Remarks by Tom Curley
President and CEO/Associated Press
Knight – Bagehot Dinner New York
November 1, 2007
Madi Reddy is a 22-year-old resident of Hyderabad, India, with ambitions to rise above his hereditary caste. He’s a newshound, investing time every day turning the news into diagrams on a whiteboard in his small apartment. He then breaks the news into conversational chunks he can use to win friends and influence people, online or in person.
Madi’s story was captured by anthropologists hired by AP to study news consumption patterns of young adults. Madi was by far the biggest news junkie of the bunch, but he was not unique.
The research we did in cities in the U.S. and abroad this past summer provided compelling evidence that the news is as valuable as ever – even in an age where screen-based headlines overwhelm the senses and the next update is never more than a mouse-click away.
Young people the world over are hungry for news. They just don’t prefer our traditional platforms and packaging.
The irony of the disrupted news economy of the 21st century is that the news is hot, but the news business is not. Old media companies the world over are bemoaning their lost audiences and sinking revenues, but young Madi is whiteboarding the news every night before he goes to bed.
Somewhere in that mysterious disconnect lies the future of news – and some great opportunities for content providers.
We – the news industry -- have come to that fork in the road. We must take bold, decisive steps to secure the audiences and funding to support journalism’s essential role in both our economy and democracy, or find ourselves on an ugly path to obscurity.
The portals are running off with our best stuff, and we’re afraid or unable to make or enforce deals that drive fair value. Revenue lines in a good month are flat. In other months, they inspire the merchants of debt to imagine how they might take us over and show us how much smarter they are.
Sam Zell said at a recent Grant’s investor conference that the people running newspapers are monopolists, too inept to adapt. Sam, show respect. You’re talking about our bosses. The margins are moving toward the norm for competitive businesses.
Our own reporters ridicule our digital transition plans as one great organization or another faces ownership changes, most notably Knight Ridder, Tribune and Dow Jones. When an experienced media operator steps up, such as Murdoch, he gets vilified.
News Corp. has been a hugely successful, long-term operator. Even before taking ownership, Murdoch has changed financial journalism for the better in this city. People at other organizations know Murdoch is not afraid. They have begun to make decisions to invest or redeploy – decisions they had postponed for years.
That is exactly what must happen. We who rule content must start making decisions, the ones that deliver journalism for another generation of readers and viewers.
I’ve been inside many major news organizations the last couple years, and, invariably, I hear the same refrain. We know what to do, but we can’t get it done. Or, sadly, we’re in worse shape than we were two years ago because we’re spending even more proportionately trying to keep the old model functioning. More than a few persist in trying to make their online sites life rafts for newspapers or newscasts.
So, a few more things might have to change. The pressures on the bosses will have to build. Many more of us in leadership positions must step up and say, now.
The first thing that has to go is the attitude. Our institutional arrogance has done more to harm us than any portal. We must understand and embrace the new ways people such as Madi Reddy are consuming content.
There’s still a place for appointment media – a home-delivered newspaper on the porch each morning or an evening newscast while making dinner. But it is a smaller place. People, of course, want the news when they want it. Even more difficult to accept, they want control over what they get.
Think of it this way. The perfect paper or newscast is becoming possible – at least in the reader’s or viewer’s eyes. What is it you really want to know? We can personalize content now.
We’re not stuck on those 15-ton behemoths that miraculously manufacture a one-size-fits-all package over several hours that gets delivered over even more hours at great cost or captive of a 22-minute time slot engineered to reach a vast range of content tastes.
Our focus must be on becoming the very best at filling people’s 24-hour news needs. That’s a huge shift from the we-know-best, gatekeeper thinking. Sourcing, fact-gathering, researching, story-telling, editing, packaging aren’t going away. These professional skills still should command premium wages. But the readers and viewers are demanding to captain their information ships. Let them.
Next to go must be despair. We begin by getting our heads around the most important fact of all: we work in a growth industry. The woe-is-us over the decline in appointment media obscures terrific opportunities.
More people are accessing news more frequently than ever before the world over. All media platforms – video, audio, digital and even text – are seeing growth. Demand for the four major content areas – news, entertainment, sports and financial – continues to rise. Financial news is hottest with companies such as News Corp. and Thomson paying premiums for bigger shares.
The adjustment we’re being asked to make is to a world of increased access, new competition and different business models. It’s not about easing onto the obit page.
The journey to the next generation news begins with us believing in ourselves and what we do. In 273 years since John Peter Zenger was jailed, nothing has been invented to take the place of what reporters and committed news organizations do. Above all, it is about speaking truth to power when power most needs to be told.
We have the power to control how our content flows on the Web. We must use that power if we’re to continue to be financially secure and independent enough to speak truth to power.
Third, while the thrust of my remarks is about content, we need money, serious money to pay for great reporters as well as hire a few lawyers to keep our Zengers out of jail.
Those of us in content must accept today’s reality. The marketplace has flipped. For the last couple hundred years, content has carried ads. In today’s Internet, ads carry content. Let me be emphatic about one point. I’m not suggesting the ad department or advertisers tell us what to write. Or that content has in any way become subservient. Simply, the structure for advertising is changing from mass to targeted.
When you drop a cookie on someone in the digital space, the ads you serve that viewer become up to 200 times more valuable. Dave Morgan, formerly chairman of Tacoda and now at AOL, puts it pretty simply. He says the future is about serving ads to people, not to pages or programs.
We must change how we charge for content. In the financial marketplace, hot news is the most valuable of all. Hedge funds pay premiums, add spiders and link to trading programs. One-size-fits-all on the business side has to evolve. Tiered pricing with premiums for timeliness or comprehensiveness is one option.
Most news organizations did deals years ago for promotion. The deals are one-sided. Job one for industry leaders should be doing whatever it takes to get a fair deal even if they must swallow some decades-long enmities and partner for more clout.
Enforcement, too, must be a part. What we do comes at great cost and sacrifice, even death. We believe content should have wide distribution. We intend to be compensated for it.
Fourth, the inverted pyramid is dead. Bet you never expected someone from AP to say that – especially since we invented it. OK, the report of the pyramid’s demise is premature. AP is cranking out pyramids even as we sit here. But there are fewer pyramids in AP’s future. We need the bulletins and the brains. The bulletins are the first 150 words, getting the news out fast, in conversational radio fashion.br>
The brains are the people who can add real value whether through perspective, deeper reporting or great writing. In short, we need talent, a lot of it and some of it very different.
Think of it as a mix from news radio to The New Yorker all under one roof with the New York Public Library thrown in – for a really great data base and interactive programs with the public. Sounds crazy, but it could be a lot of fun. We’re going to have to organize and manage differently. And we certainly are going to have to retrain our managers to deal with a range of personalities and functions.
Every generation or so ushers in a different expression of content. We’re about a decade overdue. Multi-media presentation has gotten the buzz. The challenge is far greater than putting some of us pencil heads on-air without hitting the carriage return in mid-sentence.
We’re wedded to words even when pictures tell the story. The focus has to be on the best way to tell the story whether words, pictures or both and without regard to format.
We also must speed up our clock to real time. When I started, in the sixties, the news cycle was 12 hours. Today, it’s three hours – about the time it takes for a significant percentage of the people interested in a story to have encountered the story or the news they need. Yet, newspapers and newscasts run with lead stories of marginal interest that are 20-plus hours old.
Today’s news leaders need to anticipate. Our own sports departments or magazines already do this well. They tell us about upcoming events, match-ups whether with data or in take-outs and profiles. Their columns provide perspective and insight.
Finally, and, most important, editors need to stop pining for the old world and intensify the leading to the new.
Great editors connect with readers and viewers. They build – or to use the vernacular – aggregate audiences, big or niche, with value, social currency and, ultimately, impact on the political process or social norms.
The measuring stick, really the vision, has to be about much more than yesterday’s news. Clearly, new types of news-consumption behaviors have emerged. Scanning the news has become the norm. A majority get news on line – more than those who read the daily newspaper, and half of them scan for updates several times a day.
Deeper dives for the news also are vital to today’s news consumers. The need for sophisticated content sets up opportunities around analysis, perspective, opinion, interactivity, archives and related information, especially content that can be linked.
We are approaching an amazing point in the history of media. Quality will rule. With traffic to destination websites flattening and new distribution making all content accessible, we’re entering a new era of brutal competition. The best will stand out because they will be sought out. Newsrooms need to be reorganized around new content needs..
And we need to regain control over distribution. AP last week presented to its board a dramatic new distribution plan for news that would surface more relevant and timely news through the Internet engines and enable linking and viral sharing of news through widgets and the like.
Lest you think we’re going off the deep end and giving it all away for free, we’re coupling those initiatives with strong new efforts to protect news web sites from unauthorized scraping through tighter site protocols and content tagging. We also hope to strike some attractive new distribution deals with valuable advertising support.
Heavy tech and heady stuff -- all of it requiring AP and the news industry to get together on common standards for managing content and common interests for distributing it. In a nutshell, it means reinventing our 162-year-old cooperative for the digital age.
As part of that transformation, AP will be making sweeping changes in its own news organization to move more news out of our bureaus faster for online and mobile consumption and then enhance it for print and broadcast. We intend to use valuable resources that once were needed to file telegraph-style wires in every state and redeploy those jobs for real journalism. Similar changes already have been made in our international operation with significant results.
Two tenets guide us: the need to adapt our old systems and practices, especially our mindsets, in order to compete, and the need to get control over our content, so that we can take a seat at the table to set the terms for the new distribution that the search engines and Web 2.0 channels offer.
The clock is ticking, of course, and not just from the digital shift. We face an epic news year with a wide open national election, Beijing Olympics, a slowing and heavily leveraged economy and the possibility of expanding strife in the Middle East.
Against that backdrop, there can no longer be any excuse to wait for technology to prove itself or to wait for young people to grow up and subscribe to the daily newspaper or turn on the news at 6:30 at night. The future is as clear as it was when the founders of AP rallied around the use of the telegraph in the 19th century.
In fact, if you read the history of those days, you could make an argument that those guys reacted more quickly to the shift they saw.
You can bet that if they saw a Google, a Yahoo or a Facebook, they would have figured out what to do about them. You can bet that if they found a newshound like our friend Madi Reddy in India, collecting news and tidbits to share with friends, they would have found a way to feed his obsession..
That’s our job from here on. For AP, it’s a mission that’s really unchanged from 1846.
If we make the right moves, or even some of them, we have tremendous opportunities to grow…at AP and all our organizations. The new power users of news around the world have unprecedented access and appetites for information. The challenge for all of us is to build the kind of content powers that can flood the new zones of consumption and thrive both financially and journalistically.
In the broad arc of media history, it’s a very big moment. I hope you’re all as excited as I am to be a part of it. And ready to step up to the decisions.