AP Board Approves New Pricing Structure; Pay As You Go Included; Lower Revenues At AP As a Result

The Associated Press’ board has approved a major overhaul of the way it prices and packages news for its member U.S. newspapers, and represents the most comprehensive change in the way AP content is sold throughout its history, it said. The changes will start from Jan 1, 2009.

As AP’s own story explains it, instead of offering news feeds and charging by volume of news delivered, the new plan is centered on a core service of all national, state and international breaking news, with options for adding other services or purchasing stories individually. The plan will offer U.S. newspapers more flexibility in accessing and using news of local interest that may originate in other regions.

Under the new plan, most AP members will experience either a reduction in costs, or no change, from their current AP fees. The basic fee charged to newspapers will continue to be based on circulation (AP didn’t increase the basic rate paid by members in 2007 and will do the same in 2008.).

Tom Brettingen, the AP’s SVP for global newspaper markets, told AP that the changes would result in $6 million to $7 million less annual revenue for the news agency, a shortfall he said should easily be made up from growth in other areas, including video and online sales.

Some other points:
— Broadcast and online customers should also benefit from the changes, although programs for those customers have not yet been completed.
— For additional fees, members will be able to buy premium services featuring in-depth content in news analysis, business, sports, entertainment and lifestyles.
— For the first time, members will be able to buy stories on an a la carte basis. Members who choose not to buy the premium sports package, for example, will be able to purchase individual stories, using an online system called AP Exchange.

More details in release.