THINK!: Wires, wires, wires: too expensive? Paid digital content?

I've been blogging a fair bit about the relative strengths and weaknesses of the wires versus the original news content generated by the NYT/IHT. There is a lot of MSM resentment to their fellow MSM providers - insults over quality and maturity of their writers and now of course, to add to this, we have the sin that they - guess what - CHARGE FOR DIGITAL CONTENT.

That is of course a pretty revolutionary concept for newspapers and one they find impossible to do with the exception of a handful - South China Morning Post, WSJ, the Japanese business newspaper whose name completely escapes me (this is a blog, sorrry) for example.

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Yet paid content is out there in big numbers: the wires for one, LexisNexis for newspapers and companies, investment banks - whoops, scratch that last term - big financial institutions, law firms etc; your Mum's voice over your mobile phone (yes, that's digital content which you pay for, sorry) and CNN on your cable package. In some cases it's very clear you're paying for content, in others, like your cable package, you probably have a sense its free, but it's not.

So seeing newspapers in a tizz about paying for something they can't monetize themselves is kind of ironic and mildly amusing.

But I'd like to tip my hat to Star Tribune Editor Nancy Barnes, whose remarks are in bold below, and seems to be one of very few newspaper people who kind of get this paid content thing.

Newspapers Weigh Alternatives to AP: But Do They Add Up?By Joe StruppPublished: October 11, 2008 10:21 AM ET
NEW YORK Since the Associated Press announced its controversial rate change last year, many newspapers have started considering other content options. And things are not likely to calm down any time soon.

A handful of dailies — including several who admit their AP rates actually fell — have given notice to drop the service, editors in several states are forging content-sharing alliances, and Politico and PA SportsTicker are quickly positioning themselves to help replace the 160-year-old news cooperative in daily news pages.

But is the latest dispute over AP rates and services a real sign that its relationship with newspapers will be forever changed? Can a mid-sized or major daily really exist without the news cooperative? Or is this just a bluff?

"AP is going to lose newspapers, it is a question of how many," says Editor Dean Miller of the Post Register in Idaho Falls, which several months ago gave its required two years' notice that it plans to drop the news service. "My guess is most of their losses will be in medium and small markets." Since the beginning of the year, when the backlash began against AP's rate change, more than a half-dozen dailies have given notice, including The Bakersfield Californian, the Star Tribune of Minneapolis, and Washington's Yakima Herald-Republic and The Wenatchee World.

"I think the AP regional report has fallen off in quantity, and in some ways, quality," claims Paul Emerson, managing editor at the Lewiston (Idaho) Tribune, which gave notice to AP in September — even though its rates would drop about 17% under the new system. "It is mostly a concern about content." At least one paper, the Spokesman-Review of Spokane, Wash., is challenging AP's two-year-notice requirement and plans to stop using and paying for the wire service by the end of the year. "The legal point here is that we are not canceling a contract, we are declining to sign a new contract," says Editor Steve Smith, who admits a $30,000 expected savings in 2009, but says the remaining $375,000 AP bill is too high.

"More editors are feeling disenfranchised and disregarded by AP."

AP officials declined to comment for this story. But AP Executive Editor Kathleen Carroll, addressing the rate issue during the Associated Press Managing Editors conference in Las Vegas last month, told a group of newspaper editors there, "we certainly hope that the basic fundamentals of the economy and the marketplace will firm up enough so that the pressure is off some of the people who own the AP."

But even with promised AP cuts, editors have been dissatisfied, saying they cannot afford it. Others have claimed the news content is not what they need, particularly with regard to regional and state coverage. "We are exploring our options to see what our outs are," says Ben Marrison, editor of The Columbus (Ohio) Dispatch and one of eight Ohio editors who wrote jointly to AP in late 2007 to complain.

"All of our department heads are exploring what it would mean if we had AP or did not have AP."

The dispute dates back more than a year to mid-2007, when AP announced the rate restructuring (and some new services), which will not even take effect until 2009. When the new approach 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 AP's annual meeting in April 2008.

Aside from price, there is growing criticism that AP offers content to newspaper competitors at television and radio stations that directly compete online. Star Tribune Editor Nancy Barnes says that is the key reason she gave notice to dump AP: "We want more control of our content and how it is distributed. It is very difficult for us to do that under the current AP contract."

At least one major daily, The Star-Ledger of Newark, N.J., tested that theory, publishing an entire newspaper on Sept. 10 without AP, using a combination of local staff, non-AP news services, and PA SportsTicker, a growing sports outlet that has already signed on with New York's Daily News to provide sports coverage. "They are in an evaluation period to evaluate all of our content," Jay Imus, PA SportsTicker's director of sales, says of the Star-Ledger. Editor Jim Willse and Publisher George Arwady did not respond to requests for comment.

Imus says that at least five other U.S. dailies are reviewing PA SportsTicker and have indicated interest in signing up. "I think we will be successful in serving hundreds of clients because there are many willing to give it a try," he says. "They are fed up with how intolerable AP has been.

"Another recent newspaper option is Politico, the political Web site nearing its second anniversary. It recently launched a content-sharing arrangement with numerous newspapers in which Politico provides content in exchange for the right to sell ads that are placed with that content. Politico and the paper split the ad revenues.

"There is no doubt that the trend of papers pulling back on Washington coverage is growing, and it will put more of the burden on places like Politico because people want coverage," says Jim VandeHei, Politico's executive editor. "Washington coverage is still absolutely necessary." Newspapers that have signed on include The Atlanta Journal-Constitution, The Philadelphia Inquirer, The Denver Post, and The Plain Dealer in Cleveland.

If enough papers seek to drop AP altogether, Politico could serve as an even more viable alternative, at least in part. VandeHei says, "We think we have a pretty distinctive voice."

Editors say using Politico copy with that of traditional news services such as McClatchy-Tribune, Hearst, or The New York Times News Service could fill the AP void. "I would be interested in cobbling something together," says Rex Rhoades, executive editor of the Sun Journal in Lewiston, Maine. Rhoades says even with what he terms a "small decrease" under the new AP rate structure next year, his annual cost will be about $157,000 for AP, while McClatchy-Tribune charges him $10,000 per year.

There's also the approach of newspapers sharing content among themselves. Statewide sharing has already increased significantly between some papers in Idaho, Washington, Ohio, and Florida. The Ohio group recently decided to co-sponsor campaign polls and publish the results on the same day. Rhoades of the Sun Journal also says he could see the day when newspapers nationwide share content.

Adds Miller in Idaho Falls: "Remember, AP was created by newspapers."
Joe Strupp (letters@editorandpublisher.com) is a senior editor at E&P.