The once-dominant broadcast PR industry has faced serious challenges over the past few years. That has never been more evident than in recent weeks, as The NewsMarket completed its acquisition of Medialink and On the Scene Productions (OTSP) filed Chapter 7 and shut its doors for good following financial hardship.
These developments are a bold illustration of a shift in the broadcast PR business model that has been underway for some time while the companies tried to adapt to a changing market, including the move to online.
"In business, if you don't reinvent yourself every five years, someone will do it for you," says Ed Lamoureaux, SVP of WestGlen Communications, another broadcast PR firm. "If you haven't already changed and helped your clients find new ways to do broadcast PR, you're in a world of hurt right now."
Another determining factor is the simple fact that producing a video has become easier, and less of a specialized product.
“Technology has demystified the creation of content,” says Shoba Purushothaman, chairman and cofounder of The NewsMarket. She says there's still a need for sophisticated content, but costs in the market will continue to decrease.
“There are some firms that are used to a pricing model that doesn't work anymore,” says Purushothaman.
Still, as the broadcast PR firm model is shifting and contracting, the value of video production has clearly not dried up. NewsMarket found Medialink an attractive business because while it was focused on distribution of video, Medialink offered expertise and capability in creating the content, Purushothaman says.
Other broadcast PR veterans are also working to adapt.
While Doug Simon, president and CEO of DS Simon Productions, sees the latest developments as “the end play of the whole VNR controversy,” which decimated a whole sector of broadcast PR firms' business, other offerings remain viable. For example, he says that SMTs, Internet media tours, and distributing content across media platforms are robust parts of his business.
“I was forced to diversify my business years ago because a key part of our branding was results for VNRs,” says Simon. “I realized earlier the need to make a foray into online media content. That's a part of our business that's growing rapidly in 2009.”
Simon adds that sales for this year are going to be within two to three percentage points of 2008 “due to growth of the Web video and Internet media tour business.”
Lamoureaux, too, says he has been shifting business toward reaching targeted audiences via both earned and paid media. According to Lamoureaux, WestGlen has established “microsyndication” deals and added products and services to reach more targeted audiences. This focus has helped WestGlen in a space that, he says, became “too crowded.”
“There are other companies still on the ropes,” he says. “I'm hearing stories of producers only working two- or three-day weeks. For every company that goes out of business, there are people who know what they're doing, people with good ideas.”