AP At The Crossroads: Newspapers Feel 'Betrayed' By Online Focus

This story was written by David Kaplan.
The Associated Press began some diplomatic work this week, as it started presenting details of its new pricing model to its U.S. newspaper members. The AP claims that the new structure, which has been fought over for years, will return $21 million to its members next year. Specifically, under the Member Choice plan, as it's called, the AP says newspapers can get an estimated $13.6 million in assessment reductions in 2009. Secondly, they'll be eligible for an additional $7.5 million in rate reductions through the news gathering organ's Content Enrichment program. Release

While the AP has tried to argue the benefits of the plan, which while offering greater access to the wire service's breaking news, also includes additional fees for some stories on a la carte basis. But that's part of what's been stoking its members' ire. Notes of bitterness have been creeping into relationship between the Associated Press and its newspaper members for the past few years. The nature of the relationship has changed since the 1980s, when newspapers made up 50 percent of the AP's revenue, a WSJ piece notes. As the AP has turned its focus online, along with advertisers and readers, newspapers now comprise 27 percent of the organization's revenuesalthough they are still the single largest group of AP customers. Nevertheless, as Dean Singleton, chairman of the AP's board and CEO of MediaNews Group, informed attendees at the organization's recent annual meeting, by next year, less than 25 percent of the organization's revenues would come from member papers.

Having concluded a drawn-out battle between the AP and member papers over next year's change in fee structure, a handful of newspapers are expressing betrayal at the AP's increased interest in cultivating Yahoo (NSDQ: YHOO) and Google (NSDQ: GOOG)for an entity that was started 162 years ago by a band of New York newspaperssome members are acting like they've suddenly been disowned by the family patriarch.

To be sure, its newspaper members aren't completely averse to the AP's digital moves; most appear to approve of the AP helping them transfer their content to mobile phones. But in some cases, the newspapers' own ambivalence about the web comes into stark relief when confronted with the ways the AP mixes its traditional practices with its online activity.

Ben Marrison, editor of the Columbus Dispatch, tells WSJ how the AP turned down a request for a reporter to supplement coverage of a recent trial. When the Dispatch then sent one of its reporters to cover the trial, the AP referenced the paper's online post, re-wrote it and placed it on the state wire. Marrison: "What has happened is we've become the wire service for the wire service." While the AP deciding not to send one of its reporters out to cover something that it happens to picks up later with a rewrite is not unusual or unethical; but the incident does show how even the AP's accepted behavior can fuel members' growing resentment.

By David Kaplan