MARKET FOCUS - Newswires: The battle of the business wires - The rivalry between PR Newswire and Business Wire over the lucrative press release distribution market is ugly - and will only get uglier in the Internet Age. Craig McGuire reports from the ring

For decades Business Wire and PR Newswire, the two titans of press release distribution, have pounded at each other like battle-hardened heavyweights - trading blow for blow on each other’s geographic turf, copying each other’s innovations, luring away each other’s clients. Through in-house development, acquisitions and strategic alliances, the contenders have consolidated the industry into two opposing camps.

For decades Business Wire and PR Newswire, the two titans of press release distribution, have pounded at each other like battle-hardened heavyweights - trading blow for blow on each other’s geographic turf, copying each other’s innovations, luring away each other’s clients. Through in-house development, acquisitions and strategic alliances, the contenders have consolidated the industry into two opposing camps.

For decades Business Wire and PR Newswire, the two titans of press

release distribution, have pounded at each other like battle-hardened

heavyweights - trading blow for blow on each other’s geographic turf,

copying each other’s innovations, luring away each other’s clients.

Through in-house development, acquisitions and strategic alliances, the

contenders have consolidated the industry into two opposing camps.



Though both companies attempt to tailor their offerings, delivery of

news releases is pretty much a commodity service with few differences to

distinguish the two competitors. Each has large numbers of Fortune 1000

firms on its rolls. Both draw more and more clients from the hi-tech

sector. Each offers highly customized distribution to mainstream and

trade media outlets.



’It’s like Time and Newsweek,’ says Brian Unger, marketing manager for

production house Target Video News, who has worked for both giants.

’There’s such a tremendous amount of parity you’d have to be a fool not

to see it. They are two tremendous organizations delivering high-quality

service, so it’s sometimes hard to tell whether it’s Coke or Pepsi.’



The two companies constantly question each other’s numbers and malign

each other’s capabilities. Few business rivals hold each other in such

contempt as Business Wire and PR Newswire.



Perhaps the ugliness of the rivalry was inevitable. ’When you engage in

a duopoly, which those of us who lived through the AP/UPI wars uniquely

remember, competition turns into emotion, obscuring both the strengths

and the weaknesses of the combatants,’ says Larry Moskowitz, chairman,

president and CEO of Medialink, a BW partner. ’But, it makes for a more

exciting show.’



Indeed, it promises to get even more exciting. The two giants are at a

crucial point in their histories. With the Internet bringing

opportunities for a myriad of new services, they are trying desperately

to shore up (and, where they can, expand) their market shares. And it’s

a show that communications pros will no doubt be watching: news release

distribution is, obviously, one of the most important aspects of the PR

profession.





Humble beginnings



The industry hasn’t always been this stratified. In fact, both rivals

come from relatively humble beginnings, springing up from opposite sides

of the country.



TV Guide originator Herbert Muschel launched PRN in 1954. The company

initially provided news releases verbatim to just 12 major points in New

York (Muschel went from door to media door to persuade the leading

companies to install the wire). PRN expanded down the Eastern corridor

and westward, solidifying its base with the 1997 purchases of Southwest

Newswire in Dallas and PR News Service in Chicago.



Lorry Lokey hung out Business Wire’s shingle in 1961. The company began

serving 16 San Francisco Bay Area news media, as well as seven charter

members, including American Airlines, Bank of America, GE and Wells

Fargo.



It opened its first regional office in LA, in 1967, eventually spreading

across the country.



While Lokey remains at the helm of BW, PRN was sold to Western Union in

1971. It operated as a wholly owned subsidiary until UK-based United

News & Media Group acquired it in 1982.



BW and PRN now clearly own most of the dollars 350 million market for

distributing press releases via satellite. PR Newswire reported dollars

162 million in revenues for 1999, with Business Wire clocking in at just

over dollars 110 million. The dawning of the Internet age could double

and even triple the market’s potential over the next few years by

expanding the number of media outlets and value-added services, such as

online monitoring and audio and video streaming.





Whose numbers are right?



The PR community is constantly bombarded with facts and figures from the

two industry leaders, figures that often don’t add up. For example, BW

claims a 54% percent market share, while PRN touts 53%. Each insists it

moves an average of 1,200 news releases a day, while challenging the

other’s identical claim (there is no objective industry barometer to

turn to). ’Business Wire’s 1,200 number is not a true number, and

includes things like advisories and re-transmissions,’ says PR Newswire

spokeswoman Renu Aldrich. Counters Gregg Castano, Business Wire’s vice

president of national sales: ’We don’t count the corrections and

non-news releases like they do.’



BW and PRN each claim around 40,000 clients. The business is virtually

unique in that each competitor has instant access to its rival’s client

roster, simply because each release includes contact information. It’s

an opening both BW and PRN exploit.



’We’re approached on a fairly regular basis by PR Newswire competitors,’

says Tom Kelly, head of media relations for Chicago-based Bank One. ’My

theory is, that as long as it’s working, I don’t see the need to be

making changes.’



’I’ve been contacted by these other newswires, like PR Newswire, and

I’ve heard they are good services, but we’re perfectly happy with

Business Wire,’ adds Sarah Hofstetter, VP of corporate communications at

Net2Phone.



Some argue that there are discernible differences between the two

services, however. ’The news distribution services are both very

effective and comparable in reaching US media,’ says William Adler,

director of corporate communications for the Reader’s Digest

Association. ’But when you dig down into the various layers of services

each offers, the differences become more striking.’



Adler, a former PR Newswire employee who has used both companies,

advises PR pros to ignore the numbers and look closely at which

company’s individual products are best suited for their particular

needs.





The online game



Both companies have shown the capacity for innovation, growing into

businesses their founders probably never envisioned. Over the years,

they have often switched between being the market leader and the

follower, depending on the innovation. ’They’re very good at noticing

developments in their small areas of influence,’ says Michael Terpin,

president and founder of new online competitor Internet Wire. ’For

years, when one would open up an office or offer an enhancement, the

other would quickly follow suit.’



Right now, most of those innovations center on the Internet. BW and PRN

burst into the online arena at the same time, just months apart in 1995

(BW was first). Internet-based news distribution, while growing at a

healthy rate, is still nowhere nearly as lucrative as the satellite

channel and will probably produce revenue well below dollars 50 million

this year.



Several years ago, both companies realized the need to expand into

multimedia.



Business Wire seems to have the edge online in a collaboration with

Medialink.



The service, dubbed Newstream.com, uploads releases, video, audio and

pictures onto the Web and is specifically geared toward the online media

community. PR Newswire has made headway with a similar partnership with

VNR producer Orbis Broadcast Group.



BW’s and PRN’s only significant competitor is in the online arena. The

California-based Internet Wire recently inked a string of deals

targeting the multimedia segment dominated by Newstream.com and the

PRN/Orbis alliance.



Internet monitoring is another business line that shows great

promise.



PR Newswire stole a lead in this sphere by acquiring market leader

eWatch this year. Business Wire offers online monitoring with Luce

Online and says it will soon sign with a major provider to expand its

service. ’We’re very cognizant of PRN’s acquisition of eWatch,’ says

BW’s Castano. ’We know what capabilities they have and want to go beyond

that.’



Then there’s ProfNet, the popular source service for journalists’

inquiries that PRN bought in February 1996. It has grown from 2,000

registered sources to 11,000 in its four years. For its part, BW has

made impressive strides with its own offering, Expert Source. Launched

in May 1997, it boasts 6,300 sources in its database.



Business Wire built an impressive Virtual Press Office. PR Newswire

bought Internet news retrieval and tracking system Newsdesk. PRN offers

access to over 140 live IR Web sites on its virtual IQ service. Late

last month, BW entered an alliance with IR site provider CCBN.com.





And now wireless ...



And so it goes. The two combatants are even locking horns over wireless

distribution technology, which is hardly in wide use today but probably

will be soon. PR Newswire signed deals earlier this year with Motorola,

British Telecom and Pactive to place company news in pagers and

Web-enabled phones. As for Business Wire, several providers - including

Bloomberg Pro, Bridge Flight and CBS’s MarketWatch Mobile - are carrying

its releases.



It’s this ultra-competitiveness, contesting each other on every front,

that some, like US Newswire president Bill McCarren, say separates this

business from others.



’You really can’t compare this industry to any other - it’s just that

competitive,’ says McCarren, whose company distributes releases from

government, non-profits and universities, and was recently acquired by

Medialink.



’If a hotel is booked, the clerk would send the client around the block

to another hotel. You won’t see that sort of cooperation in the wire

industry.



Competition seems to get the better of competitors.’



And that’s the way they seem to like it.





BATTLING NEWSWIRES: SELECTED PRODUCTS AND SERVICES


SERVICES

BUSINESS WIRE                          PR NEWSWIRE


DOMESTIC CIRCUITS

National, regional, state, local,      National, regional, state,

media trades, online services,         local, media trades, online

databases                              services, databases


INTERNATIONAL

Global reach; agreements with news     Global reach; bureaus in London,

groups in Europe, Asia, Africa and     Frankfurt, Sao Paulo, Paris and

Latin America                          Hong Kong


PHOTO

PhotoWire (distributed over AP         PRNewsFotos (distributed via AP

Network); AP Archiving; Presslink      Photo Express), PressLink

                                       Online, NewsCom and others. AP

                                       Archive; Assignment Photography;

                                       The Corporate Archive


FAX

NewsFax and eMail; NewsOnDemand &      Broadcast Fax; Fax-on-Demand;

Plus; Smart News Release; Corporate    Stocks On-call; Company News On-

News on the Net and eMail Direct       call; Today’s Headlines;

                                       FaxProfiles


MULTIMEDIA

(With Newstream.com partnership with   (With partner Orbis Broadcast

Medialink): Webcasting conference      Group): cybercasting live events

calls; live Web streaming audio and    on Web; archiving recorded

video; audio and video clips; slide    events; live Web streaming audio

shows; VNRs; SMTs; b-roll packages     and video; slide shows; VNRs;

                                       SMTs, b-roll packages


INVESTOR RELATIONS

Corporate News on the Net; CCBN.com    Virtual IQ (IR site management);

(partner); IPOs on the Net             Company News On-Call; Microsites


INFO AND RESEARCH

Expert Source; News clips from Luce    ProfNet; eWatch (Internet

Online (Internet monitoring);          monitoring); Buy-side Select;

CyberClipping; Media Resource Center;  Newsdesk; Today’s Headlines;

Virtual Press Club; Press Pass;        Broadcast Newsclips;

Electronic Media Kit; News on the      FaxProfiles; Feature News

Net; Corporate Profile on the Net      Service; PRN Press Room; Media

                                       Insider



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