* Thomson Reuters launches U.S. domestic news service
* Service is part of "multimillion" dollar investment
* Signs Tribune Co as first Reuters America client
NEW YORK, Dec 13 (Reuters) - Thomson Reuters Corp (TRI.TO) (TRI.N) has launched a news service for U.S. publishers and broadcasters in a bid to win business from the Associated Press and CNN.
The new service, Reuters America, provides text stories, photos and video by Reuters journalists for newspapers, television stations and online publishers. Newspaper publisher and broadcaster Tribune Co (TRBCQ.PK) is its first customer.
As part of the service, Reuters America also will offer sports and entertainment news from six partners: the Wrap, SportsDirect Inc, the Sports Xchange, US Presswire, SB Nation and Examiner.com
The service comes as newspapers and TV stations try to recover from the worst financial recession in recent memory.
Tribune Co, which owns the Chicago Tribune, the Los Angeles Times and TV stations in New Orleans, San Diego and Denver, has signed a multi-year deal. Terms were not disclosed.
Reuters is hiring journalists and using outside journalists, or "stringers," to provide general news stories in addition to its business and financial news. It also will write stories commissioned by its news clients.
"This is being designed and being run in a way that is not one size fits all," said Chris Ahearn, Thomson Reuters' president of media. "It gives (publishers) comfort and flexibility that there are other choices than... some of the legacy providers."
Thomson Reuters, which provides financial and professional data and owns the Reuters news agency, is making a "multimillion dollar" investment in technology and editorial resources, Ahearn said.
It wants to offer an alternative to entrenched services such as the AP, a cooperative owned mainly by U.S. newspaper members that pay fees to the news service.
Newspaper publishers, including the bankrupt Tribune Co, have been dealing with plunging advertising revenue, falling print sales and heavy debt from acquisition sprees over the last 20 years. Many publishers have cut costs by stripping away sections, laying off workers and outsourcing print delivery.
"The heat is by no means off on newspapers to find new ways to reduce expenses," said Rick Edmonds, a researcher and writer on business and journalism for the Poynter Institute.
About two years ago, metropolitan daily newspapers such as the Plain Dealer in Cleveland and the Boston Globe, owned by the New York Times Co (NYT.N), urged the AP to lower its fees. Some members threatened to leave the organization.
Eyeing a potential new market, Time Warner's (TWX.N) CNN in 2009 launched CNN Wire, a wire service for newspaper publishers looking for cheaper alternatives.
Tribune threatened to leave the AP, and had given formal notice that it was considering dropping its membership.
The AP, which counts about 1,400 U.S. newspapers as members, has restructured its pricing since then.
Gerould Kern, senior vice president and editor of the Chicago Tribune, said Tribune Co is using Reuters to augment its news coverage.
"This isn't an anti-AP move," he said. "We are going to take on Reuters America as a partner and remain an AP member, but buy less from it."
Tribune remains a valued customer of the AP, said spokesman Paul Colford. (Reporting by Jennifer Saba. Editing by Kenneth Li and Robert MacMillan)