News Syndicates

SIC 7383

Companies in this industry

Industry report:

This category covers establishments primarily engaged in furnishing news, pictures, and features and in supplying news reporting services to newspapers and periodicals. Separate establishments of newspaper and periodical publishers that are engaged in gathering news are classified as auxiliaries.

According to the U.S. Census Bureau, in 2010 news syndicates in the United States earned $1.9 billion in revenues. About 8,869 establishments employed 269,852 people who earned a total annual payroll of approximately $852 million. In addition to the broad coverage of mainstream wire services, organizations within the news syndicates category covered specialized areas such as regional news services (Panafrican News Agency and Macedonian Press Agency), industry-specific services (Computer Wire and International Business News Service), and government information (Federal News Service and Capitol Newswire), to name a few.

The genesis of U.S. news syndicates can be traced to the construction of the first successful telegraph line in 1844. When completed, the line connected the cities of Washington, D.C., and Baltimore and was utilized immediately by newspapers in Washington, D.C. as a means of receiving news of the Maryland State Convention in Baltimore. As more lines were constructed, more and more newspaper publishers recognized this new communications technology as a valuable means of receiving news from distant locations. It was through the efforts of newspaper publishers to share access to the telegraph lines and to share the costs associated with using the new technology as a news gathering tool that news syndicates came into being.

The National Associated Press (AP) was a collective formed in 1897 by various city, state, and regional Associated Press units. AP bylaws allowed its members to refuse association membership to applicants whose newspapers were located in the same city as those members (a practice that the U.S. Supreme Court in 1945 held to be an illegal restraint of competition). By 1907, there was a growing pool of newspapers that were denied membership into AP, including most of the newspapers owned by E.W. Scripps. That year, Scripps challenged the AP monopoly on national news brokering by establishing the United Press Association, a commercial venture which, after taking over William Randolph Hearst's International News Service in 1958, would go on to become United Press International (UPI).

During the 1960s and 1970s, the number of competing newspapers declined, leaving many cities with only one newspaper. Newspaper publishers who had felt competition-driven pressure to subscribe to both the AP and UPI services believed that it was safe to let one of them go. In the ensuing fight to retain its subscribers, AP fared better than its rival. Although UPI was still one of the four major news syndicates serving the international market (along with AP, London-based Reuters, and France's Agence France-Presse) and was second only to AP domestically, it reported a pre-tax loss of $12 million in 1980. Financial difficulties continued through the decade, and in June 1992, UPI was acquired in bankruptcy court for $3.95 million in cash by Middle East Broadcasting Center Ltd. (MBC), a London-based television news and entertainment company owned by a group of Saudi businessmen. At the time of the sale, UPI employed about 450 people full-time and another 2,000 part-time. Its comeback strategy as a privately held company focused on small-market newspapers and radio stations. However, the company did not regain its previous presence in the industry. In 2000, Reverend Sun Myung Moon's company, News World Communications, purchased the firm from MBC, and, although still operating into the early 2010s, by then it was being called "a shadow of its former self."

Based in New York City, The Associated Press was one of the world's largest news-gathering organizations in the early 2010s, with news bureaus in 120 countries around the world providing news, photos, graphics, and audiovisual services to more than 1,500 newspapers and 5,000 television and radio stations. This cooperative reported revenues of $630 million in 2011 with 3,700 employees.

The AP owned 49 Pulitzer Prizes, more than any other news organization of its kind. The AP also had 30 photo Pulitzers, also topping all other news organizations. With the launch of The AP Digital Web site, the organization teamed with names it could trust, such as Business Wire, Variety, Global Reports, PR Newswire, Reed Business Journal, and Health Day, to form a strategic partnership providing reliable news. The organization operated an international television division, AP Television News, as well as an uninterrupted online news service, The Wire. By the late 2000s, AP was using citizen-generated content in news offerings, from ventures with such participatory networks as Vancouver's NowPublic.com.

Founded in 1865, Reuters relayed news and financial information from more than 340,000 computer terminals in 158 countries in 1995. By the late 2000s Reuters was the largest international news agency in the world. It also provided data feeds to financial markets and sold software for analyzing bonds, currencies, futures, options, and stocks. Information was gathered from 267 exchanges and over-the-counter markets; 4,700 subscribers who contributed data directly to Reuters; and a network of about 1,936 journalists, photographers, and videographers. In 2008, Reuters entered into a $16 billion joint agreement with Thomson Corp. to create Thomson Reuters. The company reported overall earnings of $13.8 billion in 2011 with 57,500 employees.

In the late 2000s, Reuters published stories in 20 different languages. The company also held a 63 percent investment in the electronic trading firm, Instinet. Until 2006, Reuters shared ownership of news-and-information-offering Factiva, when Dow Jones bought out Reuters' share for $160 million. Some of Reuter's online products included financial reports, regional, domestic, and world news services, Showbiz, Desktop Library, Africa Journal, and Sports News Service. As the newspaper industry continued to contract, the AP looked for dynamic relationships with new partners. For example, at the end of 2008, Reuters announced that it had formed a partnership with the newly formed Politico, a Washington, D.C.-based online news service, to offer stories to print and online newspapers. By then it was one of the leading news syndicates for financial information.

In addition to providing reports of general interest news for the print and broadcast media, the news syndicates expanded into areas of specialized interest. One area that experienced significant growth was business news services. In 1967, AP joined with Dow Jones & Company to create a worldwide economic news service to foreign subscribers. However, the two companies parted ways in 2008, reportedly over financial disagreements. Dow Jones also operated the Dow Jones News Service in both the United States and Canada. This service provided business information to brokerages, banks, corporations, and investment houses. By the late 2000s, Bloomberg L.P. of New York had come onto the scene and established a place for itself in the business and financial services news industry.

News service agencies were impacted by the vast proliferation of readily accessible news available on the Internet. The Internet increased in use and importance throughout the 2000s, and by the end of the decade, even print newspapers were viewing their Web sites as the main product, more prominent in news delivery than the print version. Such a shift away from print subscription sales primarily affected syndicates in terms of what newspapers spent money to acquire in the digital age. The AP in particular had to adapt to the changing nature of the news industry, as it had traditionally provided services to hundreds of print, subscription-based newspapers. Competition also increased in the early 2010s. For example, media cable giant CNN developed its own CNN Wire service to directly compete with the AP; and News Corporation, a giant in the media industry and owner of Fox Broadcasting, grew substantially in its news syndicate role.

The majority of the firms in this industry in the early 2010s were small, employing between one and five people. The majority of establishments were in California, New York, Florida, and Washington, D.C. Together, these states controlled more than 40 percent of the market.

According to IBISWorld, the industry was highly consolidated in the late 2010s, with the top four firms accounting for more than 50 percent of annual revenues. According to a 2011 report by that research firm, the industry was expected to recover from the economic recession of the late 2000s, and "as online content expands to mobile devices, tablets, TVs and gaming consoles, news syndicates will have greater public exposure, spurring demand." The report also recognized the continuing impact of online content, proposing that "news syndicates will look to provide customers with cheaper, easier and faster access to more content over the Internet" into the middle years of the twenty-first century's second decade.

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