AP to build online tracking system to deter unlicensed use in hopes of generating new revenue

AP setting up tracking system for Web content

The Associated Press is moving ahead with plans for a system to detect unlicensed use of its content and potentially create new ways for the 163-year-old news cooperative and other media to make more money on the Internet.

As part of a strategy approved Thursday by the AP’s board, the cooperative will start by bundling its text stories in an “informational wrapper” that will include a built-in beacon to monitor where stories go on the Internet.

The beacon is meant to be a policing device aimed at deterring Web sites from posting AP content without paying licensing fees. The AP and its member newspapers contend unlicensed use of their material is costing them tens of millions of dollars in potential ad revenue.

“This is a pivotal step in the fight to ensure that quality journalism can be funded in the digital era,” Tom Curley, AP’s chief executive, said in an interview. “We have stood by too long and watched other people make money off the hard work of our journalists. We have decided to draw a line in concrete.”

The AP calls the project a “news registry,” and it is set to debut in November, beginning first with text stories and later expanding to videos and photos. Starting next year, newspapers that own the cooperative will be able to put their material into the registry as well.

The AP hasn’t determined how it will make money from its registry, but believes there will be plenty of opportunities. “If you can stop the unlicensed use, the value of the content goes up,” said Jane Seagrave, the AP’s senior vice president of global product development.

The registry will track electronic tags applied to the stories, including ones that let media organizations specify how their content is to be used. AP said the technology should provide detailed measurements on how content is used and support attempts to charge fees to read some stories.

The beacon will send information to the AP’s registry when the cooperative’s content is accessed. That information will let the AP know whether Web sites posting the material hold licensing rights.

Web sites can strip the beacon away, Curley acknowledged, but the AP can still track down unlicensed content using copyright-protection software made by Attributor Inc.

In a study attempting to measure the scope of online piracy, Attributor tracked 250,000 articles on the Internet for 30 days earlier this year. It found 3.4 million unauthorized uses of the articles during the tracking period.

Although the AP’s new system is set up to guard copyrights, it could also raise privacy concerns.

Just the word “beacon” could raise alarms, partly because Facebook Inc. used the same term to describe a 2007 program that automatically monitored its users’ activities at other Web sites. After an uproar, Facebook decided to leave it up to its users to decide whether to turn its beacon on.

The AP will be able to determine what’s being read on individual computers, but AP executives stressed the monitoring system won’t collect personal information. Cookies — computer coding planted into Web browsers to determine their users’ interests — won’t be part of the AP’s tracking system, Seagrave said.

“We want to know where stories are going and what is being read, not who is reading it,” Seagrave said.

Those assurances may not be enough to mollify people worried about the potential for profiles to be created about their interests based on what they are reading.

It could even be enough to discourage people from reading AP stories and instead lead them to other news sources, said John Palfrey, a law professor and co-director of Harvard’s Berkman Center for Internet & Society.

“If people think that there’s a greater likelihood that on an AP story, people could track down what they are reading, they are less likely to make the choice of that particular story rather than another story,” Palfrey said. “This seems to me … a potential third rail.”

The AP board of directors argues something has to be done to protect its content because the cooperative’s revenue is falling for the first time in years. Revenue is expected to be around $700 million this year, down from $748 million in 2008, in part because of reductions in the fees it charges newspapers and broadcasters, whose advertising revenue has been shriveling as more marketers shift to less expensive options online.

Another sharp decline is forecast for 2010, following the AP board’s decision Thursday to reduce by 10 percent the rates local TV stations pay for basic text stories.

To compensate for its sliding revenue, the not-for-profit AP, which employs about 4,100 people, plans to reduce its payroll by 10 percent before year’s end. The company has said that likely will require layoffs.

The AP’s content-management approach differs from a revenue-generating tactic backed by the Fair Syndication Consortium, consisting of Attributor, Thomson Reuters and more than 1,000 publishers, including some of the AP’s own member newspapers.

Rather than trying to corral copyright-protected stories, the consortium hopes to take a slice of the ad revenue collected by an unauthorized Web site. If a split can’t be agreed upon, the consortium will demand that the advertising running alongside the copyright-protected material be removed.

“If someone else is making money off the content, they are either going to share the money or they aren’t going to get paid at all,” said Attributor CEO Jim Pitkow.

AP Technology Writer Anick Jesdanun in New York contributed to this report.