Inside Story

The age of the news agency needn’t be over

Vital reasons for the rise of Reuters, Australian Associated Press and other agencies haven’t gone away

Rodney Tiffen 19 March 2020 2474 words

Fast and crisp: Edward G. Robinson (centre) as Reuters founder Julius Reuter in the 1940 film A Dispatch from Reuters. Everett Collection Inc/Alamy

There are only two forces that carry light to all corners of the globe — the sun in the heavens and the Associated Press down here.
— Mark Twain, 1906

Reuters, Britain’s oldest surviving news agency, traces its founding back to 1851. But the pivotal date in its development was 1858, the year it launched its “electric news” service, which had been made possible by the invention of the telegraph in the early 1840s. In the age of the internet, it is easy to forget how radical an innovation the telegraph was. The great journalist and media analyst Ben Bagdikian put it succinctly:

From prehistoric times to the nineteenth century, messages of substance could travel no faster than a man or horse could run, a pigeon could fly, or a boat could sail… The most spectacular leap in communications came when message transmission was separated from transportation. The telegraph, sending messages with the speed of light, had a social, economic, and cultural impact comparable to that of television a century later.

The amazing new technology spread rapidly, and by 1866 the first permanent telegraph cable had been laid across the Atlantic. Telegraphic communication had a huge impact on journalism, increasing the thirst for news from distant places and making its supply much faster. But the telegraph brought its own problems: sending a message was more expensive than posting a letter or paying for pigeon feed, lifting the cost of producing foreign news and forcing correspondents to keep their dispatches brief.

The growing interest in news from a variety of places meant newspapers had to match not only the speed but also the breadth of coverage offered by their competitors. But supporting the necessary network of correspondents was prohibitively expensive for individual newspapers — which is where Reuters and other news agencies came in. They provided a newsgathering operation beyond the capability of most publishers, and especially out of reach of smaller papers.

Rising urbanisation and the growth of the railways were already making distribution of newspapers easier and faster. With their potential audiences growing as literacy spread, circulations increased dramatically. Political developments also helped the press barons: Britain’s tax on publishers, levied per printed page, was abolished and the vote extended to a larger portion of the population, adding to interest in political reporting. News was more plentiful, and more profitable, than ever before.

The agencies soon decided it was more comfortable to co-exist than compete. As early as 1870, the leaders — Reuters (Britain), Havas (France) and Wolff (Germany) — had divided the world between them. By allowing each other a monopoly in certain markets they avoided the possibility of price-cutting competition, and by pooling news they cut their newsgathering expenses. The cartel gave Reuters exclusive access to the British Empire countries, including Australia, and the “Far East.” The United States was off limits because the Associated Press had already established itself there.

With its clear benefits for the agencies, the cartel lasted almost half a century. But it ended abruptly with the onset of the first world war: neither Germany nor the Allies wanted to receive information that showed the other in a favourable light, and both (correctly) accused the other side’s agencies of disseminating propaganda. Wolff disappeared with the defeat of imperial Germany in 1918.

The other original member of the European cartel, Havas, disappeared at the end of the second world war, discredited by its forced collaboration with the Vichy government in France. Even before the war, it had been widely criticised as corrupt and unreliable. Its dual business — selling advertising and providing a news service — was not always good for its journalism, and the French preference for commentary over mere reporting meant it had less status than its peers elsewhere. With Gaullist France unwilling to cede the supply of international news to Anglo-Saxon agencies, a new French-language service, Agence France-Presse, stepped into the breach. For the first several decades at least, it was heavily subsidised by the French government.

The market logic that sustains news agencies is best seen in the United States. For decades, the American media were big enough, prosperous enough and sufficiently dispersed to support two large American news agencies, Associated Press and United Press International. In the 1970s, perhaps the zenith of the American media’s fortunes, 1750 daily newspapers were being published across the country and 7586 radio and television stations were broadcasting. More than eight in every ten American newspapers had a circulation of less than 50,000, with just over half selling fewer than 25,000 copies. These papers could not afford their own national — let alone international — newsgathering operations; a subscription to an agency was the ideal way for them to cover the outside world.

News agencies came to play a strategic but largely invisible role in the flow of news. They are the wholesalers of news, while the retailers — the individual newspapers or broadcasters — are what the public sees.

The Australian media market shared only some of the features that allowed the agencies to flourish. It was much smaller, of course, but its ownership was also more concentrated and became even more so. Nearly all metropolitan and provincial newspapers subscribed to the local agency, Australian Associated Press, and commercial radio stations became reliant on its “rip and read” news stories. AAP soon became a large and profitable operation.

When it was founded in 1935, AAP’s main aim was to help newspapers share the costs of a good international news service. For that material the agency relied on Reuters, of which both AAP and its NZ counterpart, the New Zealand Press Association, became constituent members. As a result, AAP’s international coverage was overwhelmingly Anglocentric — as indeed was Australian foreign policy at the time. Given the vast distances between cities, Australian newspapers also wanted a news agency to cover interstate and rural news.

The driving force behind AAP’s creation was Keith Murdoch, managing director of the Herald and Weekly Times group, which owned newspapers in Melbourne, Brisbane, Adelaide and regional areas, and radio stations in Melbourne and rural Victoria. Murdoch’s pioneering role in creating his own company’s internal syndication arrangements significantly limited AAP’s scope for expansion over the ensuing decades.

In many subtle ways the agencies had a homogenising effect on journalistic practices and formats. Their reporters’ copy needed to be short and sufficiently striking to pique the interest of their subscribers’ gatekeepers — the “copy tasters” and other editorial staff — so their journalists were urged to write short, punchy pieces. Given the variety of editorial outlooks among the agencies’ clients, and given the importance of retaining their trust, Reuters and its rivals focused on verifying spot news as quickly as possible, to the relative neglect of longer, analytical features and commentary.

Many features of news reporting that we take for granted — the summary lead, the inverted pyramid structure, the tightly packed facts, the hard sourcing — were pioneered by the agencies. Simple, concise, arresting copy was their speciality, though those qualities could become formulaic. As the distinguished journalist Jonathan Fenby warned, “each event easily becomes a ‘turning point,’ each detachment of soldiers a ‘crack unit,’ and each decision ‘critical.’”

Although the agencies’ journalism was generally less controversial than that of other news media, the frictions generated by their rise go to the heart of journalistic enterprise. The London Times led the early opposition to Reuters’s growth, at least partly on commercial grounds: in the late nineteenth century it was selling for three pence a copy, compared to the popular papers’ halfpenny; any move that further standardised content — as the rise of the news agencies was already doing — was a threat to the Times’s status and sales.

The Times also feared that Reuters’s deepening monopoly of overseas coverage could be used to extort higher costs — a theme that has recurred in the years since then. When Rupert Murdoch launched the Australian in 1964, for example, his dispute with AAP over subscription fees resulted in his refusal for many years to subscribe to the agency.

More subtly, the Times feared that the existence of the agencies gave news sources more leverage, and indeed this soon proved to be the case. Key sources might discriminate in favour of Reuters by saying that they were thus treating all papers the same — a particularly good weapon against troublesome and critical reporters from individual papers.

Three later controversies reveal the stresses in the relationship between agencies and their clients. For a long time, the Australian Journalists Association was suspicious of AAP because it believed that newspaper proprietors would use the availability of agency copy to justify employing fewer journalists. Various rules developed over the years, especially in relation to “home town” coverage: the West Australian, for example, agreed to use exclusively its own reporters, rather than AAP copy, to cover news in Perth.

During the McCarthyist era in the United States, the performance of the news agencies became professionally contentious. Senator Joseph McCarthy dominated American politics in the early 1950s with his allegations that communists had infiltrated government, and especially the State Department. McCarthy’s reckless charges against hundreds of individuals were eventually shown to be all but baseless. The agencies, however, dutifully reported his statements, eliciting criticism that their commitment to objectivity had turned into irresponsible passivity. The dilemma wasn’t new, and has become especially acute in today’s America: is accurately reporting what prominent people say sufficient, or should journalists also test the accuracy of what has been said?

The noisiest and most public controversy came in the 1970s. In the generation after the second world war, the winning of independence by most Third World countries fundamentally changed the dynamics of international relations. A conference of information ministers from the “non-aligned” countries, held in New Delhi in July 1976, concluded that the work of the Western news agencies “perpetuates the colonial era of dependence and domination.” They joined the call for a New International Information Order, and for the existing news agencies to be supplanted by a Third World news pool.

After a few years of rhetorical fireworks, the proposal fell victim to its inherent difficulties and largely disappeared. Part of the problem was that its two major proponents were Yugoslavia and India. Although Yugoslavia was a cut above the other Russian bloc countries, Josip Tito’s socialist government was hardly a beacon of free speech. And Indira Gandhi’s Indian government had recently declared a nationwide emergency and was suppressing internal dissent. “We want to hear Africans on events in Africa,” Gandhi declared at a time when her government was limiting which Indian voices Indians could hear.

After the failure of the news pool, the international news flow continues to be lopsided, although the news agencies with their resident correspondents and variety of national markets are arguably among the least ethnocentric of Western media.

Like much of the legacy media, news agencies have fallen on hard times. The New Zealand Press Association closed in 2011 and the formerly huge United Press International has been transformed into a lean niche service, a bare shadow of its former self. And now AAP is closing.

AAP seems to have been a victim of a media oligopoly as much as of digital technology. With its two biggest shareholders — News Corp and Nine — holding almost 90 per cent of its shares, its fate was essentially in the hands of a duopoly.

Yet the financial pressures seem not to have come to a head yet, and the agency was maintaining an impressive output. Senior editorial manager Tony Gillies says that AAP was putting out 350 stories a day. Although its client numbers had fallen, it was still making a modest profit on its costs of $65 million last year.

But AAP’s existence no longer suited the commercial purposes of its two dominant shareholders. New outlets, such as the New Daily, the Australian editions of the Daily Mail and the Guardian, and the newly independent Australian Community Media group all subscribed. Were the oligopolists seeking to deprive competitors of access to copy, further reducing diversity in Australian journalism?

The internet has brought a flowering of opinion — which is broadly good for democracy — but there is not the institutional solidity needed to support large-scale, concentrated reporting. As Margaret Simons observed in the Guardian, “AAP has reported every single hearing day of every national royal commission in recent years, including those into child abuse, banking and disability.” Labour-intensive reporting of events and institutions is already in decline, and journalism startups are unlikely to fill the gap.

The internet’s impact on news is often pictured as if it is all of a piece, but in fact it will affect different areas of reporting differently. The media will always scrutinise federal government and parliament, and probably also the biggest companies. It is less likely that state governments will be subjected to similar scrutiny, especially in the smaller states, and much less likely that local governments will be. The most spectacular court cases will be reported by the media; the more mundane cases much less so.

This week the possibility emerged that AAP, or parts of it, will be taken over by a new owner, though whether its core business will be preserved won’t become clear for some time. This uncertainty adds to the strong public-interest case for government subsidies, though how this should be done isn’t straightforward. The key public policy principle is that journalism should be assisted in a way that is politically independent and commercially neutral. In other words, governments shouldn’t play favourites. Good journalism is often embarrassing to governments and other vested interests, so it is important to construct funding mechanisms that don’t interfere with editorial independence.

One promising option is for the government to fund, or partially fund, a non-profit wholesaler of news, which will provide its subscribers with a product they can reproduce and build on as they wish — in other words, a news agency. It could build on the shell of AAP, or it could be an extended service assigned to the ABC, or it could be a whole new organisation.

The agency would not aim to produce spectacular or investigative reporting. Rather, it would produce the routine but essential journalism, free of commercial pressures, that aids accountability and can be built on by other journalists.

Reuters and other news agencies were born and thrived thanks to the telegraph and the growing news market. Will the rise of the internet and the shrinking revenue of legacy news media signal their end? If so, it would be a huge loss to democracy. Former US president Barack Obama once observed that the new media ecosystem “means everything is true and nothing is true.” In democratic debates in the past, he added, “there was a baseline of facts that we could all work off of. And now we just don’t have that.” It seems unlikely that market forces will by themselves ever fulfil the unspectacular but essential role of supplying a strong bedrock of reporting and routine disclosure that will aid and discipline democratic debate. •