Unfortunately, I cannot agree with colleagues of mine who say that press freedom is under attack because the Securities and Exchange Commission revoked online-only news outfit Rappler’s license to operate. Especially since I am of the belief that Rappler was headed for closure anyway, because of the same sort of financial trouble that has been hounding legacy media organizations since the explosion of the Internet and social media.
I’m not saying that SEC didn’t do its job when it ordered Rappler’s closure. As the decision of the government’s corporate regulator makes clear, Rappler violated rules on constitutional provisions on ownership of media companies; resolving that issue is well within the purview of the securities regulator.
But I find the decision heavy-handed. SEC did not have to rule on the Rappler case when it did, given the many other cases it had to resolve—including, yes, those of other media companies that may or may not have used the same Philippine Depositary Receipts that got Rappler into trouble with the laws against the use of “dummies” to hide foreign (and prohibited, in media) ownership.
As many media watchers know, Rappler was already in dire financial straits at the time the SEC decision was handed down. Maria Ressa, Rappler’s CEO, has for months now been attempting to finance company operations through “crowdfunding” in the company’s Web site—with unsatisfactory results, to say the least.
Also, the call for SEC to go after Rappler is not a new one. It was first broached in traditional media by prominent Rappler critic and veteran newspaperman former Ambassador Rigoberto Tiglao of the Manila Times.
Tiglao has, since the middle of last year, asked SEC to act on the news outlet’s apparent violations, on the ground that media should be spared from foreign influence. Rappler, Tiglao pointed out, has been acting against the national interest through its “efforts to portray—falsely—the country as one in which the streets are flowing with blood and littered with corpses as a result of [President Rodrigo] Duterte’s anti-drug campaign.”
“[E]ven in an era of free-flowing capital, most countries in the world have maintained their restrictions on foreign capital in their media,” Tiglao wrote in July. “For good reason, since only its citizens must have primary control of the means of forming public opinion.”
I agree with Tiglao that Rappler has shown that it will play fast and loose with its data-gathering, like when it first started peddling the unfounded claim late in 2016 that 7,000 people had been killed in Duterte’s war on drugs, in order to sway the public. That figure was regularly reported, especially in the foreign press, and quickly extrapolated in time, even if there was no data—official or otherwise—to support it in the first place.
But I would have wanted the people themselves, through their outrage over Rappler’s unreasonable and baseless claims, to make that decision by voting with their wallets and their feet. I would have preferred Rappler’s “organic” death, which I believed would come sooner or later because of its unproven and—over the years—ultimately unsustainable business model.
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Truth is, traditional media is at a financial crossroads all over the world. The advent of the Internet and social media has rocked media to its very foundations, killing off circulation and drying up advertising; this is not a new or even a Philippines-specific problem for legacy media, which is still groping for a way to deliver the news at a time when costs remain the same (or keep escalating) while revenues inexorably go down.
Rappler, being an online-only news source pushing an unpopular anti-administration agenda, has had it worse than most traditional media. It was forced to subsist on investor handouts while being confronted with a declining online readership, engagement and subscriber base.
Reports of Rappler’s top-heavy management salary structure and above-industry standard rates for employees across the board were the envy of many, but made others wonder about the organization’s financial sustainability. If other media outlets were losing money, Rappler was burning the candle at both ends and getting hit twice as hard compared to its print-based competition —which still had advertising and circulation sales, no matter how greatly diminished, to rely on.
Another Rappler critic, RJ Nieto, who runs the popular blog ThinkingPinoy, used the official SEC filings of Rappler since its inception in 2011 up to 2015 to come up with the figure of net total losses of the outfit for those six years at more than P194 million. In all those six years, according to Nieto, Rappler did not make any money, despite the regular and mind-boggling (for an online-only news organizations) infusions of foreign funding from the Omidyar Network and North Base Media.
SEC did not have to hasten Rappler’s demise, in my view, because the regulator only gave Rappler a reason to cry “suppression of press freedom” when it was in fact already drowning in a sea of red ink. Press freedom advocates are already saying so, in fact, conveniently failing to mention that Rappler’s funders could already have pulled the plug on it, which was why the agency has been reduced to the media equivalent of begging for its next meal.
Rappler would have died anyway, given its unsustainable business model, the mismanagement that plagued its operations and its failure to understand and be sensitive to its market. SEC may have shut down Rappler, but it was already as good as dead.