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The Associated Press: “Free Riders” and A Question of Leadership

October 28, 2009

435717230_a36fb990c0A friend of mine forwarded me a link to a post written by Tom Curley, CEO of the Associated Press, and Curley’s attempt to monetize the AP’s online content, and just as importantly, prevent others from monetizing it without his having a cut. I have to ask, “Am I missing something here?

It seems the basic problem he is citing is that:

We content creators have been too slow to react to the exploitation of news content by third parties without input or permission. Random distribution of traffic by aggregators such as search engines directs audiences and revenues away from those who invest in original news reports. And randomness assures the aggregators and their ad networks a stream of revenue based on the aggregation and indexing of published news content.

Wait, but isn’t the AP a news wire service? As in, don’t they sell their news to news media, so other news media can publish it? As in, the AP researches news stories, writes them up, and bundles them for sale to news media, not for their own direct reporting to public audiences? Once their news hits the public, hasn’t it already been paid for?

I could see the AP perhaps being upset by what could be called news scalping, in which they sell their news, and then someone else essentially resells their news, like tickets. But scalping is such a grey area, to begin with. When I sold my Honda a few years back, was Honda upset they didn’t get a cut? You could argue that once you sell something, you’ve sold it, and it is no longer yours to sell. With tickets, it’s angering. With used cars, it’s okay. With news?

So, I did a little looking around, and discovered that this situation really isn’t as simple as Curley is making it sound. In fact, the AP IS drawing money from major aggregators, like NewserThe Huffington PostGoogle News. According to Zachary Seward at NiemanJournalismLab, these companies “are customers of the AP and fully licensed to carry its full-length content. But the AP has said it is reviewing those agreements, no doubt hoping to extract more revenue from some of the most popular news sites on the Internet”.

Huh.

Then I read that the AP is having another problem. An AP memo published by Columbia Journalism Review said that AP studies of how their clients are using their content “show that we still produce a lot of content that few of our clients value.”

From the memo:

Over a four-month period studied for Lake Placid, the AP created an astounding 2.3 million items of text, 800,000 photo items and 16,000 video items. (Note this count is all-inclusive – every write-through, every version, every service.) But when usage was studied, it quickly became clear that only a small fraction of this avalanche is actually winning favor in newspapers, on television or on the Web.

So is the REAL problem that the AP isn’t extracting enough revenue from aggregators, or is it that they are spending the remainder of their resources that isn’t represented in that “small fraction” producing content that just goes out the window? I realize that it is in the interest in the public for the AP to investigate stories that might never make it to the public or be deemed newsworthy. But only a small fraction is being used by news media?

Seems to me like the problem the AP is having has less to do with the money it isn’t making, but the money it is wasting. I don’t have the numbers  on this, so I can’t say which category is costing the AP more. But, I do think it is disingenuous for the AP to behave publicly as if it is a victim of the digitally changing times when it is A. Already making money where it seems to be saying it isn’t, and B. Is looking to be as much a part of its own problems as others that have found a way to perhaps utilize digital technology more effectively than the AP.

I’d also be interested in knowing how the growing trend in news media to outsource their reporting to the AP because of their shrinking newsrooms is benefitting the AP’s bottom line. A lot of that shrinkage has been attributed to a drop in advertising revenues thanks to, well, the digital media revolution that has been going on thanks to Craigslist, blogs, social media, pluralism period. I’m sure that the AP is concerned about its long-term viability in the digital world given that it is facing increased competition in the online news source market. But, I HAVE been noticing empirically that the AP has been making up larger and larger portions of newspapers’ content.

But I do take umbrage to what Curley said in his piece, when he said, “’Free riders’ and pirates are claiming they’re entitled to our property”. I may be reading into things here, but starting the second paragraph with this, and not going any further than one sentence to clarify exactly what this means, feels to me like he’s associating people who gain access to the AP’s content without directly paying the AP is a free rider or a pirate. Especially when he writes a paragraph that links “the exploitation of news content by third parties without input or permission” to “random distribution of traffic by aggregators such as search engines directs audiences and revenues away from those who invest in original news reports”.

I am a firm believer in attribution. And Curley has noted a problem of cutting and pasting without attribution. So, I think he has a legitimate gripe there. I mean, give credit where credit is due, give link love where link love is due. Online, the more you give, the more you get. Pay it forward.

However, as much as I would like to see the professional news industry stay in business, I also think that there is public good to people having MORE access to information in MORE places. That IS a news media outlet’s job, afterall—providing a public good in the form of information. Digital technology has made it so replicating online information costs essentially zero in marginal costs, meaning that the AP isn’t paying money to spread their content to those aggregators and “free riders”, but they ARE gaining in reputation (which is one of the real currencies of the Internet). So just how much are they really losing here? Is this REALLY exploitation of news content by third parties?

Seeing these people as free riders and pirates is to look at them myopically, at best, and focusing the discussion away from the real issue.

Maybe I’m in the minority here, but if I’m running one of the most widely distributed news media outlets, I’m taking this approach. 1. Focus on producing news content that results in the higher demand from my customers, and trim what sounds like a LOT of fat. 2. Realize that digital technology is changing the definition of “free rider” and “pirate”, and embrace the fact that my news content is benefitting more people than it ever has before, particularly those in developing countries who access my content through the Internet and aggregators, and otherwise experience greater information scarcity. 3. Not act like my company is not benefitting from something financially or economically, when in reality it is.

I like the AP, and hope they get through this. They provide an important news service, and we would be worse off without their work. I just think they should reexamine what appears to me to be self-victimization. That falls on their leadership.

Photo 1:

http://www.flickr.com/photos/randomurl/ / CC BY 2.0
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2 comments

  1. Looks like I’m not alone in my thinking: Why Does the AP Chase Phantom Enemies? | BNET Media Blog | BNET http://industry.bnet.com/media/10004537/why-does-the-ap-chase-phantom-enemies/


  2. More good points on these issues: Dissecting The AP & Murdoch Speeches Against Those Internet News Thieves http://searchengineland.com/dissecting-the-ap-murdoch-speeches-against-those-internet-news-thieves-27507.

    It would be interesting to quantify the revenue gain of the AP and its customers from search traffic, people forwarding links on social media, and clicks from aggregators, and compare it to this supposed loss they are experiencing. Or, is it that the AP hasn’t caught up with the fact that the new online business model is to not generate revenue on every last drop of your online content, but the premium stuff? And that giving some of your content away for “free” is a “loss leader” for gaining reputation and later economic gain. There are simply more competitors now. Time to evolve or die. It seems like the AP just doesn’t understand how the Internet works. Especially if this new solution of theirs is going to result in no follow links on Google, and backfire in what they are trying to accomplish.



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