Associated Press Considers Locking Up Its Online Content

from the hello,-opportunity dept

You can almost hear Reuters, CNN, UPI and a few others laugh maniacally over the news that the Associated Press is considering locking up its content. The Associated Press has a pretty long history of not having much of a grasp about how the economics of information works online, and this is the latest evidence. It wouldn’t happen for a while — because many online sites, including Google, have deals with the AP to present its content online for free. But, if the AP suddenly forced all partners to lock up their content, a couple of things would happen pretty quickly: other sources, such as those listed above, or new startups, would quickly jump into the void, thrilled that their largest “competitor” dropped out of the space. Yes, the AP is slightly different than those other players, in that it’s a collective of newspapers sharing content, rather than a truly separate operation — but functionally, they serve similar purposes. CNN, in particular, has made it clear that it would like to take on the AP with a wire service — and having the AP lock up its content would make much easier for them.

Also, I know we point this out every time some clueless news exec claims that users need to pay, but it’s worth mentioning again: nowhere do they discuss why people should want to pay. Nowhere do they explain what extra value they’re adding that will make people pay. Instead, they think that if they put up a paywall, people will magically pay — even though the paywall itself is what takes away much of the value by making it harder for people to do what they want with the news: to spread it, to comment on it, to participate in the story. Until newspaper execs figure this out, they’re only going to keep making things worse.

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Comments on “Associated Press Considers Locking Up Its Online Content”

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Ima Fish (profile) says:

some clueless news exec claims that users need to pay

Do these clueless idiots even realize that no one (other than advertisers) pay for CBS’, NBC’s and ABC’s evening news programs?!

Do these clueless idiots seriously think that CBS could make more money on Katie Couric’s Evening News if they took the show off of “free” broadcast television and made it a pay-per-view broadcast?!

God, it’s quite apparent that if CBS did it, its ratings would drop to near zero, and the ratings for the other news programs would rise.

Mark Rosedale (profile) says:

metro news

I don’t know what cities they run in, but in Boston there is the metro news publication (I know they have them in NYC). I was thinking about it this morning. Metro gives away their paper for free. It is pretty handy for me walk in to my T stop in the morning on my way to work and someone is there handing them out. Since there is a good chunk of my trip underground without cell reception I am left with listening to music, playing a game, or reading the news. They always have great information about local happenings. So I am looking around and I’d say at worst it is every 3rd person has a paper, but some mornings every other and I’m talking about full cars.

Now I obviously don’t know what their business model is nor how well they are doing, but to have so many people reading their print says something for a business model. And for sure if you want to advertise in Boston that is a good way to do it.

Don’t know exactly where I was going with this other than to say they are doing something right. The one slight unfortunate thing is their online presence is very lacking, but then again that isn’t their target audience is it?

Anonymous Coward says:

Another way of putting it...

You can also call this “raising the price on their online content”. The economics of doing this in the presence of competing providers apply here.

Whether there is a demand for their product at a higher price is the question. They certainly think so.

What makes the AP news service different anyways?

Didn’t the NYTimes, for a long time, keep their online content behind a paywall?

sluggo says:

no news is...

I’m not so sure that the AP is doing anthing boneheaded by considering this. I am, on the other hand, pretty sure that most stories reported in the news are no better than two old bitties gossiping over the fence: bad news and other people’s misfortunes.

It makes no difference whether it’s on the web or not. No News Is Good News. Most of which I personally can do without and skip over like spam (thank you once again to the inventor of the mouse wheel).

Donna says:

more of "no news is..."

I’m with you sluggo. I generally could care less. I may catch what pops up on MSNBC if I have to log on to webmail, which is about twice per month…and I may read a paper if I am sitting at I-Hop or Denny’s having an omlet and a cup of coffee, and that’s only if someone else has left a copy. If I have to go outside and pay the $1.50 to get it from the machine, 90% of the time I can live without it.

Peter says:

Come on guys

As long as I’ve been reading TD – a blog I actually like – I remember this gleeful attitude towards newspapers and content providers – they are SO DUMB they’re trying to make any money from their content – like you wouldn’t believe how dumb – and it’s SO MUCH fun watching them writhe in agony! Not very nice, guys.

Sure, it’s easy for TD to talk about giving away “content” (quotes intentional), given near-zero costs of running THIS site. But what is a news organization with actual reporters and staff supposed to do?

WHAT IS YOUR SOLUTION? Imagine you’re AP. What are you going to do? Close up shop? Fire everybody and become a blog like TD and may be pay 1-2 people every other month? Is it what you call ‘having a grasp’?

Mike (profile) says:

Re: Spot on, Peter!

Peter really nails it on the head. But Peter, you should know by now that it’s useless to bring logic into any Masnick-led discussion. His stance is that information, all information, should be free.

Um. No. But, nice try. My position is to look at basic, fundamental economics, and if you are trying to adopt a business model that will clearly fail, to point it out.

It’s not that information, all information, should be free. It’s that if you are putting up an infinite good in a competitive marketplace, and it’s not free, then you’re going to run into trouble. Lots of it.

It’s got nothing to do with “should.” If you can actually charge for information, more power to you. It’s just that it’s very, very difficult to make that model work, and there are plenty of better models out there that will increase the overall size of your market.

And it’s not like we haven’t discussed how this works:

Or given examples of folks who make it work in practice:

Claiming otherwise is a lie. And, not surprisingly, those lies always seem to come from anonymous commenters. Funny, that.

Scott Atkinson (profile) says:

Mike –

I’m a long time open source guy, and someone who has entirely agreed with your arguments about how the world works.

But I think I’m changing my mind. Maybe it’s the moment – the economy’s bad, journalism’s worse – but I think not.

The longer and harder I look at my end of the problem – how do we pay for journalism? – the harder it is to justify the ‘infinite goods’ part of your argument.

If I get you correctly, (and I’ve read through most of your posts on the subject), you believe certain elements of a ‘product’ are essentially infinite – you can reproduce a song perfectly, as many times as you want, at almost no cost.

So the behavior that most correctly mirrors the real world of economic choices is one in which you give away that which is easy to give away, while recouping your costs in items that have scarcity – merch and tickets to concerts, and – more generally – ‘access.’

My first argument is – you increase the cost that has to be recouped doing it your way. If the musician does not recover his costs with the recording itself, he/she is then forced to recoup both his recording costs and the cost of the product that *is* being sold.

In some cases, those costs would be incidental. But in other cases, they would not, and you may need items that have non-incidental costs attached (access to the band) in order to make a living wage.

My second argument surveys the state of the world: while there are lots of ‘unsigned’ bands giving away their music on Facebook and the like, the decision they’re making is a temporary one, (they hope).

They need attention more than anything else, at this point. Importantly though, that need can change over time.

Established artists lead the way: the great jazz trumpeter Dave Douglas has his own label. He allows you to ‘subscribe’ to his work. He sells merch and promotes concerts. But other than samples, he does not give away his music.

Neither do the folks over at ArtistShare, who do sell the experience of vicariously paticipating in various music projects but who, again, give very little away.

To my knowledge, both are successful, and it seems to me they’ve identified the real scarcity behind the infinite goods – there’s only so much Dave Douglas, or Daid Byrne & Brian Eno or Maria Schneider to go around.

Now something important: even if your model is more correct than my objections, journalism – with its extremely short shelf life – may not be very amenable to the kind of cost capturing you’re talking about.

I can view my relationship with Dave Douglas as a long haul kind of thing; I may not have the same sort of attachment to a flurry of articles about what President Obama is doing – in fact, I may not be able to make a meaningful value distinction about all the articles on a particular day on particular topic.

My value may come from the way I think about *all* the articles, rather than me especially liking the New York Times day in and out, and thus making a decision to support the Times in particular.

Finally, a half-formed idea. Is it possible that ‘free’ breaks as a model in a bad economy? It’s counter-intuitive, but my thought is that what may make *free* work is less how it behaves in the market place, and more the fact that there’s enough *paid* going around to both help pay for things at the producer’s end, and to absorb the cost of the free riders.

Anyway, there’s more to be said, but this is too long already.


Scott Atkinson
Watertown NY

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