Sunday, 26 October 2008

AP Backs Further Rate Deductions -- To Review Membership Structure (E&P)

By E&P Staff
Published: October 23, 2008 5:30 PM ET
NEW YORK For months, several top newspapers and chains have voice concerns about Associated Press rates and services, so going so far as giving two-year notice that may pull out of the news co-operative altogether. AP has continued a dialogue with these papers, and late this afternoon, with the U.S. economy sinking, it announced that it "will reduce U.S. newspaper member assessments by another $9 million next year and immediately begin a re-examination of the AP membership structure."

Staci D. Kramer of quickly interviewed two top AP executives. AP Chief Revenue Officer Tom Brettingen says the newspaper protests did not "per se" lead to the changes, adding, "Putting in a cancellation notice to give the paper a chance to leave has always been a way to get our attention." The illuminating report with plenty of quotes is at:
The rest of AP's press release follows.

"By the middle of 2009, AP will complete a review of its pricing and governance structure, re-examining all current policies and rules, such as the two-year notice now required for leaving the news cooperative, and considering other potential changes, including the creation of different classes of membership and services.

In the meantime, the AP Board of Directors voted at its quarterly meeting in New York on Thursday to provide all member newspapers complete access to all AP text content, at no extra cost. In addition, it voted to approve a moratorium on the rate increases that a minority of newspapers were expected to see in 2009 under the current AP pricing structure.

AP estimates these steps will save newspapers another $9 million, on top of the nearly $21 million in savings previously announced in rate assessment reductions. In addition, AP will study the potential for rate adjustments for AP Broadcast members as well."

“Our industry is in the midst of an unprecedented confluence of fast-moving and extraordinary events. Challenges to newspapers and to the economy as a whole keep changing the equation for AP and its members,” said William Dean Singleton, chairman of the AP Board of Directors and vice chairman and CEO of MediaNews Group, Inc. “It is time to consider fundamental change to address members’ rapidly changing needs and to assure that AP remains the world’s leading news organization.”

“We fully understand the pain and the challenges of our members, and we have worked to address these concerns,” said Tom Curley, president and CEO of AP. “For two years, we held rates flat, with no increases. This year we rolled out plans to reduce assessments by up to 10 percent, while providing a far greater range of content. Because of the downturn in the global economy, we are at a point where we must now examine more than just what content costs – but also how AP deals with all of its members and customers.”

This year, AP has been rolling out to members a new pricing and services packaging plan, called Member Choice. Under Member Choice, newspapers were eligible to receive nearly $14 million in assessment reductions. In addition, they would get up to another 5 percent – up to total of $7.5 million - in reductions by enlisting in the AP’s Content Enrichment program. About 10 percent of AP newspaper members saw an increase in rates under this plan, although most of them were part of groups getting overall rate reductions. Those increases will now be put on hold until AP completes the review of its structure.

Two levels of service were available under Member Choice: AP Complete and a core service, AP Breaking News. All members will now receive AP Complete, with full access to all of AP’s English language text content, including analysis and enterprise.AP will immediately launch the study of the cooperative structure and of service options, with plans to report back to the Board of Directors by AP’s annual meeting in April of 2009 with suggestions on how it might be reorganized. The AP Board of Directors oversees and approves all changes regarding structure, pricing and governance of the cooperative.



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