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Fri 29 Jan 2010 04:00 AM

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Wired for change

Technology has dramatically affected the way news is gathered, distributed and consumed forcing major shifts in the way it is monetised. Digital Broadcast caught up with three senior executives from global news wire Associated Press (AP) to find out how the agency has coped with the changes so far and how it plans to adapt for a digital future.

Wired for change
Henrik Eklund, Director of digital distribution.
Wired for change
David Hoad, Director of global video technology.
Wired for change
Tamer Fakahany, Managing editor – news production.

Technology has dramatically affected the way news is gathered, distributed and consumed forcing major shifts in the way it is monetised. Digital Broadcast caught up with three senior executives from global news wire Associated Press (AP) to find out how the agency has coped with the changes so far and how it plans to adapt for a digital future.

The Associated Press (AP) traditionally provides news for newspapers and broadcasters, but it is no slouch when it comes to serving new media outlets.

“We do a lot of what we call hosted news services. That means providing the hard work at the back-end – host it, create the content – but in the client’s house style. And they can change styles on the fly but it’s our content behind it,” says David Hoad, director of global video technology for AP.

Hoad says one reason why clients are attracted to them is the strength of the brand.

“It is one of the big differentiators between us and the rest of the marketplace. A lot of organisations delivering news – the MSNs and Yahoos – look to companies like ourselves to produce content on their behalf. We are producing more and more services for clients in that market.

“Editorially, we’ve had to learn how to shoot and edit content for the internet because there is a difference in how you compile content for online and we have also had to think about what formats we originate content in knowing that it will then be converted several times before its delivered to the end consumer. We try to reduce the number of conversion steps where possible.”

Hoad says – that without good planning – a video clip could undergo as many as six conversions before it was viewed on a new media platform.

“We had to take a step back and figure out how to work with our three primary outlets; mobile, broadcast and online. We have streamlined this process gradually during the last two or three years,” claims Hoad.

“In the early days a lot of websites and mobile operators would dip their toes in the water when developing online content. Some of them conducted trials with us for three months then simply gave up. However, for the past two years there has been a solid base of content for that market place meaning we have revisited our workflows to ensure that we are catering for them correctly.”

In order to boost the quality of its services for online and web clients, AP combined its IT and traditional broadcast engineering departments.

“We made a brand new team out of the two previous groups and this has worked out very well. In the last three years we have also brought in some new hires with some specialised web experience.”

Although Hoad says essentially, much of the technology underlying the production process remains unchanged across the three platforms, there are still additional factors that alter the way they work with each.

“There has been a lot of research looking at how to resize or re-image content for mobiles, particularly in sports. If you have coverage of a soccer match then you can ensure that the player with the ball is always in the centre of the screen. A lot of work has been done on applications like these to maximise the use of the small screen.”

The production of content specifically for online clients also alters the requirements placed on the editorial staff.

“Sometimes we might want to re-edit it for online to make it a bit shorter and snappier,” says Tamer Fakahany, managing editor – news production, AP. “The voiced packages may also need repurposing and edited down and repurposed for script. At the same time, other pieces will work across all our formats. It depends on the content of the material.”New technology platforms have created extra channels for editorial teams, but technology has also played a huge role in expanding the capabilities of AP’s staff in the field.

“AP is now very much a place of joined-up journalism where print, stills and video have a real synergy. Sometimes we will have a one-man or one-woman band, they could be filing a print story, taking a couple of stills and perhaps even shooting some video with the same camera,” explains Fakahany.

Armed with a camera and a laptop journalists can now deliver a much higher volume of content from a number of more challenging environments.

“We can place journalists into areas that previously would have involved doing a very expensive feed from or where a feed was difficult for political reasons. Now as long as our reporters can get to a good internet line, they can send us their material.

Fakahany says that this has allowed them to cover stories from certain locations that have previously proved far more challenging, if not impossible to file from.

“The story of the Madonna adoption in Malawi is a good example. We were able to satisfy the demand brought by crossover with news and entertainment and deliver a number of files during the day.

“We have also been able to drastically reduce the amount of time it takes us to get material out of certain parts of Pakistan. These technologies also allow us to get breaking news out very quickly. Previously this was only possible to do from our major hubs in Washington, Moscow and so on. Now we can do this from hinterlands and conflict zones.

“This also means that not everything that our journalists do send us, is something we want to put out to our clients. There is a real deluge of material coming in now that we have to choose from,” says Fakahany.

This is the root cause of the difficulty in monetising online content according to Henrik Eklund, director of digital distribution, AP.

“The digital ecosystem is bulimic. People are pouring content into it and no one is charging for it,” says Eklund. “It’s not broken, it’s just very dysfunctional. AP has to take the position where it sets the prices and creates the market. That is essentially my role; setting prices, finding tools for our clients to sell and make money on content.

“AP produces so much content – I don’t know how many tens of thousands of stories are created everyday. What has happened though, is that the technology shift has been used to increase the creation of content but not the range of products. This is part of the reason why the internet doesn’t work commercially,” says Eklund.

Currently, publishers wishing to use AP content pay a monthly subscription, Eklund expects this model to continue, however, he believes that it must be tweaked to reflect the reality of today’s market, if it is going to remain profitable.

“The traditional business model is through subscriptions, based on the number of broadcast households a TV channel has or the circulation of a print client. I think that model is dangerous. New technology means we have increased our output from 100 photos a day to 5000 a day, but based on the same subscription rates. I think this model will remain but it will evolve into a ‘minimum guarantee’. So this would be a client’s entry point and once they have used their quota, they have to pay extra.”

In order to put such a system in place, AP would require its clients to tag content that they produce from the agency’s material so that it can track content usage. Eklund highlights digital rights management (DRM) as one of the principal challenges for online content, made even more challenging given the volume of material.

“I don’t expect that YouTube is particularly happy about hosting 180 million streams a day with no advertising. The number of blogs is increasing by 300-400 percent a year but after three months only 20 percent of these are still active.”Eklund is well aware of the difficulty of this task as consumers are asked to get used to paying for content, describing the process as “brutal”.

“There is no market for paid content because nobody is setting a price,” he says. “We distribute our headlines, introductions and full stories online and you can find these all over the internet. Perhaps only the headlines and intros should be free and the in-depth coverage should be protected by a pay wall?”

The process of setting prices is not an easy one. Eklund suggests that a price could be indirectly derived from the cost of advertising on the page that the content appears.

“In Europe, publishers will typically get US $30 CPM for a sold-out ratio of 100 percent. If they sell a third then the figure drops to $10 CPM, if we look at half that, $5, then that would be a starting price for news content,” he explains.

Once a pricing system is in place there will also need to be several shifts in attitude among consumers, marketing managers and publishers.

“We have to contend with the legacy situation. The technology has allowed news providers to put more content into the market and dilute the value.Our clients have to be educated – they can’t have everything for free – this is a difficult behaviour to change. I think that the public are willing to pay if they know that what they are going to get, is what they need. Senior marketing managers have been operating throughout their entire careers with the old models and at the end of the day they will revert to what they know. We have to combat this.”

Assuming publishers are ready to charge for AP content and consumers are willing to pay for it, the next question is how?

“The payment system doesn’t have to be complex. Complexity is a barrier. We have invested quite heavily in a micropayment method for paying for online content using your mobile,” reveals Eklund.

“We have a reach of four billion people every day. There are 175 million PayPal accounts. Globally two billion people have a bank account. There are four billion people using SMS. So it makes sense to use SMS as the payment method.

“I think one of the main reasons that these methods are not already used widely by the media is because the US doesn’t really use SMS. They are one of the very few countries that don’t.”

The argument over the monetisation of online content has existed for several years. Major publications including the The Guardian newspaper in the UK and the New York Times charged users for access to their content. The poor subscriber take-up and the growing potential of online advertising at that time forced them to abandon the model.

Recently, News Corp chief Rupert Murdoch has suggested that he will move his publications back to a subscription model adding that he would consider removing his sites from the Google News network to prevent readers from accessing headlines and introductions from the portal.

“I see his point but he’s fighting against the windmills,” says Eklund. “There is a flow to these things and instead of trying to stop it you have to work with it. Some information such as real-time financial information may work on a subscription basis but not for general news, entertainment or gossip.

“You have to structure your content and protect some of it,” says Eklund.

“It could be an article that someone has spent months of research time on – that has real value – you should lock that value in. The method of payment is one of the most important things. If it’s easy it will work, if it is complex, it will not.”

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