William Dean Singleton, CEO of Denver-based publisher MediaNews Group and chairman of the AP board, shared a few thoughts with me in an interview about newspapers' woes that ran on paidContent this week: the economy (the downturn, not the internet, is where the pain stems from), convergent ad sales teams (print and online should not be sold separately) and the reason some AP members are up in arms over the coming changes in its price structure (faced with cutting more staff or cutting the AP, desperate editors opt for the latter). I asked a number of industry observers and editors who decided to cancel their membership for reaction to Singleton's view of the wire service and why some are considering turning their backs on the AP.
-- The backstory: Last spring, after years of debate, the AP began offering members details of its forthcoming U.S. pricing model. The AP claimed that members would get back $21 million under the Member Choice plan when it goes into effect on Jan 1, 2009. In addition to an estimated $13.6 million in assessment reductions, members would be eligible for an additional $7.5 million in rate reductions through the news gathering organ's Content Enrichment program. But the additional fees that would come with access to some stories on an a la carte basis have left a small, but vocal portion of the AP's 1,500 members confused and outraged. One reason for the confusion, according to one newspaper editor who didn't want to be identified, is that the price structure is based on circulation and level of serviceso the benefits are not uniform and difficult to compare: "So if your circulation has held relatively steady, and if you've been efficient in managing what you buy from AP then you may very well face a price increase. There aren't many of us that meet those criteria, unfortunately, but there are a few..." Lots more after the jump.
-- Expect more cancellations: This summer, six papersMinneapolis' The Star Tribune, Idaho's The Post Register, The Bakersfield Californian; and three Washington State dailies, The Yakima Herald-Republic, Wenatchee World and the Spokesman-Reviewgave the AP the required two years' notice that they were canceling their membership. (Spokesman-Review issued a challenge to that rule, seeking to be let go earlier). While these papers are barely a fraction of the 1,500 AP members, Outsell's Ken Doctor told me he believes those numbers will grow.
-- All about cost: Essentially agreeing with Singleton's point about the difficult choices editors bear with regard to getting costs in line, Doctor told me: "When newspaper companies, like the Star Tribune today, are defaulting on debt payments, the pressures are growing intense and the choices more difficult. At around 5 percent of newsroom budgets, it's a big number, an often-tempting one to cut. Of course, all newspapers can do the arithmetic and see how many reporting positionslocal reporting positionsthey may be able to keep, if they cut AP. That's the crux of much of the value argument." Alan Mutter, also tells me that Singleton is right about the centrality of cost. "[Newspapers] would rather chisel the AP out of $50k so they can keep an extra reporter. So would I I think Dean is right that you can fill a lot of space with AP stories for cheaper than hiring guys lie you and me. On the other hand, the Newark Star Ledger a few weeks ago published an entire edition without AP copy. You might ask Jim WiIllse at the Star-Ledger [which put out a single edition this month without using any AP items] whether that is something he could sustain week in and week out."
-- The entire world in 40 pages: AP's comprehensive coveragenews to sports to financial to worldwas once an indispensable service, Doctor added. Rufus Woods, editor and publisher of The Wenatchee World, one of the aforementioned papers dropping its AP membership, told me that one of the reasons they gave notice was due to "the economics of this industry, I don't know how much national and international news I'll be able to use in our newspaper next month, let alone two years from now. Our competitive advantage isn't AP news, it's connecting with the local community. To stay relevant to our market, I'll go a long ways in defending how much we invest in our local report. It would be cheaper to fill the paper with AP, but that short-term strategy would be a long-term disaster for our community and for the newspaper. They can get AP news from Yahoo (NSDQ: YHOO). Why would they need us for printing what is essentially old news?"
-- Not everyone gets a price cut: When I asked her about the rate reduction that Singleton's MediaNews got from the AP, which he cited as evidence of the organization's generosity to its members, Sarah Jenkins, the Yakima Herald-Republic's editor/VP, said that AP's magnanimity is not universal or balanced. "While I'm happy for Dean Singleton that the board he chairs worked out a structure that gave him a 10 percent price cut, my newspaper's assessment did not go down. In fact, it went up by between 3 and 9.6 percent, depending on which of the two level of service I ultimately decide to take in 2009 and whether I sign on for every possible discount. That $21 million Mr. Singleton mentions? I was complaining before and I'm still complaining. That money is going to his and many other newspapers, but definitely not to mine. I do not, however, blame the AP for the 'woes' we are all struggling with today. AP is in fact struggling right along with all the rest of us, and trying to find solutions to serve its 'customers' while generating the revenue it needs to survive and thrive (boy, does THAT sound familiar!). I appreciate the challenge AP's faces. But I do wonder if AP recognizes the challenge I face. As I said in my letter in August starting the termination clock: 'It is unfathomable to me that I would work at the newspaper that is not a member of The Associated Press. But it is equally unfathomable that AP would hit us with an assessment that ranges from 3 to 9 percent more in what are perhaps the most challenging times our industry has ever faced.'"
By David Kaplan