GARY PRUITT 2013 ANNUAL MEETING REMARKS

Gary Pruitt
President and CEO, The Associated Press
AP Annual Meeting speech
Monday, April 15, 2013
Orlando, Fla.
An Abiding Partnership

Last year at this time, I was running McClatchy and writing checks to AP. Then, in July, I became president of AP. The past nine months, I’ve spent visiting AP bureaus, studying our finances, meeting with customers in the U.S. and abroad.

I guess you could say I’ve looked at AP from both sides now. And what has struck me is the depth of AP’s relationship with you, its members. It’s not just business. It’s an abiding partnership. Not without its ups and downs, of course, but enduring nonetheless.

AP has survived for 167 years because it delivers value. It’s my responsibility to make sure that value proposition remains obvious and substantial for you.

One of the things we are doing this year is taking a close look at our news licensing business – which accounts for 85 percent of our revenue – to make sure we are doing everything possible to run AP in a way that helps support the membership.

In a victory for all of us, last month, AP won summary judgment in our lawsuit against Meltwater News, a subscription service that provided its customers verbatim excerpts of stories by AP without paying us a cent.

The judge’s decision in Meltwater vindicated our position that what all of us here do has value, and deserves protection from free-riders and those who take our hard-earned content without compensating us for it.

The ruling is a sweeping victory not just for the media – most important, it is a victory for the public.

And, it also represents the value AP brings to members. Cases like this take years to litigate and cost millions of dollars. But we view it as a critical piece of our longer-term strategy to protect original news content and assure we are compensated appropriately for it.

In the ruling, Judge Denise Cote points out that news reporting is expensive and that copyright law is what permits the media to support their work. She writes: “Permitting Meltwater to take the fruit of AP’s labor, for its own profit, without compensating AP, injures AP’s ability to perform this essential function of democracy.”

“This essential function of democracy.”

That is what we do. And what we must continue to do for a public faced with so much misinformation in this age of information overload. Working as partners, we can help secure this essential function of democracy.

What has AP done to help on this front? We’ve held down the cost of our news report, while using new sources of revenue to help make up the difference. The last time we raised your assessments was in 2006. In the past five years, as newspaper revenues have fallen by 40-to-50 percent, AP has reduced its rates by the same amount. This is what it means to be part of AP.

We’ve stepped in when members needed physical – not just fiscal – help. The tornado that hit Joplin, Missouri, killed a staff member of the Joplin Globe and wreaked havoc on the homes of two dozen other Globe employees. AP loaned the Globe reporters to supplement the paper’s own tornado coverage. We helped the Globe produce a special section on the storm, and provided hot meals and supplies. AP staffers contributed their own money to a fund for journalists affected by the disaster.

In New York, when Hurricane Sandy hit, Digital First and the New York Daily News both moved staff to our newsroom, where we were happy to set them up for business. In other disasters, we’ve provided fuel and housing to hard-hit members. This is what it means to be part of AP.

We stand with our members in fighting to keep government open and accessible. Last year, we filed more than 50 Freedom of Information Act appeals on behalf of ourselves and our members.

We also lead the fight against efforts by sports, entertainment and political organizations that try to limit press access – saving time and legal fees for members. And, we help train your reporters and editors in critical areas, like the strategic use of social networks for effective reporting. We do this training through our regular Definitive Source webinars, which are free and designed just for members. This is what it means to be part of AP.

On the business front, I want to tell you about some of the new business models and products we are pursuing to build revenue for ourselves and for you.

Last year we introduced AP’s Digital News Experiences. These are ready-to-publish digital verticals, focused on specific sports events, with deep and rich content for your websites. We provide you the content, curated by AP editors, for free. In fact, they’re better than free because AP pursues national advertising and we split the revenue with you.

They are also available under a traditional licensing model so you can pursue your own local advertising. That’s an example of the flexibility we’re trying to bring to all of our offerings to you. The verticals are designed to hold viewers to your sites, so they don’t go elsewhere. Some 600 members have already signed on to participate in this promising new business model. This is what it means to be part of AP.

Meanwhile, we have more than 1,000 members now participating in AP Mobile, a news app in which we partner with you. This partnership puts your news and advertising on one of the top-rated news apps in the iTunes store. Both AP and you can sell advertising on it – and we all benefit.

Last year, we also started AP Sports Extra. This is a service of paginated sports packages that are free to all of you who take Member Choice Complete or our sports wire. This paginated product saves you costs in production and has ad space for you to sell. It’s yet another way AP is working to help members drive revenue.

On the video front, all AP video is now shot in high definition, making us the first global news organization to go HD. Last year, we rolled out a number of new platforms to make it easy for you to have AP video on your websites – without having to make making the substantial capital investments you otherwise would.

I want to talk about our news report as well. I’ve spent a lot of time the past nine months meeting the men and women who produce AP’s news. I’ve been deeply impressed by their commitment and their exacting standards.

From Boston to Bangladesh, they create a first-class, boots-on-the-ground, round-the-clock national, international and local news report – committed to the quality journalism that sets AP apart. Our aim is relevant news that your consumers need, and can always count on.

Let me give an example of how seemingly far-flung news can become strikingly local. A few months ago, 122 clothing workers died in a firetrap clothing factory in Bangladesh. AP’s reporter there, Julhas Alam, spent two hours going through the wreckage, where he found clothing with labels sold at American brand-name companies like Wal-Mart.

His reporting forced some major U.S. companies to explain their connection to the plant and evaluate profits against lives. It was a story that touched consumers at every Wal-Mart in the country, which means nearly every AP member. This is what it means to be part of AP.

And we continue to expand our footprint in locations of critical relevance. Last year, we opened an all-format bureau in North Korea, the first and only operation of any Western news organization. At this very critical moment, AP is the only independent news company with a base in Pyongyang, North Korea.

Three weeks ago, we opened a similar operation in Myanmar – the only global news organization allowed to do so. These are locations of great interest and relevance not only to our customers in Asia, but to the United States as well.

Closer to home, we remain the only news organization with reporters in every statehouse. We focus much of our effort on accountability journalism, drilling into issues of high impact for our members. We often build databases that we offer in advance of our stories so that members can get the specific data for their communities.

This year, in addition, we have named a reporter in every state to help members untangle and explain the complexities of the Affordable Care Act – “Obamacare” – so that your readers come to you for expertise.

Serving member needs is critical to AP. U.S. newspapers once accounted for 100 percent of our revenue. They now constitute only about 20 percent of total revenue. But that in no way reduces our commitment to you. In fact, our diverse revenue stream keeps us strong and means we can provide you services at a lower cost. But the partnership runs both ways.

We need your help in combating persistent misconceptions about AP that practically qualify as urban legends.

One is the common claim that most of the AP news report is made up of member copy. In fact, only about 1 percent of stories on our national wires comes from member reporting; 99 percent comes from AP’s own reporting. On state wires, member content averages about 25 percent.

And when we do make your stories part of the AP news report, we provide links that go to the specific story on your site. Links that easily circulate on the Web and social networks, with the traffic going directly to you. And to be clear – and to address a related misperception – we don’t sell the state wires or member copy to Internet portals.

So I’ve seen AP from both sides now. And from this unique perspective, I see a valuable, abiding partnership that all of us can build on to continue this essential function of democracy.

On occasions like this I look to our founding fathers for inspiration. In this case, the blues singer Leadbelly, who reminded us: “We’re in the same boat brother.” “And if you shake one end, you gonna’ rock the other.”

So to you, the members of AP, I say: Let’s rock together.

That’s what it means to be part of AP.

 


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