Social media's importance in newsgathering

This story about Netflix CEO Reed Hastings being investigated by the SEC for posting information about his company on Facebook is a reminder of how widespread the use of social media is for many corporations to communicate with the public.

 

Hastings posted on his Facebook account on July 5 that Netflix customers were viewing more than 1 billion hours of video content a month. The company's stock rose by 13 percent on the day of the post. SEC issued a warning to Netflix that it was investigating the matter and may be taking legal action because the posting may violate a Fair Disclosure regulation by posting the update to Facebook

 

Hastings has said he considers the post to be public since many of his more than 200,000 followers are reporters and bloggers and the news was widely reported. Also, the same information was posted on the company's blog in June. The information was not, however, released in a press advisory or SEC filing. 

Additionally, Hastings says the company's stock had begin to rise even before he made the post and that the information he posted was not relevant to the stock price. He referred to the situation as a “fascinating social media story.”

 

I believe the issue at hand is whether information broadcast on social media networks should be considered as public as a press release or article on a company website. For journalists, it is a reminder that when looking for information on whatever beat you are covering, social media perhaps should be one of the first avenues you consider. Executive make big announcements via Facebook, Twitter and blogs now and it would be wise to friend or follow any stakeholder involved in your story.

Years ago it would have been impossible to hear from a CEO of a large corporation or elected official except through canned quotes in a press release issued by the company, but now, these people who use social media to engage the public and are taking advantage of the Internet as a place to interact and share information have become great sources for journalists.