• The product -- each clip, actually -- is advertising-supported. Fifteen- or thirty-second spots precede a summary and individual stories, running a minute or so each.

  SEEKING SOLUTIONS

  This is the first of an occasional series of articles examining solutions that news organizations are developing to address the range of challenges facing media today.

• The videos are a joint venture with a non-news partner, Microsoft. The open-platform crowd of techno-bloggers has already weighed in with criticism because the videos can only be accessed through Internet Explorer and displayed on Microsoft Windows' video player.
• The service offers something new, timely and essentially free to one segment of AP's client base -- online news sites. At the same time, it risks annoying broadcast clients, who like to think of up-to-the-minute news video as their domain.

• The books were being balanced by charging primary clients a use fee for content, which was then "repurposed" for international, archival and online use. In a world where, as Curley put it, "content will be more important than its container," the business was organized around containers.
  

• While the clattering wire machines, which middle-aged newsies remember fondly, had long given way to electronic transmission, there was less modernization than met the eye. Really, delivery was just a higher-tech version of the telegraph model, dating back to the 19th century -- "the fire hose," as it is called derisively in-house -- in which a stream of content was pumped at clients, who were left to do most of the sorting themselves.
  

The new AP -- and this part is very much under construction -- will more closely resemble a huge meta-database in which content is intricately tagged and retrievable on demand by clients to use as they like. (Not incidentally, the tags include invisible "watermarks," which will make it easier to track where content is used -- and if it is expropriated.)

You could boil the AP business challenge down to even simpler terms: it has the world's biggest and most expensive content-gathering operation -- roughly 2,700 journalists worldwide -- and a very turbulent mix of revenue streams to support that work.

Curley summed it up this way in a phone interview in early March: "We are an electronic news company, trying to become a digital news company… and we have some advantages: we don't have presses and trees."

But some once-lucrative lines of business -- moving ads by satellite or creating analog stock tables, to take two examples -- are fading fast. In place of sure-bet new businesses, Curley said, "we have a couple of commandments" for innovation: "use the technology to create more content and protect that content; create an AP video network; increase photos by at least 20 percent."

With the transition come a bunch of challenges. Curley tackled the income question head-on in a second speech last April at the AP annual meeting in San Francisco. He recalled that a predecessor, Frank Batten, then AP's chairman, talked about cable TV and other elements of a "future coming fast" in 1983. "Frank's speech made a case for a general assessment increase to help modernize AP's aging infrastructure. The increase was 9.5 percent. Obviously those were different days."
 

Tom Curley, Associated Press CEO

Instead, Curley proposed to "license AP content separately for each platform on which it is used" -- that is, to charge separately for online use. The proposal didn't fly. There was plenty of pushback, including some from AP board members. So online was wrapped into the general assessment for AP member clients and, in effect, has remained free for now.  

A smaller but smoother launch was the service's new youth-targeted product, asap, in September 2005. It carries an extra charge and has been picked up by about 200 newspapers, alternative weeklies and youth-targeted publications. It is an example of what Jim Kennedy, AP's director of strategic planning, calls "a cross-media mindset." Also, while "AP has traditionally defined the mainstream of news," Kennedy said, "that's not the full breadth of what people want." Topics like health and fitness, gadgets and food are on the rise.

A representative story from the asap archives is the saga of a writer's adventure making turducken -- the alternate holiday entrée featuring a whole chicken stuffed inside a whole duck, and then stuffed inside a whole turkey. The tedious and slimy process is described in a longish story, accompanied by in-kitchen video and separate audio of crunching bones. asap editor Ted Anthony has contributed an audio report on '60s-era "singing the news," a personal interest of his.

asap and the online video service may be up-to-the-minute, but, in other respects, the AP straddles some legacy practices. For instance, it does not exactly have its own Web site. Open the AP page and you will find a story list, but no display. The links are to published versions at various newspaper member sites.  (asap and the online video service are featured in headlined links to participating sites.) So, in that respect, AP continues to defer to clients. "We are still a business-to-business company," said Kennedy. "That will remain."

But when the business in question is Google, the relationship gets dicey. AP does have a licensing agreement, terms confidential, with Yahoo! and AOL. Google? Kennedy, usually voluble, hung his head when asked. "That's a problem."

asap.ap.org

Curley was not a lot more forthcoming. "Well, we're not suing Google," he said, alluding to Agence France Presse, which did just that a year ago, and immediately had all links to its content dropped from Google services, a loss of exposure that may hurt more than being ripped off might hurt. The AP's most direct competitor, Reuters, to date has welcomed Google links and has sought to be featured in Google Finance, launched in beta format last week.

So Google is essentially helping itself to AP content for free? "I wouldn't characterize it that way," Curley said. A Google spokesperson said the company would not comment on ongoing negotiations, which suggests that Google and AP are talking. Meanwhile, Google News has no mention of the Associated Press on its display page, but does link to AP stories posted on such sites as SI.com.

Then again, no one said all the pieces of a transitional business would fall into place overnight.

That was part of Curley's answer when asked why some newspapers are hanging back on picking up the video service. "It has only been out three days," he said when we spoke March 3. Some may be waiting a while to see whether they can do better than a 50-50 revenue split, showcasing local video or national and international clips from other sources. Others may not be equipped technically to be first-movers.  Five hundred outlets have picked up the service so far, with more in the pipeline.

And it looks to be an awfully good match to current trends, introduced just as broadband and improved video technology make this sort of report easy to view and well-pitched to office workers who take a quick news fix, now and then, while on the job. The current version offers a one-minute summary and a menu of a dozen stories (to be expanded to 50 or so daily as it develops). In effect, it lets you be your own news director.

That is not necessarily a happy development for broadcast outlets, though some of their sites are among the initial subscribers. As recently as 18 months ago, online was off to the side for many broadcasters, but suddenly both network and local are scrambling to put together branded online video reports with their talent and their own advertising base.

Also, among those not on board, for now, are Microsoft's own two Web site joint ventures -- MSN.com and MSNBC.com. Both offer a selection of videos from "NBC Nightly News," the "Today" show and other NBC sources.

Jim Kennedy, AP director of strategic planning

Coincidentally or not, AP got the service off to a fast start its opening week with an exclusive tape (from undisclosed sources) of an early White House conversation during Hurricane Katrina in which the possibility of breached levees was raised.

In my sampling, the videos display more quickly and play better, with with better audio and picture quality, in some places more than others. (Yahoo! is especially good.) That, too, is part of the break-in period, and comsumers of most any kind of online video require some patience.

asap and online video are only two among a dozen or so current strategic initiatives, Kennedy said. The nascent video news service captures AP's big business challenge in miniature. Ultimately it will succeed or languish depending on strength of content and user-friendly delivery.  

The story plays out largely absent the attention lavished on the newspaper and broadcast industries, the rise of upstart online wild-cards and hard times at once-proud titles. You can't buy a share of AP, so it is not on the scope of Wall Street analysts.

But the stakes are high. Will the service be able to deliver the same or improved volume and quality of original news in the future as it has in the past? AP has a couple 21st-century content strategies up its sleeve to answer in the affirmative. They are the focus of the second article in this series later this week.

Coming Wednesday: A look at some of the AP's new strategies for news.