A minority report on the Associated Press

In the wake of Clay Shirky's prediction of "widespread disruption" of syndication it's tempting to pronounce the Associated Press dead.

I've been known to go in that direction myself. But now I want to point out some reasons supporting an alternate view that the AP is positioning itself to ride out the storm. It's not a pleasant ride. The AP employees don't like it. It's not clear what's on the other side of the storm. But in many ways the AP is better off than some other journalism organizations.

The first, and most obvious, is that the AP has shed most of its revenue dependency on its member newspapers. AP's annual report doesn't specify where the revenue comes from, but most estimates say about eight out of 10 dollars in AP's revenue budget come from non-newspaper sources. Those sources include global broadcasting, commercial online customers such as Yahoo, and some you wouldn't at first imagine, such as news on the Nintendo Wii.

This revenue diversification is partially a strategic move and partially just a side effect of decisions made years ago by the newspaper companies that hold seats on the AP's board. Go forth and sell so that we may keep our assessments down, the AP was told. It did, and now it's largely self-supporting.

"Ah, but where will they get the content if the newspapers drop the AP?" you might say.

That view is flawed. The Associated Press isn't an aggregator/distributor of other people's work. Many newspaper editors desperately cling to the notion that AP gets its news from newspapers, but it's a myth. The only place you see a significant member-generated component is the state wires. They're not available to commercial clients. They're also not generating high-readership content; anybody who's done any market research knows that state news is a dead zone. The AP report is heavily dominated by staff-written Washington-based political and New York financial coverage.

This is not new. One of my early newspaper jobs in the 1970s was editing the all-wire front page of a midwestern daily newspaper. The AP was primarily staff-written then, and is primarily staff-written now. It's a creator of original content.

So you have the AP quietly shifting its mission. Once it was a network for the sharing of news among members. Then it became an independent creator of journalism distributed through its members. Now it is a creator of journalism heavily distributed through non-members, and even through its own products. The latter is a tiny part of the picture (does anybody actually use AP's mobile app?) but it's there.

This leaves us with a problem: It's changed its customer set, but it's still marketing its work largely through third parties. Shirky says that business is dead. Is he right?

Shirky didn't actually say "death of." Others did. What Shirky said was "disruption," which isn't the same thing. The new does not replace the old.

The Internet may be everywhere, but it isn't everything. We buy from Amazon.com, but we still shop at Wal-Mart. News breaks on the Internet, but people all over the world still watch broadcast and cable television, listen to radio, and read printed newspapers, magazines and books. There's still a significant market for content that gets sold to and distributed by third parties. In this market the AP has to compete with others, such as Reuters and Bloomberg. But when was it not so? The AP's future may be a difficult one, but it's not going to vanish in 2011.


I completely agree with your point: disruption doesn't replace old with new but does some things better with lower cost. AP might get stronger, not weaker. Sites based solely on AP's material will definitely get weaker. But I would like to argue this one: "News breaks on the Internet, but people all over the world still watch broadcast and cable television, listen to radio, and read printed newspapers, magazines and books." Not making a difference between media channels is dangerous. You can't really compare thousands of web news sites with TV newscasts. If TV was like web, it would broadcast the same program on all channels. Strong generalization, but makes a lot of sense IMHO. That's why TV still thrives when everybody else suffers. TV gets properly disrupted only only after the channel-based structure gets demolished, somewhere in the far, far away future. :D All the best, Pekka