Who Killed the Press Release?

Last week, the SEC made it official, ironically with a press release, that public companies, under certain conditions, can use social media and blogs as public notice to investors. That's a big deal. It acknowledges how communication channels are changing.

What prompted the clarification was a recent Reed Hastings episode on Netflix. CEO Hastings announced a key business metric on his personal Facebook page. News spread quickly, but diligent investors that were checking their mailbox for a Qwikster disc, missed out. The SEC is obsessed with ensuring investors have equal access to important financial news, so carefully reviewed what occurred at Netflix and determined it didn't care.

Actually the SEC simply added some clarification to its murky guidance from 2008, but in doing so, it effectively stated that corporate information posted on open, accessible, and available blogs or websites would satisfy legal disclosure requirements. That's really bad news for news wire companies that mostly live on that capability.

This caused Rich Tehrani at TMC to post: Has the SEC Killed the Press Release? I hope so. Press releases are broken, and news wire services are obsolete.

The concept of a press release is fine - a company has something to announce and needs a vehicle to do so. Unfortunately, the press release has become a self indulgent exercise in grandeur and fantasy. Too often, the actual news is buried behind a wall of industry leading adjectives. Press releases are written to convince the reader that a given announcement is quite possibly the single most important news of our generation.

Conversely, a blog post is written in a more personal tone. While press releases are written for the press to translate for the masses, blog posts are written for the masses. The result is the message takes priority over the image. The hints of excitement in these posts are about the future, not the past.

The implications of these changes are greater than they may appear. It isn't just about investor relations, but more about how the Internet continues to flatten distribution and communications; even the press is a questionable intermediary (AKA peer-to-peer communications). Companies can and should communicate with their various constituencies more directly by using social networks and blogs.

The press release doesn't have to die. They offer formal notice and a form of chronology. If they are to stay relevant, then an updated approach in format and approach is necessary.