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CNN and Reuters Divorce: money an issue

News Corp and NBC. Conde Nast with MSNBC.  CBS joins with the Washington Post.  Across the media industry, partnerships to syndicate and share content are becoming the norm.  CNN is bucking the trend and going the other way.

brokenAfter a 27 year partnership, CNN announced yesterday that it would no longer use news feeds and content from Reuters (one of the world’s biggest news and data syndication/wire services).   CNN said they would immediately stop using still, video and text from Reuters in all of their news pieces.  Additionally, old stock footage from “B rolls” or in archives, or content on,  anything which includes licensed Reuters video or content will be edited to remove the material before being publicly displayed. 

Coming from the P.R. machines, the spin put on the divorce was that CNN wants to focus more on its own news gathering sources. Emphasize “spin.”  It was suggested this was a strategic decision.   “This is all about us, not Reuters. This is about content ownership. … Content ownership is king.” CNN spokesman Nigel Pritchard said.  There was also talk about controlling costs and having less reliance about external material.

The real story looks like the breakup was far less about internal vision.  In fact, it’s looking like it was about that most common of relationship woes: money.  According to the Financial Times, Reuters was paid less than $10m last year by CNN.   They likely wanted more.  CNN wasn’t willing to pay.

The two companies were looking at a new long term agreement.  CNN, which is owned by Time Warner,  likely wanted broader rights – much of their past license had both time constraints (they could only show content for set periods of time, or within set time windows) and venue constraints (TV broadcast only etc).  With the media industry changing, CNN also likely sought greater leeway to distribute content online, via mobile services or other formats.   Reuters in turn, was probably looker for a much larger pay day.

An internal email to staff revealed  by the Guardian hinted to as much.  Reuters president Chris Ahearn said , “regrettably, after a period of extensive discussions, no commercial agreement could be reached at this stage.” He also expressed hope the two companies would work together again.    

Furthering the subtext that this was a financially motivated move and not, as characterized, a strategic one, CNN will continue to rely on its other long term agreements with the Associated Press, AP Television News along with other broadcasters around the globe.

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