The struggle for international news in the digital age

Just over a century and a half ago a vital new technology stunned the world. It started as a simple wire along a railway line in Britain in the 1840s. But from there the telegraph spread round the globe in less than 30 years (it reached Hong Kong, via India, in 1871). Tapping out messages by electric pulse may seem a very primitive way to communicate today, and three decades a mighty long rollout period, but at the time it wrought a revolution. Where sending information over thousands of miles had taken weeks, even using the latest steam ships, the new cables got it there at first in days, then, as connections improved, in hours and then minutes and then seconds.

This immediacy changed many aspects of life, notably international business and finance. Most particularly it transformed international news. It is no coincidence that the major news agencies we know today emerged alongside this new technology. Havas of France, starting in the mid-1830s, spawned Wolff of Prussia and Reuter of Britain by the early 1850s. Their first approach was to fill in the gaps in the cable network by other means, but later they, and the early version of the Associated Press set up in the United States in the late 1840s, all became prime users.

Clever business practices and political nous were certainly part of the equation that helped them to the top, but it was cable communication that gave them the opportunity to command the supply of news to the world. Today, Reuters, AP and Agence France Presse – Havas's successor –are still the main players, while Deutsche Presse Agentur, Wolff's heir, is close behind. The head-start “the wire services” got with cable enabled them to take in their stride the technologies of the 20th century –radio, television, satellite communication, digitisation – both for their own use and to expand their custom to new media operations, maintaining their position of strength.

But can they go on? The question now is whether these long-established institutions can hold their own in the technological milieu of today, where innovations not only appear rapidly but combine into new forms, transforming the international news environment even more radically than the telegraph did a century and a half ago.


New Players

The challenge first became apparent in the early 1990s. CNN established itself as a global player with its coverage of the Gulf War in 1991. At about the same time the BBC came out with its international television arm, now called BBC World. Unlike the terrestrial broadcasters, which were nationally based, these stations could be seen across the world in people’s homes via satellite or cable.

Whether it was coincidence or reaction, the two main television news agencies, set up in the 1950s and owned by media partnerships, fell into the hands of the two of the major wires. In 1992 Reuters bought out Visnews, which it had part-owned with the BBC and others, changing the name to Reuters TV. In 1996 AP set up its own TV operation, but a couple of years later bought Visnews's old competitor WTN and combined the two as Associated Press Television News.

This consolidation happened in time for the arrival of digital satellites, which allowed encryption of video news feeds, speeding up delivery to local stations. Despite competition from the international broadcasters and some western TV channels, APTN and Reuters TV have kept this market very well. Since local television has remained popular for news audiences their footage was, and still is, often seen –though not often recognised because it tends to go unacknowledged, something the two organisations seem to encourage.

The next challenge was much harder. The world wide web, formed in 1992, at first provided the agencies with new customers. Web companies such as Yahoo!, which were striving to keep their sites continually up-to-date, needed constant input. This situation was to change because at this point the internet was still deficient in many ways. Hardware and software were very expensive, limiting access to a small portion of the world's population, while connections were slow and often unreliable. Moreover, the content of the web was patchy at best, difficult to find things on, and its information unreliable.

The dot.com boom of 1999 seemed set to take the web the way of the old media by putting it in the hands of wealthy and well-connected owners. The origins of the internet in the military and academia, which had opened it to anyone who wanted to use it, almost became history, though the way it was organised was surely to some extent responsible for the difficulty of making it profitable.


An Improved Internet

The capitalist takeover bid failed in 2001, but it did at least encourage efforts to deal with the web's drawbacks. Thus we have seen in the past couple of years the following changes :

·The plentiful laying of fibre-optic cables, providing efficient high-speed access to many users

·Cheaper hardware and connectivity, allowing access to many more people especially through internet cafes, which have sprung up in small towns and rural districts

·New and reasonably priced technology, giving a variety of means of access, such as from laptops, personal digital assistants and mobile phones in public places through wireless connections

·The systematisation of internet searching by Google and others.

This efficient internet now poses problems in two ways for the ‘wires’.

One is that it is available not only to seekers of information but to providers. Governments, non-governmental organisations, academia, companies, clubs and interest groups all put up sites, not to mention the many thousands of individuals who have home pages and web logs, all accessible from anywhere in the world. This is eroding the agencies' near-monopoly on international information and giving it out, for the most part, free.

The second matter is that the agencies cannot use their time-honoured strategy of taking up the new technology themselves. As “wholesalers” of news, opening their own websites to retail customers puts them in competition with their own clientele. For a long time they resisted putting stories on their own sites, though they now have pages with up-to-the-minute news but little else.


A Heavy Toll

Reuters, which was immensely profitable due to its specialised business and financial information services, made its first loss in 2002 since being publicly listed in 1984. The deficit was huge: ￡493 million. One reason for this was the challenge of Bloomberg, which was founded only in 1981 but also makes its money from financial information. The US upstart got ahead with its busy computer screens, its insistence on acknowledgement of its information, and its moves into wholesale and retail television.

Reuters has taken action with new low-priced products, staff cuts and cheaper centres in Bangkok and Bangladesh. The company also recently gave notice to Yahoo!, AOL, MarketWatch.com Inc. and other web customers that they may no long provide its information free on their sites. It plans its own subscription website instead. The company made a small profit last year but is still losing ground to Bloomberg in the competition for lucrative financial information services customers.

AFP has little cause to worry because its finances are based in state support, but it too is feeling the pinch. Its subsidy comes in the form of a lump sum paid for “subscriptions” for government departments. Last year the official body responsible for calculating the amount raised it by 4.5 per cent to EUR100.2 million to help AFP “maintain its international position while allowing it to guarantee the quality of its information” in the face of “technological changes that affected the world market for information and the competition of other press agencies”.

Like Reuters, AFP is developing a web strategy. It now offers a specialised service for websites, with a variety of topics and designs. Subscription rates are not mentioned on its website, but are presumably inexpensive compared with the normal wire service rates.

AP also has a firm customer base because it is a cooperative of 1,500 US newspapers, but it is still losing money. In 2003 it made a pretax loss of US$21 million, and announced that the costs of setting up a new centre in New York would mean further losses in the coming year. Its chairman and chief executive, Tom Curley, told AP's annual meeting that the agency, after a thorough review, had three priorities: better journalism in more flexible formats, improving newsgathering technology, and designing services and business strategies to generate revenue.

As if there weren’t enough bad news, another set of challengers is appearing: contenders from non-western countries with a different take on the world.

It is easy to dismiss CCTV of China and ChannelNewsAsia of Singapore as propaganda outlets of authoritarian regimes, but they are sophisticated in their apolitical content and provide material on their international TV channels and websites that is not available elsewhere. They still require wire input to cover the world, but their sensitivites colour the stories the wires put out about them.

In the Middle East, Al Jazeera and other new television stations are providing the region with a local style of news, and they are available to Middle Eastern communities elsewhere.

The long-established agencies are not in danger of going under yet. They have solid financial grounding, a century and a half of experience, and skills learned from the many challenges they have faced in the past. Their strongest point is that they provide news to high professional standards: the trust put in them by news organisations for so many years attests to their credibility.

It's easy to forget that only a couple of decades ago “the wires” were still using “the wires”. They have been quick to change and maintain their position against the onslaught of new technology. But as more and more challengers emerge, these tough survivors will still have a real struggle to survive.