Businessmodel of Bloomberg

Customer Segments

Bloomberg has a niche market business model, serving a specialized customer segment. Its customer base primarily consists of organizations in the financial and information industry that seek real-time data, analytics, and/or news updates. Clients include securities brokerage firms, banks, government agencies, and media companies. Specific clients include the Federal Reserve and the World Bank.

Value Proposition

Bloomberg offers four primary value propositions: accessibility, convenience, innovation and brand/status.

The company creates accessibility by making its service easily available to interested parties. Its business stories are published in five languages and its terminals are available in standalone, portable, and “open” (PC-connectible) formats.

The company offers convenience by compiling information from multiple sources in an individual channel. This information includes multimedia news, financial pricing, electronic communications, and specialized financial computation services.

The company is known for its innovation efforts. It operates Bloomberg Labs, a website focused on enabling an exchange of ideas between academics, technologists, and the worldwide developer community. This discussion often leads to collaborative efforts in the building of new solutions.

The company has developed a strong brand. It was one of the earliest computerized information service providers, so it is well-established. It now maintains one of the world’s largest private cloud networks, connecting over 327,000 users in more than 180 countries. Lastly, it hires more than 500 journalists in over 150 bureaus in over 73 countries who publish over 5,000 business stories daily.

Channels

Bloomberg’s main channel is its direct sales team, through which it acquires most customers. The company promotes its offering through its website and social media pages.

Customer Relationships

Bloomberg’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website features the “Bloomberg Customer Service Center“, which enables customers to create a personal account through which they can manage their contracts, order new services, and receive important notifications. The site also includes documentation in the form of specs and guides and provides answers to frequently asked questions.

Despite this orientation, there is also a strong personal assistance component in the form of phone and live chat support. Service is proactive, with staff members not only addressing problems but also seeking customer feedback in order to implement long-term improvements.

Key Activities

Bloomberg’s business model entails maintaining a robust platform for over 327,000 users.

Key Partners

Bloomberg maintains the Enterprise Solutions Partner program. Through the initiative, the company works with financial software and technology providers to develop innovations that can benefit the global financial services community. Partners are assigned a relationship manager who trains them on the use of Bloomberg’s tools. Afterwards, they use their knowlege to integrate its data into their applications. They then receive marketing and communications support. Specific partners include Advent Software, Citigroup, Gravitas, MDX Technology, ORC Group, and Palantir Technologies.

Key Resources

Bloomberg’s main resource is its proprietary software platform. The company’s important human resources include its staff of over 3,000 technology and design professionals (including infrastructure architects, software engineers, and data collectors) and its sales/customer service staff.

Cost Structure

Bloomberg has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely research and development, a fixed cost. Other major drivers are in the areas of customer support/operations and administration.

Revenue Streams

Bloomberg has one revenue stream: subscription fees for access to its database. While the company does not publicize its pricing, a variety of sources estimate it to be as follows:

• $24,000 a year for a single terminal subscription
• $20,000 a year for customers with two or more subscriptions (e.g., large banks than can have hundreds of terminals)
• $2,000 a month for single-terminal subscribers with two-year contracts