video news releases

Medialink Worldwide -- the largest producer of fake news products such as video news releases (VNRs) -- is in financial meltdown. Almost two years ago the Center for Media and Democracy reported that Medialink had placed its faith in selling off assets, trying to boost international income and investing in the digital watermarking system Teletrax. The company's latest quarterly report reveals that, faced with accelerating losses, the company has agreed to sell Teletrax to Philips Electronics and sold "certain assets of its UK-based media communications services operation" to World Television Group. Not surprisingly, Medialink's share price has collapsed to an all-time low of just 30 cents, down from $3.65 at the start of the year. PR Week reports that, according to industry sources, Medialink is "considering offering itself up for sale."

"Two cups of McDonald's iced coffee (BUY!) sit on the Fox 5 TV news desk" during Las Vegas station KVVU's morning news show, writes Abigail Goldman. It's a "punch-you-in-the-face product placement" that will last six months. KVVU's news director says the "nontraditional revenue source" won't impact his station's reporting. But an executive with the marketing firm that negotiated the deal, Omnicom's Karsh/Hagan, said "the coffee cups would most likely be whisked away if KVVU chooses to report a negative story about McDonald's," reports the New York Times. McDonald's has similar product placement arrangements with "WFLD in Chicago, which is owned and operated by Fox; on KCPQ in Seattle, a Fox affiliate owned by the Tribune Company; and on Univision 41 in New York City." Other stations owned by KVVU parent Meredith Corporation, "including WFSB, the CBS affiliate in Hartford, Conn., and WGCL, the CBS affiliate in Atlanta -- are also accepting product placements on their morning shows." The Writers Guild of America West recently urged the Federal Communications Commission to require "real-time disclosure" of product placements and to ban video news releases, calling VNRs "an attempt to trick the viewer to think that a paid advertisement is actually news."

From the Army's 2006 All-American BowlHow can you counter "daily stories and blog entries that portray the negative aspects of joining the military"? That was PR firm Weber Shandwick's job in the lead-up to the U.S. Army All-American Bowl in January 2008. For the 11 month, $342,000 PR campaign, Weber Shandwick paired "athletes with local Army members for bowl-watching parties and football and Army skills competitions, creating feature-story opportunities." Weber Shandwick and the Army "contacted Army bases in the regions where the players are from. The Army also named a soldier as an All-American Bowl hero for every player selected for the game and honored them during the pre-game ceremony. ... The Army also released practice footage of the players to local media in regions where they reside, and profiled players to publications targeted at specific multicultural demographics." The Army was happy enough with the resulting 3,600 media hits and high message penetration -- "partially due to a successful radio news release" -- that it hired Weber Shandwick to promote its 2009 All-American Bowl.

Companies, government bodies and not-for-profit organizations have been using video news releases (VNRs) in Australia since 1995, reports Sally Jackson. The practice began when former journalist turned public relations executive Jonathan Raymond started an Australian affiliate of Medialink, the U.S.-based VNR producer. Jackson noted that the Australian media's practice of using VNRs "receives little attention" and "TV news bosses are keen to downplay their use of VNRs." Raymond scoffs at these denials. "Our material is used in 99 per cent of cases," he told Jackson. Recent examples of VNR use in Australia include a network broadcast that relied on footage supplied by drugmaker Eli Lilly to promote its erectile dysfunction drug, an item extolling meat pies, and a plug for an anti-obesity drug.

FCC Commissioner Jonathan Adelstein

As Paul Schmelzer wrote on the Minnesota Independent website, "There were two National Conferences on Media Reform in Minneapolis over the weekend: the one I attended and the one Bill O'Reilly, Juan Williams and Fox News talking head Mary Catherine Ham didn't."

O'Reilly's show tried to manufacture controversy about the conference, which I and others from the Center for Media and Democracy attended. But before addressing that, how about some real news on a genuinely controversial issue?

During Sunday's closing plenary, FCC Commissioner and fake news foe Jonathan Adelstein pledged to push for multiple thorough investigations of the Pentagon military analyst program. So far, the Pentagon's Inspector General and the Government Accountability Office (GAO), the investigative arm of Congress, have launched inquiries into the Defense Department's secret cultivation of military pundits. But those investigations aren't enough.

As we have reported previously, Medialink Worldwide -- the largest producer of fake news products such as video news releases (VNRs) and audio news releases (ANRs) -- has fallen out of favor with investors. On May 27, the company's stock closed at just 89 cents. "NASDAQ rules require companies to maintain a minimum closing bid of $1 per share. Failure to do so for 30 consecutive business days runs the risk of delisting," writes Tonya Garcia in PR Week. Medialink Chief Financial Officer Kenneth Torosian attributes the share price crash to the recent sale of 900,000 shares by Pequot Capital. However, the company's shares have been falling consistently over the last year, dropping by 75 percent since the beginning of 2008. At the end of March, Medialink announced that its board had approved a plan to purchase 150,000 of the company's own shares, in a bid to counter "recent volatility in the financial markets."

We recently received an email from someone who asked, "What is the difference between a 'product placement' and a 'video news release' (VNR)? Is a VNR a type of product placement?" Since other people might have the same question, I thought I'd post my answer here.

On SourceWatch, we have articles about both topics. As our article about video news releases explains, a VNR is a piece of video that is created (typically by a public relations firm on behalf of a paying client) and designed to look like a news segment for broadcast by TV news programs. It deceives audiences by creating the impression that the "news" they see on TV was produced by independent reporters, when in fact VNRs are promotional pieces designed to sell something for a client whose identity is not always disclosed. TV news shows often deny that they use VNRs, but Diane Farsetta, our senior researcher, has done extensive research in which she found numerous examples of the practice.

"Product placement" is a separate but similarly sneaky practice of getting television programs and movies to display a company's product within their program.

Larry Moskowitz

The first quarter report of 2008 by Medialink Worldwide -- the largest producer of fake news products such as video news releases (VNRs) and audio news releases (ANRs) -- makes for grim reading for investors. The company reports that revenues from "media communications services" dropped by 18% overall, with a 9.2% drop in the U.S. and 41.6% internationally. Medialink's President and CEO, Larry Moskowitz attributes the slump to "the overall economic downturn in the first quarter of 2008." Many investors are aren't waiting for the company's fortunes to improve and are voting with their feet. Since the start of 2008, the company's share price has dropped by over 72%.

Listen to this week's edition of the "Weekly Radio Spin," the Center for Media and Democracy's audio report on the stories behind the news. This week, we look at how Barbie celebrates Earth Day, why Freedom's Watch is under scrutiny, and how some environmental groups could think giving "clean coal" a closer look makes sense. In "Six Degrees of Spin and Fakin'," we run down Merck's long history of using spin to counter their Vioxx scandal. The Weekly Radio Spin is freely available for personal and broadcast use. Podcasters can subscribe to the XML feed on www.prwatch.org/audio or via iTunes. If you air the Weekly Radio Spin on your radio station, please email us at editor@prwatch.org to let us know. Thanks!

The giant of the fake news business, Medialink Worldwide, has fallen out of favor with investors. In the last year the company's share price has plummeted from $5.81 to its current level around the $1.70 mark. In its latest annual report, the company glumly states that sales in 2007 in the U.S. from its "media communications services" -- which includes the production of video news releases (VNRs) and audio news releases (ANRs) -- dropped by 4.8% compared to 2006. The only upside was that revenue from fake news grew by 28% from its United Kingdom office. Despite this, the company recorded a net loss of just over $4.6 million on revenues of $33.4 million. Medialink notes that while Federal Communications Commission action enforcing on-air disclosure of the sponsors of VNRs and ANRs would not preclude their use, it "could have the effect of reducing the number of broadcasters that air our clients' material." The FCC acted in response to CMD's Stop Fake News campaign.