Rappler’s uphill battle as a tech startup

By now, much has been debated about online media startup Rappler.com’s troubles on the watch of the Securities and Exchange Commission (SEC): the regulator’s voiding Rappler’s certificate of operation for purportedly violating the constitutional prohibition on foreign ownership of mass media in the country, followed by a subpoena to veteran journalist and Rappler founder‑CEO Maria Ressa on cyber‑libel charges.

The controversy has prompted suspicions about the government’s hand in undermining press freedom in the country. But more than a test case for press freedom, Rappler’s fight to challenge the SEC’s decision can also be seen as an uphill battle of a struggling tech startup.

Outdated laws

According to Ressa, Rappler’s case shows that the country’s Constitution is not yet prepared for new tech‑based enterprises—the issue being a microcosm of the startup ecosystem’s complex relationship with government.

“It’s not just Rappler. It’s Uber and Grab,” she told SparkUp at the sidelines of a forum on fake news on January 23 at Far Eastern University, Manila, referring to the controversial encounters of the government with ride‑sharing applications.

“These are completely new industries and our laws are not prepared for it,” she said. “Our laws are outdated and they need to be refreshed for this new age.”

Ressa asserted that the government has a huge role in helping startups and fostering innovation in the country.

“We wanna embrace innovation, we can compete globally, but I think if the government is not aware of its actions we will lose out to countries like Singapore and Malaysia that actually actively support startups communities,” she said.

Pivoting

Launched in 2012 by Ressa and other veteran journalists, Rappler was projected to disrupt traditional media in the Philippines, utilizing technology and social media in producing and disseminating news contents.

Their commercial activities include custom content and native advertising under #BrandRap, social media marketing, crowdsourcing and big data projects for clients.

“The important thing for us in media in general is that our future is not just in content creation,” she said. “If that’s the case, we will not survive.”

“We used technology to be able to grow faster than traditional news groups,” she added. “Originally, it was  social media, but now we have also built platforms like Agos, a disaster risk reduction and an anti‑corruption platform.”

According to Ressa, technology and the emergence of social media platforms have “crumbled” traditional business models, especially those of media entities.

“Google and Facebook are coming at us in two directions. Those guys have already taken the lion’s share of all new digital ads spends,” she said. “Facebook is also crippling the credibility of news groups.”

Ressa said the two tech giants have amassed 72% and 85% of total advertisement spending in the country in 2016 and 2017, respectively.

“How do we deal with that? The way we’re dealing with that is pivoting. We think technology has got the answer, it has got to go through data. It is the new oil,” she said, looking forward.

“In the end, to succeed you need access to capital and you can succeed globally. Young, smart Filipinos are super‑creative, but we need to give them the ability to actually create businesses that can scale.”