Some News Agencies

United Press International (UPI)

I  INTRODUCTION

United Press International (UPI), news-gathering organization based in Washington, D.C. Once the second-largest news agency in the United States behind the Associated Press (AP), UPI floundered financially beginning in the 1960s and declared bankruptcy in 1985. After a series of ownership changes and massive layoffs, the company emerged in the 1990s at a fraction of its former size.

UPI journalists supply news stories and photographs to newspapers throughout the world. Besides general-interest news, UPI also provides newspapers and World Wide Web sites with specialized reports on business, consumer issues, entertainment, health care, science, and sports. UPI Radio provides radio stations with hourly newscasts, sports and business reports, features, and other programming. UPI is called a wire service because it originally transmitted news to subscribers by wire cable. Today the company transmits news by satellite as well as by landlines.

II  FOUNDING AND EXPANSION

In 1907 newspaper publisher Edward Wyllis Scripps of Cincinnati, Ohio, founded the United Press (UP) by merging three existing news agencies. These agencies were the Newspaper Enterprise Association, a distributor of newspaper cartoons and feature articles; Publishers Press, an East Coast news service; and the Scripps-McRae Press Association, a news service for Midwest and West Coast newspapers. Scripps believed that the Associated Press, the largest news service in the United States, represented a monopoly that needed competition.

At its founding, UP had 369 subscribing newspapers in the United States and several more in Europe. In 1909 UP began serving customers in Japan, and it began offering news to South American subscribers a short time later. By 1914 UP had doubled its overall client base. By the 1930s UP had established bureaus in Central America, South America, Europe, and the Far East, and it served more than 1,100 newspapers in 45 countries.

            UP achieved several milestones, including the first news service tailored for radio broadcasters (1935), the first all-sports wire service (1945), and the first wire service to provide audio feeds to radio clients (1958). In 1957 UP won its first Pulitzer Prize, awarded for its coverage of the 1956 Hungarian revolt against a Soviet invasion. In 1958 UP merged with International News Service, a news service that American newspaper publisher William Randolph Hearst had founded in 1909. The new company, named United Press International, had about 5,000 newspaper and broadcast clients and about 6,000 employees.

III  FINANCIAL TROUBLES

UPI began to lose money in the 1960s as many of its client newspapers folded or chose to subscribe only to AP. UPI also faced increased competition from London-based Reuters and from supplemental wire services of major newspapers. In 1982 the Scripps family—which had subsidized UPI’s losses for years—sold the wire service to two Tennessee business executives for the token payment of $1 and contributed $5 million to see the company through the transition. However, UPI continued to lose customers, and in 1985 it declared bankruptcy and began laying off a large number of employees.

From 1984 to 1986 UPI lost $40 million and went through two more ownership changes. In 1991, with fewer than 600 employees and debt of more than $60 million, the company again filed for bankruptcy protection. In 1992 the company was sold for about $4 million to Middle East Broadcasting Centre, a London-based television production company headed by Saudi Arabian businessman Sheikh Walid al-Ibrahim, a brother-in-law of Saudi Arabia’s King Fahd.

By the late 1990s UPI had closed most of its European bureaus and shifted its focus to selling news to radio stations and online services. In 1997 UPI’s former chief executive, Earl Brian, was convicted of bank fraud and conspiracy for hiding the company’s financial losses from auditors in the late 1980s. Also that year, veteran British journalist James Adams took over as chief executive officer of the company.

Associated Press (AP)

I. INTRODUCTION

Associated Press (AP), largest news-gathering organization in the world. With reporters and photographers working in more than 200 bureaus around the world, AP is one of the chief sources of news for the world’s press. It provides news stories, photographs, graphics, and broadcast services to more than 1700 newspapers and about 6000 radio and television stations in the United States. In addition, about 8500 media outlets outside the United States subscribe to AP information services. The organization’s news stories reach approximately one billion people each day. AP is called a wire service because it transmits news to subscribers by wire cable and by satellite. It is based in New York City.

The Associated Press is incorporated as a not-for-profit cooperative owned by more than 1500 member daily newspapers in the United States. The membership elects AP’s board of directors, which governs the organization.

II  EARLY HISTORY

In May 1848 representatives from six major New York City newspapers gathered to discuss how they could best take advantage of the telegraph, an emerging technology that made possible quick transmission of news over long distances. David Hale of the Journal of Commerce suggested a joint venture in which the papers would equally divide the high cost of receiving information by wire and share the news that arrived. The group formed the Associated Press of New York, with Hale serving as its first president.

In 1848 the organization landed its first paying customers: the Philadelphia Public Ledger and the Baltimore Sun. In 1849 AP established its first foreign bureau in Halifax, Nova Scotia, Canada, the first port of call for ships travelling to North America from Europe. The bureau telegraphed the latest European news to New York City.

AP’s early success gave rise to several regional news associations, such as the Western Associated Press (WAP), the Northwestern Associated Press, and the New England Associated Press. During the 1860s several of these regional associations complained that AP of New York was overcharging them for European news. In the 1890s several regional associations abandoned the parent organization after AP of New York was caught funnelling news to the competing United Press (UP) for free (United Press was unrelated to United Press International, another AP competitor founded in 1907). In exchange, the owners of United Press had given large amounts of stock in their company to several of AP’s key executives.

Another flap occurred in 1898, when AP cut off service to a Chicago newspaper that also subscribed to a competing service. The Illinois Supreme Court settled the issue, ruling that AP, like a public utility, did not have the right to withhold its services. Shortly after the decision, AP reorganized as a non-profit cooperative, with members equally sharing costs.

III  RAPID GROWTH

Marines Raising Flag at Iwo Jima Five United States Marines and a Navy medic raise the American flag atop Mount Suribachi, the highest point on Iwo Jima, during the Battle of Iwo Jima on February 23, 1945. This photograph, taken by Associated Press photographer Joe Rosenthal, remains one of the most famous images of World War II. The photograph actually shows the second American flag-raising of the day. The Marines had raised the first flag on Iwo Jima more than two hours earlier, but they decided to replace it with a second, larger flag. Fighting with Japanese forces continued for nearly a month after this photograph was taken, leaving about 6,000 Marines and more than 20,000 Japanese soldiers dead by the battle’s end.Joe Rosenthal/AP/Wide World Photos 

            By 1914 AP’s membership had grown to about 100 newspapers. In 1922 AP won the first of its more than 40 Pulitzer Prizes, awarded for a series of stories about the Unknown Soldier at Arlington National Cemetery. The organization flourished during the 1920s and 1930s, starting a photo service and opening bureaus in many state capitals and throughout Europe. In 1935 AP began transmitting news photos by wire.

In response to the enormous growth of the radio broadcasting industry during the 1930s, AP launched a separate broadcast wire in 1941 that supplied written news to radio stations. The news was written in a special style designed for reading aloud. By 1942 more than 200 radio stations subscribed to the service.

AP started a sports wire in 1946, opened a book division in 1962, and launched a business and financial news service with Dow Jones & Company in 1967. In 1974 AP launched the AP Radio Network to deliver audio news, sports, and business programming to radio stations. During the 1970s AP’s Laserphoto system began delivering higher-quality photographs to newspapers over the wire, while its electronic darkroom enabled the storage of photos in digital form. AP’s ability to exploit advanced technology helped it stay ahead of its competitors, including United Press International and Reuters.

IV  RECENT DEVELOPMENTS

The 1980s and 1990s witnessed a flurry of innovations at AP. Using satellite technology, the Leaf Picture Desk digitally transmitted full-colour photographs to newspapers at the rate of 15 seconds per photo, compared to 40 minutes per photo with analog lines. Installed in newsrooms of member newspapers, the Leaf system enabled editors to select and manipulate full-colour photos from their computers. APTV, launched in 1994, delivered video footage of news events to major news organizations. In 1997 AP made its extensive electronic picture archive accessible to subscribers through the World Wide Web.

Reuters Group PLC

I  INTRODUCTION

Reuters Group PLC, one of the world’s largest suppliers of news and financial information. Through its worldwide network of about 2,000 journalists, Reuters provides news stories, photographs, graphics, and video footage to newspapers, television broadcasters, Internet sites, and other media. Although best known to the public as a news agency, Reuters earns the vast majority of its revenues by electronically transmitting financial market data—such as currency exchange rates, stock prices, and commodity prices—to bankers, traders, brokers, investors, and corporations all over the world. The data are constantly updated as financial markets change. Reuters also sells software that allows traders to analyze financial data and to make transactions directly from a computer terminal. The company has headquarters in London, England.

II  EARLY HISTORY

Reuters was founded by Paul Julius Reuter, a former bookseller from Germany. In 1849 Reuter started an independent news agency in Paris, but it failed after several months. The following year he decided to exploit a gap in telegraph service from Paris, France, and Berlin, Germany. He began using carrier pigeons to fly news about European stock prices between Aachen, Germany, where the German telegraph line ended, and Brussels, Belgium, where the Belgian line began. In 1851 Reuter immigrated to London, which was emerging as a hub in the global telegraphic network. There he set up a telegraph agency in an office near the London Stock Exchange. Initially he provided brokers in London and Paris with opening and closing stock prices, but he soon expanded the service to include general news dispatches.

By the late 1850s Reuter had established offices throughout Europe and was supplying news to major newspapers, including the London Times. In 1865 he incorporated the business as Reuter’s Telegram Company. The company expanded beyond Europe as the British Empire extended telegraphic cable to the Middle East, India, China, Australia, and Africa. The transmission of private telegrams within the empire became an important source of revenue for Reuter’s company.

Reuter retired in 1878 and passed control of the company to his son, Herbert. In 1916 Roderick Jones, manager of the company’s South African news operation, became executive head and part owner of the company and changed its name to Reuters Ltd. In the 1920s Reuters began using teleprinters (see Telegraph: Teleprinting) to distribute news to London newspapers and radios to transmit news to Europe.

In 1941 Jones was ousted by the Press Association, an association of British newspapers that had become the majority shareholder of Reuters in 1925. Jones had been knighted for his service as head of the British Department of Propaganda during World War I (1914-1918), and the Press Association believed that Jones’s close ties to the British government had compromised Reuters’s independence as a news agency. The Press Association protected editorial independence by establishing a share structure designed to prevent any one individual or interest from gaining control of the company.

III  EXPANDING SERVICES

Following World War II (1939-1945), Reuters faced growing competition from American news agencies, such as the Associated Press and United Press International. In response, it expanded its financial-information services. In 1964 Reuters introduced Stockmaster, a system that allowed users to view stock prices from around the world on a computer screen. In the following years the company continued to add leading-edge information technology services. The Reuters Monitor, introduced in 1973, displayed currency exchange rates on computer monitors in real time—that is, reflecting market conditions at any given moment. The Reuters Monitor Dealing service, launched in 1981, allowed foreign currency traders to carry out transactions directly from their computer terminals. Profits rose from £51,000 ($143,000) in 1963 to £16 million ($32 million) in 1981. By 1989 profits reached £284 million ($422 million).

In the 1990s Reuters continued to develop information systems, including multimedia and online services. It built Reuters Television (formerly Visnews) into a leading international TV news agency that provides news, sports, business, and entertainment video footage via satellite to broadcasters in more than 90 countries. In 1994 Reuters bought Quotron, a stock quote service, from consumer banking company Citicorp. The company debuted its Reuters Markets Service 3000, which offers specialized financial information, in 1996.

In 1999 Reuters joined forces with longtime rival Dow Jones & Company to combine their online news databases. The Dow Jones Reuters Business Interactive (later renamed Factiva) offers historical news from the Wall Street Journal, news from the Dow Jones and Reuters news wires, and information from more than 7,000 global business news sources.