Asia-Pacific

AP to form news group to make money from mobile

(Agencies)
Updated: 2010-10-19 09:27

Curley indicated that the clearinghouse's biggest moneymaking opportunity is likely to be the licensing of copyright-protected content to mobile phones and an array of computer tablets such as Apple Inc.'s iPad and emerging competitors.

By 2012, the AP expects more than 250 million wireless devices to either be running on Android, a mobile operating system made by Google Inc., or the Apple system that powers iPhones and iPads. Meanwhile, newspaper and magazine circulation is expected to keep falling. Curley said that will set the stage for the day when there will be "more touch screens than front pages."

"The move to mobile ... will usher in a new golden age for the development for products, if we're up to the challenge," Curley said.

Newspapers desperately need to find ways to bring in more money because their main revenue source - advertising - has plunged in the past four years. Total ad revenue at US newspapers is on a pace to reach about $25 billion this year, a nearly 50 percent drop from $49 billion in 2006, according to the Newspaper Association of America.

Television and radio broadcasters also have been suffering financially in recent years, although not as severely as print media.

Because the not-for-profit AP relies on newspapers and broadcasters for a big chunk of revenue, the news cooperative also has felt the pinch as it lowered its fees to help the media weather the advertising downturn. Last year, the AP's revenue fell by nearly 10 percent to $676 million, and another drop was budgeted for this year.

Most analysts, and even many industry executives, believe the news media miscalculated as the growth of the Web audience began to accelerate in the late 1990s. Among other things, newspapers decided to give free access to their websites, which diminished the value of the content that they sold in print. That decision also has made it easier for search engines and blogs to republish key parts of their stories - and keep revenue generated by ads on their sites.

The growing use of mobile devices could allow traditional news organizations to take back control. Curley described "a multidimensional, multi-platform opportunity" that goes beyond existing delivery mechanisms such as websites and search results pages.

The AP and many of the newspaper publishers that own the cooperative already have seized on the opportunity by creating applications for the iPhone, the iPad and Android-powered phones.

More than 70 newspapers now pay for an AP service for creating smart phone apps in a partnership with Verve Wireless Inc. Plans to do something similar with the iPad are in the works. The AP charges a fee for creating these mobile applications.

Without providing specifics in his speech, Curley indicated the AP has something more elaborate in mind for the mobile app market next year. This next-generation app platform "will offer consumers fresh perspectives on the day's top stories and take them behind the scenes with our experts," Curley said.

As part of its effort to build more mobile apps, the AP will begin offering a new advertising tool, called "iCircular," that will attempt to sell the digital equivalent of coupons and other circulars that are inserted into newspapers' print editions.

Although the news industry still has to deal with matters such as making money from news links people share on Facebook, Twitter and other social channels, Curley said the news media have no choice but to figure that out with such initiatives as the clearinghouse.

"It's time to make it a real business and extract some additional value from the marketplace to support the good work we do," Curley said.