Thought I would comment on some of the blog coverage I spotted this summer about the recent announcement out of the Securities and Exchange Commission that would allow publicly listed corporations to post financial earnings via blogs or RSS fed web pages, as opposed to the traditional financial earnings press release. It was discussed here [and here] by Brian Solis and here and here by Neville Hobson and I’m sure elsewhere by many others.
It’s great that the SEC has recognized a company website — which would include, of course, a corporate blogsite and/or RSS-fed digital or social media newsroom — as an acceptable channel of distribution for financial earnings information and has deemed the digital release of information in this manner “does not need to satisfy a printer-friendly standard or be in a format comparable to paper-based information.”
What really puzzles me is that anyone who knows anything about news releases — and I’m assuming public relations professionals should know something — would extrapolate from this SEC ruling that the much-heralded, nay, longed-for “death of the press release” is nigh or that this ruling “opens the door” for the general replacement of the press release by the social media news release.
To my mind, as someone who fielded thousands of good, bad and ugly press releases over the years as a journalist and has since written hundreds as part of my media relations work for clients big and small, such thinking belies a real misunderstanding of the peculiar status of financial earnings releases in the larger family of news releases as well as the continued general usefulness of the press release as a communications vehicle. Why?
First, publicly listed corporations drive the equity and debt markets of the world, but masses of non-listed companies and organizations of all sizes issue news releases for a huge variety of reasons — none of which involve SEC-required disclosure of financial earnings — in order to communicate with journalists who have repeatedly expressed their interest in receiving traditional press releases.
Second, go to any online newsroom of any major corporation and you will find dozens, hundreds of news releases throughout the year — but only four, count ‘em … just FOUR quarterly earnings releases, and generally very few if any other releases related to SEC-required reporting (see, for example, Motorola 2007 worldwide news releases, totalling 281, only four of which were earnings releases; or Citigroup 2007 global news releases, totaling 67, only four of which were earnings releases).
So, financial earnings releases are not only NOT the sole type of news release, they are not even the most customary type of news release; in fact, they are an infrequent type of news release. Their death would mean but one thing — the death of the financial earnings news release. Period.
I, for one, would cheer this, because in my view the press release has always been a totally inadequate medium for delivering financial earnings information. Never in the years I worked as a financial journalist — for Market News International, Institutional Investor and Latin Finance magazines — did I ever find the delivery of quarterly or annual earnings reports from publicly listed companies to be of much real use in deciphering a story. This, for a variety of reasons, not least of which are that they are often written chiefly by investor relations teams with institutional investors and analysts in mind as the primary recipients, and that the text in between the numbers is usually long on spin, inflating the good news or trying to mask the not-so-good news.
As a delivery vehicle or platform, the press release as originally designed was intended to mimic the format of a news story: inverted pyramid, catchy lead, pithy headline, short paragraphs, summary quote of substance. The idea was to make it easy for journalists working on deadline to use the information provided to them in a familiar and easily adaptable format as a springboard, from which they could take off into their own story, whichever way their subsequent interviewing and news-gathering might take them.
Financial earnings releases have none of that. Long, winding screeds of data with interpretive text. Journalists working on deadline are lucky if able to extract a few salient details from the body of the release, get some real quotes from financial analysts about whether or not they will issue buy/sell/hold advisories as a result of the earnings report and come up with a timely, breaking story that doesn’t read just like everyone else’s. Those working on longer deadlines are more fortunate, as they have time to sort through the b.s. and find discrepancies, get the Comms guy or gal to put a real executive on the phone, try to pin them down for a meaningful quote to support or contrast with what the analysts are saying in a longer, more thoughtful followup piece.
So, I’m with you … let’s celebrate the likelihood of the burial of the financial earnings news release as a result of this news out of the SEC. But, pulleaaasssse, give the press release a break, wouldya? Even in the era of Web 2.0, it’s still got plenty of life and lots of functionality left in it for businesses and organizations of all sizes. Truth be told, rumors of its demise are still much exaggerated.
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