AAP newswire customers to pay same price for reduced service

Australian Associated Press's new owners are asking long-standing customers to pay the same amount for its newswire content despite less frequent coverage and fewer staff.

Acta Diurna AAP, which launched officially last week under new chief executive Emma Cowdroy, will need to secure contracts with former clients of AAP to shore up funding and prevent News Corp Australia from poaching customers when its non-compete clause is lifted in six months.

New AAP chief executive Emma Cowdroy. Credit: AAP

Multiple industry sources told The Sydney Morning Herald and The Age that the new business, owned by a group of investors led by Nick Harrington and John McKinnon, were asking subscribers to transition the old contracts to the new company. The sources said that while some subscribers were happy to continue paying the same price because their services were unaffected, others were concerned they were being asked to pay the same amount of money for reduced coverage on particular topics.

When the sale was announced in June, AAP's new owners said it would continue to produce world news, sport, court and political reporting, and that it would have a photography and a FactCheck service. However, the announced job cuts occurred across all divisions, including sport and courts. International correspondents were also affected.

"The former AAP company is in the process of transferring its customer contracts to the new AAP as is standard practice in any sale process," Ms Cowdroy said. "AAP's new service is focused on the highest value elements of the Newswire's offering such as courts, sports and politics. These are the very elements that our customers told us they rely on heavily."

"It is in the interests of all of AAP's customers that we are commercially sustainable so that their newsrooms can continue to depend on AAP as the most cost-effective means of obtaining truly independent and accurate news reporting. AAP has been in contact with its customers and we continue to liaise with them throughout the transfer process."

Negotiating new contracts will be important for the newswire because it is operating without funding from its two former shareholders Nine Entertainment Co (owner of this masthead) and News Corp. The two companies previously contributed more than $10 million each year to AAP as part of their shareholders' agreement.

ACM and Seven West Media both previously contributed more than $1 million a year.

Industry sources have previously said that publishers such as Daily Mail Australia and Verizon Media contributed in the "low hundreds of thousands of dollars", according to sources familiar with AAP's financial position. The Australian previously reported that Guardian Australia has cut its annual contribution by 40 per cent to $75,000 annually. Eric Beecher's Solstice Media is also a subscriber.

News Corp Australia, which launched its own newswire service in June, is prevented from poaching customers for six months under an agreement made when the business was sold.