(Adds contract value from source)
By Kenneth Li
NEW YORK Aug 30 The CNN cable television news
network said on Thursday it would stop using the Reuters news
service, ending a 27-year relationship, to contain costs and
invest in its own news gathering operations.
The global television news network owned by the world's
largest media company, Time Warner Inc (TWX.N), said in an
internal memo that it wanted to reduce reliance on agency
material while achieving better control of its growth.
"This is all about us, not Reuters. This is about content
ownership," CNN spokesman Nigel Pritchard said.
"Everything is changing and content ownership is king."
Pritchard did not specify how much CNN would spend to
expand its news operation.
A source familiar with the matter who asked not be named
said the contract CNN had with Reuters Group Plc RTR.L was
worth about $3.5 million, which the source said CNN would now
invest in its news operation.
Both companies declined to confirm the value of the deal.
CNN said it would stop using Reuters text, photography and
television material from Friday.
The move came ahead of a plan to broadcast CNN in
high-definition this week, and CNN sources said news packages
containing Reuters footage had to be re-edited, including one
prepared on Princess Diana scheduled to air this weekend.
Chris Ahearn, president of Reuters Media, said in an
internal memo that no commercial agreement could be reached
with CNN after "a period of extensive discussions."
"In no way is this a reflection of the value placed upon
Reuters editorial quality by CNN or the work that Reuters has
done for them," Ahearn's memo said.
News organizations such as CNN are grappling with how best
to court new generations of viewers who are as likely to get
their information on cell phones and the Internet as from
Contracts with news suppliers such as Reuters typically
grant subscribers like CNN permission to use news content for a
"To advantage CNN in the content marketplace and manage the
continually rising costs associated with acquired assets, we
are making significant investments in our own news gathering
while simultaneously reducing our reliance on agency material,"
Tony Maddox, executive vice president of CNN International,
said in a memo dated Aug. 29.
CNN, which said it planned a multi-million dollar
investment in its news operation, will continue to use news
provided by the Associated Press and Associated Press
Television News, which competes with Reuters.
Pritchard said the decision should not be characterized as
a cost-cutting exercise.
Maddox said in his memo: "It's a step forward to greater
control of our editorial product, of the quality of the CNN
services we provide and of our growth and success in the
Ahearn added in his note: "We are hopeful that we will have
the opportunity to work with CNN again."
(Additional reporting by Kristina Cooke in New York and Gavin
Haycock in London)