The newswire business has evolved over the past 10 years, and service providers are bullish on their core offering, while branching out into new technologies and services.
“The last decade, the newswire itself became almost a misnomer,” asserts David Armon, president of PR Newswire (PRN), “because the growth in services focused on a broad range of services and products that PR people, IR people, and marketing people are taking advantage of.”
Largely, solutions provided by newswire companies are Web-based technologies that enhance the capabilities of clients to disseminate information, whether by the traditional press release or new channels. Multimedia features such as video and links to social media sites are now common.
“Today it's a true consultative sell,” says Michael Nowlan, CEO of Marketwire. “You have to understand what [the client's] objectives are, and then you've got various solutions to meet those needs.”
“Press releases have become the starting point for so many different aspects of conversation from the individual outreach to reporters, to the conversations that happen in social media spaces,” adds Tom Becktold, SVP of marketing at Business Wire (BW).
The democratization of the news and the rise of search engines have expanded the target audience.
“It used to be that a press release wasn't successful unless it generated a news article by a reporter,” Armon says. “In the new paradigm, having your release show up on [many] Web sites and having it number one in the search rankings on Google are what customers care about.”
Sensing that new disclosure regulation was in the offing, BW began developing its patented NX platform in 1999, a dissemination system that promises simultaneity. With the passage of Regulation Fair Disclosure (Reg FD) in 2000, newswires became a part of the governance sphere.
“With the rapid evolution of the Internet, it was clear that the dissemination of material information was moving to a much more rapid format than ever before,” says Michael Becker, VP of global disclosure and financial reporting services at BW.
“Under Reg FD, there wasn't any noticeable increase in the volume of news releases,” he adds. “The change was in the expediency in which they were disseminated and the depth and breadth [of information]. The distributions go to a larger [audience] and they include much more.”
Armon also saw the shift in the amount and type of information that was being distributed.
“Before Reg FD, customers... created two different versions of press releases: one that they would send to the media with basic information, and to the investment community, they would send voluminous reports,” he explains. “But passage of that rule forced companies to deliver the same amount of data to everyone.”
Technologies like webcasts and the XBRL tagging systems, which allow stakeholders to manipulate information for research and analysis purposes, are further leveling the playing field.
Despite the ongoing trouble on Wall Street, newswires predict that the current system is entrenched because of its traditional role in transparent disclosure.
“Given what's been happening in the markets, I don't see that there will be a huge push to disrupt the model that's been proven to work well,” says Marketwire's Nowlan.
For many years, the broadcast PR profession's success was generated by the need for content in newsrooms.
“TV stations realized that instead of being [a] loss leader, news could be [a] profit center,” said Jack Trammel, president of VNR-1 Communications, who has also worked on the broadcast TV side of the industry. “They increased the number of newscasts, [which] created an enormous demand for content,” including b-roll and VNRs.
Fast forward to more recent times and the broadcast PR picture is much more grim. In 2004, VNRs came under scrutiny because of their use by the federal government. Karen Ryan, president of Karen Ryan Group Communications, concluded a VNR for the Department of Health and Human Services with the words, “In Washington, I'm Karen Ryan reporting.” This was later characterized as possible “covert propaganda” by the General Accounting Office.
In 2005, The New York Times ran a 6,000-word front-page article, once again characterizing VNRs as government propaganda and furthering a debate among lawmakers about proper disclosure. By 2006, broadcast PR companies had come together to form the National Association of Broadcast Communicators, but the organization hasn't been able to reverse the perception of VNRs.
In fall 2007, the FCC leveled fines totaling $20,000 against Comcast for airing unidentified VNRs on some of its stations.
However, one part of the traditional broadcast business that has been largely unaffected by changes in media is radio.
“Radio has been rediscovered,” says Trammell. “We're doing a lot of work in radio these days. It got kind of forgotten in the rush to TV. Radio is highly targeted [and ] these days it's also highly accountable.”
Nevertheless, broadcast PR firms remain optimistic, and are taking steps to adjust their business models to acclimate to new video consumption habits.
“It's all part of a natural evolution where people are getting their news from sources other than television,” says Larry Thomas, COO of Medialink. “The good news with the Web is if the media gatekeeper decides not to run a story, there's still an outlet to ensure that you're going to reach your target audience.”
The NewsMarket, which officially launched in 2003, has created a Web-based video marketing and distribution platform based on the idea that organizations want to create and distribute their own video content and that journalists, even as early as five years ago, would seek this content. (The NewsMarket also recently introduced branded video players for clients to place on their Web sites.)
“The NewsMarket was created because we saw that technology was going to change the way business was done,” says Shoba Purushothaman, CEO of The NewsMarket. “We no longer treat video as a method of documenting something, but really as a method of sharing and communicating.”
To that end, companies like The NewsMarket, PRN's multimedia division MultiVu, and others in the sector are reaching beyond their usual boundaries to establish their place in what Doug Simon, president and CEO of DS Simon Productions, refers to as the “opt-in culture.”
“You need to be able to reach people wherever they may be,” adds Bev Yehuda, MultiVu's VP of products. “People don't get home in time to watch the 6 o'clock newscast. We need to interact with people. So let's go into [various] opportunities and distribution points. It's not right for every single campaign,
but it needs to be put into the mix to see if it's the right way to go.”
In addition to shifts in traditional media, Simon also foresees a shift at organizations, one which has already begun to affect his company's business model.
“I believe that every organization is going to become its own television network,” he predicts. “So they have to determine how they want to present that video, how they want to drive traffic to it, and how they want to syndicate it.”