The Associated Press Business Information, Profile, and History

Company Perspectives:

The Associated Press (www.ap.org) is the world's oldest and largest news organization, providing coverage of news, sports, business, weather, entertainment, politics, and technology in text, audio, video, graphics, and photos to 15,000 news outlets with a daily reach of more than one billion people around the world. Its services are distributed by satellite and the Internet to more than 120 nations. AP also is a leader in developing and marketing newsroom technology.

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 to over 1,700 member newspapers in 121 countries around the world. To collect the news and photographs it supplies to its members, AP maintains 242 worldwide news bureaus. AP also provides a broad range of other services including up-to-the-minute financial and sports news; entertainment segments; Freedom of Information issues and updates; and a historic archive of hundreds of thousands of photos and images.

Early Years: the 1800s

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 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. In the beginning the purpose of the organization was strictly financial; 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 AP was able to recover about half of its expenses. 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 sprang up over the next few years: 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 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 AP arose during the 1870s, but none were able to break the virtual monopoly 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 AP and UP had engaged in a secret agreement that gave UP free access to AP News. Outraged by this revelation, AP's Western members broke from the association and established the Associated Press of Illinois under the leadership of general manager Melville Stone in 1892. The New York AP quickly folded and its original members defected to 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 UP in an untenable position, and by 1897 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.

Dissolution and Rebirth: 1900 to Early 1920s

Controversy erupted near the close of the century and again Laffan of the Sun was involved. Laffan had set up his own agency, the Laffan News Bureau, following the collapse of UP. When AP discovered 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 AP from severing its service. The Illinois Supreme Court ruled in 1900 that AP's bylaws were broad enough to make the organization akin to a public utility, which meant AP must provide service to anyone 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, AP was able to maintain control over who was allowed to become a member. The new AP of 1900 was a cooperative, whose members shared news as well as the costs of maintaining staff to control the flow of news among members. By 1914 AP had about 100 member newspapers. Until 1915, AP members were prohibited from buying news from other services. There were, by this time, two viable competitors from whom AP members could get 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 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 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 remained with AP for a total of 41 years.

Growth Under Kent Cooper: 1925-45

Under Cooper 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 to free AP from its obligations to import European news by way of news agencies there--ironically, these were the same arrangements that had given AP its decisive edge over UP years earlier. Cooper believed news from European agencies was often slanted in favor of their home governments and figured the only way for AP to receive accurate accounts of events abroad was to use its own reporters. AP opened bureaus in Great Britain, France, and Germany in 1929 but it took until 1934 to break free of the European agencies completely.

One of Cooper's most important domestic improvements was the development of state bureaus as AP's primary operating units. Cooper also widened coverage to better reflect the public's changing interests, adding an afternoon sports service, financial information, and features. 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 AP started a news photo service and the improved AP Wirephoto system gained approval eight years later.

In 1931 member editors formed the Associated Press Managing Editors Association to review the organization's work. By 1940 there were more than 1,400 member papers in AP, the year the organization began selling its news reports to radio stations. Six years later radio stations were allowed to become associate AP members, without voting rights. Meanwhile, another legal skirmish forced AP to change its bylaws concerning membership. Since 1900 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 AP's member newspapers. At the Sun's urging, the matter was investigated by the Justice Department, which found AP's exclusionary rules to be in violation of federal antitrust regulations. The Associated Press changed its rules at its next meeting and the Sun was granted membership. As a result, any publisher who wanted access to AP news reports could become an AP member.

Expansion and World War II: Late 1940s to 1970

With the onset of World War II came 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 AP launched its World Service and two years later, in 1948, Cooper retired. He was succeeded as general manager by Frank J. Starzel, who had joined 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 this subgroup represented over 2,000 domestic stations, while AP's newspaper count had risen to nearly 1,800 members. 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 AP's World War II coverage as a reporter. By 1962 the organization had total revenues of $44 million. Although the number of domestic newspapers subscribing to AP reports had begun to decline, broadcast members were joining at a brisk pace. Advancing technology made it easier to collect and spread news faster than ever before; the 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. AP also established a book division during 1963.

AP teamed with Dow Jones & Company, Inc. in 1967 to launch a new, ambitious business reporting service. 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 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 AP in droves, with a total net increase of 1,224 member stations by the end of the 1960s.

Improved Newsgathering Technology: 1970s to Early 1990s

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 AP to transmit photographs of a much higher quality than 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 to give AP broadcast members board representation. In 1977 the same MIT team who had developed Laserphoto introduced 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. AP also began developing ways of transmitting news reports via satellite. By 1984 AP's global network included over 300 news and photo bureaus throughout the world, 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 AP.

Under Boccardi 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 to make all photos offered to member newspapers available in color. By this time 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.

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 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. Domestic newspapers began to take on a more colorful look and the combination of the Leaf and PhotoStream systems was a big part of this trend.

As the 1990s continued, 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, AP expressed its intention to devote vast resources to research and development for the rest of the century, in recognition of how technology had become an essential element to maintain the attention of news consumers.

Further Growth and Change: 1995-99

In 1995 came 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. The system saved both time and money for advertisers, and enabled wider and easier distribution of advertising messages. A competitor, AD/SAT, sued 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 created 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 had become a key part of every aspect of AP's business, particularly photography. Advances in digital photo quality allowed AP to discard film and shoot the 1996 Super Bowl entirely by digital cameras, developed in conjunction with Eastman Kodak. The digital process also enabled reporters in far-flung locations to instantly send out images using only a laptop computer and modem. 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 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 the last year of the decade AP reached two interesting milestones: its Havana news agency, closed by Cuban dictator Fidel Castro 30 years earlier, was allowed to reopen; and its news bureau in Bonn, Germany, was closed and employees were transferred to Berlin to serve the unified German market. With the addition of two more Pulitzer Prizes for 1999, AP's total awards climbed to an impressive 45 as the 20th century came to a close.

The 21st Century: 2000-05

AP had come a long way by the dawn of the new millennium, from using the telegraph to transmit news to the advances of the electronic and digital age. By the year 2000 AP was owned by 1,500 member newspapers and over one billion people saw, heard, or read its news reports on any given day. Yet with such advances came problems, like when a simple keystroke in August halted satellite transmissions to AP radio and television stations nationwide for several days. While the glitch caused quite a commotion, most of AP's affiliates were able to receive news updates via the Internet until the satellite connections were fixed. The incident, however, made both AP and its rivals realize how important it was to have backup systems in place.

After its satellite snafu, AP stepped up research and development to remain at the cutting edge of digital technology. The organization established an Internet unit, AP Digital, to provide news and photos to the burgeoning online market and the service was expanded to Spanish language markets in 2001. An online entertainment news service was launched in 2001 as well.

In 2002 AP updated its partnership with Dow Jones & Company by revamping its financial wire services. On the political front, AP acquired the Washington, D.C.-based Capitolwire (later sold) and initially planned to retool its Voter News Service, the election service it shared with ABC, NBC, CBS, Fox, and CNN. Instead the Voters News Service was disbanded and the National Election Pool was formed with its affiliates to conduct exit polls during elections.

The year 2003 heralded major change for AP with the retirement of Louis Boccardi after 18 years as chief executive of worldwide operations and a total of 36 years at the organization. Boccardi was succeeded by Tom Curley, who had served as a senior vice-president at Gannett Company, Inc. from 1998, and had run USA Today as publisher since 1991 and its president since 1986. Another watershed moment was the announcement that AP would move its headquarters from Rockefeller Center--after 65 years--to West 33rd Street near Madison Square Garden and Penn Station.

In April 2004 President George W. Bush spoke at AP's annual luncheon on the opening day of the Newspaper Association of America's convention. Three months later, AP had completed its move to Manhattan's West Side, consolidating its operations from four city locations to one. During the year AP also redesigned its web site (www.ap.org), launched the online AP Financial News service, and unveiled its first political "blog" to provide continual reporting from the national Democratic and Republican conventions. As the presidential election approached, AP was selected to count votes on election night, while the National Election Pool conducted exit polls.

In early 2005 AP had launched a new web site dedicated to the Freedom of Information Act, making consumers aware of their rights toward governmental disclosure, hoping to prompt more openness after the terrorist attacks of 2001. AP joined a group of journalists and newspaper organizations to form the Sunshine in Government Initiative, to fight increased secrecy in the government. By this time, AP had brought its total of Pulitzer Prizes to 48; news writing had garnered 19 prizes, while the remaining 29 were shared by AP photographers.

As the Associated Press approached its second century in operation, the organization could look back on an impressive list of accomplishments in the field of newsgathering. It had come a long way--bringing news to the masses through increasingly sophisticated technology--in an organization with over 240 bureaus worldwide, 1,700 newspaper members, 5,000 radio and television outlets, and 8,500 international broadcasters in 121 countries who received their news in five languages (Dutch, English, French, German, and Spanish).

Principal Operating Units: AP Ad Services; AP Broadcast; AP Digital; AP ENPS; AP International; AP Photo Services; APTN (Associated Press Television News).

Principal Competitors: Agence France-Presse; Bell & Howell Company; Bloomberg L.P.; Dow Jones & Company, Inc.; Gannett Company, Inc.; Knight Ridder-Tribune News Service; New York Times Company; Reuters Group PLC; United Press International, Inc.

Chronology

• Key Dates:
• 1848: Associated Press of New York (AP) is formed to share the news gathering costs of six newspapers.
• 1892: AP of Illinois is founded by Melville Stone.
• 1900: AP reorganizes with its headquarters reestablished in New York.
• 1922: AP receives its first Pulitzer Prize.
• 1927: News Photo service begins.
• 1929: AP opens bureaus in France, England, and Germany.
• 1945: Open membership in AP is offered for all who wish to join.
• 1954: Associated Press Radio-Television Association is formed.
• 1967: Partnership with Dow Jones offers business news service.
• 1982: AP begins transmitting news by satellite.
• 1994: APTV, an international video newsgathering service, is launched.
• 1996: The WIRE Internet news service begins operation.
• 1998: AP buys Worldwide Television News and combines it with APTV.
• 2000: A new Internet division, AP Digital, is launched.
• 2004: AP moves its headquarters from Rockefeller Center to West 33rd Street.
• 2005: AP unveils a Freedom of Information Act web site.