The Bloomberg Lesson
How a fledgling news organization got big while others shrank.
With the exception of government workers, no group of wage slaves possesses a greater sense of job entitlement than journalists, and none enjoys a better platform from which to howl when downsizing threatens. As newspaper publishers have announced buyouts or laid off newsroom staff in recent months at a dozen top newspapers in the country, journalists have given the cutbacks disproportionate play because … well, because they can.
On one point, however, the miserable, the whiners have a point: The number of newspaper reporters is in decline. According to decennial workforce estimates published in The American Journalist in the 21st Century, the number of daily newspaper journalists rose steadily from 38,800 in 1972 to a peak of 67,207 in 1992 before sliding to 58,769 in 2002, the most recent year surveyed.
Yet during this shrinking era, a news service started from scratch and entered in the ultracompetitive field of business journalism and has thrived almost to the point of dominance. The outfit, Bloomberg News, now employs 1,700 reporters and editors in 127 bureaus worldwide, and its wire service routinely supplies most top paperswith business news and briefs. As other publications have shed older, high-paid journalists, Bloomberg News has hired them: Al Hunt (Wall Street Journal), John M. Berry and Charles Babcock (Washington Post), Margaret Carlson (Time), and Roger Simon (U.S. News & World Report), just to name a few. Yes, dinosaurs all, but each conveys to readers credibility and cachet that only money can buy.
That Michael Bloomberg, who now presides over New York City as mayor, created in a little over two decades a news and information giant worth $5 billion-plus speaks as much to his enterprise as it does to the sloth and myopia of the conventional press. Better than anyone, Bloomberg perceived in the early 1980s an untapped need for instantly transmitted, market-moving news for traders of stocks and bonds. He understood that with new and affordable computer technologies he could leapfrog the old guard at Reuters and Telerate (once owned by the Wall Street Journal's parent, Dow Jones). A 10-second advantage over a competitor on a market-moving morsel of data could easily translate into substantial profits. Stock and bond traders rushed to rent the pricey Bloomberg Terminal, which now costs users about $1,425 a month. It not only delivered data but allowed customers to assemble elaborate, software-powered "what-if?" scenarios, and spat out useful analytical charts and graphs. One testament to Bloomberg's power is that every major American newspaper business page now has a terminal or two doing heavy lifting for its reporters who cover the markets.
Building the company out, Bloomberg added the news division in 1990 because numbers aren't the only thing that moves markets. By hiring journalists to staff what he calls his "electronic newspaper," Bloomberg gained access to the same events and raw material that Reuters and the Wall Street Journal had long enjoyed—the market-moving business news contained in corporate conference calls and government proceedings.
Most of the news Bloomberg publishes—it claims to produce 5,000 stories a day—has all the mouth-feel of a cup of talc, but that's the company's preference. Some of it, as Bloomberg acknowledges in his autobiography, is auto-generated from data feeds. "For example, the machine takes the predefined phrase 'The Dow Jones Industrial Index is,' and adds the word 'up' or 'down,' based on calculations of all 30 stocks' moves from the previous day to that millisecond." And so on. "Our reporters have been too valuable to be assigned to mechanical tasks," Bloomberg writes. (By "mechanical" I hope he doesn't mean "writing.")
Bloomberg's human-generated news stories are only slightly warmer to the touch. Many are written to an old template that requires lede sentences to contain a number. Words such as "but" (too abrupt), "flat" (markets aren't curved, how can they be flat?), and "uncertainty" (markets move for a reason) are subject to banishment by editors. Words that signify something demonstrable, such as "biggest" or "first," are preferred. Even if Bloomberg News reporters desired to produce well-crafted prose, how often would they have the time? In this competitive beat, five seconds separates an "atta-boy" scoop from the shame of getting beat by Reuters. Theirs is the ultimate news-you-can-use for the most demanding and wealthy readers in the world.
To use an old 1990s software cliché, Bloomberg excels in producing granular news. It doesn't matter much to your pocketbook if the price of a barrel of oil moves 10 cents, nor is a record of that movement likely to find a place in your daily newspaper. But fortunes are made on smaller price swings than that, which means very small audiences will pay handsomely for the micro-news Bloomberg delivers inside of micro-news cycles. This turns the daily newspaper concept inside out: Dailies strive to discover and report news that appeals to the many. For that reason, nobody should live on a steady diet of Bloomberg. You'd get scurvy. Still, the Bloomberg operation has earned Gerald Loeb Awards, bestowed mostly by a panel of other business journalists, for its work.
The Bloomberg obsession with giving traders what they want sometimes vectors to the absurd. The Bloomberg Terminal is marketed as a money-making machine, which it is, but it's also presented as something as racy and exclusive as a BMW. Who does the dressing? The Bloomberg sales force has a reputation for being staffed with a lot of good-looking women. (Note to Don Graham: How about hiring hot babes to deliver the Post?)
Newspapers derive most of their revenue from advertisers, but the estimated 200,000 Bloomberg Terminal subscribers provide upward of 95 percent of the company's revenues. Bloomberg regards the trickle of Bloomberg News stories running outside the terminal—in pages of the Post or Times, on the Web, on cable TV, in its books and magazines, and on his New York City radio station—as high-profile advertisements for potential terminal customers, and says so in his autobiography. For the elite who already rent a Bloomberg, exposure in these media outlets reinforce the idea that Bloomberg knows best. If it didn't know best, its news briefs wouldn't be in the New York Times. The raised Bloomberg profile also helps Bloomberg News reporters get their calls returned.
Daily newspapers didn't see the lucrative news and information opportunity Bloomberg did for the same reason they didn't enter the Web search business when it was green. As mature and graying industries, newspapers are mortified by the creative destruction of changing markets, so they take only tiny and confused steps—mostly backwards. Years after the Web had made newspaper stock tables obsolete, the dailies started to prune and discontinue them, but how many added something of greater value in the form of new columnists or graphs that explained changing markets? Bloomberg's genius, and I don't use that term lightly, was to exploit how deeply people who need information will dig into their pockets to pay for it.
Having stolen the financial presses' lunch by Hoovering every available number into its computers, the Bloomberg machine has targeted the Washington beat. In March of this year, Al Hunt, who heads Bloomberg's Washington bureau, put his press colleagues on notice when he told U.S. News & World Report'sWeb site about additions to his economic team and plans to hire more journalists to cover the Securities and Exchange Commission. As of March, Bloomberg's D.C. bureau employed 120 people. As a point of comparison, that's about three times the size of the Los Angeles Times Washington bureau.
"Our principal mandate is to cover anything that has money written on it, anything that affects markets," Hunt said. That sounds like Congress, the White House, the courts, and the regulatory agencies. At $1,425 per month, Bloomberg ain't the people's news. But at a time when newspaper readership is declining and newspapers are shriveling, Bloomberg is growing. There's a lesson in that.
Did I say that Bloomberg pays well but forces its reporters to work harder than mules carrying hods of bricks up ladders? Oh, that sounds like fun to you? Don't send your résumé to me. Track Al Hunt down and pester him. All other inquiries, including those from the famous Bloomberg sales staff, should go to firstname.lastname@example.org. (E-mail may be quoted by name unless the writer stipulates otherwise. Permanent disclosure: Slate is owned by the Washington Post Co.)
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