Saturday, 18 October 2008

Divorce between US newspapers and AP?

I left United News of India in 1987 after serving the news agency for 17 years. I worked in two newspapers later and taught in media school for seven years thereafter. Thus I have no connections whatsoever with UNI for the last 21 years, yet my loyalty to news agency journalism in general and UNI in particular has remained unchanged.
That is the reason I was drawn to read Rick Edmonds blog today at
We youngsters working under Mr B R P Bhaskar and Mr K P K Kutty in Delhi’s news room used to hold AP in big awe because of its news coverage and worldwide reach. UNI had tie-up with AP. I was thrilled when my story was picked up by AP's Delhi bureau for the first time and was published abroad.
I moved out of Delhi headquarters and worked as Bureau Manager in smaller centres. Here I had to interact with owners of newspapers to strike bargains for subscriptions and to recover long pending arrears. (That was in addition to my journalistic responsibilities.) I remember how the owners would haggle for cheaper monthly fees. I could not afford to be tough to recover the arrears because these owners would threaten to quit our news service and switch over to PTI’s. Similar was the situation elsewhere in India.
I thus had a fairly good idea about why UNI was never in sound financial health. I notice from Rick Edmond’s blog that even in USA, even in case of the powerful Associated Press, and even during the new era, newspaper owners are no different.
Please read Edmond's blog:

What would happen if newspapers divorce AP?
What would newspapers miss most, I asked AP's Executive Editor Kathleen Carroll in a phone interview Friday, if they followed through on threats to quit the cooperative?Her answer surprised me. For some it would be comprehensive and timely sports coverage that frees up their own staff to cover local teams. But even more fundamental, she said, is "a fast, steady diet of multimedia news for the newspaper's Web site." A couple years after being introduced, AP videos are widely used on news sites and are a big part of the cooperative's mobile offerings. We are in an era, Carroll added, "when people want to know what happens when it happens, and their appetite for video is huge."

Tribune became the biggest player yet Thursday to announce it had given two-year notice and was considering pulling all its newspapers out of the wire service. (The Columbus Dispatch announced Friday it would cancel its contract in 2011.) Tribune's announcement was consequential, to be sure, but Carroll took exception to one headline labeling the move stunning. "We are always having these kinds of discussions (with dissatisfied members)," she said. "The difference is that this time they are announcing" what have more typically been confidential negotiations.

Without denying the severity of newspapers' financial problems, Carroll said, she is hopeful that peace can be restored. But there are barriers. AP has a little flexibility in negotiating with individual papers -- but only a little. "Because we are a cooperative, we can't offer city X a different deal than comparable city Y," she said. "We're not like the used car salesmen who says, 'I need to go in the back room and talk to the sales manager.'" Though Carroll is a partisan and not strictly in the business loop for these negotiations, I sought her out because she takes an editor's big-picture view of the conflict. I found it noteworthy that she wanted to talk more about improved services than deeper rate reductions.This week I got Goldman Sachs' analyst Peter Appert's latest forecast. He sees total industry ad revenues falling from $39 billion this year to $30.7 billion in 2012 (and from a peak of $49.4 billion in 2005). If the industry is shrinking almost 40 percent, from almost $50 billion to just over $30 billion in ads, can AP cut rates correspondingly?Carroll's answer was that AP cannot make those kinds of cuts in its operations, nor should it -- with international markets growing and broadcast and online clients ready for an expanded report. To me, that suggests plenty more friction ahead with editors as AP redirects resources to lucrative lines of business and other clients that are doing better than the newspapers that own AP.

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