Bloomberg’s Norm Pearlstine on the next big media disruption
Oct. 22, 2012 - ABM’s Executive Forum is themed “Drive Recurring Revenue,” and few media companies exemplify that more than Bloomberg. Bloomberg chief content officer Norm Pearlstine kicked off the conference this evening in a discussion with moderator Jim Friedlich, partner at Empirical Media Partners, offering thoughts on recurring revenue strategies, which magazines he think will survive in print, and what Pearlstine thinks the next big media disruption will be.
The core for Bloomberg is the Bloomberg Terminal, which boasts 315,000 subscribers, paying about $20,000 per seat (and the main reason that content accounts for more than 60 percent of revenue for Bloomberg).
On the true source of change and success in business media
When asked whether that success really stemmed from content or technology, Pearlstine said it’s both. “For all the talk about content being king, technology has changed the market more than content,” he declared. “With Silicon Valley, we ask what they’re doing to us, they ask what we’re doing for them. Today, Google translations are awful, but in time I could see us going into local markets without a huge increase in staff.”
Pearlstine noted that Bloomberg is increasing its commitment to technology but is doing it across platforms. “We cut 50 percent of BusinessWeek staff because 50 percent of the coverage comes from Bloomberg News.”
However, Bloomberg invests in content and staff where it makes sense. “Adding staff to cover emerging markets cost us $5 million, but we added 25,000 new subscribers,” Pearlstine said. “We’re unique in that we saw a $50 million increase by hiring reporters."
The real keys for driving recurring revenue at Bloomberg are customer understanding and customer service. “We are the world’s largest private communication’s system,” said Pearlstine. “This is the tightest level of customer focus and customer services that I’ve ever seen.”
Why Bloomberg BusinessWeek will be one of the last print weeklies
BusinessWeek has seen a minor rejuvenation under Bloomberg, but Pearlstine says the magazine “still loses money, it just loses less money now.”
The role of the magazine isn’t as a moneymaker but as an influencer for Bloomberg. “It’s hard to make a business case for the magazine,” said Pearlstine. “Bloomberg had a different vision and he was right. Bloomberg had good rep among financial traders, but it needed a broader audience. The magazine enhances value of the terminal itself.”
When asked about Newsweek’s shift to an all-digital product, Pearlstine didn’t see a bright future. “It’s one thing to take the Wall Street Journal or New York Times behind a paywall — they offer specialized content and have well-known brands. Taking Newsweek behind a paywall implies there is an audience who will follow it to digital and pay for it. I don’t see it. Time magazine is a different animal. It’s part of Time Inc., which gives it some economies, and it has a pretty good digital strategy.”
Pearlstine offered a prediction on the future of weekly magazines: “Five years from now there will be three print weeklies: The Economist, Time and Bloomberg BusinessWeek.”
When asked what the market disrupters are for Bloomberg, Pearlstine said, “I was at Dow Jones when margins were north of 30 percent, and we thought it would never end. The things you don’t know will hurt you more than the things you do know. Bloomberg started with four employees and a coffee pot. No evidence that anything is on the horizon, but you just have to read about what’s going on with big data, open source and Google to know something is coming.”
By Matt Kinsman