Editor & Publisher published an exclusive story Monday about a number of Northeast newspapers that met in Manhattan to discuss creating a content-sharing consortium where they would freely share photography and stories. This is just another sign of the sorry state of the newspaper business, but it also points to the AP’s declining role as the sole purveyor of news and photos to newspapers.

Late last summer, several large newspapers informed the AP they would be ending their memberships — two years down the road, of course, to comply with AP’s rigid membership rules. Many cite AP’s rigidity and lack of responsiveness to individual newspapers’ needs.

A “Northeast Consortium” of newspapers, which will include New York’s Daily News and — at least at the present time — is said to include Newsday, The Buffalo News, the Times-Union of Albany, N.Y., and the Star Ledger of Newark, N.J., among others, is weeks away from announcing a content-sharing arrangement that will include both stories and photos.

The Daily News refused comment to E&P.

One executive who spoke on condition of anonymity and who attended the “summit” of New York-area papers, held in Manhattan within the past two weeks, cited cost savings, more timely exchange of content, and what that executive called “a new spirit of cooperation” as the primary motivations for such an undertaking. This source referred to the “Draconian terms” of the AP, which last Thursday responded to newspapers’ concerns by announcing further rate cuts and restructuring.

For its part, AP is responding to the loss of members and criticisms fairly aggressively:

Last Thursday, AP stated that by the middle of 2009, it will complete a review of its pricing and governance structure, re-examining all current policies and rules — such as the two-year notice now required for leaving the news cooperative — and will consider other potential changes, including the creation of different classes of membership and services.

The AP’s board of directors voted last Thursday at its quarterly meeting in New York to provide all member newspapers complete access to all AP text content, at no extra cost. In addition, it voted to approve a moratorium on the rate increases that a minority of newspapers were expected to see in 2009 under the current AP pricing structure.

To AP’s credit, it also has approved assessment reductions totaling $30 million for its members. Will that be enough? Only time will tell, but in the current economic atmosphere, pressure on newspapers — and, by extension on the Associated Press — will only grow. E&P’s report ended on the note that a couple of Midwestern newspapers that had caught wind of the Manhattan summit had made inquiries regarding possible membership in the consortium.

Several such groups, notably in Ohio, already exist, and if their model proves successful, it is doubtful that the AP will be able to sweeten the pot sufficiently to maintain its position of prominence in the news-gathering business.