When It Comes To News Agencies, Is “Good Enough” Good Enough?

Philip Stone June 24, 2009 Follow on Twitter

With media entities financially in pain, are news agency subscriptions sacrosanct? The AP has resorted to major rate decreases in the US to stop a cancellation revolution and in Germany DPA lost its second biggest newspaper group client for a far less expensive news source. Which raises the question of whether current news agency business models are running past their due date?

Perhaps the most damning answer to that question comes from Bodo Hombach, the managing director of the WAZ group of newspapers that canceled DPA earlier this year and instead subscribed to the far less expensive Agence France Presse. “We haven't had a single complaint from readers. Our stories are more independent than before."

The DPA response is that the WAZ newspapers are missing out on a lot of stories that only the national news agency provides and when one considers that DPA delivers around 800 stories a day on its main wire, let alone its 12 state services that have about 100 stories daily it is no doubt right. On the other hand no newspaper can possibly use that much material and that’s part of the issue. In these days, less (at less cost) may well be best.

No one in Germany is going to argue that the AFP German language service provides the volume of local news that DPA does -- it’s a David and Goliath comparison and yet in this case David again came out the winner. How come?

Because more and more editors and publishers are adopting the “good enough” rule. It means they are giving up superior services that cost a lot of money for far less expensive news services that are not really even competitive with the superior service but do provide enough information to get the job done.

This writer, when he was the managing director of Reuters Europe, Middle East, and Africa media division, ran into this same situation. A European national news agency was under pressure from its owners (its clients) to make major cost savings so the manager dumped the Reuter news service and replaced it with DPA’s English language international wire. If Reuters had gone anywhere near trying to match the DPA price then all of its other news agency subscribers in Europe would have known about it before the Reuters executive had even set foot in the taxi to take him to the airport to go back home; it was the classic case of losing a client to the rate card.

A few months later Reuters wanted to find out how the national news agency was doing with its low cost solution. The answer, which this writer has never forgotten: “Phil, there is no question that your service is better, much better than what we now have. And I have to be honest with you and tell you our editors miss it. But I also have to tell you that for our needs they agree the service we now have is good enough.”

From that conversation was born the “good enough” theory. And in the WAZ-DPA case while there can be no doubt that the AFP German service pales in comparison to DPA, if AFP provides enough German language material on the day’s biggest stories then that will probably be “good enough”. And if readers are not slighted, if editors do not feel there are stories in sufficient numbers that they have missed, then “good enough” is good enough.

DPA suspects that WAZ newspapers still accesses DPA stories via the Internet and it is running special software to check on that, but that really isn’t going to bring back the lost business. Only if the DPA North Rhine Westphalia service, for instance, has so many good stories each day that AFP doesn’t have will WAZ with its 2.9 million readers really want to return.

And that’s the Catch-22, for WAZ’s departure means an annual subscription loss of some of some €2 million to DPA and that’s money it can ill afford to lose. So rather than being able to expand the type of coverage WAZ would want, if anything it will decline. And that in turn worries other editors and publishers who do rely heavily on DPA. Less money in the DPA coffers means either less coverage or those remaining will have to pay more to keep the news status quo.

But there is a point in this story that most news agency editors shudder to think about although news agency managers do, or at least they should. Does a news agency really need to produce as much material as it does given the costs involved?  Do DPA clients really need 800 text stories on its main service plus another 100 on each state wire, plus some 700 news pictures daily?

News agency editors always seem to believe more is better and with newspaper editorial systems able to receive so much copy and so many pictures every day then why not? The why not, except for the cost side economics, is that most of that information flow is wasted. Give most clients a simple news and pictures report each day – say 100 stories and 30 pictures and most would be very happy.

Of course the argument goes that not every newspaper or broadcaster wants the same 100 stories or the same 30 pictures but then isn’t that the job of the news agency editor – to select the best each day instead of sending everything that comes in right down the pipe? News agency editors need to not only edit their copy for style, spelling and the like, they also need to determine which stories see the light of day. And the old cliché of “let the client” decide is just a cop-out from editing duties.

And if all of that information is not necessary and can be cut back, then there are economic benefits that flow down the line for everyone.

That argument from news agency managers has seldom gotten anywhere within the fiefdom of news agency editors, but the WAZ  shot is a warning to DPA, just as AP had its warnings, that new agencies  and their editors can no longer sit still with old ways of doing things.