Tomorrow's Business Today
The power of The Borg, part II
Decades ago a leading user of Bloomberg told a senior guy at Reuters that they were in trouble.
Bloomberg had invented a widget called IB – Instant Bloomberg. This was like WhatsApp for City folk before anyone had thought of WhatsApp.
IB allowed people forking out £20k a year, roughly, to chat to anyone else in the City who was doing the same.
It has become the device by which almost everyone in City firms, on trading floors, fund managers, hedge fund dealers, communicates with each other.
It’s how the business gets facilitated that allows people who read Bloomberg to get a salary, on average, of $500k a year.
And it’s Bloomberg’s genius. The computer terminal offers about 30,000 various functions – the IB is the best.
Told about all this in the early days, the Reuters man said it was never going to catch on.
That turned out to be the City equivalent of not signing The Beatles.
(Related music trivia: The man who didn’t sign The Beatles, did later sign The Rolling Stones. And Reuters has its own tricks.)
The point about Bloomberg is that none of its readers are paying their money for the journalism. They are paying for the terminal, the data that lets them do their very well paid jobs.
It’s common to say now that every business is really a data business, whether it is selling insurance or sofas.
Bloomberg was a data business long before everyone else figured that was the game and you give away other stuff to get/sell the data.
The journalism at Bloomberg is a freebie bolted on to the IB and third in importance after that and the data, no matter how good it can be.
The hacks who join from more mainstream outlets know this; they have traded a diverse audience for a large pay cheque, and who can blame them.
If you wanted to be harsh, you could say that Bloomberg’s journalism has always been a Mike Bloomberg vanity project.
Another way of looking at it is that he has turned what might otherwise be seen as a dull data business into a media giant.
But that still begs the question about what happens when he eventually hangs up his boots.
As a standalone it’s quite hard to see a business case for the news operation.
It’s an electronic trade paper for the finance sector – how much would people pay for that on its own?
Meanwhile, the paradox is that it’s one of the last news games in town with a business model that works.
The terminal subsidises the journalism. And long may it continue.
It is with no sense of irony that Tomorrow’s Business comes to you subsidised by Roxhill, erm, a business that helps you divine insights from data.
Please send candidates for press release of the day to:
Simon.english@roxhillmedia.com
Press release of the day
Donald Trump has extended the grace period for his proposed reciprocal tariffs – he says they will now go into effect on August 1.
Some good quotes on what this means here from Morningstar’s International Economist Grant Slade.
He says: “Notably, the US remains open to negotiating these new tariff rates downward. This appears a plausible outcome, with the threat of further financial market turmoil likely to limit Trump’s ability to re-escalate his trade war in full. Still, we still see risk to the US economy should tariff rates ultimately revert to, or near, levels proposed by Trump on April 2.These include a significant increase in inflation, and a slowdown in growth at best or recession at worst.”
Stories that will keep rolling
1) OBR warns on “daunting” risks to public finances. FT
2) Personal data of Paddy Power and Betfair customers compromised. Racing Post
3) Which workers will AI hurt most? NY Times
4) Business chiefs warn Labour against “anti-growth” wealth tax. Telegraph
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