Tom Curley, AP president and CEO, announced the change Monday at the annual meeting of the 156-year-old news cooperative.
Most of the 15,000 news outlets that buy AP's news, sports, business and entertainment coverage have been allowed to "re-purpose" the same material online at no extra cost since 1995. At that time, graphical Web browsers were just beginning to transform the Internet from an esoteric computer network to a mass medium.
The new pricing policy, effective Jan. 1, begins to shift some of the funding of AP to the growing online market, as technological advances and digital devices are making it ever easier for people to get their news whenever and however they want it.
"The need for online licensing is clear," Curley said during a speech at the meeting in the Masonic Auditorium, attended by member publishers, editors and broadcasters. "For The Associated Press to endure during this digital transition, we must be able to preserve the value and enforce the rights of our intellectual property across the media spectrum."
About 300 commercial Web sites, including popular destinations such as Yahoo Inc.'s Yahoo, Time Warner Inc.'s AOL and Microsoft Corp.'s MSN, already have been buying AP content, said Jane Seagrave, the news cooperative's director of new media markets.
But price increases are often a prickly issue for the AP because it's a not-for-profit cooperative that is owned by its customers — the traditional media that form its membership.
The AP expects to offset the costs of the new online licensing fees by temporarily reducing its annual membership rate increases, Chairman Burl Osborne said.
These rates — known within the AP as "assessments" — have climbed by an average of 2.75 percent annually during the past decade.
A formula for calculating the AP's online licensing fees still hasn't been set, making it difficult to predict how the pricing change will affect individual news outlets. Currently, the AP bases its rates on the circulation of newspapers and audience of broadcasters, with the largest paying more than their smaller counterparts.
A digital advisory committee will be set up to ease the transition to online licensing, Osborne said. The committee is aiming to hold its first meeting by fall.