The Associated Press is dropping its fees for newspaper members once again as it looks to strike more online content deals, AP reported. Next year, newspaper and broadcaster members will see their fees drop a collective $45 million. (In April, the AP said it was going to reduce fees by $35 million this year.) The moves come a year after a small group of members gave their two-year cancellation notice, citing the changes in fee structure. (That controversial member pricing plan divided services into core and premium; some members’ costs would have been reduced but others would have increased.) With newspaper revenues showing no signs of hitting bottom, AP is now trying to ease the financial burden on those members.
At the same time, the news service realizes that it must find other sources of revenue and cut costs. Tom Curley, the wire service’s CEO, in an interview with the AP after his announcement to the staff on the plans, said the organization expects its revenues to drop in ’09 and ’10. The AP ended last year with $748 million, a 5 percent revenue gain over ’07. To try to stem the losses, AP will cut 10 percent of its workforce.
As for trying to replace the revenue lost from its struggling newspaper members, AP is looking for more lucrative content partnerships online. It currently has deals with Google (NSDQ: GOOG), AOL (NYSE: TWX), Yahoo (NSDQ: YHOO) and Microsoft (NSDQ: MSFT). While Yahoo has said that it expects to maintain its ties to the AP for “years to come,” the Google contract ends this year and could prove thorny. Curley said that new licensing contracts are a top priority, but he didn’t say what sort of partnerships he has in mind that would offset the newspaper losses. One area the AP has offered details on is its e-commerce plans associated with its Digital Cooperative, a searchable content warehouse that allows for a broad range of digital revenue models, including paid content. AP has also been ramping up its mobile offerings in the hopes of bypassing the portals and reaching consumers directly.
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