AP overturns the old order

Reuters faces a fight to the wire as its big global rival for transmitting news and pictures goes all-out for new markets. Abigail Townsend reports

Two centuries ago, New York journalists would go to extraordinary lengths for a scoop. Eager for news from Europe and desperate to beat the competition, hacks would take to row-boats to meet ships steaming into New York harbour. Eventually, however, the expense and danger got too much for even the most hardened newspapermen and the Associated Press was born.

AP is a not-for-profit news co-operative set up by six New York newspapers in 1848 to pool resources for gathering European news. Today it retains this quaint structure, though it is now owned by 1,500 US newspaper and media groups, including USA Today owner Gannett. But with 20 million words and 1,000 photos sent out worldwide every day, the size and scope of the operation should not be underestimated.

Nor should its ambitions. AP has launched a new business, AP International (API), aimed at organising, developing and expanding all its non-US operations covering text, photo and video services. And in doing so, it aims to take on its last remaining global rival, news and information giant Reuters.

The timing, from Reuters' point of view, is not good. The company was hit hard by the global downturn and has only just begun reporting an upturn in its fortunes. API may not be seeking to compete on financial data (Reuters provides news and dealer rooms alike with a stream of market facts and figures), but the competition has still been cranked up.

The man leading the push is Ian Ritchie, who has been promoted from AP's international video service to head API and is in the process of assembling a senior management team around him. The business plan, which will cover the next three years and focus on expanding both markets and revenues, is being finished off by Ritchie and the venture is expected to be fully operational by the second half of this year.

"We're undoubtedly in a competitive position with Reuters," says Ritchie. He concedes that the two are very different businesses - AP is a co-operative, while Reuters is a FTSE 100 company and, unlike AP, a well-known brand outside the media sector - but both are fighting for space in the same, competitive market.

The point is not, however, to stray too far from AP's news agency roots - a criticism levelled at Reuters, which has been punished for its majority ownership of Instinet, an internet brokerage business, due to the slump in global equity markets over recent years.

Says Ritchie: "We've always been totally focused on our core business and that is being a news agency. It's about distributing content to our customers.

"We're pure business-to-business. We do not have a relationship with the consumer direct. We don't want to be a brand; the most important brand is our customer. We're a wholesaler, not a retailer. Reuters has been hugely successful but what we're interested in is sticking to the knitting."

With extensive resources already to hand - AP has got 242 bureaux around the globe - the plan is to build on this infrastructure. "This is about growth rather than cost cutting," says Ritchie - a comment that could be construed as a dig at Reuters, which has been forced to axe around 2,000 jobs and slash costs out of the business in recent years. "We've got all of this infrastructure, all of these advantages; we just want to give it greater focus. Be more global, more unashamedly commercial about it, provide a better service to our existing clients but also find new clients and new markets. You cannot separate text, pictures and video in this age, so we want to bring together a multimedia offering."

The decision to base API in London - "the news capital of the world," says Ritchie - was carefully calculated. "What we want to be is not just a US company that happens to have global offices, but a genuinely global set-up." As well as recruiting senior staff, the group is moving all text journalists from AP's offices in the City to a converted gin factory in Camden, north London, which is already home to AP's television arm, APTN.

Ritchie initially trained as a barrister before deciding there was not enough money, short term at least, in the profession. So he answered a headhunter's call about a media position and found himself working for Granada. His first job was to go and check out the shoot for a new series as management were not yet convinced about how well it would do. The programme turned out to be Brideshead Revisited. Ritchie was hooked, and a career in the media began.

He later went on to head Channel 5 as it came into being, wearily recalling the nightmare of retuning a nation of TV sets. He eventually settled at AP after spells with various other media organisations, including Middle East Broadcasting. That experience has come in particularly useful at AP as its TV arm has a dedicated Arabic broadcasting unit which at the height of the Iraq war was filing 1,500 reports a month to a number of channels, including Al-Jazeera. For a US company, this might seem a little contradictory, but Ritchie points out that AP guards its political integrity jealously. "If they didn't believe we have enough impartiality, they wouldn't be using our reports."

AP is everywhere. Of all the thousands of images and photos used by broadcasters and newspapers worldwide, many will have been shot by AP crews. These include several pictures of last week's bomb attacks in Iraq (the agency currently has around 150 people based in Iraq and surrounding countries).

Ritchie concedes that the agency still has issues to tackle: copy not coming through quickly enough, text having to be rewritten and clients being inundated with too much information. The creation of API, however, is about changing all that. AP may have roots going back to the 19th century but it is now keen to take on the 21st century.

Reuters, take note.