AP losing Union Leader

The Manchester, N.H., Union Leader announced yesterday it is dropping AP in favor of McClatchy and Reuters.

I expect to see more of this in 2011.

There are these telling paragraphs in the story:

[President and Publisher Joseph] McQuaid said the cost of Associated Press, coupled with its diminished New Hampshire coverage, were factors.

"We were providing more of AP's New Hampshire report than we were receiving,'' he said. "We would prefer that New Hampshire news consumers get that information directly from us.''

Skip the cost factor stuff for now.; AP can work on that and has shown it is willing to bend when pressed. It's that last graf that should concern AP staffers about the news cooperative's long-term stability and structure at the state level.

Though New Hampshire is a bit different in that most of the news is geographically concentrated in the same area where AP's pared-down efforts largely coincide, it is not unique. I'd estimate that in at least half the states AP eventually faces a similar problem:

• One or a few major papers dominate and the news is relatively concentrated geographically.
• Those papers are becoming less and less interested in statewide developments or even Statehouse developments, or if they are interested it is largely for briefs, not longer coverage.
• What they need they increasingly are getting from news-sharing agreements from any other papers of significant size.
• Smaller papers break into roughly two minds - those that want some AP state coverage but are focused primarily on local, and those for whom local is the sole focus. In any case, AP's business model is not supportable by smaller papers - there aren't enough of them and their financial underpinning of the wires service is far less than their larger brethren.

There's still a somewhat larger market for the national and international feeds. But on the state level, where AP already has largely eviscerated its bureau chief corps and concentrated its editing in hubs, further major restructuring is likely. Many of the state reports already are shadows of their former selves. I expect the AP will shed more of its bureau system in the coming year or two, instead assigning "correspondents'" to work out of Statehouse offices or their own homes, moving more of broadcast (much of which still is produced locally) to centralized operations, and spreading out remaining staff.

AP, which used to see its state reports as valuable in-state sales tools, with New York (now the hubs) cherry-picking the best stuff for the national report, is likely to simply fold most state coverage into a larger national report, keeping in mind that in some larger states that have numerous midsized news operations, which remain the state reports' "sweet spot," a state report might remain viable for some longer time.