AP's net income fell 65% in 2009--from $29.1 million in 2008 to $8.8 million in 2009. Only the sale of its German-language news service for $13.2 million kept AP from actually posting a net income loss instead of a steep decline.
AP expects a decline this year too. If that happens, it would be the first time for AP to post consecutive year losses since the Great Depression.
One reason for the decline is AP's drop in the price it charges to newspapers and broadcasters which account for 40% of its income base.
"With some media executives threatening to drop AP services to save money, the AP lowered its fees for U.S. newspapers by $30 million last year. It plans a $45 million reduction for newspapers and broadcasters this year."AP had expected a decline in revenue but closer to a 6% cut rather than the nearly 10% it sustained. The steeper revenue loss forced AP to cut its payroll 10% last year (to 3,700 employees worldwide). News coverage expenses in 2009 were slashed 24%--down $18 million from 2008's $76 million.
AP hopes to recoup current revenue losses by increasing income from internet and mobile devices. AP also plans to clamp down on informal use of its content through a news registry service that "will enable it and participating newspapers to track where and how their online content is being used."