< Banking On News

Transcript

Friday, November 21, 2008

BOB GARFIELD:
This is On the Media. I'm Bob Garfield.
BROOKE GLADSTONE:
And I'm Brooke Gladstone. Long before Michael Bloomberg was New York City’s mayor, he was in the financial information biz. Nowadays, with such hires as former Time Inc. chief Norman Pearlstine and former NBC president Andrew Lack, Bloomberg News looks like the news outlet most likely to succeed.

It all began in the early '80s with the Bloomberg Terminal. Now there are nearly 300,000 of them, offering heaping helpings of financial data accompanied by analytics that offer traders new ways to process the information.

But Bloomberg’s clients needed news, too, so he bought feeds from Reuters and Dow Jones. That irked Bloomberg. Why pay others for something you can do yourself? As Seth Mnookin recounts in December’s Vanity Fair, Bloomberg phoned Wall Street Journal reporter Matthew Winkler for advice on how to go it alone.

Since Winkler had already written about Bloomberg News, he had an answer ready when he picked up the phone.
SETH MNOOKIN:
Matt said, yeah, let's do it. You know, I'll come on board, and I think we can start this thing and we can make it work. What he saw before his bosses at The Journal, before anyone at Reuters or Dow Jones saw it clearly, was that what Michael Bloomberg was trying to do really posed a threat to these two behemoths, Reuters and Dow Jones.

For more than a century they had been the rulers of their domain, essentially, and the notion to them that Bloomberg — as I put it in the piece — this five foot six, unemployed Jewish guy from Medford, Massachusetts was going to come and pose a serious threat to them, I think, never occurred to them.
BROOKE GLADSTONE:
Now, when Winkler came in, not only was he aware that he had this opening to create this whole new news service but he brought in a few unconventional techniques. He over covered stories. You describe something called “the Goldilocks method” and “the Five F's.” And he banned the use of the word “but.”
SETH MNOOKIN:
Right. So his Goldilocks approach was — he figured what they were covering was going to be time sensitive. It was going to be an earnings report, it was going to be something related to a press release, and they would know in advance when that was going to come.

And he said, essentially, it’s either going to be exactly what we expected, better than what we expected or worse than what we expected. So if we, essentially, write those three stories before it happens, as soon as we get that release or that earnings report, bam, we can put this out on the wire.

He hired a lot of very young reporters and essentially told them, you do it my way or you’re going to pay the consequences. [BROOKE LAUGHS] Yeah.
BROOKE GLADSTONE:
There are five W’s, of course, in standard journalism
SETH MNOOKIN:
Right.
BROOKE GLADSTONE:
who, what, when, where and why. Winkler had five F's.
SETH MNOOKIN:
Right — first, fastest, factual, final and future. And all five of those had to be in, not only in every story, but in the lead. And when you start to think about it that way, you can see how they could write these stories essentially in advance, how they could use the Goldilocks approach.

And one of the reasons why they needed to do that was because he felt that being first was so important. He felt that in the financial community either you’re first or you’re worthless.
BROOKE GLADSTONE:
And why ban the use of the word “but” or “however?”
SETH MNOOKIN:
Because it presented readers with conflicting information that was difficult for them to process. [BROOKE LAUGHS] He essentially wanted a trader to be able to sit down at his desk and take a look at his screen and get everything he would need to know in a very quick snapshot.

It was a notion of multitasking that wasn't really present at the time, that you should be able to do five different things and read a news article and not need to worry about getting confused.
BROOKE GLADSTONE:
So how do you get Bloomberg News?
SETH MNOOKIN:
You can get it two ways. You can get it because a newspaper that you read or a website that you read subscribes to the wire service. But to get the full array of what Bloomberg News offers, you need to be a Terminal subscriber.

Now, for really the first time, they are starting to look at diversifying their products and moving it slightly outside of the sort of Terminal umbrella. An example of how that could work is, right now, regional papers are not able to cover industry the way they used to. The San Jose Mercury News can't cover the tech industry the way it could 10 years ago. The Boston Globe can't cover biotech the way it used to.

Bloomberg News could potentially go in, cover those industries, sell that content to The Boston Globe, to The San Jose Mercury News, and, by putting it on their terminals, attract that many more subscribers from Boston or from San Jose.

And I think one of the big questions right now is whether they will be able to do that and continue to be financially successful or whether deviating from what has always been their sort of core mission is going to end up being problematic for them.
BROOKE GLADSTONE:
Well, this is what’s interesting. Dan Doctoroff, who took over as president when Bloomberg’s mayoral responsibilities took over his schedule, Doctoroff called the Bloomberg model the journalism as capitalism approach and told you that Bloomberg’s not, quote, “burdened by the old broken business models that almost every other news organization is.”
SETH MNOOKIN:
What he meant was that the news division never made a financial decision that was not going to directly impact their readership. The New York Times’ Iraq Bureau, which costs around three million dollars a year — if they closed that bureau, The New York Times would not lose three million dollars in revenue.

Bloomberg News would never make that decision to spend that three million dollars. They would look at Iraq and say, how many of our customers would either subscribe or stop their subscription if they don't get this information? So there’s always that very direct relationship at Bloomberg.
BROOKE GLADSTONE:
Here’s the money line from your story, I think, Seth. You wrote, “For the moment, at least, it looks as if we're moving towards a world in which more people will get their information from Bloomberg News than from any other single source.” Really?
SETH MNOOKIN:
Well, right now, Bloomberg News has more editorial employees than The New York Times and The Washington Post combined which, when I found out, astounded me because they are not dependent on models that clearly are not working, advertising based, subscription based models.

Just in the last several weeks we've seen a complete bloodbath at magazines and newspapers around the country. The largest newspaper in New Jersey almost closed, which is astounding, and Bloomberg News is not only not being killed but is still doing active expansion.
BROOKE GLADSTONE:
But you seem to forecast, in a way, a time in which our dominant news source may be news through a business conscious lens.
SETH MNOOKIN:
As news organizations have stumbled, nontraditional media organizations or nontraditional models are starting to fill in that void. You have ProPublica, the investigative outfit which is now collaborating with television programs and newspapers, and that’s a non profit.

In terms of having an army of reporters, I think that increasingly we're going to see places like Bloomberg News, and we're going to see that coming from not just the financial news world but a completely different base economic model.
BROOKE GLADSTONE:
Seth, thanks very much.
SETH MNOOKIN:
Thank you. It’s always a pleasure.
BROOKE GLADSTONE:
Seth Mnookin’s story, Bloomberg Without Bloomberg, is in the December issue of Vanity Fair.