Editor & Publisher notes along with many others the announcement by the Tribune Company that it has given its two-year notice to discontinue receiving content from the Associated Press. The E&P article cites the recent rate hikes from AP as a key factor in its decision, but other accounts also highlight concerns raised by other newspapers subscribing to the service regarding AP's cutting back on local coverage and its efforts to create a more competitive position for its own content through non-newspaper outlets that compete directly or indirectly with member outlets. Whatever the exact reasons in these instances, the pullout echoes sentiments surfacing in some of Shore's private research that indicates a growing dissatisfaction with AP as a source of content.

Although some of the growing rebellion against AP services no doubt is fired by cost, content and competition from the membership-driven service, there is another key factor that is driving newspapers to reconsider AP as a source of content: the marketplace. In local newspapers and media outlets there is a dwindling interest in national news as a revenue driver, as 24x7 online and broadcast sources diminish the need of local residents to turn to their hometown papers for this view of the world. There is more money to be had by many of these papers by building up deeper and more engaged local content and by building special interest sections for holidays and other event-driven interests that will attract local advertisers more effectively. Put simply, with dwindling budgets to cover world and national events many papers are making the choice to rally their limited resources around locally focused content and advertisers.

The other key factor in the challenge to AP, though, is that there is an increasing reservoir of options for media outlets that want high-quality editorial to insert into their publications. Link exchanges, content swaps and other cooperative online publishing options enable the online editions of local papers to insert content from other newspapers and media outlets into their own sites and to host their own content elsewhere at partner sites. In other words, when revenue isn't all about what happens on your own Web site but also about driving more traffic to inventory from relationships with online publishing partners there are more options for local publishers to drive up both page inventory and audience engagement. AP delivers content inventory, but not the kind of inventory that's most likely to engage the audiences that value a local newspaper brand in a way that will drive the highest revenues.

While some newspapers seem to question the refocusing of AP's content on more analysis and opinion pieces as an additional point of concern, in general the real issue for most publishers confronting their rising AP charges is that as good as AP news can be it's not what will drive their profits moving forward in most instances. While AP has spent a great deal of legal and marketing effort to shore up the value of the AP brand through copyright protection and brand positioning, it has in many ways failed to identify how a cooperative news distribution service can help its members to generate more revenues cost-effectively. With their members cutting their own collaborative content deals left and right, oftentimes with providers of unique online sources of content, the power of the Web to make these deals work without AP's infrastructure is the chief challenge to AP's future.

All of this argues for a selloff of AP in the next couple of years to an owner that can take advantage of its extensive network of reporters and stringers to package its core assets more effectively to a broader base of clients beyond dwindling newspaper properties. News Corp would be the most likely taker, in part because of Rupert Murdoch's designs already in place to provide better global marketing for Dow Jones resources (already aligned closely with AP in financial markets), though others such as Google continue to be bandied about. The missed opportunity in this, of course, is the opportunity to redefine AP as a new kind of distribution channel for high-quality content based on a new generation of news producers and to enable it to include a cross-platform network of news enthusiasts who will add value to its brand based on their enthusiasm for commenting on news content. If everyone wants to do content swaps and link exchanges, for example, why isn't AP positioned as a channel designed to make that easier?

On this note I think that one of the great missed opportunities for AP has been its failure to adopt a strategy for embracing social media more effectively. While an acquisition of a player such as Newsvine would not have stanched the bleeding based on its core asset issues it would have at least started to position AP as a service that could center communities around key news assets. If audience engagement is the key to online publishing profits, catchy headlines and great ledes are not necessarily going to help your members as much as giving people a good reason to stay on a page - something that good social media can help to do very effectively.

AP's pricing will help to define for its members what AP needs to do to cover costs for existing editorial operations, but that's little more than an opening argument when AP members are looking for concluding remarks as to how AP will help them to drive revenues more effectively. It's probably best at this time for AP to seek a parent aggressively that will help them to maintain their core editorial assets while enabling them to invest in a broader array of content assets and services that will bolster their value over time. By all indications current AP members will not be the ones to sponsor that investment, so it's most definitely time to go find buyers to make those investments while there's still a good opportunity to do so.

Labels: AP, associated press, distribution, media, Murdoch, News, tribune company

There's been quite a rumble in the publishing community in the wake of this week's ruling by the U.S. District Court in Arizona in favor of Pamela and Jeffery Howell, defendants against a lawsuit raised by the Atlantic Recording Corporation for their alleged role in copyright infringement. Atlantic, with RIAA backing, was seeking a summary judgment against the Howells claiming that they had put music files on the KaZaa file sharing service, and by doing so violated Atlantic's rights to distribution under copyright law. That word "distribution" turns out to have become the pivotal point in a key decision that puts copyright law in its true perspective.

The key finding by U.S. District Judge Neil Wake is a simple but fairly profound observation. Wake notes that although statues and court precedents state clearly that a distribution of content is a publication, not all publications are distributions. Specific to file sharing, the defendants claim that they did not put any music in the KaZaa file folder designated for file sharing - and that the record company's claim that more than 4,000 files had been designated by them for download was due to a glitch in the KaZaa software that made their music files, present in a folder not designated for sharing, identifiable by others in the KaZaa network. So although these songs were made to look as if they were available for distribution by KaZaa, they were not by any intent of the defendants. The Howells also pointed out that their computer was accessible by others who could have made their files exposed to the KaZaa network.

The judgment reasserts that copyright is really not about the right to make copies but rather about the right to distribute copies of protected works for use by others. Implicit in that position is that individuals or institutions making copies for purposes other than distribution are not subject to copyright law. In other words, if you're using copies for your own licensed purpose, you're not a distributor: distribution is when you willingly make a work available for distribution and it's actually distributed. In the instance of the Howells, the judge perceived that through whatever happenstance an index saying that copies were available for distribution was not the same as saying that any specific person was actually distributing copies.

Though there is already a growing body of legal decisions that seem to be weighing against RIAA efforts to discourage individual consumers from copying content, the Howell decision is notable in that the judge went to particular pains to delve into the technological "hows" of file sharing as well as into legal precedents. In doing so, Judge Wake has challenged publishers pursuing such suits to recognize that the more that they go into these suits the more that they create a wide portfolio of rulings that begin to flesh out the full reality of electronic content use - a portfolio that over time has weakened rather than strengthened their claims to inhibit content copying. Put simply, the more that these suits continued, the more circumscribed their claims become and the more that their presumption of complete power over copying will weaken.

Already many in the music industry have recognized that trying to inhibit copying per se is counterproductive, as it weakens their ability to build brand value with consumers swapping from one platform to another at will to consume content. If your customer gets a new mobile phone, do you really want to hassle digital rights management issues when they try to transfer their music files to the new phone or do you want them to still be able to love the artists that you have in your stable? Increasingly being able to sustain passion for a brand is winning out over the absolute right to prevent copying. Distribution enables a relationship with a content brand: once that relationship is established, the relationship becomes more marketable than the content itself over time.

Music publishers are beginning to get a far stronger sense of building marketable relationships with audiences as the key to their future profits. Digital watermarking techniques are one key element of moving away from fortress-like content packaging and towards being able to understand the value of the relationships being formed with content as it moves from one context to another. If a CD is copied but nobody cares about it, that's probably a bigger problem in the long run than someone copying a CD and discovering that people care about it very much - and will give you opportunities for revenue that spring from that distribution. Managing copyright via asserting distribution rights is still a very key mechanism for enabling revenues, but the future is in recognizing that you're far better off in the long run taking advantage of free distribution to get content into the hands of people who are likely to be your most valuable customers. Once it's there, have your content packaging ready and able to start the value conversation.

Labels: copyright, distribution, legal, RIAA, suit