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[upbeat music] This week's episode of the Rebooting show is brought to you by Permutive.

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As the open marketplace collapses, publishers are offsetting these losses with direct sold programmatic by unlocking the seventy percent of consumers brands can't reach in the open marketplace today.

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Find out more at permutive.com. That is P-E-R-M-U-T-I-V-E dot com. Thanks so much, Permutive.

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[upbeat music] Welcome to the Rebooting show. I'm Brian Morrissey. This week I spoke to Bloomberg Media CEO, Scott Havens.

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Bloomberg Media is in enviable position. There's often talk of building global news businesses, but the reality is few can pull it off.

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The business model to support global news is difficult, particularly if you rely on ads. But Bloomberg Media is different.

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For a news operation, it is sprawling with three thousand journalists all over the world, and truly multi-platform with TV and radio operations, digital and magazines with Bloomberg Businessweek.

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It has a thriving events business, which Scott and I discuss. But it's also a small part of Bloomberg LP, the twelve point two billion dollar company driven by the terminal.

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And Scott doesn't shy away from admitting the benefits Bloomberg Media enjoys, while also pointing out that it needs to run a sustainable business just like any other publisher.

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We covered a bunch of topics in this talk, including the outlook for publishing in an AI era, as well as the growth areas that Scott sees in areas like events and video.

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I hope you enjoy this conversation, and if you do enjoy it, please leave us a rating or review wherever you get your podcasts. This helps people discover the podcast. It also makes us feel good making the podcast.

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And if you would like to give me feedback, send me an email. My email is brian@therebooting.com. Now on to my conversation with Scott. [upbeat music] Scott, thanks so much for joining.

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I wanna start off with something I saw on Semaphore, I think it was this weekend in the media newsletter. Max Townie got his paws on a pitch deck, which are always great. Mm-hmm.

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You know, everyone loves to see pitch decks. It was an advertiser pitch deck from Sherwood Media, which is the spin-out of Robinhood's Robinhood Snacks- Ah. -email newsletter. Yeah.

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And now they brought in Bloomberg alum, Josh Topolsky- Yep. -to helm this. And so they're out like, you know, looking to scare up ad dollars, investors, who knows what, the regular. And they had a, a great slide.

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And so I'll just describe it to you, even though it's hard to describe slides. I always get them confused. But the x-axis is, it's a two-by-two. Mm-hmm.

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It's untrustworthy to, to authoritative, and then the Y is cool is at the top and uncool is at the bottom. Hmm. And you know the rule of two-by-twos, right? Mm-hmm. Go to the upper right.

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You gotta be, you gotta be in the upper right. So you know where Sherwood Robin Hood is, that they're in the upper right [laughs] both cool and trustworthy. Mm.

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You guys are also-- Bloomberg got into this quadrant, and I assume the authoritative one. It's marginal on the cool side. [laughs] I gotta say it's close, but, like, you guys got into the cool side, so congratulations.

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Thank you. Thank you. Well, first of all, it's nice to be here. I can't remember the last time we had a conversation, so it's great to be on the Rebooting.

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I do read Semaphore, and I did see that, and I did smile when I saw that they put us in that box, even if it was marginal. They basically are saying Morning Brew is cooler than you. Well- But you're cooler than the FT.

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Yes, and I think if you w- dial back five years or eight years or ten years, it probably would be to the left of that.

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And but I think it's, you know, we've done this through a concerted effort to expand our coverage, to expand our talent, to expand our platforms, verticals, et cetera, and, and we've made a conscious effort, and some of the programming that we're doing right now, like Emily Chang's new show, The Circuit, I'd say is pretty cool, and is different than your mother or father's Bloomberg.

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Yeah, exactly. So- So I wanna get into that, but I wanna talk about where we are right now in media. You've had a long career in media.

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I think we first started talking when you were at Atlantic, and then you went over to Time, and then to Bloomberg. And I feel like we're between eras a little bit in the broader media industry.

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And, I mean, you can see the sort of stressors on a lot of parts of the ecosystem. Mm-hmm.

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And I mean, even, you know, this is the summer of discontent in Hollywood, and I think a lot of the pressures that have been felt on the publishing side are now being felt in other parts of the media ecosystem that had, if not escaped them, had sort of put off the sort of reckoning of the decline of linear TV- Yep.

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-for instance. What's your sort of theory of the case, if you will, about where we are in media and how you can actually build a sustainable media business if you don't have a terminal?

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[laughs] I don't know that I would say we're in between. We are certainly in an evolutionary phase right now, and I think mostly, at least for us, it's the decline of social as a major driver of scale and traffic.

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Also, the potential evolution of search as a, another major driver. So, you know, I have been in this business for a long time.

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It started in the late nineties, actually, and, you know, before social, and we built a business that used search engines, frankly, to get traffic as we launched new brands.

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Then social became almost an instant referral source, and now we're kind of moving away from that as some of the brands pull back, including Meta. And that, that's different.

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Later on, we all tried to build subscription businesses and charge peopleAnd layer on the multi-platform challenge that we all have to program for everything from TikTok to web to app to live events.

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And it is a tougher business than it once was. And so I don't know if we're in between phases right now. I think AI's been a little bit of a distraction, we can talk about that.

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But I think the search thing is a very real feeling that everybody's had.

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You know, when ten or fifteen or twenty million referrals a month evaporate, you've got to adjust pretty quickly, especially if you have a thriving ad business. Yeah.

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I mean, you said let's just get into the AI stuff, right? 'Cause I think sometimes it gets all gets lumped in, and so let's talk about, like, generative search experience, which is Google is the backbone- Mm-hmm...

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of the internet. Yep. It is, I like to call it, the benevo- mostly benevolent dictator.

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[laughs] And it's because the, whoever controls distribution is in charge, and in the internet in, in, in many ways is, you know, it's who can build a better interface and- Mm-hmm...

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be able to suck in a ton of data, but also be the one who decides where traffic goes because then you can put up toll booths. Yep. And it's a good business, as it turns out, to have toll booths. It is. I'd like one.

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Yeah. Or parking lots. I'd even take a parking lot. But that ch- that has been mostly stable, so I think when we went through the social craze and stuff like this, there's a little bit of found money- Mm-hmm...

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in the sense that search was still chugging along, you know. And search was always, you know, fifty percent of a lot of people's traffic. Mm-hmm, mm-hmm, mm-hmm.

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And, you know, the homepage long ago sort of became it was all about the side doors. And when they say side doors, I meant search and social. Mm-hmm. And now it's, you know, search is, has always been the mainstay.

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How... a lot is unknown about this- Yeah... but, like, this has to be a big concern. I think it should be a big concern on a few levels, for sure.

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And let me first say, just because ChatGPT made an interface available to the public [laughs] doesn't mean that lots of us were deploying machine learning and AI. We've been running it for- Yeah...

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you know, seven or eight years here at this company. We've invested in it on the website. We have the bulletin, the web and app side, where we've been using machine learning. We've been deploying it in many cases.

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So this wasn't a new thing for us. It just became well known to everybody else. I think when you start playing around with it, you realize the impact it could have on search traffic around the web, for sure.

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And obviously people are worried about that, and there's been some vocal media moguls out there pounding the table about making sure that they're compensated for their IP, and they should.

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We- there should be a value exchange here. The simple value exchange with Google for traffic, you know, with AI is different, especially if the traffic isn't there.

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So I think we have to work on that IP, and nobody knows the answer to that. We don't wanna train these models and then be left out on the side of the street.

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So yes, we should be worried about that, but I think there are enough eyes on it.

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And I think the industry, you know, Sam and folks that are working on AI, there's no goal to destroy publishers through this rollout of artificial intelligence. So I think they're open-minded to the conversation.

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Again, I don't think Google set out or Facebook set out to hurt the publishing industry either, so- Yeah...

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I'm not one that believes in the malicious intent, and I've always, like, frankly tried to connect with them and work with them in the era of platforms to further our business. So I think there's a lot to work on.

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You can see the very obvious workflow productivity tools. We're deploying them, translation, clipping, synthesizing, distilling, connecting stories with d- market data.

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That's all very good, and it should be very accretive to the user experience. It should be very accretive to the product over time. But we're so early. It just sort of was announced to everybody- Right...

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now everyone's mobilizing task forces. Right. But just to stick on the distribution side, because the distribution- Go for it...

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without distribution, and I mean, we, I, we talk about this in the other podcast I do, People Vs.

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Algorithms, which everyone should check out, about how, you know, media does not control its distribution in many senses now. I mean, you do when you have a terminal that's on every- Mm-hmm, mm-hmm...

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one's desk on Wall Street. But most of media is downstream- Mm-hmm... of tech platforms that control distribution, and it is an uneasy existence.

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I mean, I compared it to basically everyone's an Uber driver in the media business now- [laughs]... whether they realize it or not. Yeah.

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And, like, when you say that, like, Sam doesn't wanna kill publishing, I mean, maybe. But then again, if you're dead, whether it's a homicide or manslaughter, it doesn't really matter. [laughs] It doesn't.

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I'm just saying I think they're, they, I think they're open to the conversation. I don't know that all of the people that are building these LLMs thought about the ramifications necessarily.

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A- again, I'm not Pollyannish about it. Yeah.

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But I think they're trying to build a really cool technological platform, and it just so happens that it could be a threat to the publishing industry, the digital publishing industry, for sure.

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But- I haven't seen Oppenheimer yet- [laughs]... but I'm sure he was just messing around with some stuff. Uh. But I'll have to see it. I'm gonna see it after Barbie, of course. After Barbie.

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At the same time, the deal with Google, it seems to me broadly, was always like, "Look, we're gonna send you traffic.

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You're also gonna monetize it through ads, which by the way we're gonna control the digital ad ecosystem." Mm-hmm.

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"And, like, we're gonna get a taste downstream of the traffic we send you, and it's all good, and we're gonna set some rules up, and that's gonna take some control away from you." Mm-hmm.

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"It's just part of playing the game. You're gonna have to do things to your pages that we want, et cetera, et cetera, et cetera. We're gonna say we're in favor of the user and stuff." Mm-hmm, mm-hmm.

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W- what does the paradigm move to? I mean, you're in these conversations. Like, it seems that the camp of the Barry Diller and News Corp is CTC, cut the check. [laughs] Yep. Yep, yep.

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I mean, surely, like, Bloomberg's data is in, it's in these models, for sure.

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I don't think it's in their models because it's not publicly accessible on our website, and unless we opened up the terminal-You know, the most of the stuff, frankly, that we have on our website is public market data that almost any publisher would have.

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The stuff that's very proprietary is for our terminal subscribers, and that's why they pay the fees they pay for that. So it's a very different product. So y- the market data stuff is different. Okay.

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So the LLM can never get at the raw data. No, not unless we want it to. But, you know, of course, we're building our own, the Bloomberg- Yeah...

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GPT, where we're gonna train on our data so that we can service our clients in a better way. But no, we're not. We wouldn't give them that. You know, I can't imagine that value exchange being worth doing that.

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But, you know, the, the have they scraped our news? For sure. I mean, they've-- we're ingesting the web, and so that's a real concern, frankly, and so there needs to be some conversations about that value exchange.

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I think, and that's fine. I don't think cut the check saves the publishing industry [chuckles] over the next ten years. They're never gonna pay enough for it, right? Yeah.

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So the question is how do we as publishers leverage the power of this incredible computing so our users are more engaged that they'll pay us subscription fees, and they'll stay with us as a customer.

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They'll come to us directly. That's what we should be doing. It's the same perspective I had when the, we had the rise of the social media platforms too.

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It's you can cry over spilled milk, or you can actually go work with the guys who control the biggest audience in human existence, right?

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And build a model on top of them as part of your offering, not as your sole offering. Have you had discussions with Sam Altman or, or- Our team has met with a bunch of folks. Yeah. Yes, we have. But you're basically...

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It sounds like you think that they... It's not like ready to, what do they say, like, go to the mattresses? [laughs] I mean, it seems like some, like Barry's ready to go to the mattresses.

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He's ready [laughs] to- Or mattress or mat, I don't know. [laughs] I have no idea. I think it's go to the mattresses. I think that's the, you know, it's like, 'cause that's where you...

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Not idol, but, like, that's where you hide the guns. It's like Gangs of New York stuff. Um, uh, yeah. I was thinking more go to the mat where we're gonna fight it out. Okay.

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But yes, you could go under the mattresses for the guns. Yeah, I think that's fi- like, I think they're putting a spotlight on the conversation, and I think it'll be a positive one that will work together, hopefully.

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But I think if that's your strategy, you're in deep trouble.

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[gentle music] Okay, so what is, what's your strategy then?

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Use the tools- Yeah... 'cause I think there's twofold. There's one you can sort of marginally maybe impact, which is like you can't change the environment. And I remember like years ago talking to someone about Google.

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I would always meet with these companies, and I was like, "Why wouldn't Google just kill you?" And they're like, "Google's not the competition. They're just the environment."

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Um, and they've got a million other things to do, and they're making flying cars, so maybe they won't get to this thing. [laughs] It's like way down on their list. Mm-hmm.

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But you can control how you use the technology internally. Mm-hmm.

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And I think that's the other, that's the other source of both excitement and some amount of consternation, particularly among those who like, I don't know, type words and stuff. Ah. Yeah.

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Well- We've heard that before, though. Yeah. You know how- I, no, I do.

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I-- Look, we're in a premium business media space where our audience are leaders and executives of companies, of governments, nonprofits, and that, the type of information they need to be successful, I don't see a world where, [chuckles] you know, AI is rep- is replicating that for now.

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I think what it can do is take some of the workload off of our journalists, allow them to do the analytical piece, which is gonna become more important, allow them to stop doing the rote stuff of, of cutting and clipping and focus on making the video production better, those kind of things, and actually expand the, the amount of activity they can do on a daily basis.

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I think, yeah, so I think there is a workflow application that has been in deployment.

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I think there's a sharpening of our ad and sub business modeling, propensity mo-modeling, targeting that is in place now for us and others that will continue to get smarter.

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And then I think there's the user tools that you could develop using this. So think about ours, forget about Google Search or, or Bing integrating AI. What about us?

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What about we know things about you, you're registered, you follow these ten stocks in your watchlist, you read these types of stories and these, this type of content.

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When you do a search, why can't we have a really smart search engine on our site that is essentially, you know, AI enabled? We don't have that today.

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It's a kind of a rote search, vertical search, but that would be great. So tell me everything I need to know about the stocks I care about. Boom. Here you go, right? Mm-hmm.

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Those are things we can control, either working with the platforms or building our own, and that's a real utility because the battle now, we're back to basics here.

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How do I create a direct relationship with my audience who will visit me frequently, pay me for the content and data and tools, and not rely on sideways traffic necessarily? That's gonna be a smaller audience.

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It's gonna be harder. And you with the newsletter and podcast know about this. Mm-hmm. But those are healthier relationships, but you gotta prove your value proposition day in, day out.

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But the tools can be very helpful in that. I really believe that. Yeah. So I mean, there, there's the tools for in like the user experience and providing user value, right? Mm-hmm.

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But then you must also get the questions from how many journalists does Bloomberg have? Roughly three thousand. Three thousand? Yeah. Three thousand journalists.

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Does that mean you'll need far fewer of them to do the work because a lot of this rote work will be taken care of by the machines?

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We have been writing thousands of stories by a machine for seven years, and our newsroom has only grown in size. Okay. So no, I don't think that's the case. Okay.

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'Cause there is a lot of concern, but there is concern about this, any of these technological advances- There have been since the dawn of time, since the printing press, since the, you know, it's just it, the, people have that kind of-Trepidation and fear reaction, and I understand it, but it actually usually grows the pie.

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Does it mean that jobs may have to shift and people have to do other things? For sure. Generally, those are good things though, because machines can do some of that rote work.

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Who wants to, like, cut up video for nine hours a day?

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If a machine can help you do that faster and you can add cool graphics and interactives and do more video, actually increase the volume, I mean, that seems better to me.

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Okay, so right now you're in just sort of like experimental phase with, you know, how you can use these tools as both tools for efficiency, but also to make a better product. Yeah.

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'Cause I feel like a lot of the conversation has sort of started in the wrong place, and it's typical.

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It's like, and particularly at this time, which is basically like, how can I get more efficient, which is code for, like, how can I do things cheaper and with fewer people?

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[laughs] And that, that, like, puts the conversation in a bad place to me. Yeah. And I think the way they came out with these tools in some ways did a d- did them a disservice because- Yeah...

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they were sort of made to mimic human beings, and, you know, we've been trained by science fiction for generations to think of machines coming for us. Yeah. And that may ultimately happen.

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I'm not here to tell you that that won't happen, but- Oh, God, I hope not for like thirty, thirty-five years. Give it thirty-five. Thirty-five, thirty-five. That, I don't know if I have thirty-five.

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The, I will say the first several deployments of machine learning/AI for us have been all around improving the product, the bulletin being a good example. So we synthesize an entire article.

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It's in our app and on our site. If you wanna, if you don't have time to read the full five hundred or a thousand word article, we'll, we'll basically create a tweet, you know, for you of that.

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How do we deployed it to be smarter about ads and smarter about subs, and those are the ways we used it. We weren't looking to find efficiencies with it out of the gate.

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We were looking to make our business better and our user experience better.

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And so yeah, now there are some interesting workflow and tools that we're trying, playing around with in translation and other things that can allow us to do more as we globally expand, so. Yeah.

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I think a lot of these things, they accelerate trends, right? Mm-hmm. Mm-hmm. And I wonder if you think this will end up accelerating more content going behind paywalls. Yes. I do, I actually do.

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Um- I feel like we may be entering, and maybe this will change over time if the discovery engines change, the gatekeepers change, but I see a world where walled gardens become a little bit more real again, a little bit more prevalent again, where again, you have to have a direct relationship.

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There's probably a paying relationship, not for every vertical, but you know, we-- I'm not saying we're gonna go back to the AOL walled garden necessarily, but I do think more and more things w-- might get walled off, and might-- some of that might be a protection against rogue AI agents running around amok, scraping and ingesting things.

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Because there's Google and Microsoft who are, will generally be good actors, I think, in this, play by the rules.

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Then there's the rest of the world [chuckles] who might do things with your content, data, information that we don't want, and they really don't care what the regulations or rules are.

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And so yeah, I think there could be a little bit more of a lockdown. Yeah. So I, I, the ad market has been challenged in the first two quarters, I think of the year, it's safe to say.

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First quarter was a disaster for most people [chuckles] I don't know. It was, and it was coming, the comps were terrible 'cause Q one twenty t-two was strong. Yeah. So yeah, it was both.

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It wasn't great, and it was tough coming after last year. Q- I guess what I, and I'm sorry, go ahead. I was gonna say, but Q, Q-two did definitely improve- Yeah... I think for most people.

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We saw CMOs releasing some more money, people wanting, feeling a little bit more secure about the state of the economy and state of the world. Some of that's carried into July and third quarter.

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I'm hopeful there's no black swan event coming or some other catalyst to bad things, and that the second half will be pretty strong coming off what was a weaker second half last year too.

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Yeah, this will continue the economists' hot streak of predicting five of the, what is it they say? Five of the last three recessions. Yeah, exactly. Exactly. 'Cause we've just been hearing about it nonstop.

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Um- Non- And I think that created so much fear and trepidation again within parts of the advertising supply chain that there was some hesitation there, and maybe that's going away.

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Time is an ally right now, as if things don't get worse, perhaps they're just- Right... ultimately getting better. But do you see those challenges- Mm...

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just on a very macro level as being just the regular ups and downs of the ad business and the economy? Advertising has generally tracked the, the economy. Mm-hmm.

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And I think one of the differences, at least on the digital side, is that a lot of the shift has already happened in some ways. There's not a lot of analog media to go after. Mm-hmm. Like, the yellow pages are gone.

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[laughs] Like, newspapers are, I don't know how much skinnier a newspaper could possibly get. Yeah. And so I wonder, it's like, and then you have, like, the growth of retail media- Mm-hmm...

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and a lot of that comes from different budgets and stuff.

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But, like, there's only so much money to go around, and, like, I'm doing this from Miami, and every time I get, like, in an Uber, uh, like, you know, I got, I'm getting like video ads on the back of, you know, the seat rest and it's never been more competitive.

146
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Everyone is selling ads. Yeah. And particularly those who have any kind of interesting data asset.

147
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I mean, is advertising and is digital advertising in general in almost secular decline, or is this just like a seasonal blip? I think right now it's more seasonal and cyclical probably, right- Yeah... than anything.

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I'm not bearish on right, you know, in, in the near future about us or any of the other publishers we work, you know, closely against or sometimes with getting some piece of the pie.

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There's always been a lot of hands in the non-platform advertising market.

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I think the deprecation of the third-party cookie should be helpful to those of us who have good first-party data.And so no, I'm not worried about it.

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We're basically sold out right now, which is a different problem that we're trying to solve, you know, with the decline of social, which generated a lot of impressions, and I think the effectiveness of our sales team.

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You know, we've got a, we've got a very early tight inventory problem. It's usually fourth quarter. We're talking, you know, it started in second quarter for certain categories and targeting.

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And so we're trying to figure out how to deliver on that. We're very also fortunate. We're talking mostly about text here, you know, web and text. Yeah.

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One of the reasons that we've been pushing very hard, and I've accelerated that in the last two years towards video, is because that is the big next disruption, and that money that was tied up in linear television is huge.

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That's a big pot of money.

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And we're fortunate we've got two full stack, as I call them, meaning social streaming, digital and cable and satellite networks in Bloomberg Originals and Bloomberg Television, and we're pushing those hard all over the world.

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And, you know, we've got thirty million people in, uh, in, in streaming right now a month that are watching, and those are good CPMs.

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There's scarcity there, and not everybody has that capability, so it's a little bit more defendable- Yeah... you know, than o- the open web. Well, let me rephrase things- Yeah...

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I wanna get into the open web conversation. Mm-hmm. Is display advertising in secular decline? Uh, not for us, you know, and maybe we're in, in the, got-- we have a great category, but it's growing for us.

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We're, as I said, we're really tight on display. I think the creativity going into display has improved. The units have improved. As you know, we got rid of allowing- Mm-hmm...

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third parties of all types to kind of, to access, which freed up ability to rethink our units and what we put in there. And, and even with all of that gone, we are, we're at capacity.

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So no, I don't see it, but maybe other categories do. But I think overall display is still growing, so I'm not, I don't- Yeah... you know, I'm not thinking it's in a secular decline yet. Yeah.

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So M-Mark Stenberg, great reporter- Yeah... for Adweek, he, he had done a piece about... I always like the check-in piece six months in- Yeah...

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'cause, yeah, people do things in this world [chuckles] and then they just sort of...

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It's like, well, yeah, I always would say, I was like, "If you wrote about the thing when they started it, you better go back and check and see if they did- Yeah... what they said they were gonna do- I love it...

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and see what happened." Totally agree. And so that was a good job. Mark, if you're listening, excellent work. But he talked, uh, you know, so the open programmatic.

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Explain, first of all, the decision to sort of cut that off. A lot of publishers, they would love to do that, they just simply can't. Explain the calculus that went into that. Yes.

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Well, first of all, in the business category, high CPMs, some scarcity, the calculus a little bit easier.

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Programmatic dire- like, uh, open market or open exchange programmatic was a very small percentage of our advertising on the site.

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The CPMs had still maintained their very low [chuckles] level, and that hadn't changed over years. You know, we're talking several dollars at most.

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And so the, one, there was a philosophical issue that I had with it, which is to say we have the, I would argue, the most valuable audience in the world. We do, at various parts of the year, have scarcity of inventory.

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We, we-- w-why would we take that? What is the upside? It's not really moving the needle for us.

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And so there, you know, if you wanna work with us directly, was the calculus there, and that was more of a philosophical belief. We shouldn't be giving away valuable audiences for that cheap, right?

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Even if it was a nice check we got every month.

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We did the math on this, and because of the low impact financially to us, we were pretty confident if we reuse that space, and frankly collapsed some of those units to improve the experience for subscribers, who by the way, were complaining about our, the number of ads on our site and the slowness of our site.

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We thought that would pay back in dividends in spades within quarters. And that we could repurpose that space in certain circumstances if we weren't sold out with promoting all the great stuff that we do.

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You know, we might run around on Facebook or to promote the Bloomberg Surveillance or Emily Chang's new show or the Bloomberg Green franchise. We have to pay for some of that.

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And so, but our target audience of, you know, fifty million people is right there. Why not tell them about the new newsletter or the new show or the new podcast from Tim O'Brien, those kind of things.

179
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So that's very valuable space. It's worth a lot, and we were giving it up to ads that we didn't even know, you know, where the creative was done.

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So, so, you know, it was a bet that we could repurpose it, we could clean up the experience, speed up the site, and that we would monetize those in a better way. Yeah.

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In Q2, ad revenue's up, you know, for us, so- But you took a hit to revenue, though. Well, when you- Right? We, we took an immediate, I got into it with Mark on Twitter a little bit. Or not into it. Oh, really? Good.

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I res- I responded. I res- I just said he was a great reporter. [chuckles] No, Mark is great. I didn't, I took issue with his headline 'cause it sort of suggested- Okay...

183
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that we made this decision and we're having revenue losses. And the framing of that suggests that we might have second thoughts about the decision, and that it's impacting our overall revenue, and it's not.

184
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Like, we're growing. Yeah. And w-what it-- when you remove an ad unit, it's just literally the volume of ad units.

185
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One, say we had six and we go to five, and you remove any third-party stuff coming in, you're ab-absolutely, the next month, the check's gonna come in, there will be no check from the third parties, right?

186
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It goes to zero. Yeah. [chuckles] So, so that happened 100%. We quickly repivoted, focused on pushing harder in programmatic guaranteed and programmatic direct, which are channels that we like.

187
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And, and then, you know, combined with the decline in traffic, whatever, from social media, we're basically sold out again. So, and but we're growing.

188
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So that was the calculus, was we needed to clean up the user experience. We didn't think the impact would be, uh, you know, impactful and that we would recoup it pretty quickly. Okay. And I think we're there.

189
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[on-hold music] But this was like a small part. This was like below fifteen percent. Oh, yes. Okay.

190
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So that makes it like an easier because a lot of publishers are, I mean, like, I would always say to, like, our team, like, at my last job, like, the-- we're talking about publishing industry.

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There's so many different types of publishers, and they don't compete, and they have totally different businesses. Like, a arbitrage publisher- Really? Yeah... is not the same as Bloomberg. No, no.

192
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Look, if I was a, what, what do you call them, MFAs? MFA. Which is great. I wanna start a site just for face. I could only think of- Cover, cover the industry. The first ever trade publication for faces. Oh, God.

193
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Please don't. Be a great idea. [chuckles] I'd like to see the characters. It'd be like in Belize or- Yeah... Macedonia or somewhere. Exactly. Cyprus.

194
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Look, yeah, or if you have massive scale in, you know, a category and not as premium as business, then, like, I understand why you might take that, that open exchange inventory. I absolutely do.

195
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But, you know, if you're us or some other premium publisher, it is gonna be a small piece, and frankly, it's crazy the amount of money we spend to get this audience in than to let somebody access it at two dollars.

196
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It's just n- was never gonna happen long term. Yeah. And I think a lot of times when this is talked about, like we use programmatic, just AI offhand when we're talking about different things. Yeah.

197
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Because you use programmatic. Yeah, yeah. Like, I mean, programmatic and the old, I forget who said it, it was like it's just the opposite of programmatic is just manual.

198
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And so a lot of people, there's a lot of efficiency gains that you don't need to... I mean, I can remember, I think when I started covering this industry, people were still faxing the IS- Yeah...

199
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and like, sending those massive tapes, like, with, like, TV commercials back and forth. Yep. So, you know, programmatic as a way to target and to buy and transact, that, of course, is perfectly fine.

200
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I don't think anyone would be against that kind of stuff. Not at all. Not at all. Um, it's just a matter of how you transact with your clients and whether you know your clients.

201
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[chuckles] I think it would, you know, it's nice to know your clients.

202
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Well, yeah, and I think for publishers like Bloomberg and again, there are plenty of others, the idea of a multi-year, multi-platform sponsorship partnership is becoming much more of a focus.

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You know, there's a reason we've got more and more strategists and thoughtful marketers, and we have a big media studios group.

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And, you know, we wanna get in with a premium brand and work with them for years, not be overly transactional. 'Cause, you know, there's a crude knowledge and experience from working together.

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We can improve the, the products. We can be very helpful with the data that we have from this place and the analysts that we have that we can bring into a relationship.

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We can really help our partners more than just being a conduit for their creative. And, and so that's all part of that, like, moving upstream and working closely with clients and agencies that I think helps them too, so.

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Yeah. So overall- Yeah... within the business, like, where are you placing, like, long-term bets?

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'Cause I think in this industry, a lot of people are trying to, like, just tread water and get a cru- get a-- just figure, figure out a way to get to the end of the quarter, and then we'll just deal with what goes ahead.

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And I think that's why we've seen a lot of this pivoting to different near-term things. I mean- Yeah...

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Bloomberg is, you know, has its different in, in, in that Bloomberg Media is part of Bloomberg LP, and it is a, I was-- I thank you for inviting me to the tower. Yeah. Thank you.

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Anyone who's not been to the tower, I mean, get an invite. Don't just show up. They've got security. But, like, it's a great building.

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[chuckles] I'm like, "Hey, the return to office, just get a really great office and amazing snacks and a great atrium, and people will come."

213
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But it's a different, it's a different structure of a business, and I think it should allow to have more long-term thinking and everything I've read about Mike Bloomberg that certainly would square up with his ethos.

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Um, yes. We're very fortunate that Mike created an incredibly powerful and defendable business model in nineteen eighty-one that still generates tremendous cash flow and is very successful.

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That gives some air cover for thinking more long term for media. You know, uh, that doesn't mean at all that we have a blank check to do whatever we want.

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We have been making incredible progress, you know, o-on the profitability. We wa-wanna run, like, a profitable division, you know, and so I'm holding people to accountable on costs and growth.

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So, you know, we don't take it for granted, but we also appreciate it. Where many of our competitors might be thinking about either hiring freezes or layoffs this year or cuts, we can, we can invest a bit.

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We can be a bit contrarian. So where are we placing our bets? Mm-hmm. You know, I think there, I mentioned video. We see the tide of advertising and engagement, which is already moving to streaming and social video.

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We've been on this for a while. We wanna be a part of that. We wanna swim downstream versus upstream, right, and be the, be in the right place. Yeah. And many of our competitors do not have two streaming networks.

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And those that do compete with us on video have challenges with their old affiliate deals and the monies they've been getting for years, and we, we strategically, smartly didn't ask for sub fees back in the olden days.

221
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So we're- Yeah... we're more free to do things, you know, with our feeds. But, but that's- That was a great, that was a great little allowance, though. [chuckles] Yes.

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It ended up working really well for us, and now we have, as I said, thirty million people watching, you know, Bloomberg TV and Bloomberg Originals around the world. And this is great. This is great.

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So we're making bets there. We've got lots of folks that we've allocated there. We're having the Originals team and the TV team work much more closely together.

224
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You could-- you'll see more Originals programming on Bloomberg TV on nights and weekends, which are usually not our most engaged times when the markets close in each region.

225
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So we're trying to, you know, refocus some of that programming. That's an area that we've been doing for a while.

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Global is a competitive advantage for us with three thousand journalists andOffices in, you know, a hundred and twenty countries around the world.

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We have people, we have journalists, we have studios in many of the major cities, we have sales teams. And so, you know, almost fifty percent, probably forty-five percent this year of our advertising is ex-US.

228
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And Middle East has been, you know, driving some great revenue. Asia, Europe over the last few years has started to pick up for us as we, we've brought in some new talent at the leadership level.

229
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And so, you know, US is our biggest market, but almost half of it's now outside the US. Most of our US competitors couldn't say that. And so I'm doubling down there.

230
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You'll f-- You saw the Bloomberg UK launch with that- Yeah... John and I shepherded out. We-we've got an Australian newsletter, China. We're-- we've got a Japanese website in local language.

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We're using AI and technology to convert our TV into multiple languages, which we'll try and debut in the future couple quarters.

232
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So there's a lot going on in global, and I think again, hard to do if you're operating, you know, from the US. We have that built-in advantage of being a global company, for sure.

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The thing that gets overlooked a bit too is we're also placing our bets on people and culture. Yeah. You know? And I don't know that it's talked about enough, but, you know, this is a people business.

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We're people using technology. We're not a tech business with p-- you know, deploying people. And so whether it's sales or content or marketing or production, like, we need great t-talent.

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And it's this great talent that actually will help us navigate any future changes in the ecosystem, and we've been doing that.

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You, you know some of them, whether it's Julia, Christine, or Jess Webber we brought in for events, and we're really proud of that, and been doubling down on making sure, you know, using the office as part of it, you know, on ensuring like morale is high and people are engaged, and we care about people's mental health and care about diversity and representation within our leadership teams.

237
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And all of that is part of being able to grow and navigate. And if you don't have that, it's hard to do all these other things really well. So that's been a huge focus for us, for sure.

238
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Yeah, I mean, that's a great point. I mean, w- it's sort of been a period of discontent, I feel like- Yeah... between, and maybe it was exacerbated by COVID. It probably was. I think- Yeah...

239
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like, just being on Zoom leads to different weird things in Slack. But like, you know, there's been, you know, ton-- there's been strikes and stuff like this and, and some of them become pretty heated.

240
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And, you know, I think some of that is just the profession in many ways. I mean, again, like financial and business is a little bit different than the broader- Yeah... sort of journalism profession in some ways.

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It's always been a little bit more protected, I feel like, than general news. Yes.

242
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But there, there's a lot of strife out there and unhappiness in, in some ways, and I think it's reflected a-across the entire economy, but it's just acute in the media industry right now. Yeah.

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I, but g- we see it, I, and I've seen what's been happening in lots of places. You know, I think we invest in our people here, benefits, infrastructure, mental health resources, and, you know, training and development.

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We take that very seriously, both in media and in Bloomberg LP overall. That stuff matters. And, and we, you know, we probably pay competitively too, so there's some stability around a company like Bloomberg LP.

245
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So, you know, there are pockets of discontent that we try to address acutely, like certain functions or areas where there might be an issue there.

246
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But when we take surveys, we look at the data, we jump in and say, "Why is this group not at the average, like, morale level?" And we try and deal with that.

247
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But, you know, again, when you're a successful company, you can really invest in your people, and it's a nice, like, virtuous cycle, perhaps. And we-- that's where we are today. Yeah.

248
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So I mean, Bloomberg LP is like a very successful- Mm-hmm... subscriptions business, right? It is. And you need a subscription, and it's a high price subscription to the terminal, I'm told.

249
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I don't have one, but I do have one to Bloomberg Digital. Thank you. And I think I paid full freight for it, by the way. Did-- no intro offer or anything like that. No. Yeah. Excellent. Thank you.

250
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[laughs] Yeah, I'm doing my part. I had a few of the snacks in the tower, so I gotta give.

251
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Do you ever think like, I mean, I would think, like, I remember reading something about Mike Bloomberg, like, you know, in some meeting being like, "Why do we have a website?"

252
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And like, does he ever just say, "W-why isn't everything just a subscription?" I mean, everyone pays for the terminal. It's worked really well. Mm-hmm. Like, why don't we, why isn't this just all subscription?

253
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I mean, leave aside like TV, the dynamics are different, but I think when it comes to digital publishing- Mm... a lot of the advertising is just such a hassle. It's so hard.

254
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It puts you into, like, an adversarial relationship with your, with your consumers, which I guess should be, like, your audience should be who you're serving, but you're often left, like, saying, "Can I get like a seventh or eighth ad unit on that page?"

255
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[laughs] "I think I see some space over there." Yeah. Floating video player or something.

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[laughs] Yeah, look, I think what we've been trying to do the last couple years, I'll get back to the, the Mike question, but we really have pivoted towards a, a heavy audience for a strategy.

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And I, I don't think-- I think we are running so fast.

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I've been here almost eight years, and I think in the first, the first few years were tough to get our bearings, then we started to pick up speed, innovate, launch new things like Quicktake, The New Economy Forum, the website paywall, or the, a digital paywall.

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And then, you know, revenue started to pick up. And we were running really fast to book every ad deal, to close every subscriber. I think we lost, honest- if I'm being honest, I think we lost sight- Yeah...

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of our end consumer a bit, and across all platforms, you know, really.

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And so we've made a conscious effort to put that first and foremost, knowing that if we can, if we can serve the end consumer really well, that they'll come back more frequently, more of them will come, there'll be more places for advertising too, and we'll collect more first party data.

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We haven't talked much about data, but, like, that's important- Yeah... for lots of reasons, as we all know.

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So, so that audience first bent, which I, it comes up every week in all kinds of meetings, whether it's events or TV or, or digital, is very real, and everybody's evangelizing it now when we think about a new project.

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But Mike understands the power of media.

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He's the one thirty years ago that says radio's gonna help open doors, and TV after that to sell the terminal.Now fast forward, we've got this massive business with fourteen hundred people in media that reaches well over a hundred million people a month.

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It's a huge branding and awareness play for the company, and we have lots of different products, not just the terminal. We have the industry group in Washington. We have enterprise data products.

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It really is a door opener. It's a branding mechanism, and now it's a, a thriving business unit. We've doubled in four years revenue-wise. So like, you know, he sees the value of it. He's very supportive.

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I think a lot of those historical battles that existed between the core business and media are largely gone.

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Like it's much more, I would say today, vertically aligned than it's ever been as far as I can tell, where we're-- when I do an event in Morocco, which we just did, we're carving out a space for our terminal sales for North Africa to sell and engage customers.

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Like I'm going out of my way, our team is going to make sure they're aware, and by the way, we sold dozens of terminals from that event, which is a great way to, you know, be partners with the business that drives this company, you know?

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And so that, that's kinda consistent with- Mm-hmm. -I think a lot of the behaviors now. So he gets the value of media, and now it's a pretty big business too. Yeah.

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But, I mean, do you expect a-advertising to be a far smaller part of the media business at Bloomberg in five years? [clears throat] No, I think it'll be, I think it'll be a lot bigger.

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As a percentage, I think it will probably fall. Yeah. Yeah. I think we have a long way to go, actually. I, you know, when I think about global as well, and a lot of those mar-markets are still maturing.

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So-- And we don't get a lot of national ad budgets at this juncture. We get global ad budgets.

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So if you think about if we build a huge presence in the UK or India or Japan, how do we tap into a lot of the national advertising if we could create some scale there?

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That's an area where I think we have some opportunity. But yes, I think subs, you know, should be able to double again over the next five years. It's currently about a quarter of our business is subscriptions.

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Do I think that can get up to about half of our business? Yeah, I totally do. We have a product that people need to be successful, like it's a must-have. It's not a nice to have. I believe that anyway.

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So subscriptions are now like a quarter- Yeah. -of Bloomberg Media's business? Yeah.

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We're about half ad revenue and a quarter subscriptions, and then the events spons- mostly sponsorship, but now we're getting into some ticket sales, is about an eighth, and then an eighth is licensing and global partnerships.

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Yeah. So, but yeah, I mean, it was zero five years ago- Right.

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-the subscription, now it's twenty-five percent, a-and, and it's rising every year 'cause we're still immature compared to the Journal, the FT, and others in our space. They've been around since the 1800s, you know?

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Yeah. [chuckles] They had a head start. They did. Are events still a big focus? Mm-hmm. Yeah. We're gonna have our best year ever in live e-- we're calling them live experiences now. We won't- Yeah.

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And we-- I brought the New Economy team and the live events teams together, that we had two separate teams, which was smart to incubate New Economy, but f-operationally, it was getting a little bit- Yeah.

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-you know, complicated when we're calling on some of the same guests and sponsors. So those are together. It's, it is, it's become such a big part of our thought leadership platform for our partners.

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They wanna be involved in live experiences with thought leaders. Then they wanna, you know, develop a platform with us and distribute it across TV and digital and...

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So yeah, it's a meaningful part of our bundles, and it's-- and obviously post-pandemic, everyone's excited about experiential, whether it's, uh, as David Carey said, Taylor Swift or, or it's a business forum in Doha, which we had like, I don't know, three thousand, four thousand people at i-you know, a few months ago, the Qatar Economic Forum, a huge event.

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People traveled far for that. So people are doing business live, they wanna connect. So yeah, big business for us. I'm very excited about it.

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And I think the opportunity for us is some of our, what I call our smaller franchises, at least in the live event space, like a Green or Invest or Sustainable Business Summit, Business of Sports, how do we make those big pillars, like the size of New Economy or the Qatar Economic Forum, which are huge from a revenue- Right.

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-standpoint and news impact. So yeah, we're excited about it. I think there's also, the next phase is really interesting.

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In some way, it fits in between probably our digital, like paywall and our events business- Mm-hmm. -which is like community and connecting people beyond those several days in Doha.

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You know, call it an online community, a membership, whatever.

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But like, you know, if you're really into sustainability and you read Bloomberg Green and you go to our events and you wanna connect with people in the same, like, you know, category and business interests, how do we make that happen?

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We're a trusted platform. You know, the terminals is probably th-the largest financial community in the world. They're-- It's tied together through, through IB and communication protocols.

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You know, could we adopt a similar stance? Probably. And I think that could be a-another revenue source for us. All right, forget threads. We'll just all get on, like- [laughing] -the terminal. [chuckles] Bloomberg.com.

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Bloomberg.com. Um- There you go. Yeah. Awesome. Scott, I'm gonna leave it there. Thank you so much. Really appreciate you taking the time. Uh, it's always good to chat. Nice to see you. Thanks a lot, Brian.

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[upbeat music] Thanks so much for listening. Thank you to Jay Sparks for producing this podcast. If you have a podcast that you're considering making, you should check out Podhelpus and what Jay can do for you.

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Go to podhelp.us. [upbeat music]