Interview: Tom Curley, CEO, Associated Press; Portals, Local Content — ‘The Mother of all Battles’

In a speech last month, AP CEO Tom Curley declared that news is a growth industry and that it was high time to kick ‘despair’ to the curb. At the same time, he seemingly despaired about the balance of power that exists online, between the portals and the creators of original content. The solution: fairer deals to ensure that creators aren’t giving away the house, along with a willingness to adapt to the changing ways readers consume the news.

Last week, Curley spoke out again, this time as part of a consortium seeking changes from search engines. I interviewed him later that day about a range on subjects, including how to interpret that first speech, the role of the AP, and what it can do to help its 1,500 member newspapers profit from the transition to digital. One thing is clear: Curley has taken his ‘do not despair’ maxim to heart: “We believe that breaking news is worth more these days than it ever was. So breaking news is a premium business.“

Still he’s pragmatic, knowing that nobody will simply start handing the AP money. Even if breaking news is growing more valuable all the time, the game is to adapt and capture that value: “I think there are a couple of clear trends. One is that you really have to embrace the web 2.0 free distribution that goes beyond a site; I’ve been saying that for years. The other aspect is that everybody’s business model is in a different place… and there needs to be a lot of experimentation and a lot of innovation on these business models… pretty clearly, ad targeting and CPM (cost per thousand) revenue streams around behavioral advertising have a lot of appeal… when you’re an AP without any footprint in the advertising world, we need to get some tools or some associations. Where I’m coming from is that we must go forward with Web 2.0 — all aspects of it — which is that our content should float. It should go where people want it, and we should get compensated for it and the way to [get] compensation is different than the way it’s been for 162 years.” Much more after the jump.

– Portal deals: One way the AP is adapting is by making deals directly with the portals, such as the recent agreement with Google (NSDQ: GOOG) that came under some criticism: “We’ve monitored the traffic pretty carefully and it’s not affecting anybody’s world.… I think we’re over the first blush of worries, if not criticism, from late August.”

But deals with Google and Yahoo (NSDQ: YHOO) to furnish national and international content are secondary to what Curley calls “the mother of all battles” — local content. Here is where the AP believes it can offer newspapers a significant leg up, as the major portals attempt to invade that turf: “If you’re running one of these local papers, you want to be the portal for the area — you want to be the gateway to the important content that people value in a particular area. We can do that pretty well, and actually, with our new database approach and the new things that we’re offering, people will have access to all the breaking news content within AP for the first time.”

– AP as local news aggregator: This new approach is based on AP’s new “digital cooperative,” an attempt to facilitate better horizontal news sharing between members via the establishment of common technological standards, such as the new search exclusion protocols unveiled last week: “If they join the digital cooperative and participate in the news map, the metadata, the fingerprinting, the RSS feeds and the exclusion protocols… yeah, then we think we would be able to be a large aggregator and provide a valuable service.” The intended result is a richer experience for readers and fresh profit opportunities for papers: “The joy is not in searching, the joy is finding the content that you want. Well, we think we can make that much better and also that sets up a lot of possibilities in terms of revenue, especially around behavioral advertising.” For example, an article can be identified as referring to a flood in New Jersey or a flood in Bangladesh. Fifty papers are participating in the program already, and the AP will be offering a 5 percent rebate to participants in hopes of ramping towards 3,600 over the next year.

– The changing AP structure: Curley compared this to AP’s old structure, which hindered sharing between papers: “[Previously] we organized our content around state lines. The only way to get content from another state was to purchase it by another wire… We used to be one way: we threw a whole lot of stuff at them. In the new world, they [the papers] can program and get it, determine what they want, and they can do it by desk — a sports desk can operate differently from a national desk, etc. That’s how we expect to be more relevant.” (AP said this week that it is changing some of the editorial structurel; details at NYT.)

– Proper use of AP content: “If you want our content, we expect to be paid for it … this nonsense that you can just take the first paragraph or use the picture small doesn’t really fly with us. People die trying to take those pictures.” The co-op’s only solution, in many instances, is to file cease & desists followed by lawsuits, although Curley acknowledged that this is only marginally useful. In the Moreoever case, it was deemed worthwhile, since they “were so egregious.” The pending lawsuit kept Curley from a detailed discussion.

– Yahoo consortium: At the moment, AP isn’t involved, but it could be if it became more about content going forward. “We need at AP to be prepared for these things — we want to enable them to do business the way they want; we don’t want to get in the way of it.”

– Changing news consumption patterns: I asked about my sense that “sophisticated newsreaders” might spend a little time getting the basic facts of a story from a wire story, but then get the majority of value from vertical news sites or blogs with in-depth expertise. Curley would have none of that: “The truly sophisticated understand: an accurate source and timely source of content is more valuable today than ever, given all the nonsense that’s out there electronically… you may spend more time on something else that was related to the original break, but it’s like being a little bit pregnant — where was the news and who can you trust? And more and more, hopefully the answer is AP.”