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Can CNN Be a Better AP?

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Why it makes sense for the network to launch a wire service.

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Cable news networks have always ripped the headlines from newspapers to fill out their morning programs. Now one of them is hoping the information will flow in the opposite direction.

CNN announced this week that it will launch CNN Wire, an a la carte selection of news and feature stories to newspapers that could become a direct competitor to the Associated Press.

The stories cost $199 each and can be ordered online through the CNN Wire Store. Newspaper publishers will also have access to reports filed by CNN's big names, including Christiane Amanpour, Dr. Sanjay Gupta, and in-depth reports such as "Black in America" with Soledad O'Brien. Other CNN reporters will offer stories on health, entertainment, technology, and consumer affairs.

"As we talked with publishers throughout the country, we heard from some of them that an a la carte option would best fit their needs," said Ed Stephen, senior vice president and general manager for CNN Newsource Sales. "The CNN Wire Store was born out of that specific feedback."

Indeed, it's a problem that needs fixing.

The AP's member newspapers often complain that they want a sip of water and AP deluges them with a fire hose, forcing them to pay for stories that won't be used, even with different tiers of service and cost. CNN is smart to allow editors to buy stories as needed. The pay-as-you-go service may be attractive to small and mid-size newspapers that have been hit hard by declining ad revenue.

If successful, CNN's plan to sell its stories to newspapers will boost the broadcaster's brand name, generate additional revenue and, with luck, defray a portion of the cost of reporting the news. This could be a key element in a tough advertising environment.

CNN's new offerings are another challenge to The Associated Press, the world's largest wire service with about 4,000 employees in 240 bureaus worldwide. The AP serves about 1,700 newspapers and 5,000 radio and TV outlets in the US.

Some members are rebelling against the AP's rates and the wire service has responded by offering total savings of $5.6 million for member newspapers, later increased to $14 million and finally $21 million.

Nevertheless, several papers, including The Bakersfield Californian, Minneapolis Star Tribune, and Washington State's Yakima Herald-Republic and The Wenatchee World have given the required two-years' notice and plan to drop the AP wire.

That could be just a hardball negotiating tactic to secure additional price cuts. But in an effort to publish without AP, or at least use fewer of its stories, newspapers throughout the nation have established intrastate cooperatives to pool coverage.

The Columbus Dispatch now uses other newspapers' coverage of the Cincinnati and Cleveland baseball teams, freeing its reporters to write features and in-depth stories. After several rounds of cutbacks, The Miami Herald (MNI) and the St. Petersburg Times agreed to combine their coverage of Florida's state capital. The Dallas Morning News (AHC) and the Fort Worth Star-Telegram now share photos and concert reviews.
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