"The CNN Village: the crisis of news agencies", by Patrick White @ copyright 2008

THE CNN VILLAGE. A BOOK BY PATRICK WHITE. UNIVERSITY OF MONTREAL PRESS, 1997. CHAPTER 1

In the 1970s, they were considered as a symbol of the Western domination on the world information market. Today, however, the climate has completely changed : two of the four major news agencies, AFP and UPI are facing major problems. In France, the international nature of Agence France-Presse is being questioned. The issue is raised differently in the United States : is there enough room for two worldwide agencies, namely AP and UPI, of American origin? Moreover, can one still consider Reuters as a news agency when one knows that 93% of its revenues come from financial and economic information services destined to businesses and banks?
Jean-Louis Missika

(AP), (AFP), (UPI), (Reuters). Symbols we see everywhere, those of the four largest news agencies in the world. Why study them? Because they supply 90% of international information we read every morning in our newspapers, hear on the radio and watch on television. Because they bear influence on our lives. Because they are at the very heart of international politics. Because it is through them that an important segment of international relations is done.
Each major declaration by a head of state or political figure ends up on the news wire of one of the four agencies. The 850,000 reporters of the world use them as source material. The agencies are also intermediaries and players who fully participate to the international political life. “Indeed, agency information is used as a means of communication between countries and governments on a worldwide scale. Part of diplomatic information is broadcast through the services of world agencies.” Others constantly refer to them in trying to know what is being said about them and their neighbours. All governments, Prime Minister offices, consulates, major ministries and embassies subscribe to one of the four major international agencies while also being the sources of those agencies. The fact that an agency opens an office in a country is always the reason for great pride for a government. As a matter of fact, several countries explicitly ask that the agencies maintain correspondents on their territories. On the contrary, shutting down an office is often considered as inadmissible and the dispossessed country often protest and ask the Foreign Affairs Ministry of the agency’s country of origin to intervene.
Jeremy Tunstall, a renowned specialist of news agencies at the City University of London, maintains that the agencies are full-fledged and critical players to the good operation of international affairs :
“The four Western agencies thus act as international go-betweens for newspapers in different countries, for news agencies, for banks, as well as go-betweens for governments. Foreign relations departments have their own diplomats and embassies upon which to rely. But for diplomats, the international agencies provide the basic service of fast news; and as the only supply of fast information (…) all the players in the world diplomatic game (…) hold in common, the international agencies inevitably play a large part in updating and setting the diplomatic agenda. Moreover, these agencies do not merely play a major part in establishing the agenda, but they have done so now for a hundred years.”
As an internal document of AFP from the early 1990s reminds us, “the political issue in agencies is not new, but it is today more complicated than ever by the ideological squabbles and ambitions of imperialisms. As a frequent interlocutor of political powers and natural intermediary between them, other media and the public opinion, the news agency inevitably raises envy or, at least, tentations of influence.”
Yet, these agencies are undergoing a crisis since the end of the 1970s and they have to reassign themselves. The Reuters group only gets a negligible portion of its revenues from its news service and almost exclusively devotes itself to the transmission of financial data. The American media, on their part, have reached the conclusion that the UPI was superfluous to the market. The agency has been under the protection of the Bankruptcy Act since 1992 and, despite that fact, the news services of major national newspapers offers serious competition to the Associated Press monopoly. Finally, Agence France-Presse is still wondering if it truly has the resources to be present on all continents.
Through this book, I propose to answer the following questions. What is the recent history of news agencies? What is their structure? In what financial position are the members of this select group? What are the factors which have created the crisis the Big Four are currently undergoing? What type of crisis is it? What could be the outcome of such a crisis on the international information system? What is the outlook for news agencies? Could CNN replace the agencies? Does the future of newspapers depend on multimedia and the Internet?
It is always surprising to see how withdrawn from the public these agencies operate. They are indeed organizations which are mostly unknown from the public. Yet, these four enterprises form a private club that is so tight-knit that it yields upon each of its members tremendous political power. In this sense, this book will shed light on the problems they have had to face since the 1980s.
Chapter I
The agencies in crisis. Why?

1980 marks the arrival of the Cable News Network (CNN) channel on the market of international information. It also marks the banking of the political debate on the New World Information and Coomunication Order (NWICO). In the 1970s, NWICO generated major political debates which revolved around a perception common to developing countries : the AP, AFP, UPI and Reuters news agencies held a monopoly on information, twisted the reality of the Third World and were motivated by capitalist and colonialist interests. In 1980, the Unesco gave itself more moderated objectives and put it assault on the international agencies on the back burner.

1.1 The crisis
This crisis is defined as a period of disturbance which provoked major changes in the internal and external environment of the four international news agencies. These four corporations, traditional written agencies to begin with, rapidly transformed into large scale information agencies. Their nature and role have been profoundly transformed since 1980. Therefore, we shall not study sudden changes in the evolution of international news agencies. A crisis-bearing process was sparked sometimes in the early 1980s. The resulting crisis was provoked by disturbances :
- within the agencies;
- in the international media system;
- in the geopolitical and economic environment of the world.
The idea of a “crisis in news agencies” is not new. Used since the early 1980s, it presents two major manifestations. First, the debate on the New World Information and Communication Order (NWICO), held at Unesco in the 1970 and 1980s and where countries in the Southern hemisphere accused Associated Press, United Press International, Reuters and Agence France-Presse of throwing out of balance the flow of information between industrialized and developing countries. The idea is also associated to the important fiscal imbalances the agencies underwent following the rapid transformation of forces on the market of international information. “This identity crisis (the NWICO) preceded a financial crisis quite important for two of the agencies (UPI and AFP) and which revived several questions on the role news agencies, their fate and the transformation of their activities” remarks Catherine Conso.
Lets now look at the various aspects of this state of crisis. It is first and foremost an internal management crisis for the agencies followed by financial problems. When put in the perspective of an incessant flow of technological development and worldwide economic and geopolitical disturbances, this crisis is indeed a very influential one. the agencies are less influent than they were before 1980. Increasingly trailing round-the-clock news broadcasters such as CNN and BBC World, their role is more and more restrained. Is the global CNN village looming over the horizon?
The corporation that are AP, AFP, UPI and Reuters are navigating through this state of crisis since the beginning of the 1980s. In fact, these businesses have had major profitability problems in their activities as general information suppliers to traditional mass media. Faced with no other choice, they had to branch out in order to come out of these dire straits. In order to grow, they had to begin offering information services to other clients than mass media and also to develop specialized services for their traditional clients. A rupture had to take place : from their old, generalist position they had to revise their approach in order to become specialized information agencies.
Beginning a few years after the oil shock of 1973, the crisis has rocked all four of the international news agencies. UPI presented its bankruptcy statement in 1985; AFP came close to collapsing following a painful internal restructuring in 1986; AP lost its influence outside of the United States following its retrenchment on the American market and, finally, Reuters the agency now generates less than 5.7% of the revenues of its holding corporation, Reuters Group Plc. From many standpoints, it can no longer be considered a true news agency.
The crisis at hand is quite complex. There are several levels of explanations, internal and external. Evident for about fifteen years now, it affected each of these corporations in function of its structure, type of status, management and recent history.

The news agencies' crisis has several specific explanations :
- Major financial problems have diminished the international stature of the agencies. The financial balance has completely changed over the past fifteen years. Agencies went from a single product (general news) and varied, more or less rapidly, their products to broadcast information at large, only reacting to competition and the evolution of the market;
- The cost of gathering and broadcasting news increases more rapidly than the revenues it generates. Media are not willing to pay higher prices;
- Customers require increasingly expeditious and customized services. The technical and labour investments thus required represent colossal sums;
- The agencies, with the exception of Reuters, more or less foresaw, during the 1960s and 1970s, the exact nature of the fundamental changes in the international news market. Their adaptation was late;
- As a direct consequence, their market share in clearly declining from a commercial standpoint;
- For a long time, the four major agencies were practically alone and evolved in a market that could accommodate all of them. But for a few years now, the major agencies and smaller ones have engaged in ferocious competition.

The crisis facing the agencies was also brought on by more global and general factors such as:
- The rise of audiovisual as an increasingly important source of international information : the CNN and BBC phenomenon;
- The rising competition of regional news agencies such as EFE (Spain), ANSA (Italy) and DPA (Germany) in markets traditionally controlled by AP, AFP, UPI and Reuters;
- The arrival of low cost news services (NYTNS, The Washington Post Service, The Los Angeles Times Service, The Guardian, The Observer, The Economist, etc.) who appropriate themselves a large market share, especially in the United States and Canada;
- The general disarray of the international media system;
- Mind-boggling technological progresses;
- The new geopolitical order : the european agencies (AFP and Reuters) dominate while AP loses influence following the decline of the American economic hegemony;
- The globalization of economies has created a growing need for fast-breaking news in traditional media.

1.2 What is an international news agency?
The notion of news agency comes to us from the French industrial society of early XIXth century. Right from the beginning of that century, the economic and political elites understand the advantage of being rapidly informed on the important events of the world.
In his classic book The International News Services, published in 1986, the American media specialist Jonathan Fenby maintains that “the international news services are commercial organizations whose sole objective is to gather, distribute, sell and supply international information in the most rapid and exact manner possible” to subscribers in markets as different as Africa, Asia, the Americas or Europe while ignoring the political characteristics of those markets.
However, such authors as Jean-Louis Missika and observers in the world of communications ask themselves if the very concept of a news agency is inappropriate or even obsolete. Since agencies now sell their services (news, financial data, photographs, videos) to whoever wants them (consumers, universities, specialized industries, stock exchanges, radio, television, newspapers, governments, embassies, etc.), the news agencies have transformed themselves into information distribution agencies…
It is also interesting to note that news agencies have never received a recognized definition in international law. Thus, the term news agency is relative to a certain number of things. Even though it is summarily defined in the French law, it remains that the best and most accurate definition was coined by Unesco in a document published in 1953 entitled Les agences télégraphiques d’information :
“an information agency is an enterprise whose main goal, no matter what legal form of organization it has, is to seek news and, in general, documents on current events whose exclusive goal is to express or represent facts and to distribute those to information businesses, exceptionally to individuals, in order to ensure them, in exchange of a royalty and respecting conditions conform to laws and practices of the commerce, an information service as complete and unbiased as possible.”
Thus, the role of the news agency is to collect and process informations in the form of texts, video images, graphics and sounds, and forward them to media, businesses, State administrations, and all categories of organizations and associations. They act as supplier to media who do not have the resources to maintain correspondents in the most remote corners of the world.
Authors such as Philippe Beaudelot make a distinction between international news agencies and global news agencies. According to him, international news agencies are “national agencies who have extended their services to the international level through the availability of permanent correspondents or special correspondents in the most important places of the world and by completing their services by buying complementary informations from global agencies. Their clients are mostly national but sometimes international also.”
He therefore creates a different category which leads to the concept of global news agency :
“The are four global news agencies : AFP, AP, UPI and Reuters (five if we include, as some do, TASS as a full-fledged news agency) to which we can add three television agencies, namely Visnews (an affiliate of Reuters), Worldwide Television News (WTN a former affiliate of UPI) and CBS News. All of them are governed by a status near that of a cooperative. They dispose of a network of correspondents throughout the world, their clients are international and they offer services in many languages. As we have seen, these agencies have taken the brunt of the crisis of the last fifteen years. However, they are also the ones manifesting the best evolutive capacities whether for the adoption of new transmission technologies, or by the creation of new services which sometimes make them resemble a pool of specialized agencies.”
This book only discusses AP, AFP, UPI and Reuters. The Deutsche Press Agentur (DPA, Germany), EFE (Spain), Agenzia Nationale Stampa Associata (ANSA, Italy) are national agencies with a network of foreign correspondents and a few hundred subscribers outside of their country of origin. Their scope is too limited and they do not broadcast on all continents. Besides other international news agencies are State-controlled and therefore politicized (ITAR-TASS, Agence Chine-Nouvelles). They do not meet our criteria and their diffusion is limited outside of their boundaries. For example, the goal of former soviet agency TASS, called ITAR-TASS since January 1992, is to be “the central state information agency of the Russian Federation whose activity is designed for the inner state and international audience.” It clearly is not apolitical and broadcasts almost exclusively in the Commonwealth of Independent States (CIS). Yet, some observers like Mark Alleyne of the Chicago University maintain that ITAR-TASS deserves the status of global news agency just as Reuters, AFP, AP and UPI.

*******
CHAPTER 2

Chapter II
The Agencies Before 1980

2.1 The Glorious Years
According to Unesco data, between 1945 and 1980, the news agencies AP, AFP, UPI and Reuters broadcast 80% of the international information around the globe. This quasi-monopoly on the global flow of information was denunciated many times by the UN and developing countries who accused the agencies, considering them the undisputed leaders of international news diffusion.
Until 1934, the agencies AP, Reuters, Wolff (from Germany, no longer existing), Havas (now AFP) shared the world between themselves according to spheres of influence. At the time, the agencies were referred to as a cartel. Created in mid-XIXth century during the industrial revolution, the agencies Reuters, Havas and Wolff had signed a covenant in 1859 which delimited the territory covered by each of the agencies involved.
- The British Reuters covered its colonies, namely Egypt, India, Turkey as well as China and Japan;
- The French Havas covered Latin America, the French Empire, Switzerland, Italy, Spain, Portugal and Belgium;
- The German Wolff covered the Reich, Scandinavia, the Slavic countries (including Russia), Holland and the Austro-Hungarian Empire;
- The Associated Press joined the cartel in 1875 and covered only the American market.

It is the arrival of United Press (UP) in 1907 that will disturb the established order. Aiming to conquer new markets and gain a global status, UP began, in 1917, to open foreign offices in order to compete against AP in the United States as well as to gain new customers in Latin America and Europe. The efforts of UP combined to AP’s desire to desegregate the international communications system led to the covenant to be broken in 1934, meaning that the four agencies can compete with each other in any part of the world. This also means the end of the European monopoly on agencies. From now on, the colonial order is a thing of the past.
Philippe Beaudelot brilliantly summarized this era :
“Up to the Second World War, even in relative competition, the four agencies always kept close ties with each other and never sought confrontation. These major agencies were benefitting from a quasi-monopoly which more or less met all the needs of their clientele, the economic partaking of the world and the type of international relations being practiced at the time. They processed virtually all the information for a flourishing press in the absence of television.”
The onset of the Second World War in 1939 only reinforced this tendency towards increasing competition and, as soon as hostilities were over, Havas stopped being a martial propaganda tool for the French State and became Agence France-Presse in 1944. The war over, Associated Press preserved its status of cooperative of American newspapers, the British Reuters is also a cooperative controlled by British dailies and by the national news agencies of New-Zealand and Australia. United Press maintained its growth and associated with International News Service in 1958 to become United Press International (UPI).
Observers generally consider that from 1945 to the end of the 1970s, the international information circulation system was quite stable despite the arrival of television in 1952 and the development of new telecommunication and information technologies during the 1960s. The international information system remains a Western monopoly until the end of 1970s for AP, AFP, UPI, Reuters). However, the American agencies (AP and UPI) dominate. Before Second World War, it was mostly a European and colonial monopoly by Reuters, Havas and Wolff.
Again, Beaudelot aptly describes the situation of news agencies from 1945 to 1975, thirty years of vitality during which photo agencies, film agencies and television slowly assume their positions :
“Just as the end of World War II marked the arrival of a new type of international relations in terms of politics and economy, it will mark the dawn of a new era for news agencies. Thus, the current domination of the world by four agencies, two American, one British and one French, and excluding Germany and Japan, corresponds to the way political power is shared after the victory of the Allied forces. National news agencies multiplied and the daily press was undergoing a boom helping more than ever the four global news agencies to boost their vitality. The photo and film agencies (and later televisions which were generally closely tied to networks) adopt right away a median line due, in part, by the slow transmission of images until the arrival of video and telecommunications satellites at the end of the sixties. During the “glorious thirty” following the war (1945-1975), the news agencies were able to develop constantly and fitfully.”

The dynamism of news agencies and their quasi-monopoly situation is confirmed also by their numbers. According to Unesco data published in The World of News Agencies in 1978, their profile looked like this :
WOLRD NEWS AGENCIES IN 1978
Name of the agency Words per day Employees Subscribers

ASSOCIATED PRESS 17 million 2600 5720
REUTERS 1.5 million 3600 5000
AFP 3.35 million 1990 1729
UNITED PRESS INT’L 11 million 1825 9300
DEUTSCHE PRESS AGENTUR 115 000 800 n.d.
ANSA 300 000 570 1600
EFE 500 000 545 1730
NY TIMES 100 000 n.d. 500
TASS 100 000 560 13 525
TANJUG 100 000 895 n.d.
INTER PRESS SERVICE 100 000 390 420
KYODO NEWS SERVICE 100 000 1900 215
Source: UNESCO
A quick look at this table allows one to notice that the four big agencies do not have any real competition at the end of the 1970s. Even an “international” news agency like TASS does not manage to broadcast more than 100 000 words per day.

2.2 The agencies are accused of misinformation
The news agencies AP, AFP, UPI and Reuters are at the heart of the political debate of the New World Information and Communication Order (NWICO) which raged at Unesco from the late sixties to the late eighties. This debate, which involved the leaders of the four big agencies, revolved around the fact that the agencies were extremely powerful and were at the root of the problem of imbalance of information exchange between industrialized and developing countries. Henri Pigeat, president of AFP from 1979 to 1986, was involved in the debate and maintains that “the debate rapidly turned into a full-fledged attack against global agencies which were at once accused of blocking the development of local agencies and of being a nuisance for developing countries.”
This political debate, it must be said, is rooted quite deep in history. Following its creation in 1946, the United Nations Organization defined the principle of the free flow of information in article 19 of the Universal Declaration of Human Rights : “All individuals are entitled to freedom of opinion and freedom of expression, which implies the right of not being harassed because of one’s opinion and the right to receive or diffuse informations and ideas by any means, without consideration for boundaries.”
As early as 1953, concerns were expressed at Unesco against the one-way flow of information between the North and the South and, consequently, against the agencies who were called, at the time, “the four sisters”, a term was widely used until recently to speak of the four major international news agencies.
The decade of 1960 is one where many countries, especially in Africa and Asia, gained independence. These countries want to be admitted to the United Nations in order to have a forum to express their political desire of distancing themselves definitely from the occidental way of thinking. It is also a decade animated by the tensions from the Cold War which in turn created the non-aligned nations movement. From all this, three conceptions on the status of the press will rise :
- freedom of press
- the press at the service of the State (socialist conception)
- the press at the service of development
It is during a Unesco meeting in Montreal (1969) that the term New World Information and Communication Order was coined. During this meeting, African and Asian and Latin American countries identified three threats that will lead them to demand a new order because of the one way circulation of information from the North to the South :
- the power of the news agencies AP, AFP, UPI and Reuters
- the american television programming
- the telebroadcasting satellites
In Nairobi, in 1976, the Director of Unesco was asked to prepare a report that shall be used to “reinforce media of the Third World, to offset the action of occidental media in those countries and to propose ways to achieve a better balance and a better reciprocity of information.” The mandate was given to Sean MacBride, former Irish minister and recipient of the Nobel peace prize. The Unesco will toil on the adoption of a declaration on mass communication media (voted in 1978) which connoted (according to American media) a control of media by developing countries. Influenced by the logic of the Cold War, occidental countries opposed the declaration. The final declaration will recognize that there is a need for a more balanced diffusion of information. The triggering element was indeed the deposition of the MacBride report in 1980. The Report on the State of Communications in the Modern World maintains that the inequities in the exchange of information is imputable to the four occidental news agencies AP, AFP, UPI and Reuters. He insists that “at the international level, information circulates almost exclusively from countries with the technical means towards those who do not possess those means.” This voluminous report aims at reaching a better balance of news flow between the North and South while allowing States to define themselves what consists in a “responsible” and “well-balanced” coverage of events. “News agencies stand indicted. The authors of the MacBride report tried to reach a consensus but the document includes several reserves which contradict its affirmations.” This report, which received the support of the USSR, alarms Americans who declared that this study was the official position of Unesco.
The Unesco, on the other hand, maintained that the news agencies created a quantitative and qualitative imbalance of information. Quantitative in the sense that a majority (65%) of their news concerned industrialized countries due to their supply and demand based market. For example, in 1980, 75% of the Associated Press’ market was in the United States. Agencies thus seek to satisfy their clients, newspapers which are not evenly spread over the globe :
AFRICA : 700 million people 1% of the world’s newspapers
OCEANIA : 8 million people 2% of the world’s newspapers
LATIN AMERICA : 450 million people 8% of the world’s newspapers
NORTH AMERICA : 300 million people 14% of the world’s newspapers
ASIA : 3 billion people 24% of the world’s newspapers
EUROPE : 1 billion people 51% of the world’s newspapers

Source : L’État des médias, Montreal-Paris,1992

For news agencies, the Third World market is clearly not important on a quantitative level. The Unesco also mentioned a qualitative imbalance because the news from the four major agencies offered a negative image of the Third World, putting too much emphasis on coup d'états and not enough on the changes taking place in those countries. At the time, the criticism emanating from the Third World well well summarized by the former Tunisian minister of information and ambassador at Unesco, Mustapha Masmoudi :
“The vertical flow of global information is controlled by the Western transnational corporations AP, AFP, UP, Reuters and TASS… 80 percent of world news flow emanates from the major transnational agencies. They monopolize between them the essential share of world news… It enshrines a form of political, economic and cultural colonialism which is reflected in the often tendentious interpretation of news concerning the developing countries.”
News agencies are still powerful and influential at the end of the 1970s. Even American specialists agree with Masmoudi :
“The four predominant transnational agencies and the two largest television news enterprises, Visnews and Worldwide Television News (WTN), are immensely powerful and influential organizations, far outpacing their operating budgets. These agencies are influential not only in effectively transmitting news around the globe but also, more subtly, in defining news values and styles. Journalism in much of the Third World is patterned after Western perceptions, values and practices, especially in agency style writing.”
In their book Contra-Flow in Global News : International and Regional News Exchange Mechanisms (1992), Oliver Boyd-Barrett and Daya Kishan Thussu demonstrate that news agencies, in particular, and information, in general, are perceived as important and modern instruments of domination. They also point out that the Southern hemisphere theory according to which the “four sisters” hold an Imperialist agenda is still hotly debated today. “This strong version of media imperialism theory, however, is equally hotly contested by the western transnational themselves. The empirical evidence does not consistently support the media imperialism thesis, and in some cases the burden of responsibility can be laid at the door of Third World élites themselves.”
The NWICO debate is considered by analysts as having greatly contributed to the departure of Unesco from the United States. The attacks of Third World expressed at Unesco against the Unites States and the agencies AP and UPI were taken very seriously in Washington. The American administration left Unesco in December 1984. It contributed to 25% of the US$535 million budget of the UN agency. Great-Britain left for the same reasons, leaving a 5% hole in the budget of Unesco. These two countries often accused, as all other industrialized countries, the Unesco and its then director, Amadou Mahtar M’Bow, of being anti-American and anti-Occidental.
Since the departure of the Unites States, the budget cuts at Unesco have been considerable and the stability of the organization has been threatened. Since then and the arrival of Frederico Mayor at the head of the organization, the NWICO debate transformed into a technical debate without much scope. This is true to the point that the Unesco has decided to burry the original charter of the New World Information Order on November 10, 1989, despite the vigorous opposition of Third World countries. “The new text maintains the need of an initial charter in favour of well-balanced information and against any obstacle to freedom of expression. The Third World countries who represent the majority at Unesco, wanted to promote through the original charter a rebalancing of the means of information to their profit.” This disappearing act ends a political and ideological debate between North and South, East and West, capitalism and socialism.
All in all, the international news agencies crisis manifested primarily with the intense debate surrounding the New World Information and Communications Order. This debate, which reached a peak in the late 1970s and early 1980s, strongly destabilized the very foundation of the agencies, questioned their credibility and made them adopt a defensive position. Indeed, the partisans of the NWICO came to demand a boycott of the four international news agencies in order to decolonize information. For Michæl Palmer, a world specialist of news agencies and professor at the Université de Paris - III, “the New World Information Order represented a very real danger for the agencies.”

******

CHAPTER 3

Chapter III
The Associated Press (AP): the strongest to face the future?

“There are only two things which can light up the four corners of the world : the Sun and the Associated Press” — Mark Twain

3.1 A few facts about AP

The Associated Press is a news agency that was created in 1848 by six New York newspapers who joined forces in order to cut costs and to receive and process news from Washington and Europe. In the beginning, the agency was only concerned with the American market. This was the era of “wireless telegraphy, which ended the reign of carrier pigeons and news boats” . In 1849, AP opened its first foreign office in Halifax, Canada the main port of entry to North America. News arrived by ship and were telegraphed to New York. In 1871, AP joined the cartel of European news agencies (Havas, Reuters, Wolff) and laid its first land wire to be used uniquely for the transmission of news. Then, in 1899, AP became the first news agency to test Marconi’s wireless system to send dispatches. From this point on, things evolved rapidly and a photo service was launched in 1927.

Specialists agree that AP began opening to foreign markets during the 1920s, long after Havas and Reuters. From 1848 to 1934, the agency distributed its American news through the national agencies since the cartel prohibited the agency from selling them directly. The AP had close ties to the American government at the time and in 1919, Congress “directly supported the efforts of Kent Cooper (the president of AP) which were aimed at breaking the cartel of European agencies, thereby expanding and to expand the foreign markets of Associated Press.”

With financial support from the government and with the benefit of discount transmission rates, AP consolidated its position vis-a-vis United Press (founded in 1907) and continued to distribute the international dispatches from Reuters, Havas and Wolff in the United States. Frustrated by this position whereby it could not sell its news on the foreign market and where the cartel agencies could do what they pleased with the news it supplied, the Associated Press withdrew from this constraining association in 1934 and assumed the distribution of its news.

In the 1940s, Kent Cooper who was still president of the AP and an experienced lobbyist, embarked on a crusade to convince the American government and the League of Nations (which became the UN in 1945) to support the idea of freedom of press, and of the worldwide flow of information free from governmental control. He succeeded in gaining the recognition of Harry Truman for this principle in 1945 and won the approval of the United Nations in 1948. At the end of the Second World War, which incidentally consecrated the decline of the European agencies Wolff, AFP and Reuters, AP set out to conquer the world. “In 1946, the Associated Press supplied clients in 20 countries. In 1948, the agency had offices in fourty-four countries.” With the financial and political help of the American Congress and the White House, AP rode the post-war momentum to develop a more agressive commercial strategy. For AP, “the principle of the free flow of information without governmental intervention was not a means to an end but the appropriate way of attacking foreign markets.”

An agreement with Dow Jones in 1967 made it possible for the agency to develop a financial news service, and the AP-Dow Jones service is in direct competition with Reuters’ financial news service in more than 50 countries (AP renewed this deal with Dow Jones in 1997, for a period of seven years). Moreover, in 1967, AP stops supplying Reuters with American news, at the request of the latter, who then launched an independant news service in North America.

Thus, since World War II, AP has constantly developed its international correspondent network and has succeeded in spreading its tentacles throughout the world.

Today, AP is a global news agency with the status of a media cooperative (newspaper, radio and television). It is the world's biggest international news agency. AP, a fully private endeavor, only charges its members to cover information gathering and distribution expenses. About 80 to 90 % of its operating costs are paid back in the American market and its services are offered almost everywhere in the world at a reasonalble cost. In Canada, all daily newspapers, radios as well as television receive the AP news through Canadian Press (CP) and its French service La Presse Canadienne (PC).

In 1999, the Associated Press had over 15,000 subscribers throughout the world, including 1,530 American daily newspapers and nearly 6,000 radio and television stations in the United States. The agency has nearly 8,500 subscribers outside the US. AP now has 3,600 full-time employees (2,700 in the US and 900 abroad), excluding a multitude of freelance journalists. The president of AP is Mr. Louis Boccardi. In August 1999, AP bought all the broadcast assets of UPI (some 410 clients), putting a definitive end to UPI's dream of a media comeback.

AP has 144 offices in the United States and 96 in 71 other countries, for a total of 237 offices. Its services are received in 112 countries, mostly through national news agencies which broadcast its dispatches. Its annual budget is nearly $418 million US, and since the agency has a cooperative status, it cannot register profits. Deficits are absorbed by the members of the cooperative. In general, the Associated Press makes slight benefits which are immediately reinvested.

The ASSOCIATED PRESS offers the following services:
- general international news (AP, 1848)
- economic and financial information (AP-Dow Jones, 1967)
- photo services (AP Wide World Photo, 1927)
- radio services (AP Broadcast, 1974)
- televised services (APTV, 1994)
- compugraphic services (AP Graphics, 1990)
- magazine services (AP Magazine, 1990)
- the Dow Jones databank (1980s)
- financial transactions with Dow Jones (1988)
- sports news services (AP Sports)
- radio news services (AP Network News)
- a computer system for television news rooms (AP News Center, 1993)
- international news services for individuals (AP On Line, 1990)
- AP adSEND (digital transmission of advertising to daily newspapers through the AP network, 1994)
- AP All News Radio (radio syndication services, 1995)

Of course, the agency operates 24 hours a day. In a typical day, it receives 900 news items at its New York headquarters, broadcasts 20 million words and supplies information to a billion readers, viewers and listeners. The information is disseminated in English, French, Spanish, Portuguese, German, Arabic, Swedish and Dutch. AP operates a service in the United States which is completely independent of services for the rest of the world. Specific services are offered to Canada, Europe, the Middle East, Africa, India and Latin America.

3.2 Causes of the crisis at AP

The crisis at AP did not develop suddenly. Surprising as it may seem, the roots date back to the glorious days of the 1940s when the American agency decided to proceed with its international expansion. Here is how unfolds this “critical phase” which has affected AP since the late 1970s :

a) causes particular to AP :
- profound modification of the financial balance
- notable increase in the cost of information gathering
- reduction of foreign services in favor of a focus on North American interests

b) general causes :
- the NWICO debate which has constantly questioned the existence of American agencies AP and UPI
- crisis in American printed news and in the information market
- competition from news services such as those of the New York Times and Los Angeles Times
- increased disinterest by Americans concerning foreign information

Following its international expansion after World War II, the Associated Press agency had to deal with the increasing cost of gathering international news. However, the difference between the increase in international and national news gathering is not very significant.

“Between 1943 and 1963, expenditures for foreign information have increased by 75% (in constant dollars) while those for national information increased by 68%. In 1963, the Associated Press allocated 55% of its financial resources for the gathering of international dispatches. Since, in each case, AP had to cover worldwide events for its American clientele, satisfying its foreign market only marginally increased the agency’s expenditures.”

It was during the 1970s that the crisis manifested itself in a concrete way for AP. The ever-increasing costs associated with the international sector, the tenacious competition of Reuters and United Press International on the American market and the general depreciation of global economics created by the 1973 oil crisis had disturbed the daily operations of the agency.

Important news services developed in the United States starting in 1970. One after the other, the main newspapers of the country began offering their news to other media at very competitive prices. These alternate news services, in direct competition with the basic service of AP and UPI, offered news features, texts by their own foreign correspondents and reprints of articles from affiliated papers. The competition gradually increases. More personalized and cheaper, these “supplemental information services” became increasingly popular. They “significantly encroached upon the traditional markets of the Associated Press.” The New York Times News Service (NYTNS) increased its subsciptions worldwide from 50 to 500 subscribers between 1960 and 1989, and this meant more direct competition for AP and UPI. The New York Times Company itself had 1998 revenues of US$2.9 billion.

All these factors are not exclusive to AP, but they did have an influence on the international status of the agency. From the onset of the 1980s, the major consequence of this increasing competition combined with the increase in expenditures, have resulted in a rupture in AP’s already fragile financial balance. The agency was faced with a financial connundrum and had to update its technology. It was left with no other choice than to proceed to the application of austerity measures such as closing news offices, most of which were located in Africa and the Middle East.

In 1999, AP was left with only six offices in Africa : Algiers, Cairo, Abidjan, Harare, Johannesburg and Nairobi. According to its advertising pamphlet “AP: Who, What, Where, When, Why and How”, published in 1995, the agency had 148 offices in North America; 35 in Europe; 21 in Latin America; 15 in Asia and 10 in the Middle-East.

For many, the recent budget cuts do not at all reflect a decline for AP. Walter Mears, a former veteran journalist-manager at Associated Press, believes that even in the long term, the collapse of AP is highly improbable.

“Not that we have not had to temper our goals and sometimes reduce our staff level in times of recession. We have had to cut expenses, but never at the cost of curbing our central, essential services. The kind of decline that has been suggested is unrealistic. (…) For most newspapers, we are a bargain. In hard economic times, we are an even greater bargain. The editorial engine of an industry, AP will be here, delivering, for a very long time to come.”

Nonetheless, AP is an agency with the means of selling its services abroad on a more or less profitable basis.

For fifteen years now, the agency has been in a fragile but stable budgetary situation. AP has a total debt of $10 million US. Expenditures continue to grow. In 1973, AP purchased $2.3 million US of equipment and the figure reached $16.2 million US in 1983. That same year, AP increased the cost of its subscriptions by 9.5%. In 1984, it had a deficit, but turned out $5.4 million US in profits the following year. In 1986, it had to invest $13.6 US million in new technology after having made $ 10.5 million US in profits. These investments were not necessarily an indicator of ill financial health, but, in 1987, AP was forced to sell all its interests ($58 million US) in AP-Dow Jones/Telerate. The agency was turning out low profits on its current operations, but this was not enough to meet all its investment needs. In 1991, AP had a cumulative debt of $41 million US. Another decrease in revenues occured in 1993 ($3.3 million US) followed by an increase of 4.5% ($16.1 million US) in 1994. It is important to note, however, that AP was forced to increase its operating expenditures by $30.6 million US in 1994 due to the introduction of AP Television. This led to a dead loss of $7.8 million US (before income tax) for 1994. AP maintains that it has had a net positive balance each year for many years now. It also says that APTV is profitable. “Overall, AP’s financial health remains sound and capable of handling the startup costs of new services without compromising the resources needed for our core misison.” This does not prevent the fact that Associated Press had a deficit of $12.4 million US (after income tax) for the 1995 fiscal year.

Moreover, the market of American daily newspapers has been stagnating for some time and there was a marked decline between 1980 and 1995. In 1980, there were 1,750 daily newspapers in the US; 1,688 in 1986 and 1,533 in late 1999. AP therefore had to reduce its foreign investments and services in order to compensate the losses on the U.S. market.

While newspapers had still been getting their dispatches directly from agency wires towards the end of the 1970s, the situation changed slightly in Canada after that point. AP’s influence was declining. For example, daily newspapers in Canada like The Globe and Mail, The Montreal Gazette and The Toronto Star could and did purchase at low cost and publish articles from Bloomberg, Deutsche Press Agentur (DPA), the New York Times, The Washington Post, Knight Ridder Newspapers, The Economist, The Guardian, Cox, Scripps, The Observer and The Independent. Even though AP is broadcast in English Canada through the Canadian Press (CP) wire service, it remains a dominant source.

In France, Switzerland, Belgium, Asia, Africa and French-speaking Quebec, AFP remained the number one agency since its services were more exhaustive, entirely French and ready-to-publish (AP also does have a French news wire). Indeed, the budget constraints at AP have had a negative influence on its French service and most of the texts on its wires are only translations. A 1993 study by Mylene Paradis of Laval Univeristy on the processing of international information from 1970 to 1990 shows that only 11.1% of international news published in Montréal’s La Presse bore the AP signature. In the influential Montreal newspaper, Le Devoir, this figure was only 2.96% while Quebec City’s Le Soleil was 13.96%. “The results of this content analysis demonstrated that the three French dailies used Agence France-Presse to a great extent. The pages of these papers are brimmimg with AFP dispatches.” Between 1970 and 1990, AP was clearly left aside, particularly in La Presse and Le Devoir. This tendancy favored Reuters and AFP. The study also explains that at Le Soleil, AP was at this time the second choice following AFP.

The situation in Canada has however improved for AP. In 1994, the national news agency Canadian Press (CP) and its French equivalent Presse Canadienne (PC), cancelled its subscription to AFP, saying it was too expensive. CP broadcasts news to more than 1,000 clients in Canada and was relaying AFP news to all its domestic suscribers. In January 1997, following a major restructuration, CP and PC dumped Reuters' French service. AP is now in a very strong situation in Canada since it is the only foreign news agency broadcast to Canadian media through CP and PC. Canadian media can only suscribe to Reuters and AFP on a one on one basis.

AP is now taking better care of its North American clientele. According to Michael Palmer of Universite de Paris, “this can be explained by a confrontation between the geopolitical and financial interests of the agency.” Indeed, the main market for AP is the United States, its geopolitical center of interest. The costs of the agency are absorbed on the American market, which allows AP to offer its services for a ridiculously price elsewhere ($30,000 per year for a French newspaper with a print run of 180,000).

Some refer to this as dumping:

“The information distribution overcost of Associated Press in other countries can thus be compensated and limited. Therefore, rates are often unrelated to the actual cost of the service and even to that of transmissions. Because of this, AP can maintain unprofitable services in France and in other countries due to a policy in which it is hard to distinguish commercial interests from a will to expand.”

The geopolitical interests of the United States are close to those of AP, namely North America, Europe and Asia. Clearly, the United States also has strategic interests in the Middle East, Latin America and in Africa, but they are more limited. The same is true for AP as an American corporation. AP is strong everywhere in the world but is less so in Africa and the Middle East. In fact, the agency manifests little interest in gathering information in the South, especially in Africa. The cost of gathering news in those countries is generally higher than the revenues generated, and Associated Press only does so because it considers it a public service. If one takes into account the rules of the market, the cost of subscirbing to AP for a Third World media is basically symbolic.

For Thomas Kent, former editor of the worldwide service at AP’s headquarters in New York, the major problem facing the agency is competition. “Competition between the agencies is very rough. We always try to work faster than the other agencies and to work better. Sometimes we succeed, sometimes we don’t. The competition also works very fast. In no way do we get the impression that the world depends on us. The competition is now tougher.”

Kent maintains that competition still exists, even in today’s circumstances. According to him, even though UPI was stronger five years ago, there are now agencies that were not part of the current picture at that time. “From our point of view, there is no monopoly. Every day, all we see is competition. There are more news agencies in 1993 than there were in 1988 or even in 1983.” Financial agencies such as Bridge News and Bloomberg are the most obvious examples.

Finally, another factor can explain the crisis AP has been undergoing for the last fifteen years, which is the disinterest of a majority of Americans for international information. For many analysts of the American scene, including Jean-Luc Renaud of the University of Minnesota, the Vietnam War (1955-1975) did not help the cause of Associated Press. It provoked a certain apathy in the public with regards to foreign news. “The Vietnamese debacle generated a climate of introspection. The attention of the public tended to shift toward domestic affairs.” As they explain in their book UPI: Down the Wire, Gregory Gordon and Ronald Cohen, who were working at UPI in the the 1980s, it is common to hear daily newspapers and radio stations complaining about the excess international topics on the news wires of AP and UPI.

However, this lack of interest of Americans regarding international news is contradicted by a study realized during the 1980s by W. A. Hachten. “The study demonstrates that the media people estimate at about five percent the portion of the audience interested by international information, whereas 41% of their audience say they are interested.”

3.3 What Saved AP

There has been a crisis at AP, and its traditional activity as a news agency has been slightly put aside in favor of the development of more specialised services. Up to now, this crisis has affected AP’s status for various reasons. AP has comparative advantages due to its status and structure. As a media cooperative, it can, by and large, cover its finances against the vicissitudes of time. AP is a non-profit organization, and as such can remain relatively independent financially. Indeed, the newspapers, radios and television networks who are owners of AP meet once a year in a general assembly to balance AP’s $420 million US budget, and the members are willing to make compromises for the agency’s survival. If AP is faced with a deficit, a rationalisation plan is established and the members of the cooperative are required to make an additional financial effort. On the other hand, if the agency turns out a profit, it is immediately re-invested. This worldwide organization requires very strict commercial management. “If the rigors of capitalist rules are theoretically tempered by their cooperative status, these corporations, who are generally non-profit, cannot ignore the rules of commercial management for long. The notion that a small group of cooperating newspapers could support the colossal charges of a worldwide network of journalists, offices and transmissions is not feasible.”

The moribund state of its main competitor, United Press International, has also helped AP throughout the last ten years. Even though UPI began having minor financial problems in the 1960s, it was only at the end of the 1970s that everything went awry. The rapid succession of executives at the helm of UPI and their managerial inefficiency led it to table its bankruptcy statement in 1986. Since then, UPI has been in a weak position and has allowed AP to considerably enhance its market share in the United States and Latin America as well as win back former customers. On the eve of the year 2000, AP holds a quasi-monopoly in the United States, the market which provides it almost all of its revenues. According to the most recent statistics, 94% of American daily newspapers subscribe to AP, when, in 1985, it was 73%; 71% in 1980 and 67% in 1970. In 1994, only 11% of daily newspapers subscribed to UPI. This was a boon for AP. In August 1999, UPI sold its 410 remaining radio and TV clients to AP.

Finally, AP’s efforts to diversify since the end of the 1960s has allowed it to get in spite of the crisis it was facing. AP started experimenting with information technologies in the 1960s and began applying those technologies to news rooms in 1972. Its beneficial association with Dow Jones News Service in 1967 and the successive launching of new products (the AP Leaf Picture Desk digital photo service, in 1991, AP Broadcast, APTV, in 1994, AP Graphics, AP OnLine, AP Magazine, and various databanks) could eventually help the agency in developing new niches while both ensuring a certain financial stability and facing the challenge of Reuters’ intense competition in research and development.

For example, the introduction of the digital News Camera 2000 in 20 offices in 1994 allowed the agency to transmit a picture only moments after the event. With its AP Basic service, aimed at small daily newsppapers, AP now transmits 9,000 words per minute compared with only 66 in 1993. AP is definitely entering the global information market era.

For Jean-Claude Bouis, a New York AP executive, “we had no choice but to commercialise information and widen our customer base because we saw that the newspapers, radio and television markets had reached a plateau, and that we had to find new sources of revenue. We could see that our information had considerable value.” Bouis and his colleague Michelle Sagalyn, executive in charge of the information technology service, give several examples of recently implemented projects :

- A “Home and Business” information technology service through which 4 million subscribers connect their computers directly to AP through a modem;
- AP OnLine : an international information menu written in New York where eports from 91 of AP’s worldwide offices are classified;
- A databank of news concerning women, and another concerning medical information targeted for hospitals, drugstores and medical research centers;
- An agreement with the French newspaper Le Nouvel Observateur which has purchased AP OnLine and ported it to the Minitel system, providing the French with continuous information concerning the United States.

For Mr. Bouis, these initiatives “do not affect the agency’s mission of informing the public. Our customers are still radio, television and newspapers.”

AP’s diversification efforts even made Jeremy Tunstall, of the City University of London, declare, in the early 1980s, that the agency was in the best position to face the future and react to the explosion in the demand for real-time economic information :

“The Associated Press has achieved the strongest diversification within the news field because AP-Dow Jones puts it internationally into partnership in the strongest traditional form of agency news (financial data) and with financially strong American newspapers (The Wall Street Journal), and gives it a powerful position in providing general financial news in a form suitable for domestic U.S. news media.”

Ten years later, he wrote that “the lone American AP is now outgunned by European Reuters and AFP. During the 1980’s Europe took over from the United States as the world leader in news . In the 1990’s, we expect this leadership to be more recongnized.”

AP's cooperative status, the fall of UPI and its diversification efforts have all played an important balancing role with the result that the international news agencies crisis is affecting it less deeply. These effects have been limited to a rationalization of effectives, of resources and of its worldwide network of correspondents.

Globally, one can notice that the crisis at AP has manifested itself as competition from other information suppliers which have forced the agency to maintain competitive rates. The agency was forced to reduce its expenditures, especially in Africa and elsewhere abroad, as well as in its foreign language services. This contributed, along with the debate on the New World Information and Communications Order (NWICO), to a decrease in foreign newspaper subscriptions. Our main argument here is that the production costs of AP have increased more rapidly than the sales rates, which created some financial insecurity.

***

CHAPTER 4

Chapter IV
Agence France-Presse : At The Crossroads

4.1 Agence France-Presse (AFP) : A Painful Restructuring
4.1.1 Some facts about AFP
The agency, first known as “Havas” was founded in 1835 by Charles-Louis Havas. It is the oldest news agency in the world. In the beginning, Havas had two types of activities : the translation of foreign newspapers for Parisian diplomats, politicians and journalists and the diffusion of a newsletter commenting on important events in France. As early as 1838, Havas developed a privileged relationship with the French State by ensuring the distribution of its ministerial correspondence. In 1845, Havas began using the newly-installed telegraph system. On the eve of 1847, Havas had an almost complete monopoly on information in France.
In 1857, Havas created a publicity department and from that year until 1940, it concentrated its market on the sale of news and publicity; its corporate status ensured it a certain prosperity up to World War II. In 1859, Havas participated in the creation of the cartel of European agencies. The cartel allowed it, along with the Reuters and Wolff agencies, to meet the very high costs of telegraph transmissions and to divide the world into zones of influence. In 1881, the French Act on Freedom of the Press was voted by the French National Assembly. From that moment on, the use of the telephone, teletypewriter and short-wave radio was to bring about a revolution in the daily life of the agency. Cables kept reaching further and further, as the media extended their coverage. When the First World War exploded, it disrupted the cartel, and the 1930s were witness to its dismemberment. Competing agencies (AP, UPI and TASS) were growing and, at this same time, Havas was undergoing multiple financial difficulties. Luckily, the Quai d’Orsay was there to bail the agency out. In 1940, the Havas agency changed its name to the Office Français d’Information (OFI) and, in August 1944, to Agence France-Presse. “The AFP adopted its current name in 1944, after the liberation of Paris when journalist members of the Résistance traded their guns for typewriters.”
From 1835 to 1944, Havas was a global news agency which was strongly influenced by French government policies. It was considered to be more or less partisan, depending on the events in question. From 1944 to 1957, AFP was a public organization, and in 1957, the French National Assembly voted “Les statuts de l’AFP” (the AFP statutes) which confirmed its independence from the State. Nonetheless, this does not keep certain parties from occasionally qualifying it as being “unreliable for a good number of journalists.”

From 1957 to this day, Agence France-Presse has continued to develop its markets and to modernize its structure and services. Under the leadership of Jean Marin, who died in 1995, and who was active in the agency from 1954 to 1975, the agency was reborn. In 1994, the AFP celebrated 50 years of history.
AFP operates 70 permanent offices throughout the world, other than in France itself where it has 25 offices. It is continuously expanding its world presence : an office was inaugurated in Shanghai in October 1994 and others, Los Angeles, Chicago, Miami, New Orleans and Denver, are scheduled to open at some point. The agency also operates some 80 branch offices, called sub-bureaux. AFP explains that a branch office is staffed with only one reporter who is responsible to a larger main-office. According to AFP’s own statistics, the agency has 1,000 permanent journalists and 200 photographers and a total of 2,000 employees. It also employs 2,000 freelance journalists and photoraphers throughout the world.
AFP has journalists and bureaux in 165 countries and 1,050 media-subscribers (650 newspapers and magazines and 400 radios and televisions) in 147 countries. It reaches a total of 2 billion people which makes it, it says, the most widespread news agency in the world. With the help of the one hundred national news agencies which receive and transmit its information, it reaches a total of 12,000 media users indirectly : 7,600 newspapers, 2,500 radio stations, 400 television networks as well as 1,500 private and public subscribers such as banks, administrations and businesses. Its revenue is approximately FF1,3 billion ($212 million US).
The agency operates non-stop, broadcasting two million words per day in six languages (the equivalent of a 5,000 page book) in addition to some 250 photos, 20 graphs, and 15 radio chronicles. AFP is based in Paris with strategic regional news desks in Washington, Hong Kong and Nicosia. Paris provides service to France, Europe and Africa, while Washington covers both Americas, Hong Kong covers the Pacific and Asia and Nicosia is responsible for the Middle East. A Latin American service is coordinated through Montevideo, in Uruguay, since 1998.
The creation of the regional directorates helped the agency establish a closer contact with its customers while decentralizing its Parisian operations. The Hong Kong regional directorate, created in the early 1980s, made it possible to direct and regionalize the agency’s English language operations in Asia and the Pacific. A Bonn desk, which was transferred to Paris in 1987, brought the agency closer to its German-speaking customers in Switzerland, Austria, Luxembourg and Germany itself. The Washington desk was given the responsibility of the news coverage of Canada and the United States, which provides a more personalised service to the customers there. The Nicosia directorate in Cyprus centralised information gathering in the Middle and Near East. “One of the most significant gains is that, in Nicosia, Arab journalists treat, in Nicosia, the bulk of the information from Jerusalem. They speak on the phone several times each day with their colleagues in Israel. They travel to Jerusalem. For people who understand the Near East, this type of collaboration is highly meritorious.” A smaller regional bureau also exists in Sao Paulo for the Portuguese-language media.
AFP operates in six languages : French, English, Spanish, German, Portuguese and Arabic, and plans to launch a Chinese service. Specific services are offered in Latin America and North America, the Caribbean Islands, the Far East, the Near East, English speaking Africa, North Africa and Sub-Saharan Africa. Other services are also broadcast for German, French and Arabic speaking countries are also broadcast. The AFP realises half of its turnover in France. AFP says it is the leader in Asia, the first international agency in the Arab world and the most present in Africa.
Despite its already strong international presence, the agency has nevertheless deployed its own worldwide broadcasting network since 1987. It uses six geostationary satellites which feed nearly 1,500 parabolic antennas and 2,000 computers and terminals.
From a technological standpoint, AFP has five subsidiaries : POLYCOM for satellites, SPDVC for video production and broadcasting, AFX News Ltd for the English language economic service, Logipress for information technology engineering, and Inédit for editorial engineering (Internet presence and new technologies).
AFP offers the following services :
- a general news service (AFP, 1835)
- a photo service (AFP Photo, since 1985)
- a radio service (AFP Audio, since 1984)
- a telematics service (AGORA, 1983 and MINITEL, 1985)
- a telecommunications service (POLYCOM, 1986)
- a graphics service (AFP Infographie, 1988)
- an business news service (SEF and AFP-FINANCES, 1968)
- an English language economic service (AFX News, 1991)
- a sports department (AFP Sports, 1982)
- a magazine service which covers various subjects (AFP MAGAZINE)
- a publishing service (AFP-ÉDITION)
- a specialized bulletin service (Africa, sciences)
- an Internet service : France-Presse Online
- CD-ROM editing : AFP DOC (1993), AFP Sciences (1996)

The presence of AFP is particularly significant in Europe, Africa, Latin America and in the Middle East. It is less so in North America.
AFRICA: 44 offices, 72 journalists, 5 photographers
EUROPE: 25 offices in France, 27 outside of France, 630 journalists in Paris, 95 in Europe. Photos are exchanged by the European Pressphoto Agency (EPA)
NORTH AMERICA: 5 offices, 3 branches, 42 journalists, 21 photographers
LATIN AMERICA: 25 offices, 60 journalists, 14 photographers
MIDDLE EAST: 16 offices, 51 journalists, 7 photographers
ASIA & PACIFIC: 21 offices, 79 journalists, 27 photographers
Source: AFP
4.2 The crisis at Agence France-Presse
The causes of the crisis at AFP can be explained easily. They manifest themselves in various ways. For Catherine Conso, who conducted two major economic studies on news agencies throughout the world, Agence France-Presse has long suffered from an unprofitable operation which compelled it to undertake a difficult restructuring process. In fact, this inefficient management was being felt as early as the beginning of the 1970s at a time when AFP became aware of the need to follow in the footsteps of AP and Reuters in such areas as automation, the development of new products and in making massive technological investments. The crisis at AFP was manifested as follows :
a) causes particular to AFP :
- financial imbalance (accumulated deficit, cost of modernisation, cost of news gathering, competition)
- slow adaptation to the break-up of markets and to new technologies
- internal crises (strike in 1985-1986, decentralisation, cutbacks, restructuring)
- management of three-way relationships (the French State, French media and foreign media : structure of the AFP and credibility problem)
b) general causes
- weakness of the French market (70 newspapers and 25 audiovisual media; compared to 1,650 newspapers and 6,000 radio and television stations in the United States)

4.2.1 From a financial nightmare to a spectacular comeback
Agence France-Presse was unprofitable for a long period of time.
The financial imbalance of the corporation represents a true challenge. By experiencing one deficit after another, it got so financially engulfed that its complete dismantling was even seriously considered. Its economic viability had been repeatedly questioned, but in the past two years, a spectacular financial adjustment has occurred. Indeed, since 1994, the AFP has covered its expenses and is now self-sufficient. Between 1990 and 1996, the agency grew by 40%.

Agence France-Presse
A glance at AFP statistics from 1981 to the present illustrates this exceptional turnabout (FF1 = $0.185 US) :
1999 Deficit
1998 Deficit
1997 Slight deficit
1996 Equilibrium
1995 Financial equilibrium
1994 Accomplished financial equilibrium
1993 FF17 million deficit
1992 FF28 million deficit
1991 FF36 million deficit
1990 FF50 million deficit
1989 FF40 million deficit
1988 FF22 million deficit
1987 FF7.9 million deficit
1986 FF149.7 million deficit
1985 FF63.6 million deficit
1984 FF44.1 million deficit
1983 FF84.5 million deficit
1982 FF31.5 million deficit
1981 FF31.5 million deficit

Sources : L’Express, Media Moguls (1991), The European, TV5, AFP, Direction of Communications, Le Figaro

Financial imbalance, clearly visible in successive annual deficits, can be explained by various factors. First, the financial disruptions of AFP were a direct consequence of the high cost of modernizing the agency, a fact that had become unavoidable to its survival. For the financial year 1993-1994 alone, costs related to modernization were FF140 million. “In order to meet international competition and the evolving needs of its customers in the last decade, the agency has had to make an important effort to modernize and adapt to international markets” , wrote Nathalie St-Cricq in 1986. AFP spent a lot more than AP for technology because it was so far behind its American counterpart.
The introduction of information technologies in 1975 and of telematics in 1980, as well as the launching of the photo service and the development of new, real-time news services, had a considerable impact on the agency’s revenues. From FF210 million in 1976, AFP’s budget rose to FF750 million in 1985. These figures were supplied by the executive in charge of communications at AFP, Sybil de Guitaut. In 1999, the budget was FF1.3 billion. However, Conso maintains that “the increase in activities at AFP is low and not much above the inflation rate. This weak growth is actually characteristic of AFP.” Sybil de Guitaut maintains that this statement is untrue. “The growth of AFP is still superior to that of the inflation rate.”

The increase in the cost of gathering international information is another factor which has accounted for French agency’s financial crisis. Indeed, 70% of the increase in the costs of news production during the 1980s relates to the increase in the wages of AFP’s journalists. Just before he resigned as CEO of AFP, Henri Pigeat declared that wage costs were attacking the very viability of the agency : “If we want to keep this agency alive, there will be no other solution than to lessen the gap between its evolving expenses, notably wages, and its real revenues. In general, we produce more costly services than all of our news agency competitors, whether national or international.”
For example, the news agency La Presse Canadienne (PC) and its English counterpart, The Canadian Press (CP), broke their 50 year contract with AFP in 1991-1992 because their subscription rates had become too high. This means that 1,300 Canadian media no longer receive the French and English services of AFP through PC and CP. A direct subscription is now required. It must be noted that PC and CP, as well as their members, have been facing serious budgetary problems since the beginning of the 1990s. Important members of PC and CP which were already receiving AFP directly considered that a subscription as a double billing. The Canadian radio news agency, NTR, also abandoned AFP in 1995, along with the TVA network, the largest private French television network in Canada.
Moreover, as of 1986, a new phenomenon was developing : the progressive de-commitment or disassociation of the State with Agence France-Presse, which was to negatively affect the financial results. Also, faced with serious budgetary difficulties and wishing AFP to become more autonomous, the French government limited its financial involvement with the agency. Until 1985, the government provided 60% of AFP’s financing. The 1984-1989 five-year plan projected to reduce this participation to 50%. The goal was reached and, in 1999, 43% of AFP’s income was said to come from a budget voted by the National Assembly. For some analysts, it is difficult to believe that the agency could manage to continue its worldwide presence below the 50% mark, except by penetrating new markets and only if its services became profitable.

The record deficits of Agence France-Presse in the mid-1980s “have accelerated the necessity of a new vision of its place and its future” On December 31, 1988, despite total assets of FF517 million, AFP had a debt of FF264 million, almost half of its financial statement. The agency was deeply indebted until 1994, when financial equilibrium was reached. “The will to make AFP profitable, or at least to avoid making it a structurally unprofitable organization, significantly influences its operations.” Until recently, 70% of production costs have been devoted to wages. The AFP budget went from FF100 million in 1969 to FF1.3 billion in 1999. The former president, Lionel Fleury, estimates that recent deficits are not very elevated for an agency which has an annual income of over one billion francs. However, he does recognize that employee wages and production costs are too high.
“Media are looking for productivity and try to rationalise their technical means and their production in general. They do not understand that agencies are not doing the same by lowering their rates and by accomplishing gains in productivity. This is where we become a bit embarrassed. An agency’s mission is to maintain a network all around the world and the costs of this know-how has a tendency to increase, sometimes faster than the inflation rate.”
Economic realities have had a noticeable influence on AFP since 1980. AFP was late in improving its competitive edge and in implementing its technological diversification policy, at a time when the media market became saturated in occidental countries.
4.2.2 Late Adaptation to New Market Conditions
Slow adaptation to the break-up of markets and to new technologies is another factor of the crisis at AFP. AFP lagged in diversification. While its three main competitors, Reuters, AP and UPI plunged into information technologies in 1964, 1972 and 1974 respectively, AFP only began automating in 1975. This late diversification was a major hindrance to its prosperity. Another example is that of the financial and stock exchange information broadcasts in real-time by powerful computers; Reuters innovated by using this service as early as the late 1960s and AP signed a strategic alliance with Dow Jones in 1967 while AFP waited until 1991 before launching its worldwide English economic service with the Financial Times. The ever late AFP also signed a strategic alliance with British Extel Financial, but this was in 1990. AFP was the second to last of the international news agencies to launch a photo service, in 1984. AP had initiated its photo service in 1927, UPI in 1952 and Reuters in 1985. The field of telematics is one of the rare fields where AFP has innovated. In 1980, it launched a central databank called AGORA that is accessible to individuals. In France, AFP’s information is quite popular on the Minitel network. In comparison, AP OnLine was launched only in 1991, Reuters made its news accessible on the Internet only at the end of 1995 but many online services such as CompuServe, America Online and Yahoo are now suscribers !. Even UPI only launched its retrieval service, in the 1990’s.
Like other agencies, AFP had no choice but to follow technological evolution. While in the 1960s its only customers were the media and the State, AFP has since then seen its niches breaking-up and fragmenting. The demand is not what it used to be. Today, we expect news agencies to become information agencies and to offer services such as photography, information technologies, real-time economic, financial and stock exchange information, à-la-carte information, etc. The old customer base of the AFP still exists, but a new one is developing : non-media clients. This is where the competition is taking place, since media and State profits are stagnating. In France, for example, the situation has changed considerably : over 20% of agency business comes from clients other than the media or the State. This is enormous considering that the level was near zero in the 1970s. It is, however, very little when compared to other international agencies.
Catherine Conso aptly summarizes AFP’s situation : its competitive position on diversification and specialization is not as strong as that of other agencies.
“Agence France-Presse clearly appears as the one with the classic behavior of a dominant news agency whereas AP and Reuters diversified earlier on and more rapidly. (…) The analysis of AFP’s sales figures for France demonstrate the importance of public services in the agency’s overall customer base. This situation also demonstrates how little diversification the agency has accomplished.”
AFP displayed scant marketing savvy and its technological lag was quite obvious in some ways. For example, newspapers and direct customers of AFP have only been able to receive the agency’s dispatches by computer since the late 1970s. Before the 1980s, it did not even have an R&D budget.
This slow adaptation of AFP to new technologies and to the break-up of its markets also manifested itself in the adoption of a five-year plan for modernization in 1984-1989. This plan, financed by investments of FF266 million over five years, corresponded to an increase in sales figures of 40% over 5 years (1983 to 1988). The French State was to supply this financing. These investment expenses did not come from AFP’s operating budget. However, there was some revenue dependency in this field and therefore little or no State intervention. The intervention was a short term plan construed to face an ad hoc problem rather than the agency’s fundamental structural problems : it had fallen behind technologically and its competitive position was weak . Catherine Conso pretends that despite the considerable increase in investments at AFP from 1984 to 1989, “it is unlikely that a few years will be enough to makeup for a period of under-investment.” In 1992, Jean Huteau, a former AFP journalist, went so far as to write that “Pigeat’s five-year restructuring plan had been useless.”
Although it had been discussed since 1979, the plan was implemented only in 1984 after endless negotiations with the State. It has been applied since then. It allowed AFP to save face and to ensure its international status within the select group of news agencies. However, this illustrates to what point it was been difficult for Agence France-Presse to develop both its technology and a service and client diversification reflex at a sufficiently early stage. “Just look at the facts. Even when it has the required capital, AFP either doesn’t do it or does it badly. The list of lost opportunities would no doubt be quite long. Not only does the agency not investigate far enough in the sector of economic and financial information, but it also neglects other fields.”
Indeed, the agency did realize, fifteen years late, the importance of implementing products for non-media clients, which create a new demand (banks, businesses, stock markets, business people, scientific communities, etc.). According to some analysts, the major mistake was not to have made strategic decisions soon enough. “By not making the strategic decision to develop an economic and financial information service, the management of AFP missed the boat for this non-media diversification, depriving itself of an important and financially sound clientele. A particularly costly mistake.”
Neither was the international economic context and the structure of the agency to its advantage :
“The future of AFP is still threatened, notably because the diversification towards economic and financial information has occurred in a more difficult context than for competing agencies (1987 stock-market crash, increased need for profitability). Finally, its particular status does not allow it to develop by creating joint ventures with other partners which would allow a more flexible financing of the required investments.”
AFP did try to prove otherwise by developing a participation in several affiliates such as POLYCOM, SPDVC, AFP-EXTEL, and the European Press Photo Agency (EPA).
AFP’s economic recovery plan was implemented in 1984, at a time when its finances were not at their best. Following the record deficits of 1985 and 1986, AFP had no choice but to implement a draconian restructuring plan in 1986. This plan, combined with the 1984 modernization plan, led to a rationalisation of effectives and to budget cuts. The result was an internal crisis.

4.2.3 Internal crisis
Since 1970, AFP is the only international news agency which has experienced major union disputes. This internal crisis, which was particularly intense from 1971 to 1974 and from 1982 to 1986, exemplifies the difficulty of managing the agency. Indeed, several trade unions coexist within.
In their book AFP : une histoire de l’Agence France-Presse (1944-1990), Jean Huteau and Bernard Ullmann wrote with much detail about the concealed conflicts that hit head-on both the agency and its image abroad. The two former AFP journalists report on how, already in 1968, AFP management, employee unions and the agency’s technical service had started to be interested by the eventual automation of certain types of information. Information technologies would truly transform the life of the agency.
In 1979, Henri Pigeat was elected to the head of AFP. Pigeat, a former senior official who was considered pro-Valéry Giscard d’Estaing, was quite unpopular among employees and their numerous unions. The trade unions were not very conciliatory. In 1981, they fought to obtain bonuses since the journalists were now being obliged to type accents, uppercase and lowercase characters in their texts… Yet, it was especially following the 1986 strikes that AFP labor relations worsened and that its international reputation was further tarnished. Indeed, under Henri Pigeat’s direction, AFP was obliged to implement a painful restructuring plan in order to counteract the effects of the record deficits of 1985 and 1986 as well as to diversify the agency’s products and customers. In May 1986, Pigeat announced that the deficit would be FF63.6 million instead of the FF40 million that had been forecast. According to the French Minister of Finances, “AFP is on the verge of collapsing and we are at a stage where emergency measures are unavoidable.”
Afraid of the idea that the agency might succumb, the executive board voted, in July 1986, a plan that involved laying-off 300 employees (15% of the personnel) at the Paris headquarters while creating 50 new openings abroad. AFP decided to decentralise the agency’s structure : Paris would remain at the heart of its activities, but regional offices in Bonn, Nicosia, Hong Kong, Sao Paulo and Washington would now have more power. The agency moved the German office from Paris to Bonn and reduced the number of regional directorates. The objective was to save FF50 million annually. Immediately, “the trade unions reaffirmed their hostility to this plan, which resulted in reoccurring strikes and incessant confrontations between management and representatives of personnel.” Henri Pigeat was blamed for “not taking the journalists’ point of view into account .” The strikes accelerated in 1986. Not one word came out of the agency’s teletypewriters around the globe. Pigeat’s head was the price to be paid. He resigned in December 1986 and the strike ended. This event only reinforced the feeling of total crisis at AFP. It shed light on the chaos that reigned within the agency. Several subscribers were seriously worried by the eight-day strike, considering it to be professionally unacceptable. “Never before has an agency deprived its customers of its services for such a prolonged period. The foreign offices have pointed it out that the loss of prestige was considerable. The severity of the conflict and its politisation would leave deep scars.”
The internal crisis at AFP was certainly quite dramatic at times, as it had been for UPI, but such incidents as these never rocked Reuters or Associated Press. Even though labor disputes have been more discreet since 1986, three employee strikes in 1994, 1995 and September 1999 have further tarnished the agency’s worldwide reputation and undermined the morale of its troops. This agency’s continual internal crises have been detrimental to its development.
In February 1996, an internal survey of 308 AFP employees showed that “90.54% consider that the corporation does not have a coherent strategy and 85% declared being dissatisfied with internal communications at AFP.”
One can see that it has been necessary for AFP to overcome its internal crises in order to finally be able to accomplish significant adjustments. This is not the case at United Press International whose services have all but disappeared today.
4.2.4 AFP : An Outdated Status and an Unreal Situation
The structure and status of AFP make it a unique news organization in today’s world. One can undoubtedly say that this structure has amplified the crisis the agency has undergone since it was voted into existence by the French National Assembly in 1957. The structure have had the effect of making AFP dependent of the French State and, therefore, of the Cabinet, Parliament and President.
The structure of AFP is quite complex. According to the incorporation of Agence France-Presse, it stands as “a worldwide information organization” that must “provide French and foreign users, regularly and without interruption, exact, unbiased and trustworthy information.” Moreover, the law adds that “Agence France-Presse cannot, under any circumstance, take into account any influences or considerations that might compromise the exactitude or objectivity of the information : it must not, under any circumstance, come under the control of an ideological, political or economic group, by right or by fact.”
This makes AFP a “legal freak”. The fact is, also, that the agency is headed by an executive board of fifteen members whose interests are divergent : a majority of French newspapers (eight seats), public radio and television networks (including the State, two seats), public services (including the State, three seats) and agency employees (two seats). The executive board elects the CEO of the agency, but, in reality, the State always gives its approval first. The independence of the agency from the State is ensured by a superior Council.
This structure accentuates the true tridimensional nature of the agency.
AFP Wolrdwide Budget

State subscriptions = 49%
French media = 22%
Foreign media = 23%
Non-media = 7%

Budget for France

Public services = 42%; French media=39%;Non-media =11%
Source: Le Monde (October 1997), L'Express (1993), AFP
AFP has therefore the difficult task of managing triangular relationships with the French State, the French media and foreign media. This makes its financial viability difficult. AFP does not even possess its own funding.
“The facts are hard. The gathering, processing and distribution of information cannot be accomplished cheaply : French users (the press, the State, and the public powers) do not supply the revenues needed by the agency in order to continue operating abroad, and foreign markets are necessarily unprofitable due to the intense competition we face from other agencies who do not need them to survive.”
Thus, it seems impossible to talk about AFP without analysing its legal status, its historical context and the French market. “The difficulties and ambiguities of AFP, a national agency with an international mission, can be explained by two facts : the situation of the French press and the sometimes conflictual relationship it maintains with AFP on the one hand and the assistance of the State on the other.”
AFP must meet on a daily basis the requirements, requests, criticisms and remarks of its French customers while keeping in mind that it must also meet the expectations of the thousands of foreign media who receive, directly or indirectly, its services. The latter would not hesitate for a moment to terminate their subscriptions if there was to be even the impression of a decrease in the quality of the service. Moreover, AFP must answer to the French government. Since it is, for the most part, financed by the government, AFP is, to a certain degree, dependent on its policies. This “French”, “strategic” and “political” aspect of the agency is not well perceived by foreign analysts. The political connection of the AFP to the French State has often been criticized by foreign journalists (see TIFFEN, 1978), by American (COHEN, 1991) and British daily newspapers and by the international journalistic intelligentsia (PALMER and TUNSTALL, 1991), who have considered AFP as sometimes unreliable, biased and a tool of the French Ministry of Foreign Affairs.
This influence of the State in the decision-making process at AFP is sometimes apparent : the State decides on agency rate increases, approves the nomination of members of the executive board, nominates the CEO and openly criticizes the agency anytime it sees fit. One can call to mind such examples as the cancellation of dispatches under pressure by spokespersons from the Élysée , the criticisms of Valéry Giscard d’Estaing and his close collaborators regarding the “«left wing tendencies» of the agency copy” , the 1975 dismissal of Jean Marin by the Council of Ministers, blackmailing and intimidating the agency , etc.
The lack of objectivity AFP would have displayed in covering some events in certain countries was exposed during a seminar on the role of media in helping developing countries which was held in November 1993 at the University of Western Ontario, Canada. Khedidja Boudaba, a reporter at the national office of the Algerian News Agency (APS) declared, supported by her colleagues, that AFP’s coverage of Algerian events was not objective. The dispatches concerning Islamist militants were “biased” and “imperialist”. She did not blame the whole of AFP’s coverage but maintained that the colonial ties of France with certain countries, such as Algeria, influence the final product of the agency : the dispatch. Only a news content analysis could confirm these allegations. The AFP declared it was “in complete disagreement with these affirmations.”
Many still remember that AFP had announced that Queen Elizabeth II gave birth to a lardon instead of a boy (garçon), referring to Prince Charles.
Claude Moisy, the former president of AFP who left the agency in January 1993, is aware of the negative image of the agency. As an example, he refers to the election of agency CEOs, a practice that casts doubts on the independent nature of the agency in the eyes of its competitors.
“It is true that the world press is interested in the underpinnings of the AFP and is sometimes brought to comment, and not always positively, on that corporation when the election of a new president leads to controversies and debates, when not actively to power struggles, especially when political considerations are taken into account. Some of our competitors often take pleasure in pointing out that those in power are trying to impose someone who is favorable to them. Obviously, this is quite detrimental to the AFP image.”
Moisy also says that political powers could, even today, intervene on the content of the AFP, although not for long.
“I did not have more difficulty with public powers than I had with business executives or movie stars. I am absolutely positive of that. It would be more accurate to talk of an absence of intervention. It is a phenomenon that progressively became natural through time. Of course, things did not happen this way twenty-five or thirty years ago. I think that today’s mores are such that even if a political figure tried to intervene on the content of AFP, he could not do so for a very long time. The whistle would immediately be blown on this anomaly. I myself, in three years, have only witnessed one serious intervention by political powers. It was at the time of the Habache affair.”
Henri Pigeat shares this point of view. “Experience allows me to say that the AFP machine is too cumbersome and complex for easy manipulation by any power, whether economic, political or social.”

Moisy adds that even international observers no longer question AFP’s independence. “Today, you could interrogate information professionals such as political officers — whether they are Scandinavian, British, German, Japanese or American — the objectivity, independence and credibility of the AFP can no longer be disputed.”
On the other hand, Pigeat adds: “At no time, was there a considered analysis in France of the situation of AFP."
Specialist Michael Palmer believes that the reputation of AFP has been tarnished by the French themselves.
In times of crisis, government politicians examined the «AFP file» as an exercise in crisis-management, rather than with a considered understanding of AFP’s complex national and international operations and standing. Franco-French considerations regrettably distort the visions of government politicians — which does not help the international reputation of AFP — and undoes the painstakingly acquired reputation for credibility.”
The facts support Palmer’s affirmation.
In February 1996, AFP was once again struck by a major crisis related to its ambiguous status : the French Prime Minister Alain Juppé, and other representative members of the State on the executive board of the agency refused to re-elect Lionel Fleury as president, despite the favorable vote of the eight voting members representing the French media. Prime Minister Juppé accused Fleury of letting the AFP “drift off course” when covering the wave of public sector strikes in France in December 1995 and also of improper conduct during the scandal concerning his subsidised apartment in the heart of Paris while he was assistant to the mayor. For almost a week, the agency was paralysed by the State’s inappropriate intervention and its international credibility was deeply shaken. The government made a value judgment on the quality of AFP’s coverage pretexting that the agency had gone astray by covering stories that were detrimental to the international credibility of France and that were embarrassing to the French government.
Lionel Fleury was dismissed and Jean Miot, president of the Fédération nationale de la presse française and CEO of Groupe Hersant, was elected CEO of the Agence France-Presse on February 3, 1996 after three ballots. Miot, aged 56, made his candidacy public after announcing his resignation from the agency’s executive board. Lionel Fleury, whose mandate as CEO of the AFP ended on January 31 was a candidate to his own succession as of the first ballot. Interviewed on the eight o’clock news bulletin of France 2 on February 2, Fleury declared that he actually had very little influence “on the agency’s copy” and that the government had been deluded if it believed otherwise.
In order to restore the agency’s credibility, Jean Miot, the new president, tried to change AFP’s 1957 status to make it more efficient, to find partners so as to develop the agency’s presence outside of France, to boost its information technology plan, to make up for lost time in the multimedia sector and to recreate a healthy climate within the agency. This constitutes quite a challenge for AFP’s three-year plan (1998-2001).
"The 1957 statute, for Jean Miot as for his possible successors, makes the chairman's seat a paralytic's chair," wrote La Tribune on July 6, 1998. "However, chaning it implies breaking many taboos," it added.
The Society of Journalists, which represents 180 of the agency's 1,200 journalists, feared AFP would follow the path of UPI.
The French government announced in the fall of 1997 it would review the status of AFP. It gave financial experts a mandate to review the company's future and structure.
Le Monde newspaper said that the audit points to "the lack of commercial policy, mistakes in the acquisitions of certain subsidiaries, centralised organisation of the business, the absence of management control or even the current management's over-blind strategy."
The audit underlined for the first time Agence France-Presse's structural incoherence, a neither a real public service nor a commercial company. It confronted what Le Monde called a taboo by commenting that "nothing in AFP's statutes prevents it from earning advertising revenue."
The audit blamed AFP's whole management team, not just chairman Jean Miot, who said there was not much in the auditor's report that the agency's managers did not know already. "It is a critical view of the business which shows up both its weaknesses and the accumulated failings of past years," wrote Le Monde.
Trade unions also blamed AFP for failing to buy Worldwide Television News (WTN), Le Monde said. Force Ouvrière, which represents some journalists at the agency, complained that AFP "failed to buy WTN", which was acquired by Associated Press. AFP could not put together a bid enough with Fuji TV of Japan and the Brazilian TV network Globo, reported Le Monde.
Jean Miot presented a three-year plan on July 15. The plan followed to main thrusts: the non-media market and the need to have a medium-term strategy. Miot urged the modernising of AFP's lilliputian business structure, which consists of only 20 people, compared to about 500 for Reuters just at its London headquarters.
Most of all, Miot did not succeed in boosting the image of an agency that was weakened by two weeks of strikes in January and February 1996. “These few days have been detrimental to the image of a major and independent agency and not to a State agency as the government would have everyone believe.”
He was forced to resign in late 1998, after the company's board refuses to renew his mandate. Eric Hiuly, a technocrat, was named to replace him and he proposed in September 1999 a full reorganization of AFP, including an involvement of the private sector that could lead to a revision of the company's statutes or to the creation of a new multimedia unit. That led to a one-day strike by French staffers in late September 1999 as employees feared the possible privatization of the firm. As far as analysts are concerned, privatization might be the last option available for the French agency.

4.2.5 Weak Internal Market in France
One of the characteristics of l’Agence France-Presse is that it is simultaneously a national and international news agency. The customer base of the agency in France is limited, not to say frail. This is one of the disadvantages with which it must deal and which has fuelled the crisis it has been facing since the late 1970s.
A comparison with Associated Press can serve as an illustration. AP is also both a national press agency (United States) and an international agency. It serves one of the largest internal markets in the world : 1,600 daily newspapers with a total print-run of 62,500,000 copies every day; 9,200 radio stations and 250 television stations. Out of this number, AP serves 1,550 newspapers and 6,000 radio and television stations.
In France, AFP only serves 100 radio stations, 70 newspapers and 25 broadcassting corporations. The French internal market has only 82 daily newspapers with a total print-run of 12 million copies every day. This market is made up of one public radio network with several programs, four private radio networks (two of which are national) and several free radio stations. Moreover, there are just under ten national television networks in France. The margin between both countries is enormous. The nature of the French market hinders the competitive position of the agency since a majority of its revenues, besides those coming from the State, are from national media. “The size of the national market plays a determining role in the profitability conditions of news agencies : one needs only to compare the respective sizes of American and French markets.” wrote Catherine Conso. If one takes into account the fact that 39% of AFP’s turnover in France comes from local media, it is easy to understand that, contrary to AP for example, the national market is a handicap rather than an advantage. One should also bear in mind that daily print-runs have considerably decreased. “In 1947, there were 175 provincial daily newspapers and 28 Parisian daily newspapers — 40 years later, the figures have dwindled to 70 and 12, respectively. Between 1970 and 1986, the circulation of national titles fell by 9.5 percent, those of regional titles by 8.5 percent.”
The small French market, where AFP is in competition with AP, Reuters, Bloomberg and Bridge and 200 specialised national agencies, also highlights the problem of the low rates charged by the agency on its own territory. Whereas AFP cannot charge more than US$40,000 per month to a daily with a print-run of 225,000 copies, the German agency DPA charges up to US$41,800 to its subscribers with the same print-run. In the United States, AP can charge up to US$36 000 for a daily newspaper with the same print-run. Jean Miot said in an interview in October 1997 that the AP rates were "ferocious dumping" and would force the agency to have a deficit in 1998. AFP subscribers who sit on the agency’s executive board want AFP services at the lowest possible cost while the cost of gathering the information keeps increasing more rapidly than the revenues generated from the rates it charges. Moreover, the Ministry of Economy and Finances must approve any increase in AFP’s rates. This partly explains the financial crisis of the French agency. However, AFP controls about 60% of the media market in the whole of France.
4.3 What Saved AFP
The situation at AFP has improved since the 1986 crisis. What has saved AFP are its comparative advantages :
1) AFP is a latin agency and this constitutes a strong point. It is different from Reuters, AP and UPI which are Anglo-Saxon. The coverage of Asia, Latin America and Africa is exceptional.
2) The financing by the French government has a positive effect, even though this is precisely why the agency has had a hard time penetrating English-speaking markets. AFP embodies the French factor and allows France itself to radiate internationally and, in this sense, the financial support of the French government is assured no matter what dire straits the agency may endure. In this regard, it is ironic to see that until recently former CEO Lionel Fleury considered that the future of AFP would be in English.
3) Finally, the economic diversification undertaken by AFP since the mid-1980s, as well as the development of new markets, have given a reprieve.
The fact that Agence France-Presse is the only one of the four major agencies to be French is in its favor. According to Jim Hoagland, in an article he wrote in March 1972 for the Washington Post concerning Anglo-Saxon agencies, they are often obliged to remain quiet in order to avoid retaliation from the authorities. “The most serious consequence of official susceptibility and retaliation concerns news agencies and correspondents of Reuters, Associated Press and United Press International who, under moral pressure, often keep quiet unless the information is of primordial international importance.” He estimated that this situation did not exist for AFP.
Michael Palmer also maintains that Agence France-Presse is the favorite of Southern hemisphere countries. “The AFP is preferred by some third world country State agencies over the American and British «commercial and capitalist» agencies.”
Oliver Boyd-Barrett, a British specialist from Leicester University, even says that the service of AFP is the best of the four with regards to Southern countries.
As we have seen here, the status of an independent news agency financed by the French government can be detrimental to AFP, although it is sometimes a blessing in disguise. Obviously, the financial assistance of the government leaves doubts about the independence of the agency but, more importantly, it does ensure a certain stability through the inevitable financial fluctuations. Above all, the French State wants AFP to remain a world-class news agency that can proudly compete with Associated Press and Reuters. AFP, in the eyes of French politicians, is perceived as a necessity which serves to maintain the prestige of France, of the French language and of the French culture throughout the world, especially at a time when the magnetic attraction of English is universal.
“The only global agency to maintain French as an international language for part of the world is, of course, AFP. If AFP loses more ground than it has so far, the consequences would be dire, not only to itself and the independence of the francophone press vis-a-vis its sources, but also with regards to the standing of French in the world. The cultural influence of our country abroad and its own internal cultural determination are at stake in this debate.”
One last point which should be discussed is the relatively successful diversification undertaken since 1980 at AFP. Even though it was late in coming in comparison to AP, UPI and Reuters, the economic diversification of AFP has truly saved the agency up to the present. When it began noticing that its revenues were stagnating and its media customers levelling off at the end of the 1970s, the Pigeat-led AFP decided to target the non-media market in order to increase its revenues and reduce the contribution of the State.
The 1984-1989 five-year plan and the 1991-1994 strategic development plan have had some positive results among which has been the creation of new products. First, in 1985, the AFP launched a global photo service (AFP-PHOTO) that allowed it to become a full-fledged news agency. This photo service transmits 50,000 photos per year and has been successful in terms of both finance and prestige.
AFP-PHOTO allowed the agency to give itself a priority goal : to penetrate the American market, if only partially, something that was unthinkable even fifteen years ago. The New York Times, USA Today, The Washington Post, The Los Angeles Times all subscribe to AFP-PHOTO. In Canada, The Montreal Gazette, Toronto’s Globe and Mail, Le Devoir, La Presse and Le Soleil also subscribe to this service which is in direct competition with Reuters and AP (UPI sold its photo service to Reuters in 1984). Throughout the world, hundreds of media are now photo-customers of AFP, European and Latin American media among others. This made the former president of AFP, Claude Moisy, say that “the agency is gaining ground and is penetrating markets that seemed, just a few years ago, hard to penetrate or even impervious.” AFP believes that any subscriber to the photo service is also a potential subscriber to the general news wire.
The development of foreign markets was also part of AFP’s diversification strategy aimed at preserving its status as an international agency and at capturing market shares that were formerly dominated by TASS and UPI, both of which almost completely disappeared during the 1980s.
In 1999, Agence France-Presse and its various news wires are very much in the forefront and hold a dominant position in several markets. “Its geographic coverage puts it in the lead among international agencies.” Its radio service (AFP-AUDIO), launched in 1984, currently has hundreds of subscribers in France and the rest of Europe, in Africa and in Canada.
Today, AFP’s presence is strong in Africa, in Latin America and especially in the Middle and Far East. It is number one in the French parts of Canada and is the dominant agency in France, Switzerland and Belgium. It is also quite popular in Western and Eastern Europe and in South East Asia. Its weak point is definitely its inability to penetrate the American market otherwise than with its photo service. The number of American newspapers subscribing to AFP news can be counted on the fingers of one hand. Clearly, AFP is dragging its feet in the United States. Indeed, for a long time now, American media have financially supported AP and UPI. The crisis at UPI and the almost complete dismemberment which occurred between 1980 and 1986 has opened a door to AP without, however, making it easier for other agencies to fill the void.
“American media have reached the conclusion that they do not need two news agencies. This obviously curtails the ambitions of other non-American agencies on the American market. It is not clear whether AFP can hope to find any financial future there. I, personally, have never believed it would and I still don’t” declared former CEO Claude Moisy in January 1993. Still, AFP cannot completely ignore the American market, which is why the agency cut its ties with Associated Press, as Reuters did at the end of the 1960s. Until 1995, AP supplied American news to AFP. Since this annual contract, worth one million US dollars, was not renewed, AFP is now on its own in the USA with the one million dollars to invest in its own journalists.
AFP has made a major breakthrough in England and in other anglophone countries in the past recent years. The reinforcement of the English language news service, accomplished under the direction of Jean-Louis Guillaud, Claude Moisy and Lionel Fleury, is remarkable. In 1986, AFP decided to “downsize” part of the Paris headquarters and to strengthen the Hong Kong and Washington offices in order to better serve its growing anglophone markets. AFP signed contracts with two influent British newspapers, The Independent (1991) and The Telegraph (1992), both of which cancelled their subscription to Reuters (Both newspapers have since taken Reuters back). The AFP English service is also gaining subscribers in Vietnam, Taiwan, Malaysia, Singapore and Thailand, “countries where the press is expanding, along with our revenues.” One must not forget that CNN and The International Herald Tribune both subscribe to the Agence France-Presse news wire. In an interview aired on TV5 on May 21, 1994, former CEO Lionel Fleury even declared that 33% of the global revenues of the agency “regarding text” come from Anglo-Saxon media.
The collapse of the Berlin Wall in 1989, the fall of communism in Eastern Europe (1989-1991) and the disintegration of the USSR in 1991 opened up new economic perspectives for the agency. The decline of the TASS news agency, which lost its monopoly everywhere in the USSR and in countries of the Eastern block makes it possible for AFP to distribute its services directly via satellite in Russia, in the Republics of the Commonwealth of Independent States (CIS) and in Eastern Europe. However, these markets are somewhat unstable and the agency will have to be make long term efforts on this front.
There are other examples of the diversification that has allowed AFP to cease being a “one-product” agency. Its financial and stock exchange news service (AFX NEWS) is not the least of them. It was launched in 1991 in partnership with the British firm Extel and the Financial Times. This service employs 50 journalists throughout the world and costs 50 million francs. Although it has difficulty competing with Reuters’ equivalent service, it is increasingly popular in Asia. However, whereas AFP has three financial journalists in Washington, Reuters has 200.

Another example of diversification not to be forgotten is the renowned sports service, AFP-SPORTS, which was launched in 1982. AFP offers sports information in English 24 hours a day on the Internet : World Sports Report. Also very popular is the computer graphics service (AFP-INFOGRAPHIE) which has made important breakthroughs in France, Canada, Spain and Latin America. There is also AGORA, the AFP databanks. AFP-PRO and AFP-DIRECT allow ordinary people to refer to AFP dispatches through their computers and Minitel terminals. Along with the Globe OnLine company, AFP is also present on the Internet where it offers its world information classified according to country (www.afp.com) for two francs per story. Finally, the 1990 «satellisation» of the entire AFP information network has meant the death of the famous «cables».
More than 150 years after its foundation, Agence France-Presse has managed to survive the most serious crisis of its history. It has survived, and has avoided bankruptcy. It underwent a financial crisis, a credibility crisis, a crisis which deeply affected the morale of the agency. In the end, AFP has managed to stay in the select club of the three world-class news agencies, but its future remains fragile. It is at the crossroads.
With about 15% of its global revenues stemming from the «non-media» sector, AFP must further its economic diversification and find new market niches in order to reduce its dependency on the French government. It must become a true «business enterprise». As for its geographic coverage and number of correspondents, AFP claims to be the largest agency in the world in 1999, but in reality, its sales puts it in third place. It has fewer employees than Reuters or AP, broadcasts less information than AP and has fewer permanent and freelance journalists than Reuters.
AFP must closely follow the evolution of AP and Reuters and be very aware of new technological developments in order to avoid being distanced or outdated. It must also steer clear of the problem of computer piracy. The launching of France-Presse Online, a daily AFP information page on the World Wide Web (www.afp.com) was quite promising but it failed in 1999.
AFP must keep on with its international expansion. A breakthrough in the field of television broadcasting would allow it to compete with Reuters Television and AP Television, who bought WTN in 1998. On November 15, 1996, AFP signed a cooperation agreement with the image agency WTN but the picture agency has been absorbed by AP. AFP news can however be seen on Bloomberg TV now. That is a start.
The former president, Jean Miot wanted to put forth on-line services and to “adapt the agency to the new world of communications and to the digital revolution”. Sadly, he failed.
In order to be better equipped to face the competition, AFP has started to pool its resources with Radio France International, Canal France International and TV5. The reason is simple : the increasing cost of covering international events combined with the necessity of embarking on the information superhighway leave no choice but to take advantage of all available synergies.
Hopefully, AFP will survive. Competition in the international news environment is too vital for democracy.

****

CHAPTER 5

Chapter V
UPI : A Dead Dinosaur
“One can wonder if UPI is an agency like others and even if UPI is still a global news agency or if its example isn’t the beginning of the end for the small group that has so far dominated the international commerce of information.” Henri Pigeat, Le nouveau désordre mondial de l’information, 1987, p. 20

5.1 UPI : A Nightmare
5.1.1 Some Facts About UPI
United Press International is an American news agency founded in 1907 by Edward Willis Scripps under the name : United Press. It has a private corporation status. Scripps wanted above all to abolish the monopoly that Associated Press had on the American daily newspaper market since 1848. E. W. Scripps was also the owner of Scripps Howard, a family network of American newspapers.
The Second World War signified the rise of the United States in the international arena. This directly promoted the overseas development of the agency. Starting in 1945, UPI underwent an astounding growth in the United States, Canada, Latin America and Asia. In 1958, United Press merged with International News Service, an American agency owned by William Randolph Hearst, to form United Press International (UPI). It was definitely from that moment that UPI could lay claim to an international network of correspondents and transmissions. It was a watershed in the history of the agency. In 1958, UPI had 6,000 employees and 5,000 clients around the world. Unfortunately, its evolution was not to continue in this positive vein. As early as the mid-1960s, UPI began being besieged by financial problems. Nonetheless, it would receive nine Pulitzer prizes rewarding the excellent quality of its stories and pictures.
The heirs of E. W. Scripps, known as the Scripps Howard company, sold the agency in 1982 after helplessly witnessing both the increasing financial losses of UPI and the loss of American subscriptions.
And the situation kept on worsening : UPI changed hands four times between 1982 and 1992 and management has changed five times since 1993.
Until recently, UPI was one of the four world-class news agencies. The financial troubles it has experienced since the late 1970s have been such that they have scared away the majority of its subscribers. Consequently, the owners of UPI began dismantling its services one by one, especially following its requests to be placed under the protection of article 11 of the American Bankruptcy Act, in 1985 and 1992.
UPI headquarters are located in Washington. Until 1984, New York had been the heart of the agency.
UPI claims to have “representatives” in over 75 countries. Its news service is distributed “to thousands of media throughout the world”. Although it claimed to have 2,500 subscribers in August 1991, today it would be more accurate to say that it has about 500, given the fact that The Associated Press, its former arch-rival, bought all of its radio and television assets in August 1999. UPI operates two news wires : one for American media and one for foreign media. Until the early 1980s, it was considered as both an international and a national news agency for the United States.
UPI has approximately 400 employees. It still has 33 news desks in the United States and 47 abroad.
Its international service is based in Washington D.C. and it has international desks in Toronto, London, Hong Kong and Buenos Aires. In the United States, an organizational restructuring was announced on July 15, 1993, which transferred the coordination of the service to the six regional centres : Washington, Dallas, Miami, Los Angeles, Chicago and New York.
UPI offers an English service for the United States and the rest of the world. However, Chile and Puerto Rico have a different service than the rest of Latin America which receives services entirely in Spanish while a Portuguese service is offered in Brazil. Moreover, since June 1992 the new owner, the Saudi Middle East Broadcasting Service television network, has produced an Arabic service for UPI customers in Europe, North Africa and the Middle East.
The following services are offered by UPI :
- a general 24-hour a day news service in English, Spanish, Portuguese, and Arabic (UPI NEWS, 1907)
- a digital press photo service (UPI PHOTO)
- a telematic service which offers daily and weekly newspapers from around the world computer access to information on sports, financial, U.S. State and national as well as international news (UPI STORY RETRIEVAL SERVICE)
- UPI News You Can Use : specialized news on various subjects available from on-line servers

UPI is currently developing a series of specialized online services intended mainly for industrie