AP Struggles to Survive Crisis Killing its Members

(MoneyWatch)  Ten days ago, we reported on the first cracks appearing the most famous news cooperative in the U.S., the Associated Press. There's more bad news for A.P. today, but first, let's consider the critical role it plays in news dissemination.

Although AP was built around the newspaper industry, it actually serves all media channels, especially online, by supplying the bulk of the news articles flowing through radio and TV stations, websites, newspapers and magazines. In this era of massive layoffs across the board in media companies, AP has actually become much more vital, in that an ever-higher proportion of the typical news operation's content comes via AP (or from its British competitor Reuters or the French wire service AFP.)

But news contet has never been the primary focus at Reuters (which is now owned by Thomson.) Instead, its main focus was on supplying financial markets with information and trading products, a far more profitable business. Reuters also has long generated the bulk of the overseas video distributed by many U.S. TV stations, inclduing CNN.

It might be argued that the much larger and (once) more powerful newspaper industry in the U.S. constrained the AP from following the multimedia path pioneered by Reuters. Instead, AP's strength has been in text and in photos, both of which are becoming more difficult to effectively monetize.

According to Editor & Publisher, the giant Tribune Company has given AP a two-year notice that it plans to drop the news service. And, news reports today indicate that the Columbus Dispatch is also planning to drop the AP.
These latest blows to AP don't really come as a surprise. For many newspapers, the AP subscription is one of the highest fixed costs they carry on their books. After waves of layoffs, it appears some companies have decided AP is simply a luxury they can no longer afford.