A number of issues are on the radar for newswires as they try to keep up with a changing media and financial climate.
Rather than merely distribute the news, newswires recently became the news with their outspoken criticism of Sun Microsystems' decision to release its second-quarter earnings on its own Web site and via RSS feeds before pushing the information through the usual channels.
Ready or not, the time is approaching where other companies might begin taking steps to follow Sun's example. Web disclosure, the likely advent of widespread use of tagging system XBRL (eXtensible Business Reporting Language), the continued growth of social media as a communications vehicle, and the more boisterous calls for accurate and effective measurement techniques are some of the issues that newswires are facing today. In various ways, the industry is preparing for what's to come.
The major newswire services - PR Newswire, Business Wire, and Marketwire - are steadfast in their belief that they offer the best methods for financial disclosure.
"We have an infrastructure that works, that's time-proven," says Michael Lissauer, EVP of marketing and business strategy for BW. "We have no plans in place to do anything different."
Part of the reason for the industrywide confidence is the amount of legwork financial disclosure requires, from maintaining contacts in the media to developing the infrastructure to adhering to the Securities and Exchange Commission's (SEC) rules.
"Will DIY disclosure be more of a threat to our industry?" asks David Armon, COO of PRN. "It's always been there. Web postings and e-mail don't replace the wire. Most companies want to adhere to the letter of the law when it comes to disclosure, but they're aware of the spirit of disclosure. They want to make information available to everyone at the same time."
For the major newswires, staying relevant means keeping up with the myriad advancements in technology that are intended to add value. For example, BW allows clients to file to the SEC's EDGAR database and with XBRL through services it offers in-house; both PRN and Marketwire partner with Rivet Software, using its Dragon Tag software to offer enhanced XBRL services.
"The next time [there's] an earnings release, we'll wind up with another story of who's doing what, whether it's Sun or not," says Thom Brodeur, SVP of global strategy and development for Marketwire. "The smartest thing that a newswire can do to support its client base who want to leverage the Internet more is to be the facilitator. The simpler you make things, the less likely you'll be displaced."
Despite the partnership, Brodeur thinks it will be awhile before there is widespread XBRL adoption.
"With any new innovation, it becomes about learning curve," he says. "It's going to be a lot more prevalent as the marketplace gains a better understanding of how to use it."
XBRL, an XML language, is a tagging system that allows financial text and business information to move across computer systems without being re-entered, cutting down on the amount of work and minimizing the potential for error. Last month, the SEC announced that its EDGAR database began accepting XBRL data from mutual funds.
PRN also thinks the transition to the new language will be a slow process because the need is limited to people who would profit from the switch, such as auditors and financial analysts. PRN offers XBRL attachments that are distributed with text releases.
"There has been a low adoption rate so far," says Armon. "I can see the benefit of not having to manually take those statements and put it into an Excel file. [But] management discussion and analysis... that stuff won't go away."
BW has invested a great deal to offer XBRL services in preparation for what it feels will be an inevitable mandate for the system.
"We're always out there looking at the news aggregators, portals, and what the media systems are capable of supporting," says Tom Becktold, BW SVP of marketing. "You have to take that mix and get the IR or PR pros' information out in as reader-friendly and advanced [methods] as possible."
Measurement, monitoring, and social media
In the current media environment, it has become a necessity for newswires to add multimedia elements, such as photos, audio, and video, to make a client's release more compelling.
"Our job now is to tell clients that have good quality images how they can get them into the hands of consumers and the media," says Armon. "[It] used to only be video from companies that wanted to get on the 6pm news."
PRN now even has a presence in Second Life, featuring message boards with headlines about in-life entrepreneurs.
Like Web 2.0 offerings, technologies that provide accurate measurement and monitoring have grown in importance, especially now that press releases have the capacity to reach consumers.
"Our clients are just getting to the idea that they can reach their audiences directly and expanding the definition of a news release as a media relations tool," says Laura Sturaitis, SVP of media services and product strategy for BW, which has recently upgraded its NewsTrak measurement service, which monitors where a release appears online and who's reading it.
With multimedia releases and the client's desire to analyze the ROI of the newswires both becoming commonplace, measurement may begin to play a heightened role in the newswire business.
"More and more of our clients are asking us, 'What can you do to monitor and measure the efficacy of this press release?'" says Brodeur. "Because we sit in the middle of the communications work flow and life cycle, monitoring is critical."
The multicultural perspective
Black PR Wire, Hispanic PR Wire, and US Asian Wire operate separately, but have a strategic partnership that combines their outreach to up to 1,500 different news outlets. Issues faced by these newswires reflect an evolving niche demographic, as well as advances in the newswire industry.
Across the board, multicultural newswires are seeing a spike in Internet usage by the consumer and the media outlets they work with. This is driving multimedia innovation, such as increased use of RSS feeds and releases that are enhanced by video and audio.
The Hispanic and Asian populations (which include areas West to India and East to Asia Pacific) are growing in number and spending power, and the African-American market, which is still the largest minority group in the country, continues to be a major target of many businesses. Serving all of these interests means catering to constituents who have international origins, diverse cultures, and varying socioeconomic status levels.
As more companies try to reach these demographic groups, there's increased competition from other newswires and services looking to gain a foothold in a new market. Staying relevant has taken on a new importance. Part of that is measurement, as ethnic wires have to prove that they do an effective job of reaching their respective communities.