Los Angeles, CA (PRWEB) August 27, 2014
The press release services market has a buyer power score of 3.0 out of 5, signifying a medium level of buyer power. A variety of market characteristics underscore this power level. First, high product specialization defines the market. “Because each newswire constructs its own distribution network, buyers must work with a specific supplier if they wish to use that supplier's network,” according to IBISWorld business research analyst, Kayley Freshman-Caffrey. Suppliers may specialize further by constructing networks targeting certain audiences; for example, they may offer distribution over channels directed at certain ethnic groups, genders or geographic areas. This high specialization hurts buyers by minimizing the number of available suppliers.
High market concentration further constrains buyers' choice of supplier. The top four firms dominate the market due to their favorable reputations and distribution networks. The considerable influence of these suppliers allows them to obtain exclusive contracts with media outlets, reinforcing their power. Buyers that value the distribution networks of these suppliers will have little choice but to hire them. Consequently, high market concentration reduces competition, although competition is present among less prominent market firms.
Low switching costs ease these negative effects on buyer power. Press release services are typically purchased on a one-time basis, empowering buyers to choose a new supplier if their current one is performing poorly. “Low switching costs protect buyers from being stuck in long-term relationships with low-quality suppliers and incentivizes suppliers to provide high quality services,” says Freshman-Caffrey.
Additionally, a high availability of substitutes provides buyers with alternatives to press release services. Rather than buy press release services directly, buyers can purchase them through a third-party firm. They can also deliver information through mobile or social media instead of press releases. Buyers can leverage the existence of these substitutes to negotiate lower prices. Together, the high availability of substitutes and low switching costs negate the harmful effects of high vendor specialization and high market concentration to leave buyers with moderate power. Major vendors include Business Wire, PR Newswire, Marketwire Incorporated and Cision. For more information, visit IBISWorld’s Press Release Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of press release services, which are also called news wires or wire services. Providers typically operate a distribution platform that facilitates the creation and optimization of customized news content, enabling buyers to easily distribute proprietary news to a general or targeted audience. Such platforms also include tracking capabilities that enable buyers to measure and evaluate audience reach. Press release writing services, advertising agency services and public relations services are not included in this report.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.