More hassle for AP ahead: CNN starting to pitch its own wire service to newspapers

It look’s like there is more stormy weather ahead for AP. CNN  is starting to pitch it’S own wire service to potential newspaper customers.

A quote from a letter sent last week from Joe Middelburg, CNN Newsource Sales’ vice president of sales & affiliate relations:

“Like most major news organizations, CNN has its own internal wire service to provide original reporting on world news. With a worldwide staff of 3,800 people, 22 international bureaus, soon to be 15 domestic bureaus (including Seattle), 900 North American TV broadcast affiliates, a Web site, and a radio network, we are able to maintain a strong flow of up-to-the-minute stories. We now believe we have the base to offer this service to other news organizations.”

Definitely “interesting” times ahead for the AP.

In Germany there are still  (or is it already?) a number of wire services around (with dpa my employer being the predominant one) But we also see that more and more newspaper publishers are going to think about syndicating news at least among their different outlets.

Looks like quite dramatic times at AP reports extensively on a quite dramatic turnaround in AP’s plans how to charge it’s content to its membersin a series of posts that relate to a  press release from AP titled “AP Board approves further rate reductions; AP to undertake review of membership structure“:

Some quotes from the press release and the posts (emphasis mine):

Press release:

“The Associated Press will reduce U.S. newspaper member assessments by another $9 million next year and immediately begin a re-examination of the AP membership structure.

By the middle of 2009, AP will complete a review of its pricing and governance structure, re-examining all current policies and rules, such as the two-year notice now required for leaving the news cooperative, and considering other potential changes, including the creation of different classes of membership and services.

Interview post:

“I wrote earlier that AP is constrained by its need to deal with members equally. Brettingen: “For a long time, it was a strength. Maybe in difficult times, it’s not a strength. There are no better deals.” One solution being raised is the possibility of creating more member classes, allowing for greater differentiation. Each class would still need to be treated alike but more classes, more options. Cross hears two major threads: members who don’t want to have to make choices and members who want a minimal amount at a lower rate. But, she says, “Keep in mind the philosophy: [Members] all share equally in the costs of the reporting regardless of how much you use.” One of the questions that will have to be considered in the review: Does AP still function like a cooperative?

Brettingen (AP’s chief revenue officer): “We have a lot to make up. We’ve been working on the revenue side; this undoubtedly is going to require some work on the cost side. For a company where the costs are primarily its people, it’s going to mean having to look at some positions.

So it looks like the last weeks where quite some turmoil at the AP.

IMHO AP does the right thing by coupling a quick relieve to its members with a fundamental re-examination that offers the chance to re-structure its relations with its members. AFAIK AP already has a tiered rate plan in which the non-members (essentially the online only customers like Google, Yahoo etc.) pay a significantly higher fee than it’s members.

Hopefully none of my friends at AP will be affected by the expected staff cuts. Given that they all work in areas that AP considers essential for it’s future i think a notice to any of them is highly unlikely.