Associated Press CEO on the Future of News | At Barron's

Key Concepts

• Business Model: Associated Press (AP) operates primarily as a B2B (Business-to-Business) provider, licensing news content to media organizations globally. It is also exploring direct-to-consumer (DTC) strategies and philanthropic funding.
• Ownership Structure: AP is an independent, not-for-profit news organization structured as a newspaper cooperative. It has no parent company, corporate owner, or shareholders, meaning all profits are reinvested back into the organization.
• Nonpartisanship: A core principle of AP is to provide the same factual, unbiased news report to all its customers, regardless of their political or ideological leanings.
• Diversification: AP is diversifying its revenue streams and customer base beyond traditional newspapers to include broadcasters, technology platforms, and direct consumers.
• Artificial Intelligence (AI): AP is actively engaging with AI, establishing principles to protect its intellectual property and ensure fair value for its journalists' work, while also embracing the technology's opportunities and challenges.
• Local News Support: AP is actively working to support the struggling local news ecosystem in the US through its philanthropic arm, the Associated Press Fund for Journalism.
• Global Operations: AP has a significant global presence, with journalists in approximately 100 countries and commercial operations in many of them, aiming to inform half the world's population daily.
• Visual Content Strategy: AP has significantly increased its visual output, with over 75% of its total output now being visual, recognizing the importance of visual content for digital audiences.

Business Model and Ownership

The Associated Press (AP) operates as an independent, not-for-profit news organization with a predominantly B2B (Business-to-Business) model. Its primary function is to serve as a news provider to media and information businesses worldwide. The core of its business model is a licensing or subscription model, where these organizations pay to access AP's news content.

Daisy Vera Singum, CEO of AP, has been in her role for nearly four years. She clarifies that AP is not owned by any single entity. It was founded in 1846 as a newspaper cooperative, a structure that persists today, allowing for cost-sharing in news coverage. This cooperative nature means AP has no parent company, corporate owner, or shareholders. Profits generated are reinvested back into the organization to support its fundamental news mission.

Direct-to-Consumer (DTC) Strategy and Nonpartisanship

AP has been actively pursuing a direct-to-consumer strategy for the past three years, driven by a perceived gap in independent, nonpartisan news in the United States. Vera Singum emphasizes that this DTC effort is not intended to compete with AP's existing B2B customers. Instead, it targets a niche audience seeking factual reporting.

A key differentiator for AP is its unwavering commitment to nonpartisanship. The organization provides the same news reports to all its customers daily, without alteration or nuance based on their political leanings. This approach aims to serve individuals who desire factual information to form their own conclusions, even in an environment where many prefer echo chambers.

Global Reach and Mission

AP operates in approximately 100 countries, with journalists stationed in each of them and commercial operations in many. The organization estimates its reach to be half of the world's population daily, underscoring its mission to inform the world and ensure the dissemination of independent and nonpartisan news. From a business perspective, AP focuses on financial management to enable investment in journalism, cybersecurity, product and tech development, and essential infrastructure.

Diversification Strategies

Diversification at AP encompasses customer groups, business models, and geographic expansion. Currently, about 40% of AP's revenue originates from outside the United States, highlighting the importance of geographic diversification.

Customer groups have evolved significantly. While initially focused on newspapers, AP now serves broadcasters, corporations, and technology platforms. In the coming years, US newspapers are projected to be a smaller contributor compared to broadcasters and tech platforms.

The business model is also diversifying. Beyond its B2B licensing, AP is exploring direct-to-consumer avenues, tapping into advertising, donations, and subscriptions. Furthermore, AP has established the Associated Press Fund for Journalism (APFJ), a philanthropic arm designed to support parts of the news ecosystem where revenue generation is challenging, particularly local and state newspapers in the US.

The AP's direct-to-consumer website operates on a free, advertising-supported model, with an increasing emphasis on donations to support its public service mission.

Navigating Artificial Intelligence (AI)

AP has adopted two guiding principles regarding AI: the protection of its intellectual property and the maintenance or gain of fair value for its journalists' work. These principles have shaped commercial deals, including the first with OpenAI and similar agreements with other tech platforms.

AP views AI as a transformative technology that will fundamentally alter news creation and audience engagement. The organization embraces AI's opportunities while implementing guardrails to mitigate challenges. An example of a guardrail is the regular updating of standards for journalistic use of AI. AP's confidence in its licensing deals with AI companies stems from its long-standing expertise as a licensing business, providing a framework for valuing its content.

Supporting Local News in the US

AP maintains a presence in all 50 US states, covering news from state capitals. Recognizing the pressure on local news, AP launched the Associated Press Fund for Journalism (APFJ) to raise funds and support local news infrastructure. This initiative provides AP content and services to not-for-profit newsrooms that are filling news deserts, helping them become more vibrant community assets.

Covering Global Conflicts

Covering conflicts like the war in Gaza is extremely difficult. AP maintains staff in Gaza, prioritizing their safety and security as the paramount concern. The organization acknowledges the increasing challenges and the vital importance of its staff's work in bearing witness to events in Gaza, especially when access for other journalists is limited. AP also has a strong team in Ukraine, with staff safety being a constant worry. The organization must also cover other emerging conflicts, such as recent violence in Nepal. The current global landscape, with multiple ground wars and widespread unrest, presents an unusual and demanding period for AP.

Litigation with the White House

AP is involved in litigation with the White House, which is appealing a district court ruling in AP's favor. The case is scheduled to be heard on its merits later in the year. Despite the legal proceedings, AP states that its day-to-day coverage of the US President and access to information has not been significantly impacted.

Future of the News Business

Predicting the future of the news business is challenging, especially with the added complexity of AI. However, AP believes it will always have a role as a news agency and a supplier to the broader news and information system. While the specific product portfolio may evolve, with services potentially becoming as important as content, AP's fundamental role is seen as enduring.

AP's Survival and Evolution

Comparing AP to its former competitor, United Press International (UPI), Vera Singum attributes AP's survival to its clarity of mission and purpose, its independence, and the necessity of generating revenue to support its mission. This independence fosters agility and a continuous need for self-evolution. Despite the challenging environment of the news industry, AP has a history of adapting and reinventing itself, having been in operation since 1846 and surviving numerous ecosystem changes.

AP's Products and Capital Deployment

AP's output includes significant visual content, with over 75% of its total output now being visual, reflecting a strategic focus on engaging digital audiences. This includes Pulitzer Prize-winning photojournalism. AP also produces widely relied-upon sports polls, such as the college football top 25. Capital deployment decisions are driven by business and audience perspectives, focusing on what is important and what engages audiences.

AP maintains a presence on all social media platforms, recognizing their importance for growth in the consumer space, though it is not a heavy direct-to-consumer business.

Daisy Vera Singum's Career Path

Daisy Vera Singum, originally from England, has spent her entire career in journalism. After obtaining a law degree, she began at the Financial Times and also worked with LexisNexis. She has been with AP for over 15 years, progressing through various roles, including leading international operations, before becoming CEO. She views the CEO position at AP as an amazing opportunity.