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91. AP Hopes to Improve Online Revenue Streams

91. AP Hopes to Improve Online Revenue Streams

Over the last several years the Associated Press has sought to move its content online. From the last segment we saw one such effort, with the AP teaming up with Microsoft to provide online video. With member newspapers threatening to leave, and profits failing, one place the AP is looking to improve its bottom line is the licensing deals it has with major Web sites,

“The Associated Press hopes to negotiate more lucrative licensing deals with major Web sites while mining new revenue from advertisers and readers as the 163-year-old news cooperative adapts to Internet-driven changes in the media.”

Over the last year, the AP has reduced its fees for U.S. Newspapers by $30 Million dollars. Over the next year it plans to reduce those fees by another $45 Million. All of this is in an effort to keep member newspapers who can no longer afford to use the AP’s content from leaving altogether. The AP states that they expect revenues to fall this year and next, after seeing them rise by 5% in 2008.

The biggest negotiation for the AP will be on its licensing deal with Google. They want to find a way to improve their terms, which they believe mostly benefit Google, which makes money by putting ads against the content. They are also looking for new ways to put advertising against their own photographs and news stories.

Will this work? I think the AP is asking the same questions the rest of the news industry is asking, what should their place be in the new landscape. Fortunately, the AP has the advantage that they are not directly tied to any platform, they have chosen to take a multi-channel approach which gives them more flexibility than the newspapers have (one example of this flexibility can be found in this segment’s clip). This approach, however, does not hand them a new way to monetize this content once the services that typically paid for it run out of money.

What do you think? Can the AP survive and if so, what should they be doing?

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