AP board approves new pricing structure

By Seth Sutel, AP Business Writer
NEW YORK (AP) -- The board of The Associated Press on Thursday approved a major overhaul of the way the AP prices and packages news for its member U.S. newspapers.

Instead of offering news feeds defined largely by the volume of news delivered -- large, medium or small -- the new plan is centered on a core service of all national, state and international breaking news, with options for adding other services or purchasing stories individually.

Tom Brettingen, the AP's senior vice president for global newspaper markets, said the plan will offer U.S. newspapers more flexibility in accessing and using news of local interest that may originate in other regions.

The changes, which take effect Jan. 1, 2009, were first proposed at the company's annual meeting in May. The basic assessments charged to newspapers will continue to be based on circulation.

AP said most of its member newspapers would wind up paying either lower fees or see no changes. Brettingen estimated the changes would result in $6 million to $7 million less annual revenue for the news agency, a shortfall he said should easily be made up from growth in other areas, including video and online sales.

"It's an amount we believe we can swallow, and clearly it would be beneficial to the industry during challenging times to have a little bit less to pay us," Brettingen said.

AP CEO Tom Curley noted in a May speech that some member newspapers would rather not pay for news they don't use.