Using AP fees wisely

A thought from a meeting yesterday with John Lowe and an idea I had a week ago: what would happen if newspapers withdrew their subscriptions from the Associated Press, which cost too much and offer little value online when you can link instead, and used all or part of those savings to start an incubator fund for local news startups?

Such a fund would offer a extraordinary advantage over printing day-old national news that people can get instantly online.

The innovation required for newspapers to reinvent themselves isn’t generally coming from within. There are institutional and cultural reasons for this. For instance, a friend who took an early retirement from The Oregonian said that his group of friends who wanted to discuss how to change the newspaper had to do so off company time. They brainstormed ideas over pizza and beer that were rarely implemented once they got back into the office. Google has the 20% rule. This is a significant difference in workplace, but a seed fund for news startups would promote the type of creativity and tenacity needed to survive in this new environment that corporate culture typically squashes.

Newspapers could benefit in a couple of ways. One, the contract with the startup might structured in such a way as to guarantee content to the newspaper’s print product at mutually agreeable rates. Two, if the startup pulled something particularly innovative, the newspaper could just buy the company. This is what Google does because it knows that disruptive thinking has a lower barrier to implementation on the ‘net.

8 thoughts on “Using AP fees wisely

  1. Nice post and makes a lot of sense. For the last couple years I haven’t really understood why papers continue their AP subscriptions. It seems as though many do it because “all the others do.”

    If only a portion of the money put forward for tech startups were made available for news innovation I think some tremendous things could be accomplished in a very short time.

  2. Totally agree that newspapers aren’t ballsy enough to do it on their own, while most of them have yet to realise the potential of the internet, linking etc.

    Once more newspapers start to struggle they’ll start cutting the contract quickly, realising AP syndication is overpriced and often irrelevant.

    Good idea…

  3. You suggest that newspapers “fund” local news startups but then say if things work out for the startup, the newspaper should then buy them.

    Doesn’t funding a startup imply ownership?

    As I understand it, the way it works is someone funds a startup then SELLS the startup if it works out.

    Maybe I’m missing something.

  4. @Daniel KnightNews Challenge is a non-profit that requires the funded entity be non-profit also. I don’t think many newspapers are non-profit, which I guess is my point. Newspapers that provide the funding you suggest would want to make a profit.

    One point I totally agree with is that AP content “offer[s] little value online” and a link to that content is probably more than enough for national news on a local newspaper website (if it belongs there at all).

    I don’t know much money dropping the online license to AP content will generate as I think the online license is a small add on to the print license. The online license used to be free with the print license.

    A license to AP content for print is, I believe, the main reason newspapers get AP content.

  5. The News Challenge actually funds for-profit ventures. The caveat is that whatever they produce has to be open source (there’s more in the FAQs). I still think this idea has a lot of merit and, if a newspaper were actually willing to take the dare, I’d be more than happy to help them smooth the rough edges of the competition.

  6. @Stephen I think there are varying degrees of ownership that could exist with this suggestion. To my understanding, there are two ways a venture fund would try to turn a profit on a startup. One, they’d build the company’s value with the intent of trying to get it bought by a larger firm. Two, the startup would have a business model, go for an IPO, and then the venture firm would make a profit off the stock. What I’m suggesting in this post, though, is a little bit different. I’m not sure how much money most newspapers spend on AP, but I’m pretty darn sure that it would be better spend on funding creativity. I envision having a contest, a la the Knight News Challenge, where the money is seeded based on the merit of the idea.

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