Wednesday, June 23, 2010

AP Fired From CNN

After preparing for some time to rely only on its own resources, CNN will not use any photos, videos or newswire reports from the AP, as the cable news network said. Three years ago, CNN dropped Reuters (NYSE: TRI) following a 27-year relationship as way to cut costs. In a staff memo written by CNN President Jim Walton, cost containment was cited as a reason for severing ties with the AP to shift costs in support of creating more original content. While CNN has taken a beating in primetime at the hands of Fox News and even MSNBC, its website continues to be dominant. In addition, it has consistently held the top spot for paid news apps in Apple’s iTunes Store.

It’s worth noting that just as CNN is breaking up with AP after 30 years, it is getting back together with Reuters, albeit in a more limited form than it previously did when the last contract ended three years ago. As Walton notes in his memo, Reuters will provide breaking news as a supplement to CNN’s original reporting. In addition, Spanish-language wire service EFE will also add to CNN’s breaking news offerings.

Another reason for cutting off the AP feed is because CNN has been trying to compete against the news service with its own CNN Wires product. CNN has sought to attract newspapers to pay for its services, and by relying on the AP, CNN had a harder time differentiating itself. Unlike the AP’s newspaper members, which have to give a two-year cancellation warning if they want to opt out of the service, CNN has a commercial licensing agreement set to expire June 30 and doesn’t have the same time constraints placed on it. In a statement, the AP called the move “unfortunate.”

The full CNN memo follows:

To: CNN Staff
From: Jim Walton

We are taking an important next step in the content-ownership process we began in 2007 to more fully leverage CNN’s global newsgathering investments. Starting today, CNN newsgathering will be the primary source of all content for all of our platforms and services. We will no longer use AP materials or services. The content we offer will be distinctive, compelling and, I am proud to say, our own.
Beyond the obvious business reasons for this operating shift—the content we spend our money to create should be the content we present, and less reliance on outside sources will mean more to invest in our organization—there are other important motivations. CNN-exclusive content will further differentiate our platforms in the media marketplace. It will provide consumers with the unique news and information experience they expect from CNN. And it will make us more creative, resourceful and collaborative journalists and news professionals.
To support this new model, we are expanding the CNN Wires team and embedding positions with desks and bureaus to speed information to air. Among continuing infrastructure improvements to further our distinctive storytelling, we’re launching CNN Share to aggregate editorial content and facilitate easy distribution and sharing across platforms; launching a new alert system for breaking news; creating newsgathering opportunities across all dayparts; and building tools to expand information gathering from social media and emerging sources.
Our global broadcast affiliates will be key partners in this effort. Creating more original content will enhance our service to them and build stronger working relationships going forward. Additionally, we are entering into an arrangement with Reuters to supplement breaking news coverage and we have the Spanish-language wire service EFE available in-house.
This effort is the result of creative thinking, partnership and hard work by colleagues from across CNN guided by the same goal: to further strengthen CNN’s leadership position and grow our business. I am grateful to them for bringing us to this point, and to each of you for taking it from here. By embracing this new way of working, we are demonstrating our commitment to the future of CNN.

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