Wednesday, 22 October 2008

More on AP, newsroom cuts and outsourcing

Is the current economic crisis a game-changer for the media landscape? (I thought I'd just try and throw in that much over used media term to see how it reads: ghastly. I think I might start playing 'game-changer' bingo.)

With some newspapers struggling to meet their commercial paper obligations, certainly in 2009, and certainly when 2009 ad forecasts are revealed, some may go under. To prevent this, all issues are on the table, including the heavy usage of wire services such as AP.

I've blogged extensively on wires, and personally have my own thoughts as to what their future is and how in-house resources could and should be better allocated.

Here's more on the AP story. (Previous posts from E&P, then typically MSM behind the story, in a NYT piece that managed to catch up, but not even mention E.W. Scripps!), then more from E&P today.

Are we reaching a tipping point on the viability of many American newspapers, the viability of AP being the symptomatic tip of exactly that point but not the point itself (if I may be allowed to mix my metaphors)?

The more worrying picture for all these newspapers who attempt to devalue paid content from AP is that they devalue their own paid content in so doing. Why should consumer readers pay for content if newspapers won't. Equally, if the AP won't hold the line, or starts a panicky pricing slash in a short-term recession, they may live to regret it, if they live that is.

I'll come back to price cutting in a recession in a minute, but broadly speaking, in media, once you cut prices, it's a long slog to get those revenue figures back-up.

Time for steady hands and steadier nerves.

Will Scripps Follow Tribune In Dropping AP?

By Joe Strupp

Published: October 20, 2008 12:50 PM ET
NEW YORK Just days after Tribune Co. revealed it had given its two-year notice to possibly drop the Associated Press following a recent new rate structure, another major newspaper chain indicated it is considering the same move and is negotiating with AP over rates.

E.W. Scripps, which owns 17 daily papers including the Rocky Mountain News in Denver and The Commercial Appeal in Memphis, Tenn., declined to say if it already had or had not given notice to AP.

But in an e-mail to E&P, Tim King, Scripps vice president for corporate communications and investor relations, stated: "At this point, all I'd be comfortable saying is that we are a member in good standing of the AP, but we have been engaged in discussions concerning pricing so the future is uncertain."

Rocky Mountain News Editor and Publisher John Temple declined to comment on the situation when asked if notice had been given or if the chain would drop its AP membership. But he said he did believe his paper could operate without AP content.“I think we are very close to being able to do so,” Temple told E&P. “I think there are different papers that could put out a paper without AP in different ways. I believe you can do it and satisfy the needs of your readers.”

AP Spokesman Paul Colford declined to comment on Scripps' situation. The news cooperative just recently received the required two-year notice from Tribune, which owns nine daily papers, that could result in that chain dropping AP in 2010.

Several editors at a handful of Scripps papers declined to talk about the AP on the record, although several said changes could be in the offing. Don Kausler, editor of the Anderson (S.C.) Independent-Mail, said he did not know exactly when or if notice had been given, but said papers are ready to do without AP if needed.“It’s much like what Tribune is doing, leaving options open,” Kausler said. “When AP requires two-year’s notice, we see no harm in exercising that option. That doesn’t mean that in two years we won’t be running AP stories, but by giving notice, that can happen.”

Kausler said for a small paper like his, which often runs no more than one page a day of national and international news, AP can be expensive.

“Sports is probably the area where papers are more dependent on it,” he adds. “But in the next two years, you will see more alternatives.”

Shane Fitzgerald, editor and vice president of Scripps' Corpus Christi (Tex.) Caller-Times, agrees: "We will just wait and see what happens. We have other wire services, too. We use AP and others."The recent decisions to drop AP service follow the planned AP rate structure change, which was announced in 2007 and takes effect in 2009. The rate change initially prompted complaints from numerous newspapers, including two groups of editors who wrote angry letters to AP to complain in late 2007 and early 2008.Under current AP policy, each newspaper buys a package of general news created by AP based on that paper's location and circulation. The package usually includes breaking news, sports, business, and other national, international, and regional news relevant to the client's market, including its state AP wire. ((Under the new structure, AP member newspapers will receive all breaking news worldwide (including items from other state wires), as well as breaking sports, business, and entertainment stories. In addition, a package of premium content — made up of five types of non-breaking stories including sports, entertainment, business, lifestyle and analysis — will be available at an additional cost. ((When the new structure was announced in 2007, AP promised a combined savings of $5.6 million across newspaper member budgets, which increased to $14 million —and, finally, $21 million just days before the April annual AP meeting. AP also recently instituted a hiring freeze.

In recent months, other papers have given the required two-year's notice to drop AP. Those include: The Star Tribune of Minneapolis, The Bakersfield Californian, The Post Register of Idaho Falls, and The Yakima Herald-Republic and Wenatchee World, both of Washington.

The Spokesman-Review of Spokane, Wash., is trying to cut ties without a two-year notice, planning to discontinue AP content at the end of 2008. At least one newspaper, The Star-Ledger of Newark, N.J., tested the approach by publishing an entire newspaper for one day last month without AP content. So far, that paper has not given notice to cut the service.

Joe Strupp ( is a senior editor at E&P.

Meanwhile, over at AP, in the middle of consumer rebellion, the Chairman of the Board of AP thinks it's a good idea to announce that he personally thinks it's a good idea to outsource editorial offerings. Sex on the beach in the UAE, here we go. The AP CEO must be thrilled at his Chairman's fantastic sense of timing.

Personally, until I know a lot more about what's on offer in Bangalore et al., I'm with Bernard Lunzer, president of The Newspaper Guild-CWA. "It may in the short run save costs. In the long run, what does it do to the quality of the product?"

Production and other back office outsourcing to Bangalore is one thing, editorial content, quite another.

Monday October 20, 7:24 pm ET By Matt Sedensky, Associated Press Writer
MediaNews CEO says consolidation, outsourcing could help newspapers survive
AVENTURA, Fla. (AP) -- Consolidating and outsourcing news operations -- even overseas -- could help newspapers survive as their revenues continue to shrink, the head of a major U.S. newspaper company said Monday.
MediaNews Group Inc. CEO Dean Singleton, who also serves as chairman of the board of The Associated Press, told the Southern Newspaper Publishers Association that his company was exploring outsourcing in nearly every aspect of their operations.
"In today's world, whether your desk is down the hall or around the world, from a computer standpoint, it doesn't matter," Singleton said after his speech.
MediaNews publishes The Denver Post, The Detroit News and 52 other daily newspapers and is well known for cost-cutting efforts, including combining many operations of its papers near San Francisco.
Singleton said sending copyediting and design jobs overseas may even be called for.
"One thing we're exploring is having one news desk for all of our newspapers in MediaNews ... maybe even offshore," he said during the speech.
Other publishers also have consolidated newsroom functions this year. Two Florida papers owned by The New York Times Co. said in August they were merging news and copy desk functions, design, layout and pagination. The McClatchy Co. papers in Raleigh and Charlotte, N.C., are sharing sports and political reporting staff.
But few have sent newsroom functions overseas, limiting off-shoring mostly to ad production and other non-editorial functions, said Ken Doctor, a media analyst with Outsell Inc.
Notable exceptions are Thomson Reuters, which has been using journalists in Bangalore, India, to handle some basic news such as corporate earnings reports, and a Web site called, which has five regular contributors overseas who write about Pasadena, Calif., using webcasts of council meetings and information provided by citizen volunteers.
"We used to have on-the-ground reporters, but the expense was prohibitive," said James Macpherson, editor and publisher of the site. "Regretfully, we had to lay them all off."
Macpherson said he saw no reason a larger publication couldn't adopt similar techniques to save costs.
"You might miss the nuance of a sneer on a councilman's face but you know how he voted and what he said," he said. "That's factual and can be reported on from anywhere."
In a statement, Thomson Reuters spokesman Joe Christinat said that "by reporting some of the more commoditized news from Bangalore, our reporters are freed up to add greater value to the file with more insight, analysis, interviews, exclusives and market-moving, in-depth stories."
Despite this year's dismal drumbeat of layoffs and revenue drops, Singleton said newspapers still have incredible reach in the country, calling them cornerstones of democracy. But he said they must change in order to survive.
"Fond memories of dead newspapers will do nothing for our communities," he said.
Singleton praised electronic versions of newspapers because they eliminate printing and delivery expenses. He also said newspapers could heal their bottom lines by building up their ad sales forces and producing more niche publications like wedding magazines to attract more advertising.
Singleton said no decision has been made to outsource editorial functions overseas at any MediaNews publications, though it was recommended by consultants. He said publishers were trying to consolidate editing and design domestically, whether in one place or several, and see if they could match the savings they would see by going overseas.
Editors and reporters have intensely questioned newsroom outsourcing. Long-distance editors might miss locally relevant nuances or fail to fill in context based on a knowledge of the region, said Bernard Lunzer, president of The Newspaper Guild-CWA.
"It may in the short run save costs. In the long run, what does it do to the quality of the product?" he said.
But Singleton said Monday that local editors would always maintain final control and that no page would go to press without their approval.
Singleton talked about outsourcing delivery of newspapers, relying more intensely on syndicates for non-local news, and moving circulation call centers offshore.
He mentioned outsourcing printing to competitors and centralizing ad production and said that may be as cheap as going overseas. But he said most of the preproduction work for MediaNews' papers in California is being done in India, a move he said cut costs by 65 percent.
"If you need to offshore it, offshore it," he said.
AP Business Writer Anick Jesdanun contributed to this report from New York.


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