Most print media – newspapers and magazines – have been struggling for at least a decade to accelerate the pace of digital transformation. As momentum built, two years of COVID-19 and the accompanying downturn halted revenue growth as many advertisers pulled back.
This is not the case at Bloomberg Media, whose best-known holding company is Bloomberg Businessweek. The company announced stunning results for 2021 last week:
- Total revenue is up 48% year-over-year.
- Total advertising is up 66%.
- Digital subscription revenue increased by 58% and the number of subscriptions increased from around 250,000 to around 370,000.
New product lines like Quicktake, a news streaming service, and new markets like the Middle East grew even faster. And with the exception of print advertising and events, which are still rebounding after numerous in-person cancellations, last year’s growth followed a strong 2020 with overall revenue growth of 42%.
The private company declined to provide revenue figures (although Axios reported in early 2021 that an internal memo listed a $100 million goal for the year). He doesn’t talk about profitability either. But it provided an answer to the obvious question: how was this level of growth achieved?
It’s not that the company was early in the move to paid digital subscriptions. A metered paywall was implemented barely three years ago. The price is $415 per year, compared to $99 per year for the weekly magazine printed 50 times a year or $475 for both. This reverses the typical newspaper model in which a print subscription with digital access is much more expensive than a digital-only subscription.
The relatively high digital price makes sense primarily because Bloomberg has developed a full suite of digital products and is regularly adding new ones. In 2020, she launched a vertical on climate and sustainability (Bloomberg Green) and, in 2021, Bloomberg Equality, focusing on issues of diversity, equity and inclusion.
In 2019, he launched a personal wealth vertical and acquired CityLab from The Atlantic, and he focused content areas on crypto, healthcare, automotive, luxury, and entertainment.
Digital subscribers also have access to growing video services, including a streaming service.
The digital side is rolling out introductory offers (currently $1.99 per month for three months) with frequent tweaks and experimentation. However, Bloomberg doesn’t appear to be inflating digital growth numbers with deep discounts — both revenue and subscriptions grew at about the same rate in 2021. As I wrote, several newspaper chains aren’t maintaining this equilibrium, with the number of subscriptions growing much faster than revenues.
Like the New York Times, Bloomberg Media is gradually moving from a national market to an international market.
Scott Havens, who became CEO in January after Justin Smith left to start a new company, wrote to me in an email that “there is no urgent need to change our course.” So, going forward, innovation means finding opportunities for video growth and inventing even more verticals.
“The type and quality of business reports and information we provide to world leaders gives Bloomberg a business advantage,” Havens said. “Our offering is a ‘must have’ versus a ‘nice to have’. ‘The overall goal is to reach’ various generations, from aspiring professionals to established leaders, and to reach all segments of society.
Havens and Smith came as a team eight years ago, having worked in tandem to run Atlantic Media before Bloomberg. It is therefore not surprising that a new CEO means continuity, not departure in a different direction.
There were two milestones in the development of Bloomberg Media. Bloomberg had a scattering of story content for 20 years, even as the backbone of his business was the financial industry data terminals that made Michael Bloomberg his $50 billion fortune.
To become much bigger quickly in the news space, Bloomberg bought Businessweek for a pittance in 2009. The venerable title was bleeding money like many post-recession magazines, but still carried the kind of brand recognition influence that would bring a journalist’s calls back to Washington.
Then, in 2014, Michael Bloomberg, after eight years as mayor of New York, returned to his eponymous business. His return roughly coincided with the appointment of Smith, who, in turn, hired Havens.
Shortly after his debut, in March 2014, Smith released a lengthy strategy manifesto, notable for its consistency with what Bloomberg is doing eight years later. He wrote:
While our traditional competitors buckle under their own inherited weight, we are unencumbered and enjoy a series of unique corporate advantages: Bloomberg’s business model; our owner’s insistence on the long-term perspective; a culture of disruption; and an established tradition of high quality journalism.
Seizing this opportunity will require long-term investment and a high appetite for transformation, risk, as well as tolerance for intermittent outages. But the Bloomberg culture, long defined by urgency, entrepreneurship and adaptability, provides an excellent foundation for this work.
The note goes on to outline the “six big steps” needed, including expanding audiences, launching new digital destinations, digital video innovation and growing a global television business. The last two stages involve printing – content and design. This seems to me to be a weak point in the success story of Bloomberg Media.
Nothing obvious is wrong with the selection or execution of the story. However, with five editors in the past eight years, you can tell that management has not been happy with the editorial formula.
By my reckoning, the 72-page February 14 issue contained six pages of paid ads, plus a few other house and leftover ads.
A distinctive “playful” design has remained unchanged for years.
Print circulation, meanwhile, rose from almost a million in 2012 to 316,000 at the end of last year. That is to say, Bloomberg Businessweek faces a typical set of print magazines – not just soft advertising, but also rising postage and paper costs and disappearing single-copy newsstand sales.
The company is obviously helped by its powerful parent company. Aside from the corporate culture, being private with access to interest-free capital for expansion means never getting into an exhausting debt cycle. And the mothership can absorb operating losses that peaked at $60 million at the time of the sale and have only slowly come down.
What I take away is that Bloomberg Media, for all its distinctive elements, serves as an example of the benefit of waging digital wars on multiple fronts at once, while having a solid guiding strategy and patiently holding on to it.