After preparing for some time to rely only on its own resources, CNN will not use any photos, videos or newswire reports from the AP, as the cable news network said. Three years ago, CNN dropped Reuters (NYSE: TRI) following a 27-year relationship as way to cut costs. In a staff memo written by CNN President Jim Walton, cost containment was cited as a reason for severing ties with the AP to shift costs in support of creating more original content. While CNN has taken a beating in primetime at the hands of Fox News and even MSNBC, its website continues to be dominant. In addition, it has consistently held the top spot for paid news apps in Apple’s iTunes Store.
It’s worth noting that just as CNN is breaking up with AP after 30 years, it is getting back together with Reuters, albeit in a more limited form than it previously did when the last contract ended three years ago. As Walton notes in his memo, Reuters will provide breaking news as a supplement to CNN’s original reporting. In addition, Spanish-language wire service EFE will also add to CNN’s breaking news offerings.
Another reason for cutting off the AP feed is because CNN has been trying to compete against the news service with its own CNN Wires product. CNN has sought to attract newspapers to pay for its services, and by relying on the AP, CNN had a harder time differentiating itself. Unlike the AP’s newspaper members, which have to give a two-year cancellation warning if they want to opt out of the service, CNN has a commercial licensing agreement set to expire June 30 and doesn’t have the same time constraints placed on it. In a statement, the AP called the move “unfortunate.”
The full CNN memo follows:
To: CNN Staff
From: Jim Walton
We are taking an important next step in the content-ownership process we began in 2007 to more fully leverage CNN