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Associated Press

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Yale School of Management
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Mark Twain once proclaimed, “There are only two forces that can carry light to all corners of the globe – the sun in the heavens and the Associated Press down here.” Mahatma Gandhi joked, “I suppose when I go to the here after and stand at the Golden Gate, the first person I shall meet will be a correspondent of the Associated Press.”

As Twain’s and Gandhi’s comments attest, during the 19th and 20th centuries, the Associated Press was one of the world’s leading news gathering forces. Founded soon after the invention of the telegraph, the AP was organized as a collective of newspapers that agreed to share their content. In addition, the AP built an enviable news gathering force itself that provided additional material to its members and subscribers. While remaining largely an instrument of the print media, the collective managed to accommodate the emergence of radio in the 1930s and television in the 1950s.

But the appearance of the internet in the 1990s proved more challenging. As ad revenue declined and readers went online to get their news, AP’s member newspapers suffered. Ironically, many of the digital news sources merely repurposed (without compensation) AP material. To try to deal with the emergence of the internet, AP negotiated deals with portals such as Yahoo! and Google. The collective also reduced member assessments and gave newspapers more flexibility in utilizing and paying for the service.

These measures were only a prelude to a more comprehensive response. After the appointment of Tom Curley as CEO in 2003, the AP readied a set of innovations to help it and its member newspapers cope with the creative destruction being wrought by the internet. First, AP invested in software to tag, track, and license all the material that the collective was putting online – creating a News Registry and sponsoring a clearinghouse to collect license fees. Then, the AP created a new platform that would allow individual, paid subscribers to read news from the AP and its members. The first effort on this new platform was an app for mobile phones. In 2010, AP unveiled an even larger effort dubbed “Gateway” that would allow all manner of devices to access (for a fee) the AP and member newspapers’ content.

While AP’s executives heralded the innovations, member newspapers gave them a lukewarm reception. The AP had always been a wholesaler to its constituent newspapers. But now, what would the AP’s new value proposition to its constituents be? How would the innovations change the relationship between the AP and its member newspapers? Might the venerable collective have to adopt a new organizational form? And for its new retail customers, would the AP be able to create a web-based product for which subscribers would be willing to pay?

Published Date: 15/12/2010

Suggested Citation: Jed Williams, "Associated Press," Yale SOM Case 10-038, December 15, 2010.

Keywords: Newspaper, AP, Internet