Associated Press Announces Plans for iPad Application

[ChazUK]

Maybe you should read the rest of my comment before responding; I clearly stated that during the print media days, the AP and Reuters' money came from reprint royalties, not directly from their own printing houses. With the internet news sources no longer having to rely on AP or Reuters for their stories, they no longer have to pay royalties to them for news, unless they specifically choose to reprint/repost those specific stories. This means that unless the AP and Reuters can find another way to monetize their news, they can't afford to operate. Does that make sense to you?

Hmm. Perhaps you should rewrite these with your new facts then:

he Associated Press (AP) is an American news agency. The AP is a cooperative owned by its contributing newspapers, radio and television stations in the United States, which both contribute stories to the AP and use material written by its staff journalists. Many newspapers and broadcasters outside the United States are AP subscribers, paying a fee to use AP material without being contributing members of the cooperative.

http://en.wikipedia.org/wiki/Associated_Press

AP supplies a steady stream of news around the clock to its domestic members, international subscribers and commercial customers. It has the industry's most sophisticated digital photo network, a 24-hour continuously updated online news service, a state-of-the-art television news service and one of the largest radio networks in the United States. It also has a commercial digital photo archive, a photo library housing more than 10 million images.

http://www.ap.org/pages/about/about.html

Is there any chance you can show us where the AP have lost subscribers so much that it has been forced into this new business model?

 

[Vulpinemac]

How would Google lose ad revinue?
People pay for news channels for their cable/satellite subscription, yet they still advertise.
People pay for newspapers, yet they still advertise.
Magazines? Full of ads....

I have no doubt that ads will eventually worm their way into these subscription based models and Google are more than capable of providing these ads. I bet the media moguls in charge of the news sites want it both ways (subscriptions and ads).

And what's different about that? It's worked for a couple hundred years already in the print media. Just look at all the ads in any newspaper or magazine you buy at the bookstore. In the paper, the ads are relatively generic and usually local to where the paper is printed, in a magazine, the ads are usually focused around the general subject matter of the periodical. The point is that by including both ads and subscriptions, the costs at both ends go down while keeping the income reasonably steady. No ads--higher subscription prices; no subscription--much more advertising or higher advertising rates. A good balance is one where the company profits by keeping both sides happy.

 

[Vulpinemac]

Hmm. Perhaps you should rewrite these with your new facts then:

http://en.wikipedia.org/wiki/Associated_Press

http://www.ap.org/pages/about/about.html

Is there any chance you can show us where the AP have lost subscribers so much that it has been forced into this new business model?

A good argument; thank you. Now, who's paying those reporters? Or do you expect the AP associates to rely on free reporting by the consumers the way CNN's iReport section is doing now? If the newspapers are losing subscriptions, that means they're also losing on advertising income. Coincidentally, that means they can't afford to pay their reporters which means they have to get by on fewer reporters.

I also seem to remember that even unassociated newspapers would purchase articles from the AP (and Reuters.) Either way you look at it, royalties are slipping and direct-to-consumer media outlets are why. The only way to counter that is to find a direct-to-consumer subscription package that works. At the moment, we have no idea what will work; neither do they. They can't just take a 'wait-and-see' attitude, they have to try and take the lead early on and 'scoop' their competitors.

 

[ChazUK]

And what's different about that? It's worked for a couple hundred years already in the print media. Just look at all the ads in any newspaper or magazine you buy at the bookstore. In the paper, the ads are relatively generic and usually local to where the paper is printed, in a magazine, the ads are usually focused around the general subject matter of the periodical. The point is that by including both ads and subscriptions, the costs at both ends go down while keeping the income reasonably steady. No ads--higher subscription prices; no subscription--much more advertising or higher advertising rates. A good balance is one where the company profits by keeping both sides happy.

I have absolutely no problems with an ad supported, consumer supported model if it keeps costs down all round.

I was just trying to point that Google doesn't stand to "loose" <sic> as their primary business is electronic ad distribution and with these electronic magazines where ads will be unblockable (unlike on modern day web browsers) then Google could stand to gain a whole lot more from this media shift from print to electronic.

As I said above, as long as it keeps costs down for consumers, an ad+ subscription model is the way forward imo. (We're singing from the same hymn sheet here).

EDIT: Now I've re-read it my "media moguls" comment did sound like I was talking in a negative light!

 

[jerome65]

Surely your argument here is nullified by the fact that the Associated Press isn't a "paper media" company so they aren't in the same dire straits that the rest of the industry are?

The Associated Press is a non profit organization and they are also lucky that they have subscribers involved in more than one media form (TV, Radio and print) unlike most newspapers who are limited to print and web based content delivery.

I the AP were limited to print only media, I'd agree with you but as that's not the case, why should we pay?

You should pay because you are not a "subscribing" member of the the AP, and they have to make money to pay the bills and salaries of their employees. Surely you realize that the reporters and photographers have to eat don't you? Maybe you should consider giving up your salary so that your employer can cut the price of their product....

 

[ChazUK]

You should pay because you are not a "subscribing" member of the the AP, and they have to make money to pay the bills and salaries of their employees. Surely you realize that the reporters and photographers have to eat don't you? Maybe you should consider giving up your salary so that your employer can cut the price of their product....

I'm thinking along the lines that the AP have never had a direct to customer business model. They haven't been as affected by the low sales of newspapers and STILL get their money for their content no matter how many papers are sold plus the fact that their content is still published on various websites (which is in turn paid for by their subscribers).

If anyone should be charging, it's the people subscribing to the AP for their content.

Where the hell did I say that I didn't want the reporters and photographers to be fed? Nice way to slip words into my posts.

 

[Chip NoVaMac]

So we just tack on the $30/month for the New York Times that also takes stories for the AP. And if I were to also pay for the AP paynews, I'll be getting something different that's worthy? No. More duplication.

Thanks, Apple.

Hope not that bad.... Amazon's Kindle subscription for the NYT is $13.99 a month. For locals for the NYT the charge is like $25 a month for home delivery. For some like myself it would be like $32 a month.

Charging for stuff people work for a living to produce -- the insanity! This stuff doesn't just magically come together. We in the news biz aren't a nonprofit (insert joke).

It's about damn time our big boys started reclaiming money for our work. If 1/10th of the people read our content but we make 10 times more on that segment that does, so be it.

Welcome to the world of the internet! Where people think that the net should be free or cheap. And folks have no issues in going in to a brick and mortar shop to only shop online for the cheapest price and no sales tax.

In the end it will be about content and how it is presented on the iPad that may make it worth the monthly fees to view it.

I am one of those that have given up on the likes of the Washington Post. But miss it at the same time. Going online right now is not the same thing. Lot more work to find the stuff I am interested in. As to AP; I get tired doing a google to only find AP/UPI stuff rewritten in some cases.

I go back to the mock-up of the Sports Illustrated on something like the iPad. Make me want to subscribe! Give me a reason to pay for it. I am a newshound and history buff. So with the AP app give me links to the past events like the Chiie earthquake or for tomorrows match up between the US and Canada for the gold in mens hockey - allowing me to easily look back at the "miracle on ice".

If you want them to take that into account you also need to take into account when considering if it is a good price that the ad revenue for the device will probably be a LOT less than print for quite a while. If they save 50% of print/distribution, and it cost 15% more to add interactive content and their ad revenue is down 35% then they can't make money if they sell it for 50% less than the print version.

You may have missed my point - I want to have the full newspaper to look at with the iPad. Ads and all! Since I have given up on the printed version of the Post I have missed on some coupons and sales - since I was not in the "loop".

For the likes of newspapers, I might be willing to forego interactive content.

Having worked as the media manager for my company a few years ago; I will say that if the iPad is as big of a success as Apple and others hope for ad revenue may increase. Newspapers and magazines charge what they do for ads based on the subscription base for the most part. Of course other factors come in to play... profitability and production costs. But if they are able to add more eyes thru the iPad - then everyone can win maybe in the end.

 

[hiimamac]

I can see a lot of other media agencies following in a similar path.

Many more to come.

I still dint get it. Take a look at a program called Boston Lite, it's free and gives you access to the Boston hearald the Boston globe and many other papers where many of the stories are indeed, AP stories. What will it fo that you can't do for free?

 

[cmaier]

I still dint get it. Take a look at a program called Boston Lite, it's free and gives you access to the Boston hearald the Boston globe and many other papers where many of the stories are indeed, AP stories. What will it fo that you can't do for free?

The point is the newspapers are going out of business, so they're all going to start having to charge money.

 

[flyguy206]

if it is priced right u dont see a problem with an subscription. but to try to take away something that you was given away for free is just wrong.

 

[cmaier]

if it is priced right u dont see a problem with an subscription. but to try to take away something that you was given away for free is just wrong.

If someone gives you a hamburger today, they don't owe you a hamburger every day forever.

 

[fox10078]

I like the AP app because it gives me local and world news. So I'm excited for an iPad app.

 

[jerome65]

I'm thinking along the lines that the AP have never had a direct to customer business model. They haven't been as affected by the low sales of newspapers and STILL get their money for their content no matter how many papers are sold plus the fact that their content is still published on various websites (which is in turn paid for by their subscribers).

If anyone should be charging, it's the people subscribing to the AP for their content.

Where the hell did I say that I didn't want the reporters and photographers to be fed? Nice way to slip words into my posts.

The AP sells their service to a customer, typically another news source. As newspaper revenues go down there are fewer companies both buying their content and contributing to it. That brings down the revenues of the AP and threatens their business model.

Now putting out an application to directly distribute their content to the consumer is putting them in competition with their clients. This may not be the best thing for them to do, however for them to do it without charging for it would be far worse since they would be undercutting their traditional clients.

Either way you look at it though the facts are the same, if you can't make money selling the news through ads and subscriptions then you will go out of business eventually. I doubt that the government will "Bail out" the news industry as they did with the banks.

 

[furi0usbee]

In other words, your argument simply does not hold water--or ink. If you're not willing to pay, then honestly you get what you pay for. Is that succinct enough for you?

I would hope you are not that naive to think that you actually get unlimited bandwidth with "unlimited" accounts. All ISPs have internal caps that they go by. Go over it, and you'll hear from them. Has happened to me.

I'm not talking about specialized/dedicated content about trains, I'm talking about news. If you want a hobby publication, you should pay for that. AP and Reuters already have a method of monetizing their news. Here is one reason news will always be available to us... Google.

Google will pay any fees AP imposes (above and beyond what they charge) because Google makes money when people use the internet, read the news, then search Google for what they've read, etc. AP won't make enough money from subscribers to be able to tell Google, Yahoo, etc. that they no longer can offer them the news feeds.

Google/Yahoo... their whole business is search/ads/etc. Ever see when something happens to a celebrity? Search results for that person goes up substantially. Google like, so they will pay to allow us to read free news.

Plus, almost all news sites have ads embedded in them, another source of revenue. So FREE news will always be here, as someone is going to want to push that info/ad to you, then hope you go search the web and either buy something or view another ad.

 

[jerome65]

You may have missed my point - I want to have the full newspaper to look at with the iPad. Ads and all! Since I have given up on the printed version of the Post I have missed on some coupons and sales - since I was not in the "loop".

For the likes of newspapers, I might be willing to forego interactive content.

Having worked as the media manager for my company a few years ago; I will say that if the iPad is as big of a success as Apple and others hope for ad revenue may increase. Newspapers and magazines charge what they do for ads based on the subscription base for the most part. Of course other factors come in to play... profitability and production costs. But if they are able to add more eyes thru the iPad - then everyone can win maybe in the end.

Yes, but ad revenue on the internet is not as "generous" as it is in print or on television. Sure that will change, but until it does then revenues from advertising will be down compared to the printed format. That was probably fine for the online edition since this was a "value added" presence on the web and not a business that needed to show a profit, and I would be willing to bet that the ad revenue generated by the websites development, maintenance and reporting is enough to support a newspaper without the print side of the business.

This new medium may be even worse during the start-up phase since they will have a much smaller subscriber base. Most likely the ads in it for the first year will be "give away" to their print advertisers or at best part of a package deal along with the print ad. I wouldn't be surprised if it takes as much as 5 years to build up enough ad revenue to match that generated by the print side, and that probably won't be enough to turn a profit on the eBook form without some form of subscription pricing similar to the printed version. The cost of production may be down from a printed format, but until ad revenues can match what is generated by the printed format then the subscriber will probably have to pay a higher percentage of that production cost for the business model to be self-sustaining and show a profit.

I do see your point, and that you are not necessarily expecting to get it for free. A lot of people here do want it to be free, or at least cheep enough that the company producing the content and delivering it may not be able to cover their costs and make a profit. In the NYT thread on pricing a lot of posters thought that anything over $10/month was too much, even though that is less than 25% of the print pricing.

I'm just trying to point out that these companies still have to cover their costs and turn a profit, and they probably cannot do that at what a lot of people have come to expect to pay (or more to the point not pay) for content on the internet.

 

[jerome65]

...Google will pay any fees AP imposes (above and beyond what they charge) because Google makes money when people use the internet, read the news, then search Google for what they've read, etc. AP won't make enough money from subscribers to be able to tell Google, Yahoo, etc. that they no longer can offer them the news feeds....

Does Google actually pay anyone for the content they link to? I thought they have been able to fight off doing that, and instead charge fees for "sponsored" links.

 

[ChazUK]

Wirelessly posted (Mozilla/5.0 (Linux; U; Android 2.1-update1; en-gb; Nexus One Build/ERE27) AppleWebKit/530.17 (KHTML, like Gecko) Version/4.0 Mobile Safari/530.17)

I'm thinking along the lines that the AP have never had a direct to customer business model. They haven't been as affected by the low sales of newspapers and STILL get their money for their content no matter how many papers are sold plus the fact that their content is still published on various websites (which is in turn paid for by their subscribers).

If anyone should be charging, it's the people subscribing to the AP for their content.

Where the hell did I say that I didn't want the reporters and photographers to be fed? Nice way to slip words into my posts.

The AP sells their service to a customer, typically another news source. As newspaper revenues go down there are fewer companies both buying their content and contributing to it. That brings down the revenues of the AP and threatens their business model.

Now putting out an application to directly distribute their content to the consumer is putting them in competition with their clients. This may not be the best thing for them to do, however for them to do it without charging for it would be far worse since they would be undercutting their traditional clients.

Either way you look at it though the facts are the same, if you can't make money selling the news through ads and subscriptions then you will go out of business eventually. I doubt that the government will "Bail out" the news industry as they did with the banks.

Lovely.

Now, where did your jibe about me not wanting people to eat come from?

 

[ChazUK]

Wirelessly posted (Mozilla/5.0 (Linux; U; Android 2.1-update1; en-gb; Nexus One Build/ERE27) AppleWebKit/530.17 (KHTML, like Gecko) Version/4.0 Mobile Safari/530.17)

I'm thinking along the lines that the AP have never had a direct to customer business model. They haven't been as affected by the low sales of newspapers and STILL get their money for their content no matter how many papers are sold plus the fact that their content is still published on various websites (which is in turn paid for by their subscribers).

If anyone should be charging, it's the people subscribing to the AP for their content.

Where the hell did I say that I didn't want the reporters and photographers to be fed? Nice way to slip words into my posts.

The AP sells their service to a customer, typically another news source. As newspaper revenues go down there are fewer companies both buying their content and contributing to it. That brings down the revenues of the AP and threatens their business model.

Now putting out an application to directly distribute their content to the consumer is putting them in competition with their clients. This may not be the best thing for them to do, however for them to do it without charging for it would be far worse since they would be undercutting their traditional clients.

Either way you look at it though the facts are the same, if you can't make money selling the news through ads and subscriptions then you will go out of business eventually. I doubt that the government will "Bail out" the news industry as they did with the banks.

Lovely.

Now, where did your jibe about me not wanting people to eat come from?

 

[jerome65]

Wirelessly posted (Mozilla/5.0 (Linux; U; Android 2.1-update1; en-gb; Nexus One Build/ERE27) AppleWebKit/530.17 (KHTML, like Gecko) Version/4.0 Mobile Safari/530.17)



Lovely.

Now, where did your jibe about me not wanting people to eat come from?

From your original post:

I the AP were limited to print only media, I'd agree with you but as that's not the case, why should we pay?

If they give away their content direct to the consumer then why should anyone pay, be you or a network TV station or your local newspaper? If no one is paying then how do the reporters, editors, and supporting staff make a living?

I may be interpreting what you are saying too broadly but it sounds like you are saying you are not willing to pay for the news, and the ultimate result of that is putting people out of work or reducing their wages for the same job so that their company can operate at a reduced cost to stay in business with a business model that relies solely on ad revenue. As far as I know there is not a single major newspaper or online newspaper operates on ad revenue alone.

 

[ChazUK]

From your original post:

If they give away their content direct to the consumer then why should anyone pay, be you or a network TV station or your local newspaper? If no one is paying then how do the reporters, editors, and supporting staff make a living?

I may be interpreting what you are saying too broadly but it sounds like you are saying you are not willing to pay for the news, and the ultimate result of that is putting people out of work or reducing their wages for the same job so that their company can operate at a reduced cost to stay in business with a business model that relies solely on ad revenue.

I based that on their current business model. None of this is me wanting to deprive journalists of food like you assumed. The AP are in a far better position than a lot of the needier newspapers (who more than likely already pay money to the AP for content).

Anyway, living in Britain, I already pay a large corporation for news every year (clue: The BBC) in the UK television licence fee so to accuse me of not wanting to pay for news is a little naive.

 

[jerome65]

I based that on their current business model. None of this is me wanting to deprive journalists of food like you assumed. The AP are in a far better position than a lot of the needier newspapers (who more than likely already pay money to the AP for content).

Anyway, living in Britain, I already pay a large corporation for news every year (clue: The BBC) in the UK television licence fee so to accuse me of not wanting to pay for news is a little naive.

The AP does not get government funding from the US government to operate. They make money from people paying them to reuse the content, and I believe that they get the bulk of their content from their contributing members, ie. the newspaper industry. They may be in better shape than the newspaper industry but that is because they do not have the same expenses in production and distribution and because the get a fee for the use of their content. Still, no matter if they are in good shape or not, if they are not collecting some form of revenue for their content then they will not be able to stay in business.

And I didn't accuse you of not wanting to pay for the news, in your own words:

why should we pay?

You may not want to deprive the journalist, editors, and photographers of their livelihood, but if the companies, be it the AP or the New York Times, cannot make money to employ their staff then the end result is that they will be out of a job. And if businesses cannot find a business model that they can make a profit on the internet with then eventually they will leave it.

 

[ChazUK]

And I didn't accuse you of not wanting to pay for the news, in your own words:

Selective quoting. Nice! Here is my real explanation for criticising the AP with this one. My beef is with people assuming that the AP are in the same position as newspapers are right now. (As explained before) if a newspaper owning AP subscriber sells a single newspaper, the AP will still have got their money from the subscriber regardless of the amount of papers they sell.

I have no problems with paying for content. Music, satellite tv subscription, physical games, videos and game downloads on PS3, apps off of Android Market, software for Mac/PC, Blu-ray and DVD but if it really does make you happy (in a "Surely you realize that the reporters and photographers have to eat don't you?" kind of way):
I hope reporters starve.
I hope photographers starve
I don't want to pay for things.
I expect everything for free.

Now, if only I could steal food...... <ponders for a moment>

(It would be a bit silly of me to want reporters and photographers to starve really as my job wouldn't exist without them) This will be the last I say on the matter but thank you for the discussion!

 

[jerome65]

Selective quoting. Nice! Here is my real explanation for criticising the AP with this one. My beef is with people assuming that the AP are in the same position as newspapers are right now. (As explained before) if a newspaper owning AP subscriber sells a single newspaper, the AP will still have got their money from the subscriber regardless of the amount of papers they sell.

I have no problems with paying for content. Music, satellite tv subscription, physical games, videos and game downloads on PS3, apps off of Android Market, software for Mac/PC, Blu-ray and DVD but if it really does make you happy (in a "Surely you realize that the reporters and photographers have to eat don't you?" kind of way):
I hope reporters starve.
I hope photographers starve
I don't want to pay for things.
I expect everything for free.

Now, if only I could steal food...... <ponders for a moment>

(It would be a bit silly of me to want reporters and photographers to starve really as my job wouldn't exist without them) This will be the last I say on the matter but thank you for the discussion!

I must be misinterpreting your words, to me it sounds like you are saying that the AP should not charge a subscription for their direct to consumer application for news is because they charge other news sources subscription fees and because they are not at risk of going out of business at the moment since their revenue stream is from their traditional subscribers.

If they don't charge a fee for a direct for consumer distribution they are at risk of cutting off one revenue stream and not replacing with another, which is bad business. Worse if they didn't charge for a direct to consumer distribution how could they expect to keep their current subscribers without offering the same (lack of) price?

Personally I think that turning to a main stream direct to the consumer distribution model is a risky move since it puts them in direct competition with their traditional subscribers as well as their contributing members. The result of this could be that they loose both their traditional subscriber base as well as their contributing members, cutting both their traditional revenue as well as the number of stories contributed to them for distribution.

If I offended you with my statement I apologize. At the same time I find it disturbing that so many people want everything "published" on the internet for free without regard to the cost of putting it there, or they expect to pay no more than a certain amount for an eBook because they have a preconceived notion that it has less value because it is not printed on paper. Sure there will be savings to the publisher, but I would be willing to bet that those savings are never going to bring the cost down as low as people expect it should be. I also doubt that any major news website online today really makes enough money through ad revenue to support their business without additional income some other form of distribution.

 

[cmaier]

At the same time I find it disturbing that so many people want everything "published" on the internet for free without regard to the cost of putting it there, or they expect to pay no more than a certain amount for an eBook because they have a preconceived notion that it has less value because it is not printed on paper.

It does have less value as long as it is DRM-encumbered. I can't lend it, copy it, resell it, in some cases I can't even copy excerpts from it, I can only read it on a given device, I can only read it as long as the DRM servers still function, the publisher can take it away from me at any time, etc.

 

[jerome65]

It does have less value as long as it is DRM-encumbered. I can't lend it, copy it, resell it, in some cases I can't even copy excerpts from it, I can only read it on a given device, I can only read it as long as the DRM servers still function, the publisher can take it away from me at any time, etc.

You do make a good point about DRM and it's restrictions. These restrictions could still face "Fair Use" challenges in court in the future, and I would hope that the publishers would loose if they their DRM goes far enough to restrict fair use provisions of the copyright laws.

Still, there are costs involved in creation and production that limit how low the product can be produced for and still be a profitable business. If the electronic format cannot find a price point that will be profitable and the market will accept then it's success will be limited as a main stream format.