Date: Thu, 20 Apr 95 10:05:21 PDT
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Eric Meyer wrote:
>The secret, Rosalind, is that they've just created what amounts to an
>online news cartel. Play their game or go find your own news to use
>as a lure to get readers, whom advertisers will follow. And the new
>online consortium has sufficient clout to control AP pricing. If AP
>suddenly becomes prohibitively expensive to non-cartel members -- i.e.,
>to "non-contributing" members like Prodigy -- where will the commercial
>online networks look for breaking-news content? UPI?
This isn't the first time you've hoisted conspiratorialist theories about how
newspapers could control the AP for oligaristic purposes. As a former UPI and
Reuters hand who competed with AP for the years, I would love it if that
theory were true. However, I'm going to debunk it:
Just like with any other business, AP's costs are rising and it needs to
increase revenues to cover those costs. It could demand more money from its
existing membership, but in times of 30%-40% rates hikes for newsprint its
members (notably your 'cartel') won't stand for increases of more than
inflationary percentages. So, AP must win new business. Yet, AP has held 100%
market shares of U.S. newspapers and TV stations since approx. 1990 and has
been ineluctibly losing radio station business ever since the Reagan Admin.
rescinded the FCC mandate that every licensed broadcaster air some news. This
means its only recourse is to gain nontraditional media business (Prodigy,
etc.) The AP has been pursuing this course these past few years and nearly
1/3rd of AP's revenues today come from non-newspaper and non-broadcast
business.
Yet, your theory casts the AP as a lackey to a cartel that will force it to
apartheidize membership into cartel and non-cartel members, prohibitively
raising its prices to the latter. This would lose membership and existing
revenues and starved the AP of sources of potential new revenues.
Indeed, this New Century Network would permit its papers to be less reliant
on the AP: They'll be able to exchange stories for publication through their
own network, rather than rely on AP wire copy or the AP's transmission
facilities.
>These folks even own a big chunk of Netscape.
Thinking that their 11% equity will allow them to control Netscape?
>OPEC could only dream of being so well established.
Sigh.
Rosalind Resnick is right both that this effort may be starting a bit late
and that there remains a lot more to be done if national advertising is to be
attracted to online newspapers. The New Century Network, at best, may create
a defacto national SAU for online newspapers. At worst, it is a circling of
old media wagons on a threatening New Media frontier.
--------------------------------------------------------
Vin Crosbie voice(212) 207-9290
ProductView Interactive, Inc. fax (212) 207-9295
One Dag Hammarskjold Plaza vin@productview.com
New York, NY 10017
--------------------------------------------------------
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Reply-To: rosalind@harrison.win.net (Rosalind Resnick)
To: meyer@newslink.org, online-news@marketplace.com
Subject: Re: New Century Network From: Vin Crosbie Date: Thu, 20 Apr 1995 12:26:56
How the Web Was Won
Subject: Re: New Century Network
From: Vin Crosbie
Date: Thu, 20 Apr 1995 12:26:56