AP Adopts a Can-Do Attitude

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Important Details About Go! Conference Session "News": It’s the bedrock, foundation, and platform for just about all segments, audiences, and types of advertisers in the information industry. It’s under a perfect storm of pressure, making headlines about itself daily. This session explores the future of news, and what it will take for it to survive and thrive and impact readers in the coming year.

Presenter: Tom Curley, CEO, Associated Press

Listen to Tom Curley, and you can hear a new fighting spirit that is a signal of Round 2 in the news industry’s Internet adventures. 

“Yes, we can,” Curley told those in attendance at Outsell’s Go! Conference on Tuesday, answering his own rhetorical questions, saying AP can get beyond the world of simply providing feeds, orienting its business around text and staying behind the comfortable walls and old business models of the newspaper industry. Optimistically, he offered: "The rest of this story has only just begun."

His comments showed a thoughtful – and public — understanding of the dimension of the problems before the industry:

• “Take Back the Channel”: “The new distribution has certainly arrived. But the new Internet economy [for newspaper companies] has not…..It’s not enough to let your content be scraped and searched and hope that CPC [cost per click] advertising builds your business. We have to re-engineer and transform our businesses to take back some control over the flow and monetization of our content in the new distribution channels…..Portals have built their fortunes from non-proprietary content, and the content providers, including AP, are figuring out how to get it back.”
• “Plumbing”: “We’re ripping out the old 20^th century plumbing and putting in a lot of 21^stcentury information management…On the content side, there are metadata standards to be created, linking mechanisms to be built and platforms to be put in place for the consumers to contribute some content of their own…Tags and links have become the new ‘currency’ of the Internet.”
• “Packaging”: “The days of mass audience and general-interest programming are limited….We are thinking….about how to package and customize our content for different B2B markets…..for the 18-34 demographic….around major stories , such as the Middle East…or Olympics…Video represents perhaps our biggest opportunity.”
• “Partnerships”: “Your content will be stolen and misappropriated unless you take the initiative to….establish creative new distribution partnerships….We look at the emergence of new players, particularly MySpace and others in social networking…and of course the mobile and wireless space looms beyond the Internet horizon…Now that the game has broken wide open, the game is all about ubiquity.”
• “Networking”: “The average [time spent on individual newspaper sites] was little more than 12 minutes per month. Twelve minutes a month is not enough to build a digital business on….You find the typical visitor spending 42 minutes a month visiting one or more sites across the [would-be]network [of newspaper sites]….There should be no dead-ends determined arbitrarily by geography.”

Curley, a long-time Gannett executive, took over the reins at AP three years ago. He inherited a company dipping its toes into the Internet business and is now jumping in with both feet. His role requires the vision of a next-generation news exec and the political skills of a U.N. General Secretary, as he reports to an often sharp-elbowed board populated by the CEO’s of the ’s newspaper companies.

In one sense, Curley’s words were unremarkable. He frankly assessed the difficult straits news companies today find themselves in, noted some mis-steps and proposed some ways forward. What makes the words stand out is that he is rare among current leaders of American news companies in frankly and publicly acknowledging that the industry is at an unprecedented crossroads. Though he shied away from words like “crisis”, his belief that the industry needs to take dramatic action to save itself is clear.

Curley’s stand-out-from-the-crowd statements stand against a backdrop of the recently announced 20 percent newsroom staff cutback by the well-regarded Dallas Morning News and this year’s announcements of both news staff and news space cutbacks by both the New York Times and Washington Post, among many others.

Curley’s AP is moving tentatively to provide leadership for a news fraternity that’s had a hard time coming to terms with the newer distribution models of the Web. These models, of course, have meant that readers more often first view newspaper content in headline form on Yahoo News, Google News MSN and a myriad of other non-news sites. In coming to grips with that world, AP has taken several steps:

• Tested an AP/local news feed with Topix, the news search site majority owned by three of AP’s stakeholders, Gannett, Tribune and McClatchy. That feed has helped test out the proposition that search engines could better identify, rank and properly return news results, given technical mapping help from news providers.
• Announced in broad form a licensing agreement with Google. Though neither AP nor Google revealed either terms or specific uses of AP content by Google (other than a “product not yet launched”). As we noted when the agreement was announced, the agreement is probably  a subtle way to raise a flag of truce between Google and publishers. Clearly, Google is compensating AP for the use of all those headlines appearing on Google News that never get clicked on, but still generate part of Google’s booming billion-dollar ad business.

It’s clear that these two moves are but prologue for a much wider strategy of full engagement of the news industry with the GYM companies. That strategy will include a reckoning in this round 2, a compact of sorts. The effort: re-establish real financial value in the headlines, summaries, stories, photos (and someday soon audio and video) the news’ industry’s heavy investment in newsroom staff produces. It’s an attempt to provide a framework – a new and growing revenue stream – that offers potential in paying the salaries of those 52,000 people still working in American newsrooms.

In Outsell’s Opinion: It’s good to hear an American newspaper executive frankly acknowledge the transformational efforts needed to resuscitate the industry. The last year’s quarterly company reports have sounded much alike: lead with a 30%+ on-line revenue growth, point to a booming real estate ad sector, and downplay national and retail problems. Bury the facts that print revenues are flat-lining below inflation and that no turnaround in declining print circulation seems in the cards. Announce major staff cutbacks and pretend that they are not irretrievably damaging the products that readers are getting. 

AP is “just” a collective, a vehicle run by member newspapers. But Curley’s leadership team has rightly figured out that in its role as both one place where much newspaper content physically comes together – an aggregation point – and where the industry’s companies regularly meet, AP can have a vital role. It can be a leading role, without being the leading role, to the extent that newspaper executives are nervous about their brethren’s sharp elbows. It can augment the ongoing negotiations, led by Hearst, Scripps and MediaNews with Yahoo and Google, on how to reach a precedent-setting collaboration plan, including both classifieds and news.

What is refreshing about the AP’s initiatives is a newfound understanding that in tagging, linking and data flow the battle win be won and lost. This has been a hard lesson for the industry to learn, as it applied paper-centric, single-market-centric thinking to the problem and opportunity posed by the Web.

It’s still concerning how much AP and the industry it seeks to lead have one foot stuck in the past. On the AP end, it’s been slow to recognize the power of the blogosphere  — Curley’s use of the term “pajama-clad bloggers” betrayed a certain retro view of a powerful force. Its own difficulties in delivering on product and project timelines are well-known in the industry. Its aging and often risk-averse staff poses a challenge to change. It has a mixed record on moving on niches, though its planned October re-launch of a interactive-chart-heavy business product, partnered with Morningstar, is a potential bright spot.

On the newspaper end, on which AP’s fortunes are inextricably tied, the debilitating impact of non-standard, non-inter-operable editorial and advertising systems throughout the industry is a problem that cannot be under-estimated. And, though Curley talked of a “no- dead-end network of newspaper sites, that reality is still far from any actual execution, as the evolving GYM networks eclipse its very possibility.

Even greater courage is required to force the changes needed.

Still, we get the sense that AP is an institution trying to come to grips with the issues. It’s only Round 2, maybe, of many to come, but it’s good to see the industry playing a little offense.