04/18/2005

Prepared Remarks by Tom Curley
President and CEO
The Associated Press
AP Annual Meeting
San Francisco, Calif.
April 18, 2005

“The news business is in transition or evolution … or maybe revolution. The future will tell us the right word, and the future these days comes fast. Whatever comes in the news business, The Associated Press will be part of it, because of what it has been, what it is today, and what it is becoming.”

Those words were delivered by AP’s chairman, Frank Batten, at the annual meeting in 1983.

The dawning threat, two decades ago, was the arrival of cable television and its all-news, all-the-time competition. Frank, of course, knew something about that arena. He had just launched the Weather Channel.

Frank’s speech made a case for a general assessment increase to help modernize AP’s aging infrastructure. The increase was 9.5 percent. Obviously, those were different days.

Today, we know better than to imagine an outsized rate increase in the face of the complex challenges confronting our industry. While the digital revolution has certainly hastened the need to modernize our infrastructure yet again, it also has disrupted our businesses in other fundamental ways that defy the simple math of rate adjustments.

In 2005, there are no easy answers. The audience is shifting to digital, on-demand platforms. Advertising is following the migrating eyeballs, and new distribution networks are requiring us to rethink how our content reaches the consumer.

Yesterday, we were entirely focused on fashioning our content to fit certain containers – the morning or afternoon newspaper, the 6:30 evening newscast, and, most recently, the Web site.

Today, users want content to flow free of those containers to the the desktop, the cellphone and, soon, the set-top box in the living room.

Who is in control? The gadget makers? The search engines? The online and wireless networks that transport our digital content?

Look closer and you’ll see the users themselves are the ones in control, and their demand is pretty clear: They want what they want when they want it. And therein lies our opportunity.

All of us here today in the so-called “mainstream media” have the power -- individually and cooperatively -- to reclaim our relevance to modern audiences and to move news back to the center of the information universe.

At AP, we’re focusing on opportunity and growth, and the cooperative is at the center of our planning.

It’s a world too sophisticated to be left to farms of servers and robots and business models built only on them.

After all, the new freedoms inspired by this electronic world will require all the connected and dedicated journalists we can dispatch.

We would love to announce that we have one “big bang” in store to rebalance AP and the media world as swiftly as Chairman Batten’s infrastructure update of 20 years ago. Realistically, we must look at a series of well executed steps, over the course of the next few years.

Our strategic plan lays out an ambitious goal, as well as the principles and projects that will lead us there. Our goal is the same as the tagline we adopted a year ago -- to be the essential global news network.

To earn and burnish that title, we are embracing three principles:

First and foremost is speed.

We aim to be first to file the news around the world in multiple formats and fast to market with new products and services, also in multiple formats.

Our performance in Iraq and in last fall’s elections set the modern standards for our dedication to this core value, and you will see it reflected every day in our multimedia coverage of world events, and in our refinement and development of products and services for the on-demand, digital age.

Second, to enhance our speed, we seek increased productivity and flexibility across all parts of the company, from news to technology to the business side. Last week we announced we would exit an all-news radio business. Many of the resources will be shifted to a new domestic video unit.

We are determined to retire outdated policies and practices and to reinvent and redeploy resources to gather and deliver the news in ways that meet the demands of our “always-on” audience.

Third, we commit to growth. We must maintain our financial strength to support our journalists and the tools they need to deliver the world’s most authoritative news report across all media types.

To achieve growth at the 6 percent level we realized in 2004, we will rely less on general price increases for core domestic services and focus more attention on new product development and expanding our markets worldwide. We will rely less on repurposing print content for other markets and devote more resources to creating new content packages for those major on-demand platforms.

To take AP there, we have launched several initiatives, which should produce visible results by the next time we meet in Chicago.

As we have developed the next generation AP, which you have heard us refer to as eAP, we have realized that we will need more content and data services. We are moving into new areas of coverage as the mainstream of news grows ever broader and deeper.

In our development of new content, we plan to bolster strengths and fill the gaps. In sports,
where our domestic story and photo reports are predominant, we will add data capabilities to ensure us -- and you -- of an independent, accurate and robust source of sports scores and statistics for all uses, print and interactive.

Our new sports statistics initiative is intended to increase our clout in negotiating data rights and access with the leagues and other authorities in the growing, and increasingly competitive, business of sports.

AP also will introduce a multimedia package for 18- to 34-year-olds beginning in September. Those of you who have reviewed our prototypes have given it good marks. Many of you expressed skepticism about your own ability to develop print or Web-based products that resonate with this audience.

We have concluded that this audience is too important to ignore, especially as they are most likely to access content outside containers. We believe enough of you agree and together we'll figure a way to succeed.

Throughout the year, you should notice steady improvement in the depth and breadth of our financial and entertainment reports. We are shifting staff to upgrade coverage in both areas.

We are even revamping one of the most venerable of our core services -- newspaper stock listings -- by reshaping the print presentation to deliver more analysis and offering state-of-the-art tools for the Web and other interactive platforms.

Meanwhile, on the breaking news front, we continue to roll out regional editing desks to enhance the speed and relevance of our report. Mexico City comes on line later this year to help develop content in both English and Spanish and to move it north and south in this hemisphere.

We know that more won’t be better if we don’t improve how we provide the content. After a century and a half, AP is shedding its telegraph model of content delivery for a database model, the project at the heart of eAP.

With the arrival of the eAP database, you will have easier access to the full spectrum of our text, photos, graphics, audio and video. Members will be empowered to search, select and customize the reports they want to receive from AP. The old “fire-hose” method of delivery will be retired, in favor of custom access to the database.

That means no more fancy footwork and extra charges to move the stories you want from one state to another. It will enable you to get deeper, more specific content that fits your local market needs.

In the first stage -- coming later this year -- you will get a window on AP content. Your news staffs will be able to see and search our content, across media type, across category and across state lines.

The new Web browser view dramatically improves on the one we offer now. Rather than separate, reverse chronological rundowns of text, photos and graphics, you’ll see story-centric displays of multiple media types, all related to the same event.

In a second phase, we’ll integrate the new AP viewer with your newsroom workflow, so that you can easily move content into your production systems for print, broadcast and online.

That will require the development of new formatting and tagging standards with a Web-based interface that we will be sharing with you and your production equipment vendors over the next 18 months. We believe that these changes will translate into measurable production efficiencies in your newsrooms.

For instance, we intend to tag all the important people, places and things in the text, so you can link additional resources to them -- stock prices and charts for public companies, statistics for athletes and profiles of the rich and famous.

As a cooperative, we have the opportunity to set the standards for how this tagging gets done, just as we did for print formatting decades ago, and we look forward to working through it with you.

Along the way, we’ll also explore new business opportunities in the online and mobile markets that members can join.

As part of our historic shift to the database, we will adapt our rates and licensing policies to reflect the needs of our customers and the various uses of our content.

With the database in place, we’ll be able to simplify member pricing to a few broad tiers of entitlement, rather than the current system of pricing every last wire you receive by circulation and territory.

The board has voted to license AP content separately for each platform on which it is used. After a decade, we have decided to end free re-use of content by members and others on the Internet and other platforms.

We plan to couple this online pricing with smaller annual assessment increases. But the need for online licensing is clear. For AP to endure during the digital transition, we must be able to preserve the value and enforce the rights to the use of our intellectual property across the media spectrum.

Of course, we understand that this is an era where every organization -- every newspaper, every broadcaster, every group -- must focus on its own needs and opportunities. As your cooperative, AP will try to chart a course that provides you with superior service and access to our content in ways that open new opportunities.

We think the digital advisory committee announced by Chairman Osborne could help all of us evaluate opportunities at a time of industry transformation. We’ll aim to hold the first meeting of that committee before fall.

As the audience turns to new platforms and adopts new habits, the news must follow, or we risk losing our connection to the readers and the viewers we have all worked so hard and long to engage.

Whether it is the world at war in Iraq or at play in the Olympics, whether you seek the first, authoritative word of a pope’s death or the first reports of a devastating tsunami half a world away, the AP -- your AP -- is there.

We are there to count the votes, tally the scores, deliver the verdicts and capture all the moments, large and small, that change lives, move markets and affect the course of history. As we move forward together through a period of great change, that AP is the one you can count on. As we evolve, our values endure.

As Frank Batten said:

“AP occupies a place without parallel in meeting the news and information needs of our citizens and, indeed, of hundreds of millions all over the world….You and I, all of us, are custodians of a priceless and singular asset. Let us together make the AP stronger and keep it free.”

Thank you.

And now let’s turn to AP’s executive editor, Kathleen Carroll, and a team of AP reporters and editors who will look ahead to the trends most likely to shape the news.