Tuesday, May 25, 2010

Publish 2 and disrupting the AP

Publish 2 announced this week that it is starting a nationwide (worldwide?) news sharing service with the idea of disrupting the Associated Press.

Scott Karp, Publish 2's CEO, made the presentation at Tech Crunch's Disrupt conference this week. (Be sure to watch the video' don't just read the story.)

I think Publish 2 will have an effect, but not the fully disruptive one it aims for. Having worked for the AP in a state where there were sharing agreements before they became fashionable and now having some association with a news exchange, allow me some observations (the map that Karp displays in the video is missing some states with news sharing arrangements):
  • Publish 2's biggest contribution to the party is standardizing the news feed format so that it is compatible with AP's.
  • Newspapers will sign up as contributors if the copy can simply be funneled into the system from an RSS feed, which I suspect it can.
  • Newspapers may sign up as users because it is no or low cost to them. However, I don't expect this to replace the AP but to end up being used as more of a supplemental service by many papers.
Some of my reasoning:
  • On the state level: In states where the news sharing operations already are in place but are cut and paste, a system that automates the process would make sense. However, in other states, such as Ohio, the papers already have built out fairly robust sharing software.
  • In some states, the sharing systems are closed ecosystems by design. In South Carolina, for instance, the largest papers have a closed system because some of them don't want smaller nearby competitors getting the goods. Publish 2 allows exclusions, but then we're back to a better tech platform that just enhances, but does not necessarily create, something disruptive.
  • This system, though Karp doesn't say so and may not believe so, is aimed at larger papers that  are the ones a) struggling the most and b) are just a fraction of AP membership. Reality check: Smaller papers don't particularly want another input to sort through.
  • The argument could be made that those smaller papers might shift from the AP to this because of the cost factor. I don't see it for a couple of reasons:
    • News people want information validated. Rant as you will, but the AP provides that validation. If they want to shift to lower cost, CNN's new wire service might perform the same function.
    • There might be a handful of blogs and other "alternative" sources they would come to trust, and I'd hope that a service like this might lead to more, but in most cases I'm willing to be it will be in specialty areas, such as food or the tech example Karp used. It's not likely to be in the areas of general news, and especially not politics (too much chance of getting burned). Maybe sports, but there are some serious egos to overcome in that bullpen.
  • The smaller papers are simply more likely to drop the "wires" entirely. It's a manpower and market issue.
The AP already is getting less than half of its revenue from newspapers, so I'm not sure how disruptive this would be in that sense anyhow.  And it's started experimenting with a la carte pricing.

There's really a deeper philosophical thread here. At one point, Karp refers to the AP delivering a lot of "commodity" stories. Granted, and point well taken. The less-philosophical reason is simple - AP serves a wide variety of members. It's stories have always tended to be plain-vanilla. Argue good or bad, it is what it is.

The deeper philosophical argument goes to the nature of news and its function. Many of those commodity stories cover things that no one else, not even alternative sources, is covering. It's the old utility model - you charge the urban, affluent customers more so you can afford to serve the rural areas. Or you provide a package with some loss leaders made up by a higher blended rate (the cable TV model Karp refers to).

I like to think that is the underlying philosophy, but I also understand things are changing. Let's see where thing go.

Meanwhile, AP, which has talked about integrating all sorts of content into  its News Exchange platform might simply duplicate Publish 2's model inside its own framework.

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