The Associated Press - Company Profile, Information, Business Description, History, Background Information on The Associated Press

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Company Perspectives:

The Associated Press is in the information business. Its fundamental mission is to provide state, national and international news, photos, graphics, broadcast and online services of the highest quality, reliability and objectivity to its domestic owners as economically as it can. The AP is a member-driven company. News bearing the AP logotype is expected to be accurate, balanced and informed. AP feels that unrestricted access to the sources of news is essential if those standards are to be met by the AP and other news organizations. The AP seeks no special privilege beyond free access. It believes that the more journalistic voices the world hears, the better informed it will be.

History of The Associated Press

The Associated Press (AP) describes itself as the largest newsgathering organization in the world. Organized as a nonprofit cooperative, AP provides news and graphics by wire to over 1,700 member newspapers and 6,000 member television and radio stations in the United States, and 8,500 other subscribers in 110 countries around the world. To collect the news and photographs it supplies to its members, AP maintains 240 bureaus in more than 70 countries. In addition to its basic newswire, AP also offers other services including APTN, a television news agency; the 24-hour AP All News Radio service; and, on the Web, public access to news text, sound, and images via The WIRE. AP staffers have won 45 Pulitzer Prizes, 27 of them for photography.

Early Years

The Associated Press was first established in 1848, when six of the most prominent daily newspapers in New York City decided to pool their resources in order to cut costs. Representatives of the six papers--the Journal of Commerce, the New York Sun, the Herald, the Courier and Enquirer, the Express, and the New York Tribune--were able to put aside their competitive differences, and the Associated Press of New York was created. David Hale, publisher of the Journal of Commerce, was its first president. The purpose of the organization at the beginning was strictly a financial one. By sharing all the news that arrived by telegraph wire and dividing the expenses evenly, each member was spared the dangers of losing wire-borne information to a higher bidder.

By 1850, the group had its first paying customers, the Philadelphia Public Ledger and the Baltimore Sun, which were given access to AP dispatches for a fee, without becoming actual members of the collective. A seventh full member (another New York paper) was admitted in 1851. Over the next several years, the number of client newspapers outside of New York grew, and the AP was able to recover about half of its expenses through its sales of news to those papers. The AP kept its transmission costs in check by sending out news to each geographical area only one time. The newspapers in each area were left to distribute the news among themselves. This led to the formation of several regional associations modeled on the original AP. The Western Associated Press (WAP) was created by a group of Midwestern daily newspapers in 1862. Other groups that sprang up over the next few years were the Northwestern Associated Press, the New England Associated Press, the Philadelphia Associated Press, and the New York State Associated Press.

As the regional associations, especially the WAP, gained strength, friction developed between them and their New York parent. The Western papers felt that they were being overcharged for European news, which by the 1860s was flowing steadily to the United States by underwater telegraph cable. Concessions were made, and peace reigned for several years. Several competitors to the AP arose during the 1870s, but none were able to break the virtual monopoly the AP held on the transmission of domestic and international news by wire. The first serious rival emerged in 1882, when the United Press (UP), led by William M. Laffan of the New York Sun, was formed.

In 1891, Victor Lawson of the Chicago Daily News produced evidence that top executives of the AP and the UP had engaged in a secret agreement that gave the UP free access to AP News. Outraged by this revelation, the AP's Western members broke from the association, and in 1892 established the Associated Press of Illinois under the leadership of general manager Melville Stone. The New York AP quickly folded, and its original members defected to the UP. Stone then pulled off a major coup for the new AP by obtaining exclusive arrangements with three major European news agencies: Reuters in England, Havas in France, and Wolff in Germany. These contracts put the UP in an untenable position, and by 1897, the UP had thrown in the towel. All of the New York dailies except the Sun and William Randolph Hearst's Journal were given memberships in the new AP.

1900: Dissolution of AP of Illinois; Rebirth in New York As a Cooperative

Another controversy erupted in 1898, and again Laffan of the Sun was involved. Laffan had set up his own agency, the Laffan News Bureau, following the collapse of the UP. When the AP discovered that one of its client papers, the Chicago Inter Ocean, had used Laffan copy, it sought to punish the Inter Ocean by cutting off its AP service. The Inter Ocean sued to block the AP from severing its service. The Illinois Supreme Court ruled in 1900 that the AP's bylaws were broad enough to make the organization akin to a public utility. The Court's decision meant that the AP must provide service to anybody who wanted it. Rather than comply with the Illinois Court's conclusion, the Associated Press of Illinois was dissolved, and the organization set up shop once again in New York. The new AP was organized under New York State law as a nonprofit membership association, with Stone continuing in his role as general manager.

By reorganizing, rather than by complying with the Illinois Supreme Court's decision, the AP was able to maintain control over who was allowed to become a member. The new AP of 1900 was a cooperative, whose members were to share their news with each other and share the costs of maintaining staff to control the flow of news among members. By 1914, the AP had about 100 member newspapers. Until 1915, AP members were prohibited from buying news from other services. By that time, there were actually two viable competitors from whom AP members could be getting additional news: the United Press Association, formed in 1907, and the International News Service, founded by Hearst in 1909. Laffan's agency, after thriving for a few years, was out of the picture by 1916.

In 1910, a young Indiana journalist named Kent Cooper approached General Manager Stone with the idea of using telephone rather than telegraph to feed news to out-of-the-way newspapers. Although this method was only put to use for a few years--due mainly to the emergence of the teletype machine in 1913--Stone was impressed, and he hired Cooper as AP's traffic chief. Cooper worked his way up to assistant general manager by 1920. A year later, Stone retired, and was succeeded by Frederick Roy Martin. Cooper replaced Martin as general manager in 1925, and he remained with the AP for a total of 41 years.

Growth Under Kent Cooper: 1925--45

It was under Cooper that the AP grew into a gigantic international news machine. From the beginning, Cooper saw countless ways to improve the organization's methods of collecting and distributing information. One of his most important moves was his ongoing battle to free the AP from its obligations to import European news by way of news agencies there--ironically, these were the same arrangements that had given the AP its decisive edge over the UP years earlier. Cooper saw that news from European agencies was often slanted in favor of their home governments. He believed that the only way for the AP to receive accurate accounts of events abroad was to use its own reporters. The AP opened bureaus in Great Britain, France, and Germany in 1929, but it took until 1934 to break free of those confining arrangements completely.

One of Cooper's most important domestic improvements was the development of state bureaus as the organization's primary operating units. Cooper also widened the AP's coverage to better reflect the public's changing interests, adding an afternoon sports service, financial information, and features. The AP's new acceptance of human interest stories, which it had historically disdained, led to the organization's first Pulitzer Prize, awarded to Kirke L. Simpson in 1922 for a series on the Unknown Soldier buried in Washington, D.C.'s Arlington Cemetery. In 1927, the AP started a news photo service, and the improved AP Wirephoto system gained approval in 1935.

In 1931, the Associated Press Managing Editors Association, a group composed of editors of AP member newspapers for the purpose of reviewing the organization's work, was formed. By 1940, AP membership had grown to more than 1,400 papers. The AP began selling its news reports to radio stations in 1940, and by 1946, radio stations were allowed to become associate AP members, without voting rights. Meanwhile, another legal skirmish forced the AP to change its bylaws concerning membership. Since 1900, the AP had generally been regarded as a private association with the right to refuse membership to any outfit it did not want to admit. When the Chicago Sun--a paper launched by Marshall Field in 1941 to compete with the Tribune--sought entry into the AP collective, it was denied membership by the publishers of the AP's member newspapers. At the Sun's urging, the matter was investigated by the Justice Department, which found the AP's exclusionary rules to be in violation of federal antitrust regulations. The AP changed its rules at its next meeting, and the Sun became a member. As a result, since 1945 any publisher that wanted access to AP news reports could become an AP member.

Expansion of Broadcasting Operations Following World War II

World War II brought further breakthroughs in international news coverage, including the additions of transatlantic cable and radio-teletype circuits, leased land circuits in Europe, and an overseas radiophoto network. In 1946, the AP launched its World Service. Cooper retired in 1948, and was succeeded as general manager by Frank J. Starzel, who had joined the AP in 1929. The organization continued to grow steadily through the 1950s under Starzel. Broadcast media began playing an increasing role in news coverage in the United States, and in 1954, the Associated Press Radio-Television Association was formed. By 1960, that subgroup was already representing over 2,000 domestic stations. Meanwhile, the AP's newspaper count had risen to nearly 1,800. In addition, about 3,500 news outlets outside of the United States were receiving AP reports.

Starzel retired in 1962, and the general manager position was assumed by Wes Gallagher, who had led the AP's World War II coverage as a reporter. By 1962, the organization had a total revenue of $44 million. Although the number of domestic newspapers subscribing to AP reports was beginning to decline, broadcast members were joining at a brisk pace. Meanwhile, advancing technology was making it easier to collect and spread news faster than ever before. Use of computers was expanded to include typesetting. Wire systems were overhauled and modernized, and a direct Teletype line connecting Moscow, London, and New York was installed. The AP also established a book division during 1963.

AP teamed with Dow Jones & Co., Inc. in 1967 to launch a new, ambitious business reporting service. The AP-Dow Jones Economic Report was an in-depth business newswire service transmitted to governments, corporations, trading firms, and other interested entities in nine European, Asian, and African countries. The following year, the same team launched the AP-Dow Jones Financial Wire, a teleprinter news service aimed primarily at stockbrokers in all of Europe's financial centers. By 1970, these services were being offered in 17 countries. Broadcast stations continued to join the AP in droves, with a total net increase of 1,224 member stations for the 1960s as a whole.

Improved Newsgathering Technology During the 1970s

Technological progress continued to improve AP services during the 1970s. One of its breakthroughs during this period was the Laserphoto news picture system, developed jointly with researchers at the Massachusetts Institute of Technology (MIT). The Laserphoto system allowed the AP to transmit photographs of a much higher quality than was previously possible to both print and broadcast members. Another new general manager, Keith Fuller, was named upon Gallagher's retirement in 1976. The following year, three new seats, bringing the total to 21, were added to the AP board of directors, in order to give AP broadcast members board representation for the first time. In 1977, the same MIT team that had developed Laserphoto broke through again with the Electronic Darkroom, a system capable of transmitting, receiving, and storing pictures in digital form.

By the early 1980s, newspapers were generating about half of AP's revenues, as new media, particularly cable television, emerged to dilute print's role in delivering news to Americans. In 1982, the organization amended its bylaws to allow the use of its news reports by member newspapers on cable systems. The AP also began developing ways of transmitting news reports via satellite. By 1984, the AP's global network included over 300 news and photo bureaus throughout the world, and it was delivering reports to 1,300 daily newspapers and 5,700 broadcast stations in the United States alone. In addition, there were 8,500 subscribers in foreign countries. Fuller retired as both president and general manager that year, and was replaced by Louis D. Boccardi, a 17-year veteran of the AP.

Under Boccardi, the AP continued to enhance its services through the rest of the 1980s. A new graphics department was added in 1985, and a year later, a transition began that made all photographs offered to member newspapers available in color. By this time, the AP's network of satellite receiving dishes had grown to 3,000. Further improvements were made on transmission speed, business coverage, and graphics over the next few years. In 1989, the organization developed a fully designed sports page that could be delivered over its GraphicsNet system. Other new services included state weather maps and a biweekly package of stories and columns aimed at senior citizens.

The AP collected revenue of $329 million in 1991. As the 1990s progressed, the organization focused on ways to make more money from nontraditional sources, such as the sale of photo technology and through its AP-Dow Jones financial services outside the United States. By early in the decade, all of the AP's photo members had the Leaf Picture Desk (a digital photo compression and transmission system) and PhotoStream (its high-speed digital photo service) in place. U.S. newspapers began to take on a more colorful look in the 1990s, and the combination of Leaf and PhotoStream was a big part of this trend.

As the 1990s continued, the AP focused on adding video news coverage to its arsenal. In 1994, the organization launched APTV, an international video newsgathering service based in London. Other developments included a 24-hour broadcasting operation, All News Radio, and the commercial sales of AP's television newsroom software, called NewsCenter. In order to remain a leader in the international newsgathering community, the AP expressed its intention to devote vast resources to research and development for the rest of the century, in recognition of the fact that technology had become perhaps the most important element in the battle for the attention of news consumers.

The year 1995 saw the introduction of AP AdSEND, a digital advertising delivery service. For a small per-use fee, advertisers could upload copy and images into an AP database, which could then be downloaded by newspapers and other users ready-to-print. The system saved both time and money for advertisers, and enabled wider and easier distribution of advertising messages. A competitor, AD/SAT, sued the AP for allegedly monopolizing the market, but the suit was dismissed and AD/SAT folded soon thereafter.

The next year the company formed a new multimedia unit which set to work creating The WIRE, AP's public news web site. The WIRE, which was also featured on many member web sites, contained text, sound, and image information, and was updated continuously. Digital technology was becoming a key part of every aspect of AP's business, particularly photography. The 1996 Super Bowl was entirely shot by the AP with digital cameras it had developed in conjunction with Eastman Kodak. The digital process saved both time and money, enabling reporters in far-flung locations to send out images instantly using only a laptop computer and modem. The AP's immense photo archive was also being digitized, allowing anyone to download a high-resolution copy from a collection of hundreds of thousands of images for a small fee.

In 1998 the AP celebrated its 150th anniversary. The company's video service was expanded during the year with the purchase of the Worldwide Television News agency from ABC. APTV was subsequently renamed APTN, or Associated Press Television News. In April 1999, 21 AP photographers shared two Pulitzer Prizes, bringing the organization's total to 45.

As the Associated Press entered the latter half of its second century in operation, it could look back on an impressive list of accomplishments in the field of newsgathering. The organization had come a long way from its early days utilizing the telegraph, but it was still engaged in the business of transmitting news via electronic media to a wide audience.

Principal Subsidiaries: La Prensa Asociada, Inc.; Press Association, Inc.; SaTellite Data Broadcast Networks, Inc.; Wide World Photos, Inc.; The Associated Press A/S (Norway); The Associated Press A/S (Denmark); The Associated Press AB (Sweden); The Associated Press (Belgium) S.A.; The Associated Press GmbH (Germany); The Associated Press, Ltd. (U.K.); The Associated Press, Ltd. (Canada); The Associated Press de Venezuela; AdSEND; AP Multimedia Services; AP Information Services; AP Telecommunications.

Principal Competitors: Agence France-Presse; Bell & Howell Company; Bloomberg L.P.; Comtex Scientific Corp.; Corbis Corporation; Dow Jones & Company, Inc.; Gannett Company, Inc.; Knight Ridder; The New York Times Company; Reuters Group PLC; The Times Mirror Company; Tribune Company; United Press International, Inc.


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Further Reference

Alabiso, Vincent, 'Digital Era Dawns,' Editor & Publisher, March 2, 1996, p. 8P.Alabiso, Vincent, Tunney, Kelly Smith, and Zoeller, Chuck, Flash!: The Associated Press Covers the World, New York: Associated Press in association with Harry N. Abrams, 1998.'AP in `Healthiest Condition,' 1963--$44 Million News Year,' Editor & Publisher, April 25, 1964, p. 20.'AP Offers New Member Services,' Editor & Publisher, April 29, 1989, p. 20.'AP's Digital Darkroom Breaks New Ground,' Editor & Publisher, June 11, 1977, p. 15.'AP Upgrades,' Editor & Publisher, April 30, 1994, p. 14.'Associated Press Taps Boccardi As President and General Manager,' Wall Street Journal, September 14, 1984, p. 24.Brown, Robert U., 'Transition at AP,' Editor & Publisher, April 21, 1979, p. 130.Consoli, John, 'AP's Online Wire Making Strides,' Editor & Publisher, May 3, 1997, p. 12.------, 'Improvements at AP,' Editor & Publisher, April 26, 1986, p. 20.'Dow Jones, AP Plan International Service to Report Business News, Starting April 1,' Wall Street Journal, January 23, 1967, p. 26.Emery, Edwin, and Emery, Michael, The Press and America, Englewood Cliffs, N.J.: Prentice-Hall, 1977.'Gallagher: AP Geared for `News Explosion,' Editor & Publisher, March 21, 1970, p. 11.Garneau, George, 'AP Archive Set to Fly,' Editor & Publisher, June 22, 1996, pp. 38--39.------, 'AP Leads Pack in Moving Ads,' Editor & Publisher, May 11, 1996, pp. 22--23.Gersh, Debra, 'State of the AP,' Editor & Publisher, May 1, 1993, p. 15.Giobbe, Dorothy, 'AP Chief Upbeat About Newspapers,' Editor & Publisher, April 29, 1995, p. 12.'Keith Fuller Chosen As A.P.'s President at Annual Meeting,' New York Times, May 4, 1976, p. 14.Kobre, Sidney, Development of American Journalism, Dubuque, Iowa: Wm. C. Brown Co., 1969.Lenett, Joe, 'The Rivals ... AP and UPI,' Editor & Publisher, June 27, 1959, p. 222.Mott, Frank Luther, American Journalism, New York: MacMillan, 1962.Rathbun, Elizabeth, 'Associated Press Tackles International Video,' Broadcasting & Cable, July 18, 1994, p. 44.Rosenberg, Jim, 'AP Expands Photo Archive, Rolls Out Server,' Editor & Publisher, August 1, 1998, p. 22.Scully, Sean, 'AP Determined to Stay on Cutting Edge,' Broadcasting & Cable, September 27, 1993, p. 44.Shmanske, Stephen, 'News As a Public Good: Cooperative Ownership, Price Commitments, and the Success of the Associated Press,' Business History Review, Spring 1986, p. 55.Stein, M.L., 'AP Reports to Its Member Editors,' Editor & Publisher, November 10, 1990, p. 18.'A Strong Year for Associated Press,' Editor & Publisher, May 9, 1992, p. 16.'What's New? That's a $42 Million Question,' Editor & Publisher, April 6, 1963, p. 12.

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