Press Releases

01/31/08

Associated Press board gives final approval to new pricing plan

By SETH SUTEL
AP Business Writer

NEW YORK (AP) -- The board of directors of The Associated Press gave final approval to a new pricing plan Thursday that will overhaul how the news cooperative's services are packaged and sold to its newspaper members.

The changes, which received initial approval from the board in October, will result in about $6 million in savings to AP's newspaper members when they take effect Jan. 1, 2009, the company said in a statement.

Some newspapers had wanted more and quicker savings. In a letter to AP's top executives dated Jan. 2, a group of eight editors at large newspapers called on the AP to further reduce its rates, noting the hardships the newspaper industry is going through.

The letter's authors included Martin Baron, editor of The Boston Globe, which is owned by The New York Times Co.; David Shribman, executive editor of the privately held Pittsburgh Post-Gazette; and Karin Winner, editor of The San Diego Union-Tribune, owned by The Copley Press Inc.

AP CEO Tom Curley and AP Board Chairman Dean Singleton wrote back to the editors saying, "We are painfully aware how difficult these times are for traditional media, especially newspapers."

The letter also noted that the AP "faces digital era challenges as great as any member.

"As a result," the letter said, "the board's guiding principle has been to insist AP attain a sustainable funding model."

The AP said in its statement Thursday that the pricing plan will result in a reduction in fees paid to AP for about 80 percent of papers; fees will remain the same at about 10 percent, and 10 percent will likely see an increase.

The changes are designed to give newspaper members access to a core service of breaking news from every state and country, while allowing them to add on premium services by topic. It will also give newspapers more flexibility in licensing AP news.

Newspapers will become eligible for further reductions in fees by joining a news indexing service designed to make news stories easier to organize and search online. The AP said it estimates participation in that service could save newspapers an additional $7 million.

Newspaper companies have been struggling as an economic slowdown has badly hurt their classified advertising revenues, notably in real estate and employment, and as readers and advertising dollars continue to migrate to the Internet.