For the US media, 2021 was supposed to be a year when fortunes came crashing down to earth. The end of the ‘Trump bump’ was expected to give way to a slump exacerbated by Covid-induced news fatigue.
Digital subscriptions sold in 2020 were expected to be cancelled en masse, while the long-term economic effects of coronavirus threatened to stymie the advertising market’s pandemic recovery.
As it’s turned out, 2021 has been a stellar year for many large US news companies – not least Bloomberg Media, the consumer arm of Michael Bloomberg’s financial giant.
“This year, 2021, is by far and away the best year in our history,” says Justin B Smith, who joined Bloomberg from Atlantic Media Group in 2013.
“The truth is, everyone’s doing well this year. There’s been this windfall of advertising spend that has really been unprecedented. I’ve never seen anything like it in my career.
“It started in 2020, the second half, particularly in the fourth quarter. It powered through 2021. Particularly digital advertising, but even some of the traditional platforms like TV and print have done extremely well.
“My sense is that most of our competitors are in the 30% growth range – that’s just anecdotally what I’ve been able to gather. But we’ve seen 50%.”
Subscription growth slows, but Smith still expects to challenge market leaders
Despite the strong growth that Bloomberg Media and some of its rivals have enjoyed this year, Smith retains serious concerns about the future of the journalism industry.
Speaking at an Enders Analysis conference in March, he called on his peers to show more “imagination, creativity and urgency” in the wake of the Covid-19 crisis. “There’s a lack of focused, entrepreneurial talent in the news media industry, especially on the business side of media,” he said at the time.
Has Smith seen anything in recent months to encourage him? “The most encouraging thing since then is the acquisition of Politico by Axel Springer for $1bn,” he says. “That was a rewarded innovation… a classic example of invention, innovation, testing and experimenting with new ideas paying off.”
Smith says he was also “thrilled” to read about the rise of Industry Dive through a Press Gazette interview with the B2B firm’s chief executive, Sean Griffey. “What he’s done is really, really clever,” says the Bloomberg Media CEO.
For its part, Bloomberg Media has launched six new businesses over the past five years. This includes streaming channel QuickTake, the Bloomberg New Economy Forum (a world business leader event that takes place later this month in Singapore) and a consumer news subscription business (distinct from Bloomberg’s more expensive B2B terminal subscription).
Launched in 2018, Bloomberg Media’s metered paywall business grew fast and hit 250,000 subscriptions around this time last year. In February, Axios reported that Bloomberg Media expected to hit 400,000 subscriptions by the end of this year.
Now, Smith admits this is one area of growth that has fallen victim to a Trump slump.
“We are not going to hit 400,000,” he says. “And the reason for that in fact is that we’ve seen, post the Trump era and post the January 6 insurrection, there’s been a significant downturn in the news cycle. So we’ve seen flatter traffic across this year than we’ve historically seen.”
Despite the subscriptions slowdown – not unique to Bloomberg Media – Smith remains convinced this will emerge as a “very, very large business for us”.
Bloomberg Media says it now has more than 350,000 active subscribers, 40% of whom are outside of the US. Its subscription arm is now a “nine-figure business, with revenue up 80% over the previous year”.
Bloomberg’s consumer subscription numbers currently trail well behind the Wall Street Journal (which has close to 3m digital-only subscribers) and Financial Times (around 1m).
But Smith points out that both have longer-established paywalls – the WSJ’s dates back to 1996 and the FT’s to 2001 – and that they each benefit from corporate subscriptions, paid for in bulk by companies for their employees. (Smith says Bloomberg Media might one day move into corporate subscriptions, but for now “we don’t like the heavy discounting piece of it,” he says. “That’s what’s made us reluctant to jump into that business.”)
Long term, Smith has both Journal and the FT in his sights. “I think our goal over time is to be the market leader,” he says.
Bloomberg Media says it reaches more than 100m users a month across its own platforms and through social media and distribution channels. “So we’ve got a big audience to convert,” Smith adds.
Google and Facebook should agree ‘transformational’ deals with publishers
In spite of the surprise ad “windfall” of 2021, the bigger picture for Bloomberg Media and other consumer-facing news companies is that the online marketing world is increasingly dominated by the ‘duopoly’, Google and Facebook.
As a result, the pair are coming under increased pressure in jurisdictions across the world to help news companies fund the content they produce. Within the past year or so, both have launched $1bn programmes – Google News Showcase and Facebook News respectively – to pay publishers for their content.
Bloomberg Media is a partner of Facebook News – “we really appreciate that relationship,” says Smith – and is in talks with Google over News Showcase, which is expected to launch in the US in the near future.
However, like many other publishing leaders across the world, he is not fully satisfied by the schemes and ultimately believes Google and Facebook should contribute more to the global journalism industry.
“They’re making payments to news publishers which are more and more meaningful – but they’re not transformational,” says Smith.
“In fact, when I’ve had conversations with some of the leaders of the platforms I’ve really urged them to think about the actual challenge itself. Which is: we have a global journalism news business that’s been decimated in terms of job loss and business model disruption – platforms having played a big role – and we need to solve for that. We need to solve that for so many different reasons.
“And handing out relatively minor cheques to a handful of different publishers seems like a bit of a Band-Aid approach, and seems too incremental and not transformational.
“If publishers and platforms really could have a true channel of conversation and dialogue around a transformational shift in the relationship then there could be some really exciting outcomes from that.
“There is no doubt that those trillion-dollar market caps are in part – maybe not a majority but in some part, some significant part – built off the back of original content that we pay for.
“So there should be more equitable sharing and there should be more transformational, bold thinking – not this very sort of public relations, government relations, reactive incrementalism approach.” (Smith notes that both Google and Facebook appear to have first launched their cash-for-content schemes in countries where political pressure is greatest.)
But would Google and Facebook ever really volunteer serious amounts of money to journalism without PR or regulatory pressure?
“I mean, these deals that they’re doing are a tiny, tiny drop in the bucket in terms of their resources,” says Smith. “These are not material dollars for the platforms at all.
“My suspicion is that they would do these deals forever if they thought that it was somehow helping. I think what would be more exciting would be to say: Well, how do we solve the global journalism problem, together? What would it take to fund original journalism at scale in the world?
“If you could just add it up – the number of journalists required to really move the needle on original journalism output in the world, wherever it’s sat within a brand or a platform – the numbers are not that big compared with these companies.
“They could actually solve for the core issue. I just don’t think there’s been that kind of creative thinking or commitment brought to it.”
Email firstname.lastname@example.org to point out mistakes, provide story tips or send in a letter for publication on our "Letters Page" blog