“Bloomberg just wants you to be locked into the ecosystem and never, ever leave. It’s like the Hotel California of financial data.” — Robin Wigglesworth
The secret sauce that powers Wall Street isn’t just Red Bull or over-worked first-year analysts who spend nights sleeping at their desks — it’s a computer service that has a shockingly high market share. The Bloomberg terminal is a must-have for traders, and the terminal service — which costs upwards of $2,000 a month — is by far Bloomberg’s biggest source of revenue. The terminals don’t just contain a treasure trove of data, they also help weave together the financial industries’ human intelligence. For many, the terminal is worth the price simply for the chat function that connects traders to one another.
On this week’s episode of our podcast What’s The Point, a look at the Bloomberg terminal, from its clunky interface to its sleek predictive search. Linette Lopez of Business Insider and Robin Wigglesworth of the Financial Times are our tour guides.
Also this week, a Significant Digit on the number of female elected officials in the U.S. Former FiveThirtyEight intern Abby Abrams did the research.
Stream or download the full episode above, and find video and a partial transcript below.
Audio extra: Linette Lopez tells the story of how traders went after the chef Mario Batali from inside the Bloomberg terminal. Find the clip on Dropbox.
FiveThirtyEight: The look and feel of the Bloomberg Terminal
FiveThirtyEight: Bloomberg’s approach to data
Jody Avirgan: Put Bloomberg’s market dominance in context. Are they really the only game in town?
Robin Wigglesworth: When you look at splits of revenue for data provision across the financial industry, they’re around half of that. But in the core stuff, for a lot of people in finance, you have to have a Bloomberg terminal. Especially if you work in bond markets. And if you want to deal with people who are in bond markets, you have to be on the terminal.
Avirgan: But other than the fact that you have to be on it because everyone else is on it, what actual data do you get access to that you wouldn’t have otherwise?
Linette Lopez: Well the news is fast. It’s really, really fast. That’s edge. The vast resources are one thing, but, again, you can’t discount the “I have to be on it because everyone else is on it.” There needs to be somebody on the other side of every trade. And this is the way of doing business.
A $2,000 per month addiction
Lopez: On Wall Street, time is everything. That is why these guys never do their own laundry, they never cook their own meals. And if you have something that’s a time saver, the more you can roll into a Bloomberg [terminal] the better. This is why Goldman Sachs has a concierge for all its partners. You call one number, and you have someone who can babysit your kids or send flowers to your friends who just got married. Because all of your free time should be spent doing your work.
Wigglesworth: Two thousand dollars a month sounds like a lot to us —
Avirgan: It really is!
Wigglesworth: It is. I’m not going to buy one for my home. But if you’re a guy in the financial industry, the feeling is that you have to have one. It’s not one of the areas that you cheap out on.
And if you think this isn’t worth [the price], their response has always been “tell us what we can do to make it worth the price.”
Avirgan: Which means adding more features. Which of course makes you even more dependent.
Wigglesworth: Exactly. It’s an addiction. You know, when people lose their jobs or leave for another job, Bloomberg offers them a Bloomberg [terminal] at home for free, just to keep them hooked. It’s like a dealer giving away freebies.
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What’s The Point’s music was composed by Hrishikesh Hirway, host of the “Song Exploder” podcast. Download our theme music.