The 130th annual meeting of the Texas Press Association held last weekend in Austin reflected the state of the industry and the economy in the state. Attendance was down from previous years, as more newspaper publishers and owners ratchet down their expenses to compensate for declining revenue. The opening remarks of most of the program speakers addressed the public perception that the newspaper industry is dying. In their follow-up comments, they all took special care to draw the distinction between large metropolitan and the community newspapers represented in the audience.
I think one of the best explanations I have read for the differing prognosis for the two segments of the newspaper industry appeared in the May issue of the “American Journalism Review.” The article titled “A Costly Mistake” chronicles the repercussions felt by the newspaper industry since the Associated Press started selling its news content to America On-Line (AOL), CompuServe and Lexis-Nexis. The subscription fee Internet providers offered the news content free in order to generate traffic flow to their sites. Throughout the 1990s, millions of AOL subscribers got their daily news fix from its package of wire copy. The conventional wisdom was this was going to be extra revenue for the AP. In 1998, the AP began selling “wire news” to its first open Internet customer, Yahoo.
Now, it is the primary news provider for many of today’s biggest online news giants, including Google.
So what’s wrong with this picture? Newspapers have owned the Associated Press as a nonprofit news cooperative since 1846. The very same newspapers also have newspaper Web sites that compete with the online providers for traffic and ad revenue. So in a very real sense the board’s decision to sell the AP wire to Yahoo, Google and others means that newspapers have been handing their competition access to their chief weapons in the fight for the news audience. There is no news organization that is as extensive a news gathering machine as the Associated Press, with some 3,000 journalists in 243 bureaus around the world. Some of the stories that the AP sends out to its digital customers are stories rewritten from newspapers.
To compound the mistake is what some analysts refer to as the “original sin” — the more or less collective decision to offer free access to news online. Walter E. Hussman, the owner-publisher of the Arkansas Democrat-Gazette, said when you give away the news, it becomes a commodity. When something becomes a commodity, you lose your pricing power. The implications are fairly obvious. Why buy a copy of the New York Times or pay to go to their Web site when the AP’s versions of the same national and international events are available just about everywhere? Indeed, why bother with your local paper, or its Web site, when it contains the same generic AP content available in thousands of other places? The message is sinking in with many newspapers, and the AP is seeing a rash of “intent to cancel” letters coming into their office.
There are a lot of “what if” discussions going on among newspaper people, but the genie is out of the bottle. Digital clients have grown into one of the AP’s largest revenue sources. The large metro newspapers are trying hard to turn their large corporate ships around and focus on local news. They are trying to use their collective influence to get the AP to provide more state and regional news, the kind of content that distinguishes them from the nationally and internationally focused Web sites. The AP still does not sell its state and local wires to digital-only outfits.
It remains to be seen if the metros can make the shift fast enough and grow enough readers to their print products. Will local content, along with state and regional news, be compelling enough to get readers to subscribe to online editions? In community newspapers, we use the AP to help round out the news and sports packages we offer; but its offerings are not the focus of the content. We have to provide the news and information that readers cannot find elsewhere. It is local content that generates the audience our business partners require to grow their business. It is a successful formula that has served local communities for years — the equation right now just needs a little boost from the national economy.
Robert Brincefield is vice president and publisher of the Brownwood Bulletin. His column appears on Sunday. He may be reached by e-mail at bob.brincefield@brownwood