financial stress. For AP to present a double-digit rate increase as a rate cut in this environment is outrageous. Your rate structure needs to present more options. Or if you insist on offering only two choices, you need lower rates. Or both. In Cedar Rapids, our financial stress has been compounded by a historic flood that cost The Gazette greatly in terms of operating expenses and lost advertising and circulation revenue.

I don’t know yet how The Gazette will operate without AP content. Perhaps we will become an all-local newspaper. Perhaps other services will meet a diminished need for national and international news and features and sports content. Perhaps we will work out content-sharing arrangements with Iowa newspapers or with independent newspapers around the country or with both. We are currently working on a project that will redirect our print and digital projects and we will work out those details as part of this project. Whatever the solution, we will not continue paying increases like this for services whose value is declining.

I know we are not the first paper to give you this notice and I presume we will not be the last. I have conferred with other editors who have made this choice and I know we will have considerable support. I understand the AP contends that membership requires two years to sever. We are not sure whether that is enforceable or what our time frame for severing this agreement is. We are not planning to make the move immediately, but we will tell you if we plan to leave faster than two years. I hope that the severance period, however long it is, will give you and us time to address the issues that brought us to this decision.

The Gazette values its long relationship with the Associated Press. We hope you will work with us to develop rates and services more suitable to the challenges we both face. I look forward to discussing these issues with you.

Sincerely,

Steve Buttry
Editor