Last week the Associated Press announced reduced rates and more content options, effective at the beginning of next year.
The news source is making itself more flexible and affordable in order to stay relevant. The company is cutting $35 million in rates and launching a new membership option, a “limited” version of its “Member Choice Complete” service. And the site is also allowing members to cancel their membership with a year’s notice, half the current limit. The company is trying to make sure it works in this new economy, which means it needs to be affordable, and it needs to profit from its online exploitation.
These reduced, flexible rates come as the organization attacks the revenue model behind the way news is distributed online. Its behemoth adversary, Google (GOOG), believes it drives business, 300 million clicks a month, to newspaper websites. This is a classic clash of old vs. new media. The old is trying to protect its traditional business models, concerned that new technologies are rendering its business model obsolete. Is there a compromise?
For the sake of the future of news organizations, I sure hope so.
The Associated Press, concerned about online news aggregators that gather links and headlines, or even reproduce articles, wants to make sure that portals legally license all its content. In contrast, news aggregators argue that posting a headline or a sentence from an article should be allowed for free, under the “fair use doctrine.”
The AP is now asking for “fair share,” and it’s concern comes back to the newspaper industry’s massive issues. The AP, which is owned by newspapers, including the New York Times (NYT), gathers and distributes news from thousands of print outlets. With newspaper advertising and subscription revenues dwindling, the industry is desperate to monetize the exploitation of its content online.
There’s the distinction between driving traffic and syndicating content.
Google sends one billion clicks a month to newspapers, 400 clicks per second. That’s fine; it’s the copying and pasting articles that’s bad news – No pun intended. The AP is working on ways to tag and track its content to help prevent uncompensated exploitation of articles. Google and Yahoo (YHOO) can sell ads on search results that yield links to articles. The Huffington Post says the site pays the AP for all the content used on its site. While deals with the AP are common, individual newspapers often don’t have licensing agreements with sites like Google and Yahoo for their content to appear on those news pages.
The AP isn’t the only news creator that has a problem with the way their content is being exploited. Last week, at the National Cable Show, News Corp (NWS) CEO Rupert Murdoch attacked Google, “Should we be allowing Google to steal all our copyrights?,” he asked. “Thanks, but no thanks.” But at the same time News Corp needs Google to direct people to its headlines and drive its online business. Some argue that News Corp’s headlines are less valuable in the algorithmically analyzed world of Google. But there’s no question that News Corp needs Google, and not just for driving traffic, but also for tools like Google Maps, which are often featured on newspapers’ websites.
These two types of media organizations need each other, but the newspapers need the websites more. Now let’s see what kind of deal they can strike to keep the content traffic moving.