CNN The Newspaper News Agency? Come On, Let’s Get Real!

Philip M. Stone December 3, 2008

So much fuss has been made of the CNN all expenses paid meeting in Atlanta ending today in which the cable news network is trying to entice newspaper editors that it has the right goods to replace the AP at far lower price. A reminder to newspaper editors – you get what you pay for!

If CNN feels it can be such a great competitor to the AP then how come on almost every breaking story it quotes the AP as its source for breaking news? In fact it also quotes Reuters quite often but since it no longer subscribes to the Reuters service any more – investing that money in gathering its own news – the cable network obviously has anxious eyes watching the reuters.com web site and they source off that that.

For the Mumbai tragedy last week when CNN actually by luck had a full crew already in the city who were they continually quoting for casualty updates? The AP of course.

CNN may well believe that its internal news wire is second to none but how will CNN do in the real world when it has only itself to rely on? Watch CNNI a whole lot as this writer does and it’s obvious without the news agencies CNN would not have its breaking news updates as fast as it does.

And for the AP that is playing this whole thing rather cool – probably because it, too, understands fully well CNN’s limitations – it really should start playing hardball with the cable news network. For instance, CNN apparently has canceled the AP text services for cnn.com but CNN is keeping AP for the television networks. AP should cancel that contract.

An old news agency rule – and this writer was in the news agency business for some 30 years in senior executive positions – is that you don’t sell your services to your competition! Bloomberg doesn’t sell to Reuters (indeed there was a federal investigation a few years back when the feds thought Reuters had surreptitious access to Bloomberg) and AP shouldn’t be selling to CNN since it has announced it is an active competitor.

Who is going to monitor whatever Chinese Wall CNN promises to set up that keeps AP material off that internal CNN newswire? Who is going to make sure the AP material isn’t rewritten so it can go on that wire? That kind of arrangement just doesn’t work. If CNN is going to compete with the AP then AP should withdraw its services from CNN, and make CNN resort at least to doing what it does to get  Reuters news – lift it off the Web. 

Having said all of that, one can’t help but admire CNN for its audacity in trying to corrupt newspapers away from the AP, and the CNN editorial goal of owning its own material so it can sell what it likes to whom it likes when it likes is absolutely on the right track, but the network certainly isn’t there yet as judged by how much it uses news agencies for CNNI.

Looking at the agenda for the meeting that ends Wednesday with a studio tour it seems to be CNN’s attempt to introduce itself to the newspaper world, but it seems very light on what CNN can actually do for newspapers. No doubt once the participants leave Atlanta we’ll have a better feel for what is going on. CNN says it won’t have any comments until after the meeting ends.

AP issued a note Tuesday in which it said, “We understand the current economic challenges mean newspapers are examining all alternatives. Competition is a healthy thing, and AP welcomes it.” That’s not what they said when they were able to say good riddance to the real UPI in the mid-80s via cut-throat pricing competition, and one doubts they mean it now.

But US newspapers are barking up the wrong tree with CNN – which is not even a shadow of what UPI used to be. Instead of a three-day freebie in Atlanta their time would have been better spent in New York discussing with AP management exactly what it is they want from their AP and what they can afford.

As this column wrote back in November, “What is the AP’s real purpose for being these days? Is the AP, for instance, an international news agency headquartered in New York with subscribers all over the world to whom it provides a first-class text, pictures, and video report of the world’s happenings in equality to all subscribers globally? Or is the AP a US domestic news agency, headquartered in New York, whose primary purpose is to cover the US like a blanket for its US owners and subscribers and of course to provide national and international coverage, too, but anything it does is predicated on providing the best possible editorial product for the US media? Or, is it both?” What do its owners/members/clients want it to be?

The AP today really does provide value for money, but given the economic climate it’s no longer good enough. Do American newspapers need the AP spending millions on a television video service when there are cheaper ways of producing online video? Do US newspapers want the AP spending resources on a German translation service, even if it is making a profit? The AP has diversified greatly in recent years but even so it still gets 27% of its revenue from US newspapers, and 17% of its revenue from US broadcasters, so the question really becomes whether those two groups that make up near half of total revenue should not be the primary focus of what the AP does and anything else is incidental?

The answer to that again depends on what it is the AP is supposed to be. US newspapers are saying they want the AP to charge considerably less – some 30% less -- even though for many newspapers the AP today is a good financial deal considering the space a newspaper devotes to AP products and what it would cost in local resources to fill that space. But be that as it may, newsrooms are hemorrhaging financially and that great AP deal simply is no longer great enough.

So US newspaper editors, stop fooling around with a cable news network. You own one of the world’s greatest news agencies and the problem between you both is to come to an understanding of what exactly you want, and what you are prepared to pay, and then the AP management needs to come up with the answers on how it can comply.

Time is running out. That works needs to be done now.