Questions: should newswire agencies serve consumers – directly? And, to a broader extent, how does the current information shift impact the agencies’ future? Two recent events lead me to explore these questions in today’s Monday Note. The first one is rather significant: last week, Associated Press announced a deal with Google allowing the search engine to republish its newswire stories. And the second was the admission by the new CEO of Agence France-Presse that he was indeed willing to join the B2C fray.
Before going further, a bit of disclosure. About a year ago, the previous AFP CEO asked me to evaluate the newswire agency’s strategy. I interviewed countless people, insiders and outsiders — especially AFP customers. Early this year, I handed my report to the CEO who, in turn, forwarded it to the union representatives (the unofficial agency co-managers). Consistent with their unabated propensity to relieve themselves on their doorsteps, the unions leaked the report to everyone around them, they even made it downloadable. (Expecting their reaction, I had carefully redacted every piece of data that could have been of interest to the competition.) Needless to say, my report was blasted by unions, with truckloads of personal attacks targeting my past, my career, my connections, my supposed agenda. Again, this is part of the French news agency’s folklore. Since then, the CEO who ordered the report has resigned — he was clearly at odds with the unions – was replaced by the former head of the national TV archives whose primary mission, given by the Culture minister, was avoiding any conflict with the unions (in other words, give them what they want, elections are two years down the road). Why the Culture minister, you ask? Because he oversees the Agency, which draws 40% of its revenue from the government. (The new CEO was picked by president Sarkozy within the minutes of his predecessor’s resignation.)
With this out of the way, let’s go back to the issue of newswires going after the consumer market. Should they do it?
Unfortunately, there is not one answer to this question. It depends on each company’s customer base, on its shareholder structure, and on its financial health. Historically, newswire agencies justify their existence with their unique ability to provide breaking news, in depth-reporting, on a global scale. In order to do this, they maintain a network of bureaus and correspondents all over the world, with the ability to collect and process huge amounts of text, photo and video on a round the clock basis. All the four major agencies — Associated Press, Reuters, AFP and Bloomberg — are truly amazing news gathering machines with large staffs of highly dedicated newspeople at the frontline of the information.
With the advent of instant and ubiquitous information, the dominance – and even the relevance – of the “Big Three” (Bloomberg is marginally in the general news segment) is now seriously challenged. Newsrooms wonder: does it make sense to pay high subscription fees to newswire services increasingly undermined by the global information overflow? More