In ten years newspapers will be selling their content to the AP

by Jason Preston on August 14, 2008

When the AP released their A New Model for News report this past June it led me to interview Edward Roussel at the Telegraph about their recent changes in the newsroom.

But it also prompted me to scribble this in the margins (yes, I printed it out):

The AP is flipping the news model!! Newspapers beware…

What I meant is that the AP is positioning itself to steal news distribution from its member papers while they’re all looking the other way.

If you read between the lines in that report, you can see how the AP is learning where and how young people are reading the news, building the infrastructure to reach that new audience, mining the member papers for content, and creating the ad network that will support it.

The on-demand generation

The AP report studies the news habits of (an admittedly small sample of) young people from around the world. The goal? To understand where and how the new generation wants to get its news.

This is important because news, like anything else, is a product that needs to be marketed and sold. Babies don’t just pop out asking for the New York Times and a pair of reading spectacles, thanks very much, can I get a coffee as well?

The research shows that this next generation of news consumers is an on-demand generation. They want their TV on-demand. They want their news to interface with them on their terms.

Mobile is a big contact point and growing quickly. So is the web. These are both lean-forward mediums, where people like to multitask, and they allow people to go as far into a story as they choose.

If you build it, no one will come

There is an oft-mangled quote from Field of Dreams: “If you build it, he will come.”

I’ve heard it said a million times in business, meaning that if you make something big enough, compelling enough, the users will arrive of their own accord. It’s not true.

As Mark Potts astutely notes in his reading of A New Model For News, the AP places special emphasis on encountering consumers where they already are:

Deliver to the technologies these readers live with…These readers are looking at TV, their phones and PDAs, and other, fresher technologies (a surprising number don’t even have computers at home, or dismiss the computer as more of a time-waster). That’s where news needs to be delivered, with the same quality and aggressiveness of traditional outlets.

The on-demand generation does not want to be forced onto your field. The trick is to find out where they are already spending their time and meet them there, on their turf.

To this end, the AP has started into the distribution territory. They’ve already build the widely acclaimed mobile news network and have one of the best iPhone news applications.

The internet makes distribution and reproduction of content so cheap it might as well be free. It’s easy and cheap to meet the hippies halfway, and another touch point means another place to generate revenue from the same content.

Massive scale leads to large ad revenue

Touch points are all well and good, but they’re worth nothing if you can’t make money from them. Since the AP isn’t charging consumers for their news, are all these innovations for naught?

Of course not (sorry – couldn’t resist).

The AP does have, inexplicably, their own news site where they serve ads alongside AP content. It’s not widely known and it probably doesn’t make them tons of money, but that’s not the point.

So far, the AP has:

  • Done research on how young people want to read the news
  • Re-tooled their editorial process to reflect that
  • Done research to find out where young people want to encounter their news
  • Built news distribution networks on those platforms
  • Built a site where they can practice selling ads against news content

Ah-ha!

Through its member newspapers and its own archives, the AP has access to an astoundingly large collection of content—text, audio, and video—that it can serve ads against.

Like Google, their strategy will be to make a small amount on every impression served, while outsourcing most of the content creation (to member papers).

The AP is poised to flip the age-old relationship of content provider and distributor. Inside ten years, the AP will control the distribution path to the largest possible audience, and will be offering member papers a kickback on all ads served against its articles.

Papers would be insane not to take that deal.

Like what you see here? Come to The Pitch for free drinks and good discussion on the business model of the future.

{ 3 comments }

1 Monica Guzman 08.14.08 at 2:16 pm

“The on-demand generation does not want to be forced onto your field. The trick is to find out where they are already spending their time and meet them there, on their turf.”

So true. We’ve got to do our homework.

2 Jason Preston 08.14.08 at 4:36 pm

The good news is that the AP actually did a significant portion of it in their study, which is available to anyone online. Worth passing around the office, maybe.

3 Curt M. 08.16.08 at 2:19 pm

Let’s hope that, in the meantime, AP hasn’t helped kill off the providers of that news by taking the readership away from the websites of the radio, TV and newspapers that create that content. Ten years may be too long to wait for this change. Perhaps, AP should start paying providers NOW and not later.

This goes along with the idea of content creators banding together to syndicate their work and charge for its use on other web sites. Difficult, but not impossible, is what I’ve heard about that proposal.

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