Commentary on AP-Google deal

Lots of trumpeting last week about AP's new deal with Google in which the search-engine giant gets continued access to AP stories and will host them while paying an undisclosed sum, and, perhaps more important, giving AP lots more data about how its content is accessed and viewed.

But Frederic Filloux, in a Monday note, questions whether AP (and AFP, for which he has consulted) is following the wisest path:

Unable to position itself as a genuine partner to the media sphere, Google tries to fracture it by striking deals left and right. In this divide and conquer respect, the AP agreement is a good one — from a Google standpoint. First, Google buries the hatchet for good with AP, transforming a contentious relationship into a true partnership. Second, this deal is a major departure from the “snippets strategy”,  in which, until now, Google News contented itself by crawling thousands of sources and extracting headlines and short abstracts. Under the the new AP-Google agreement, Google pays an undisclosed amount of money to AP and provides precious traffic data — in exchange of full stories. (To be complete, AFP also has its own deal with Google, although a more modest one). ... Thanks to its deal with the two newswire agencies, Google is now in the self-sustaining news business.
For AP and AFP, these licensing deals with the search engine go against developing their own business to consumer website. Frankly, who will go to their home pages when Google News already hosts the newswires stories, with a better access, and… native search engine optimization?  Why build a website that will compete against a full licensing deal? It doesn’t make sense.

Filloux also questions whether both agencies can - and should - remain member-owned cooperatives. The piece is aptly titled "The Newswire Quandary."

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.

That was the week that was - without AP

You can be sure the wire service will be watching closely, and maybe nervously, next week as Tribune papers do without as much AP content as possible.

As Phil Rosenthal, the Chicago Tribune's media watcher put it on his blog:

Some newspapers have determined that shared wire content that is available to readers from many other outlets is worth less to them than unique, proprietary content, especially online. Coupled with reductions in the space allocated for news in print, papers are weighing whether there’s the same need for Associated Press content as in the past.

Or to put it another way, once AP sells it to Google, why does anyone else need to buy it?

This just goes to highlight the tough spot AP really finds itself in. Don't forget, it was not that long ago, in August, that I was quoting Cleveland Plain Dealer Editor Susan Goldberg on her view of what the wire service should do. Unique content was not part of her vision:

Goldberg, asked if the Plain Dealer and similar papers might go without AP someday, said "it's possible." There's a basic disconnect, she said: "I want them to cover the really boring meeting at the Statehouse so my people don't have to." But, she said, AP wants to do bigger projects and enterprise "that I have neither the desire nor the room to publish."

I think we'll all be interested to see what conclusions Tribune reaches.

CNN goes a la carte

CNN, which began selling its content akin to a wire service earlier this year, has now broached the wall to a la carte service, a term that wire services have struggled with for years.

(See, the dirty little secret is that there are a lot of cross-subsidies inside the wires, just as there were with the old phone company; it's why papers in the smallest states, for instance, have been able to get a state report nominally on par with that of some of the largest. Start selling things individually, however, and a lot of things that make for a well-rounded wire report likely get ditched.)

Editor and Publisher reports CNN is selling single copies at $199 each through the CNN Wire Store. So it's not exactly whip out the credit card and buy a few. Still, I can see more than a few publishers doing the calculus - and puiting more pressure on AP.

Can news agencies just do 'good enough'?

That's essentially the bottom-line question of ex-Reuters man Philip Stone in Follow the Media.

It's going to be difficult. It's a result of the legacy of the news wires and the pressures the grew in the halcyon days of the 1980s and '90s.

Before then, the AP, for instance, had state offices that were fairly lean but were able to put out decent state reports because of the abundance of local media - PM papers, radio stations with news departments in about every county seat, etc.

In the '80s and '90s, covering such routine local stories started to become a bit unfashionable in metro newsrooms. In addition, the papers had started on their bureau cutbacks. (Remember, many states had at least one paper that saw itself as the state's paper of record, with far-flung bureaus. In Iowa, for instance, it was the Register. In Rhode Island (OK, far-flung there would be a little stretch) it was the Providence Journal. In South Carolina, The State had bureaus as far away as Beaufort, for instance.)

The call went out to the wire services more and more to take over more and more of those stories. It worked, for a while. And the culture that developed was that more and more kept members happy (and quiet) -- a good thing.

Then the bottom fell out. AP is buying out staff and consolidating desks at regional hubs, for instance. But that also means doing less. And let me tell you, one of the biggest complaints I hear in S.C. newsrooms is that the AP wire here, for instance, is a shadow of its former self. (I hear the same complaints from friends in other states.)

So if you are a wire service manager and your job security depends in at least part on not having member complaints, what would your reaction be, even if reason told you cutting back probably is critical.

AP is making the changes, as are other wire services. But it's a race against time -- and the members.

It's also a struggle against an idolatry of a false reality that AP loves to trot out as evidenced by this from a Columbia Journalism Review Article (you'll also find it retold on page 3 of AP's own reporting "Reporting Handbook" by Jerry Schwartz):

As the story goes, Mahatma Gandhi was released from an Indian prison in 1932 in the middle of the night to elude the press. He was taken to a remote railroad station where darkness obscured his identity. But then an intrepid Associated Press reporter named Jim Mills appeared out of nowhere.

It was not the first time the reporter had tracked down the holy man to land a scoop. An impressed Gandhi quipped: "I suppose when I go to the Hereafter and stand at the Golden Gate, the first person I shall meet will be a correspondent of The Associated Press."

AP emblazons that apocryphal quote on T-shirts as an emblem of its huge international footprint.

AP and the other wire services may be able to pull it off - but it will be a struggle for all these reasons.

AP competitor in the offing?

I've said before that one of the stupidest things AP did this past year was take on a small-time news commenting site, the Drudge Retort, over the right to use snippets of AP stories.

It stirred up a furor among the technorati. But more important, I wrote, these are the people who not only can be angry about the AP, but can do something about it (forget about the attempts by AP member to set up their own content-sharing systems; in many ways, that's just the same model scaled down).

So here's one example of what AP may have to look forward to: Newswire 21, a proposal to create an alternative news cooperative using models like Wikipedia and a sort of crowdsourcing (if you extend the concept to the proposed network of "virtual bureaus" likely to be in many more communities than AP offices).

Newswire 21 is talking about subscriptions for $100 a month, a mere fraction of the typical AP cost.

The project is looking for $1 million from the Knight News Challenge to get started. Even if it doesn't get it, I'm sure there are and will be more such ideas forthcoming. The growing number of local online sites and the ease of "webbing" and filtering their output any way you wish makes it almost inevitable.

One of AP's responses, of course, will be "quality" -- a perfectly rational and reasoned response when your customers are primarily editors. But the customer base is now news consumers (I'll include in that any number of blogs, Web sites, social media sites -- anyone who wants to incorporate a news "feed"), and among them, "good enough" often is good enough.