[Infowarrior] - CNN Pitches a Cheaper Wire Service to Newspapers

[Richard Forno]

December 1, 2008
CNN Pitches a Cheaper Wire Service to Newspapers
By TIM ARANGO and RICHARD PÉREZ-PEÑA

http://www.nytimes.com/2008/12/01/business/media/01cnn.html?8dpc=&_r=1&pagewanted=print

CNN, in the afterglow of an election season of record ratings for  
cable news, is elbowing in on a new line of business: catering to  
financially strained newspapers looking for an alternative to The  
Associated Press.

For nearly a month, a trial version of CNN’s wire service has been on  
display in some newspapers. But this week editors from about 30 papers  
will visit Atlanta to hear CNN’s plans to broaden a service to provide  
coverage of big national and international events — and maybe local  
ones — on a smaller scale and at a lower cost than The A.P.

“The reality is we don’t have a lot of relationships with newspapers,”  
said Jim Walton, president of CNN Worldwide. “We have relationships  
with TV stations around the world.” Mr. Walton said the meeting this  
week, which CNN has billed the “CNN Newspaper Summit,” is “kind of a  
get-to-know-you.”

With its CNN Wire, the company is going up against the largest news- 
gathering operation in the world in The A.P., and it must convince  
editors that it can offer something that is well outside its broadcast  
expertise — which may not be a tough task given the dire circumstances  
newspapers face. In addition, a number of newspapers are unhappy with  
the cost of The A.P., a nonprofit corporation that is owned by the  
1,400 papers that are its members. Some newspapers have even given  
notice that they intend to leave The A.P.

“I’m very interested in hearing what they have to present,” said  
Benjamin J. Marrison, the editor of The Columbus Dispatch in Ohio,  
which is among the papers that have said they will drop The A.P.  
because of its cost. “It has a lot of potential. We just need to  
understand it better.”

“Mainly, we’re going to listen to what it is they have to offer, and  
what their plans are for expanding their news-gathering operation,”  
Mr. Marrison added. “They say they have more than 3,000 journalists  
worldwide, and that’s a formidable group, and we want to see how they  
intend to deploy those resources, how in tune they are with the needs  
of newspapers and their Web sites, and what kind of cooperative they  
intend to build.”

The project has several implications for the news business.

For CNN it amounts to another expansion of its operations at a time of  
severe cutbacks across the media industry, especially at newspapers,  
which are facing the wrenching circumstances of both a faltering  
economy and the continuing flight of advertising dollars out of print  
and onto the Internet. And for The Associated Press, it represents a  
competitive threat, while some client newspapers already are leaving  
the service because of financial pressure. (CNN Wire would also  
compete with other services, like Bloomberg News and Thomson Reuters.)

On Nov. 20, Tom Curley, the president and chief executive of The A.P.,  
spoke to employees in New York City and by Webcast to groups around  
the world — a recording of which was heard by The New York Times —  
about the state of its business. He outlined three main challenges:  
the economic downturn, the financial problems of newspapers, and what  
he described as customers becoming competitors, specifically CNN.

Of those three challenges, he said he was most worried about the last  
one.

“On the competitive side, CNN volunteered to be the first, but any  
number of people could have pulled the trigger,” Mr. Curley told  
employees. “They’re coming off a very strong election cycle, they have  
extra money and they’re going to do it because they can.”

Mr. Walton, of CNN, says that the network already runs an internal  
wire service for its bureaus and CNN.com, and that taking it outside  
is a logical step. The breadth of the service that CNN will ultimately  
offer is unclear, and partly depends on the demands of newspapers. CNN  
Wire could offer columns written by some of its high-profile  
personalities, like Anderson Cooper. It also plans to offer text  
versions of its major investigative pieces for television.

“The CNN system is set up so we use content across all our networks  
and platforms,” Mr. Walton said. “It’s not unusual for Anderson Cooper  
to appear online or on CNN International.”

And local coverage could be in the offing. In August, CNN said it was  
dispatching journalists to 10 cities in the United States, but in a  
bare-bones fashion: the correspondents will be laptop- and camera- 
toting one-person bands, rather than workers in expensive bureaus.

“This is obviously a national wire service,” said Susan Goldberg, the  
editor of The Plain Dealer in Cleveland, which has already published  
some stories from CNN’s wire service. “They’re not opening up shop  
here in Ohio necessarily. We would like to see them put out accurate,  
informative, entertaining news and information. We would also love to  
see them produce content that works really well on the Web. Shorter  
stories, because all of us are dealing with shrinking space in our  
print edition.” (An editor from The Plain Dealer will attend the CNN  
meetings.)

A number of newspaper editors say the component of A.P. service that  
would be hardest to replace is still photography. CNN said it did not  
plan to offer photography but would offer streaming Web video for  
newspapers’ sites.

Mr. Walton declined to say how many journalists CNN was looking to  
hire, but job ads have been appearing online. One recent posting  
sought journalists to staff bureaus in Atlanta, Washington and Los  
Angeles.

The help-wanted ad described the service like this: “The CNN Wire is  
on CNN’s editorial front line, editing and vetting the work of  
correspondents and producers worldwide and doing original reporting  
for use across CNN’s networks and Web pages.”

In an interview, Mr. Curley of The A.P. said that given the state of  
the news industry, “we should rejoice that someone has millions of  
dollars to spend on breaking news.”

“Breaking news is very, very expensive and if they have the resources  
to spend on it, we welcome them to the game,” he added.

But in his conference with employees, Mr. Curley suggested that the  
CNN wire service needed major improvement before it could play at The  
A.P.’s level.

“You really don’t want to put quotes up there that could end up on  
locker room walls,” Mr. Curley said, before doing just that.

“The current CNN wire, if you look at it truly is still, and  
remarkably, abysmally written,” he said. “However, they’re  
interviewing A.P. people, we know, and that can be transformed. And if  
you have enough money and you have enough ego and enough desire, you  
can fix that in a hurry.”

Last year CNN said it was dropping Reuters’ wire service. The move  
saved the network more than $3 million annually, but it was not a cost- 
cutting decision, executives said. Instead, it was part of CNN’s  
strategy of relying less on outside media outlets for news coverage.  
In that vein, CNN plans to drop The A.P. for CNN.com in January. (CNN  
the television network will continue to use The A.P.)

“Look at the history of CNN,” Mr. Walton said. “We launched as one  
network in 1980. Today CNN is more than just one network. We have a  
huge radio business. A huge online business. We’re about content.”

“We want to own more of our own content and reporting. We felt we had  
to look at our business as more than television,” he added.

The Associated Press is more than 150 years old and is the world’s  
largest news-gathering operation, with more than 3,000 journalists in  
over 100 countries.

“I think the crucial question is whether CNN is going to try to really  
go head-to-head with The A.P., or offer something that’s a lot more  
selective,” said Jack Driscoll, the former editor of The Boston Globe  
and editor in residence at the M.I.T. Media Laboratory. “Newspapers  
are hurting so much that they could be willing to get less for less.”

In that case, Mr. Driscoll said, there is probably room for a new  
competitor.

“But if CNN is going to try to do something close to the range and  
quality of The Associated Press, that’s awfully hard to do, and it’s a  
huge financial undertaking.”

Some newspapers that have long relied on The A.P. have said they would  
drop the service because of its cost, which varies — The Columbus  
Dispatch, for example, paid more than $800,000 a year. Others,  
including The Star Tribune of Minneapolis and the Tribune Company, one  
of the largest newspaper chains, have also given notice that they plan  
to drop out of the service. The A.P., in response, announced in  
October that it would reduce prices, which will result in a cumulative  
savings of $30 million annually for its member newspapers.

This stands in contrast to the current financial fortunes of CNN.

In October, CNN said it was hiring nearly 30 people to staff a news  
hub in Abu Dhabi, and has made other international expansion moves.  
And Mr. Walton said the network was on track for its fifth consecutive  
year of double-digit profit growth, a first for CNN.

“One of the good things is that when you are profitable, you can  
reinvest,” Mr. Walton said.