As we wade into the dog days of summer, some companies find themselves wading into the waters of crisis and devaluation. Bad news continues for WeWork, and Disney+ looks to add to consumers’ empty pockets. Meanwhile, a new study shows jumping on a news trend may be counterproductive for pitching journalists.
WeWork Continues Downswing
What happened: WeWork delivered sobering news about the future of its company this week in its second quarter earnings report. On Aug. 8 the coworking space company reported a net loss of $347 million. The earnings release did not spark confidence in investors, sending shares tumbling almost 20%.
"[C]ombined with increased member churn and current liquidity levels, substantial doubt exists about the Company’s ability to continue as a going concern," the release said. "The Company’s ability to continue as a going concern is contingent upon successful execution of management’s plan to improve liquidity over the next 12 months."
Valued at $47 billion in 2019, the organization took hits due to downturn during the pandemic, poor real estate decisions and the erratic behaviors and spending of its former CEO and co-founder, Adam Neumann.
Communication lessons: There’s something to say about commercial transparency, particularly as a publicly-traded company, but it does come at a price. What do you say to your current members who continue to use the service as needed? What do you say to your employees, who may start to worry about the future of their careers and stability of their positions?
Kat Maramba, Vice President, Media Engagement, Global Situation Room, says it’s now important to continue to project a sense of reliability and grow trust in any external messaging that goes out to the public.
"Every crisis is an opportunity to show your key stakeholders, in this case, fans and members of WeWork, that they are part of their community for a reason and that WeWork is a brand they can continue to be proud to support during both good times and bad," she says.
That form of trust can continue by addressing news and earning reports publicly and continuing transparency to maintain that trust among members. Maramba says this could be done through newsletters or (even though possibly painful) town hall forums.
“David Tolley (WeWork’s Interim CEO) noted that they are "laser-focused" on member retention—and they'll need to "walk the talk" on this…mean(ing) they'll have to continue to earn members' trust by sharing a clear path forward,” she says. “Also tangible KPIs they'll be measuring themselves against [are important] to showcase what they're working towards.”
Disney+ Announces Subscription Increases
What happened: On Aug. 9 Disney announced it’s raising the prices by 27% on its streaming subscription product, Disney+. Disney+ with ads will remain at $7.99 per month, however, commercial-free Disney+ will increase to $13.99 per month.
Disney also revealed its streaming division lost $512 million in its fiscal third quarter. However, the company reported overall quarterly revenue of $22.3 billion compared to market expectations of $22.5 billion, which is still a lot of billions for the normal consumer to see and comprehend.
And even though the TV division continues to suffer losses from a decline in subscribers in both streaming and cable, its parks and experiences division remains profitable, reporting a 13% increase—a total of $8.3 billion in revenue.
Communication lessons: For the average consumer, who continues to deal with inflation and price increases on almost everything—streaming may become a luxury. But it also is a simple, even cheap form of entertainment for most families instead of, say, taking a whole trip to Disney World or even an afternoon for a family of four at the movie theater.
Your subscribers are your greatest stakeholders. They will keep your product afloat. Not shareholders. So when you are showing profits elsewhere in your portfolio, how do you explain rate increases to your subscribers—your number one fans? And this doesn’t just go for Disney, but every organization jacking up prices over the past several years.
Curtis Sparrer, a principal of Bospar, says when it comes to price increases, you need to be “Casper the Friendly Ghost—transparent.”
“That means explaining the reason why you’re doing it, and when you’re doing it,” Sparrer says.
“You need to also give customers a reason why this is good for them, such as higher quality, and faster responsiveness.”
Study Reveals Hitching a Campaign to Current Events “Trickier Than Ever”
What happened: Propel, a Public Relations Management (PRM) platform, released statistics of how the news was pitched in 2023 with its “Wrapped: H1 2023 Journalist Engagement” report. Propel looked at over one million PR pitches sent to journalists via the platform from January to July 2023. The company found which topics were most likely to get a journalist’s attention and elicit a response. For example, pitches mentioning King Charles III’s coronation only received a 0.37% response rate, while pitches on quantum computing were responded to 18.58% of the time. The average response rate to PR pitches for the first half of 2023 was 2.95%.
The report looked into various topics and events from 2023 including tech, social media, world events, celebrations, the economy, funding rounds, and climate & energy to see how likely a journalist was to cover a given topic.
The data reveals the increasing difficulty of standing out in journalist inboxes and pitching unique, interesting story angles that add insight to what’s going on in the world.
Communication lessons: As tempting as newsjacking may be when it correlates with your product or organization, your pitch can get lost in the shuffle as journalists can be inundated during certain current events (see Super Bowl or “Barbie” movie).
“For years, one of the most popular PR strategies is to find something going on in the news and tie it into a campaign,” says Zach Cutler, co-founder & CEO of Propel PRM. “However, after looking at the [report] numbers, it’s clear that this strategy isn’t working like it used to. In fact, it seemed as if the more popular the topic, the less likely it was to receive any engagement.”
Cutler says it appears journalists are inundated with similar requests around popular events and get bored of them easily, so PR pros must do their homework when it comes to pitching.
“Before hitching a pitch to something in the news, people in comms should ensure that they actually have an interesting, unique angle on the topic that will stand out from the crowd,” he says. “By shifting tactics, coupled with increasing their use of data-driven insights to understand when a campaign is working, people in comms can increase their organization’s reach and come up with ever more interesting and relevant stories for a journalist’s readers.”
Nicole Schuman is senior editor for PRNEWS. Follow her @buffalogal