Commercial newswires distribute news releases on behalf of businesses and organizations for a fee. But where did they come from? How have they evolved into what they are today? What will tomorrow bring? In this article we explore newswire history and the evolution of a service that marketing and communication professionals use on a daily basis.
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The first commercial telegraphs, which appeared in 1837, made it possible to share the news long distances over copper wire. This invention gave birth to news agencies like the Associated Press (founded in New York, 1846) and Reuters (founded in London, 1851).
In 1906 Ivy Lee, the founder of modern public relations, issued the world’s first press release. Sent on behalf of the Pennsylvania Railroad, the release provided information about the Atlantic City train wreck.
Then in 1954 PR Newswire was founded and in 1961 Business Wire was founded. The emergence of commercial newswires made it easier for businesses to distribute their news broadly. In return, businesses paid fees for access to these proprietary newswire networks.
The Internet Enabled and Ruined Everything
The internet, which became publicly available in 1990, enabled newswires to release news directly to the consumer. However, it also eroded the monopoly that wire based newswires had on news agency access. Shortly after the launch of the internet Marketwired was founded in 1994 and Globe Newswire (owned by NASDAQ) was founded in 1998.
Reports of Their Demise Were Greatly Exaggerated
Many thought it was the end for newswires when, in 2008, the SEC began to accept the release of material news through company websites and social media feeds. However, the SEC exception only applied to the largest and most widely followed companies. (Learn more here)
For more than 99% of publicly listed companies, commercial newswires still represent the only reliable and approved way to distribute material information to investors.
Newswire Industry Continues to Evolve at a Dizzying Pace
In the first half of 2016 Cision acquired PR Newswire for US$841 million. NASDAQ then acquired Marketwired for roughly US$200 million in the first half of 2016 only to turn around and sell its entire corporate solutions business (aka Globe Newswire & Marketwired) to West Corporation for US$335 million in January 2018. Following these transactions the number of credible TSX approved industry participants has been cut nearly in half and now includes only:
This consolidation is likely to have an impact on pricing.
Newswire history began with a new technology and might be brought to an end by technology. Beyond its initial impact in the 1990’s, the internet continues to disrupt the newswire industry as it evolves new technologies that threaten to substitute and replace newswire services. Commercial newswires, which have been around for about 60 years now, continue to contend with technological disruption and will either evolve, be consumed, or die.
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