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Press
Releases
10/25/2007
Associated Press board approves new
pricing and packaging plan for newspaper members
By SETH SUTEL
AP Business Writer
NEW YORK (AP) -- The board of The Associated Press on Thursday
approved a major overhaul of the way the AP prices and packages
news for its member U.S. newspapers.
Instead of offering news feeds defined largely by the volume
of news delivered -- large, medium or small -- the new plan
is centered on a core service of all national, state and international
breaking news, with options for adding other services or purchasing
stories individually.
Tom Brettingen, the AP's senior vice president for global
newspaper markets, said the plan will offer U.S. newspapers
more flexibility in accessing and using news of local interest
that may originate in other regions.
The changes, which take effect Jan. 1, 2009, were first proposed
at the company's annual meeting in May. The basic assessments
charged to newspapers will continue to be based on circulation.
AP said most of its member newspapers would wind up paying
either lower fees or see no changes. Brettingen estimated
the changes would result in $6 million to $7 million less
annual revenue for the news agency, a shortfall he said should
easily be made up from growth in other areas, including video
and online sales.
"It's an amount we believe we can swallow, and clearly
it would be beneficial to the industry during challenging
times to have a little bit less to pay us," Brettingen
said.
The pricing changes mark the first time the AP has revamped
its fee structure since 1985, when the cooperative began assessing
newspapers based on their circulation instead of the population
in their area.
AP CEO Tom Curley noted in a May speech that some member newspapers
would rather not pay for news they don't use.
Many newspaper publishers are looking for ways to reduce costs
amid a prolonged downturn in advertising. In the past two
weeks, a number of U.S. newspaper companies reported slumping
ad revenues for the third quarter.
AP didn't increase the basic rate paid by members in 2007
and will do the same in 2008.
As of the end of 2006, AP got about 30 percent of its revenue
from U.S. newspapers and about 15 percent from online commercial
sales, which is the fastest-rising segment of the AP's business,
according to company spokesman Paul Colford.
AP is a global news company founded in 1846 and owned by its
member news organizations. Last year, its net income fell
28.5 percent to $13.3 million as revenues rose 3.9 percent
to $679.8 million.
The new plan, which the cooperative is calling "Member
Choice," will affect U.S. newspapers. The AP said that
broadcast and online customers should also benefit from the
changes, although programs for those customers have not yet
been completed.
Besides the core breaking news service, member newspapers
also would be able to add premium services with in-depth news
analyses, business, sports and entertainment articles.
Members also will be able to buy stories on an individual
basis, something that wasn't possible before. Newspaper editors
will be able to view and purchase stories outside of the core
breaking news service using a Web-based interface called AP
Exchange.
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On the Net:
AP: www.ap.org
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