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Will the ad-revenue-generating power of TV vs. online advertising increase Rupert Murdoch’s influence over the national conversation? 8/24/08

Posted by Steve Boriss in AP, Murdoch, NYTimes, Wall Street Journal.
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We have another indication, as if we needed another, that online ads do not attract ad revenues like their counterparts in television. Based on Olympics ad spending, TV video ads may be 100x more valued by advertisers than online video ads. Video ad spending on NBCOlympics.com was only $5.75 million, just 1.1% of the $505 million total for video ad spending. A crude comparison, but still…

In the national news supply chain, original content driving the national conversation has originated from the newspaper side — AP, NY Times, and Washington Post — which are converging to the low revenue world of online advertising. On the other hand, Rupert Murdoch’s Wall Street Journal, unlike those venerable institutions, can draw upon the resources of News Corporation’s high revenue-generating TV properties. More revenues, more original reporting, more control over the national conversation. Look for Murdoch’s influence over our top stories to increase.

If partisanship doesn’t kill the AP, it will just make them stronger 7/27/08

Posted by Steve Boriss in AP.
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My most recent article on PajamasMedia is a cautionary tale about being careful what you wish for — you just might get it. For all those who have been concerned that the AP has not been fulfilling its mission to provide “unbiased news,” be assured they have heard you, and you will now instead be reading something it calls “accountability journalism.” But it’s not about politicians being accountable to you — just accountable to the personal conclusions of reporters. Read more about it at PajamasMedia.

Brewing battle between AP and its member newspapers will make papers healthier and their readers happier 6/29/08

Posted by Steve Boriss in AP.
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Lost Remote reports that there is growing interest around the country in Ohio newspapers’ plans to side-step the Associated Press and share statewide news only among themselves, ensuring that their papers are the exclusive sources for their original stories. Some papers feel they are simply being taken advantage of by the AP. The editor of the Columbus (OH) Dispatch said “What has happened is we’re becoming the wire service for the wire service,” as the AP lifts their statewide stories and distributes them to others. Robert Rivard, editor of the San Antonio Express-News, searched for a reason for being for his paper’s relationship with the AP, telling the Wall Street Journal, “If they’re our partners, they’re going to help us find ways to reduce costs. If they’re not our partners, they’re just vendors.”

If this trend catches on, it will be good for both these papers and for readers. The papers will be publishing more exclusive content, reestablishing their positions as indispensable news sources. Readers will benefit because more of the news they receive will be at the state rather than the federal level — news of education, roads, public services, and other areas that more directly affect their lives than most news out of Washington. Papers will be better off looking to their readers’ lives for inspiration than to Washington.

Maybe member newspapers should dissolve the AP, set-up news exchange instead 6/26/08

Posted by Steve Boriss in AP.
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It seems like AP member newspapers are finally beginning to understand that the AP monster they created has turned on its masters in the Internet environment. They give the AP their money and content. In exchange, they lose original content they might have had, while everyone in the world has immediate access to the same AP stories they do.

But, who is controlling whom here? Just about every member of the AP’s Board is a newspaper exec. If the AP isn’t working for them anymore, they could liquefy this not-for-profit for its assets, distribute the proceeds among the members, and create one or more organizations that do make sense in the age of New Media.

How about a news exchange, where the papers buy and sell articles among each other? Some of the more entrepreneurial papers could redeploy staff they might otherwise lay-off, and turn them into profit centers who create news for other newspapers. Some might even create articles that vary by worldview – from left to right – providing the other papers more choices to match their readerships than the traditional, center-left establishment worldview of the AP. Most importantly, since use of such an exchange would require out-of-pocket expenditures, it would force newspapers to think twice before offering anything other than their own, original content. Their focus should no longer be on the big national and international stories anyway, which have become a commodity, ubiquitous on the Internet. As the Wall Street Journal points out, newspapers in Ohio and Montana are beginning to experiment with cutting the AP out. But perhaps all papers would do better to simply cut the AP off.

Is AP’s crackdown on bloggers actually a crackdown against defections of its own members? 6/16/08

Posted by Steve Boriss in AP.
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The blogosphere is in full boil about one of its own being warned by the AP that it must even more sharply limit the number of AP-written words it uses in its citations of AP articles. One of the biggest blogs, TechCrunch, is even calling for a boycott of AP story citations.

But, while the bloggers understandably think it’s all about them, I have a hunch it isn’t. Rather, it is a shot across the bow of AP’s own members that they had better not drop their costly memberships in favor of citing AP articles instead.

Increasingly, AP newspapers are realizing that the Internet has turned their membership into a rotten deal. The not-for-profit AP takes their money and their stories, uses their money to pay for its own staff to write additional stories, then shares everything with all other members, so that the papers are left with no exclusive content on the big stories of the day. This wasn’t a problem before the Internet, when readers could only access these stories from their local papers.

So a newspaper trying to cut its costs could theoretically drop its AP membership, keep its exclusive content to itself, and start each big story “According to the AP,” lifting as many words as possible then paraphrasing the rest. By cracking down now to limit the number of lifted words, the AP is making the price for defecting members higher. Whether this is a crackpot theory or not, one thing is clear — now that the old model for the relationship between the AP and its members might be hurting members more than helping them, a crackup seems inevitable. (H/T: Jim Harper)

Is the AP Good for America? 5/18/08

Posted by Steve Boriss in AP.
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My latest article at PajamasMedia.com is about the Associated Press (AP), which has become the elephant in the newsroom. At face value, the AP seems like a good thing, allowing its member newspapers to pool their resources to keep costs of reporting non-local news low. But, the AP is the core reason why the same news stories with the same slant appear in nearly every US newspaper. And while in the past, membership had its privileges, these days the AP is looking more and more like a competitor that is putting its own members out of business. Read all about it at PajamasMedia.com.

First Google News, now iPhone. AP is putting its own members out of business, but no one seems to notice. 5/6/08

Posted by Steve Boriss in AP.
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Whenever the AP and its member newspapers meet, the elephant in the room bears an uncanny resemblance to Dr. Frankenstein’s creation. These members created the AP more than a century ago to save money by pooling their reporting resources. Members pay substantial fees and share their own stories with other AP network papers, and in exchange get news from distant places dirt cheap. This worked fine as long as there were just a handful of AP papers in each town and local audiences had no other way to get this news — to readers it still felt like their local papers had valuable, exclusive content well worth the subscription fee. But all that changed once the Internet developed and readers could get the same AP news from a multitude of places, rendering each paper’s national and international content much less valuable. Actually, it’s a lot worse than that. Members had grown so dependent upon the AP that most have been eliminating their out-of-town reporting capabilities while the AP has expanded into a behemoth, now with more than 4,000 employees and 240 worldwide bureaus. The AP is growing, while its members are shrinking.

In other words, the AP monster has turned on its creators and is now taking their money while putting them out of business. Last September it was announced that the AP signed a contract with Google News giving its original wire stories prominence, while reducing traffic and presumably online ad revenues at AP members’ own sites. And now the AP is turning on its creators once again, this time launching a program to make its stories available on iPhones, preempting its members’ necessary efforts to restore their ability to generate and deliver their own, valuable original content. But still, AP members don’t get it. Lincoln Millstein of Hearst Newspapers said AP’s new plan provides “a big benefit for users, and a great opportunity for providers of local news and advertising.” We await a coherent explanation for what exactly that opportunity is for providers who don’t happen to be the AP.

Ohio newspapers try to break away from the AP cartel, only to form another. But the future is competition, not collusion 5/2/08

Posted by Steve Boriss in AP, Competition.
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Can we talk? Almost from the very beginning, the Associated Press (AP) has been a greedy deal among newspapers at the expense of their readers. It started innocently enough as a group of New York newspapers pooling their resources to get news from Europe faster. But soon, it degenerated into an anti-competitive scheme resembling a cartel, with AP member newspapers at times banding together to snuff-out would be competitors by denying them membership. Worse still, it created an unhealthy culture in which newspapers viewed themselves as collaborators, not competitors. It’s not a daily miracle that virtually every mainstream outlet covers essentially the same news items – it’s an AP-created culture in which papers refuse to compete for readers by offering different stories.

The AP formula worked for newspapers prior to the Internet because even though papers nationwide were printing the same stories, local readers could only get this material from their local newspapers. But now that readers can get this news from just about anywhere, local newspapers are now seeking to withhold news they would have shared with the AP (e.g. original local stories) so they still offer news that would otherwise be unavailable to their readers.

Does this mean that newspapers are now poised to compete on the basis of providing original content that cannot be found anywhere else? Unfortunately, some habits are hard to break, as shown by a group of Ohio newspapers that have essentially formed their own AP-like cartel, to deny the AP of stories they will instead share among themselves. The Cleveland Plain Dealer’s reader rep Ted Diadiun defended this new arrangement, writing “we don’t compete for readers with the newspapers in Cincinnati or Columbus, except in the most tangential way, and never did.” That may be true of the past and present, but it may make little sense in the future. If there is, indeed, a market for pan-Ohio news, which in itself is questionable, each of these newspapers ought to be pursuing it at the expense of its fellow Ohio newspapers. The future of news will be about every news outlet fighting for itself to satisfy their audiences. News outlets will no longer be playing on the same team. (H/T: Lost Remote)

Is it sadomasochism? Can anyone out there make sense of today’s relationship between the Associated Press and its member newspapers? 12/4/07

Posted by Steve Boriss in AP.
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The relationship between newspapers and the Associated Press (AP) once made a lot of sense, if not to the public then at least to the newspapers who owned and controlled this not-for-profit. It made sense for everyone when newspapers established the AP 160 years ago as a pooled-reporting operation to get news from Europe faster and cheaper. After that, it made sense for these AP-member newspapers, but not the public, when it degenerated into a cartel with bylaws designed to snuff-out would be competitors, before the U.S. Supreme Court found them guilty of violating the Sherman Anti-Trust Act (1945). Since then, it has made sense for AP-member newspapers, but not the public, to continue to act like a cartel, pooling stories to keep reporting costs artificially low. This has made it cost-prohibitive for newcomers to compete by delivering better, alternative news content. Now you know why we have not seen a single new, financially self-supporting metro daily newspaper in the last 60 years.

But as of recently, the relationship between the AP and its members seems to make no sense, and the papers’ actions have switched from being selfish to seeming stupid, suicidal, or sadomasochistic. First, newspapers started handing over their articles to AP representatives the night before their papers were delivered, allowing audiences to get their stories sooner and free via local TV and radio. Next, members allowed the AP and other members to post their articles on the web, allowing everyone to get their full stories without buying their paper or visiting their site. Next, after making the foolish complaint that Google News was not paying them for words in the brief synopses linking to their articles, members even more foolishly agreed that, instead, Google News could pay the AP a nominal amount, feature the AP’s version of the story, and ignore similar stories at the members’ own sites — a boneheaded move that, no doubt, has cost them a good deal of online traffic. Now, with newspapers shrinking their staffs and suffering a 9% revenue drop through the 3rd quarter of 2007, in part because they offer so little content that cannot be found elsewhere, the members are allowing the AP to use their fees to do more of its own reporting, increase its total staff, and greatly expand its international operations.

So, this relationship seems to have devolved into sadomasochism, with members now paying the AP to inflict pain and potentially fatal business damage on them. Is there anyone out there willing to make the case that this relationship is still a win-win?

Elephant in the Newsroom: The REAL media consolidation problem is the AP network 8/1/07

Posted by Steve Boriss in AP, Consolidation.
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The FCC’s release of 10 new studies on media consolidation is accompanied by outcries from the usual suspects, claiming that corporate buyouts leave viewers with “fewer choices for information.” But, no one ever seems to ask why we have almost no choices of information right now. Why is it that our news has been limited to a single “national conversation?” And why, strangely, does no one ever acknowledge that this might be a problem in a large country with an infinite number of possible stories and angles?

In fact, the mother of all media consolidations — the formation of the Associated Press — is the reason that all of our mainstream outlets run just about the same stories. It began in 1848 as a clever and benign arrangement in which NY newspapers pooled their transportation and telegraph resources to get news from across the Atlantic faster and cheaper. But, it soon degenerated into a collusive, anti-competitive scheme. The AP papers shrewdly signed an agreement giving Western Union exclusive rights to their telegraph business in exchange for higher telegraph fees for all other news providers. Then, AP bylaws were redrafted to give members veto power over admission of would-be competitors in their local circulation areas. In desperation, the fledgling Chicago Sun took the AP all the way to the U.S. Supreme Court, which in 1945 found it to be in violation of the Sherman Anti-Trust Act.

But, bylaws or no bylaws, the damage was done, and we continue to suffer from the AP’s improprieties. Today’s papers are collaborators, not competitors. Through their membership in the AP, they share news with each other, and use precious column inches to reprint the same, single set of national stories — space that could be used to provide more choices of information. In fact, the reporting costs are so low when papers work through the not-for-profit AP that no one can make a profit by launching a paper with alternative information. Now you know why not a single, financially self-sustaining metropolitan daily newspaper has been founded in more than 60 years.

Hey, FCC Commissioner Michael Copps! You really wanna do something about media consolidation? Move your Board seat from the FCC to the FTC, forget about Big Oil, Big Pharmaceutical, and Big Tobacco, and break-up the corporate conspiracy that has sharply limited our choices of information and greatly harmed our democracy — “Big News.”

Old Media personalities who decry “media consolidation” are actually fighting to protect the AP News Cartel (“APEC”) 5/11/07

Posted by Steve Boriss in AP, Cartel, Consolidation, McChesney, Moyers.
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When Old Media dinosaurs like Robert McChesney and Bill Moyers preach to us about the looming catastrophe of media consolidation by large, greedy corporations, it is a classic case of the pot calling the kettle black. What is really happening is the break-up of a large, greedy, Old Media news cartel. In a traditional cartel like oil’s Organization of the Petroleum Exporting Countries (OPEC), a group of producers colludes to set their prices higher than they would otherwise be if they actually competed with each other. Newspapers set-up their own cartel in the 19th century, the Associated Press (AP). It allowed papers to work together for their mutual benefit to pool the high cost of original reporting. It seemed innocent enough, but soon after its formation, AP members began to snuff-out potential competitors by essentially giving themselves the power to deny membership to others within their local markets, preventing them from enjoying these much lower news production costs.

Even though the U.S. Supreme Court found the AP in violation of the Sherman Anti-Trust Act in 1945, and forced them to change their bylaws, not a single, financially self-sustaining metropolitan daily newspaper has been founded in the 60+ years since that decision. The reason is that the AP, now joined by the NY Times and WaPost wire services, still works as an effective cartel against new competition, even without denying membership. Today, what I call the “Associated Press Editorial Cartel” or “APEC” functions as a group of news producers who collude by sharing the same set of news stories and news angles. This pushes their news production costs lower than if they actually competed against each other based on news content. But more importantly, it pushes news production costs far lower than would-be competitors would be able to achieve if they were actually foolish enough to try to compete by creating their own, original news stories and angles. Old Media types often warn us about the evil done by “Big Tobacco,” “Big Pharmaceutical,” and “Big Oil.” But, they never utter a word about the harm that has been done by “Big News,” which has denied us a multitude of voices.

NY Post rewrites biased AP article to fit its own biases. What’s the problem? 4/26/07

Posted by Steve Boriss in AP, Bias, Iraq, NY Post, Talking Points Memo.
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The Talking Points Memo scolds the NY Post for not running an AP story as written. The original AP release, written in a way that puts the Bush administration on the defensive, begins, “A historic veto showdown assured, Democratic leaders agreed Monday on legislation that requires the first U.S. combat troops to be withdrawn from Iraq by Oct. 1 with a goal of a complete pullout six months later. ‘No more will Congress turn a blind eye to the Bush administration’s incompetence and dishonesty,’ Senate Majority Leader Harry Reid said.” The NY Post version, rewritten in a way that puts the Democrats on the defensive begins, “The White House warned yesterday that Senate Democratic leader Harry Reid’s new legislation requiring the first U.S. troops to be withdrawn from Iraq by Oct. 1 is a ‘death sentence’ for millions of freedom-loving Iraqis.” Neither version is “objective,” but true objectivity is not possible, nor will it be a guiding principle in the future of news. And it’s also true that neither version contains inaccurate or misleading information. So, why is it wrong for the NY Post to edit AP stories to avoid alienating its readers? Perhaps other AP clients, with declining circulations, should be asking themselves the same question.

The AP Monster Turns on its Creators 4/10/07

Posted by Steve Boriss in AP, Carroll, Newspapers.
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Meet Kathleen Carroll, Executive Editor of the Associated Press. She is one of the most powerful women in news, and not just for her obvious influence on news stories. She has dracula-like powers to suck the life blood out of her hosts, the metropolitan daily papers that created and still fund the “non-profit” AP. It wasn’t always like this. When newspapers formed the AP, it was first a way to pool costs. Later, it was a way for papers to keep competitors out of their own markets, until the U.S. Supreme Court found them in violation of the Sherman Anti-Trust Act in 1945. Now, this operation takes stories from its newspapers and distributes them across the Internet — leaving these papers with little to no original content or, for that matter, much reason to exist at all.