What the Bloomberg scandal tells us about the media

Neil Irwin of The Washington Post writes about how the recent Bloomberg snooping scandal illustrates what drives today’s business journalism.

Irwin writes, “The interface, while not particularly hard to learn, is not intuitive, so people who are used to it tend to want to stick with it. It is not uncommon for hedge fund types switching jobs to have in their contracts that they will have a Bloomberg terminal at their new job. And the terminals have email and chat services that only subscribers can use, and which many Wall Street types use to trade gossip and tips with each other.

“You can’t think about Bloomberg News without understanding that this is the ecosystem in which it exists. The journalists there also create some excellent work on topics that have nothing to do with financial markets, but their bread and butter, their raison d’etre is to be one more thing that makes the Bloomberg terminal something that financial professionals can’t afford not to have.

“For Bloomberg, in other words, the terminal business is so lucrative and so important, that it can spare no expense to make sure that if a plane crashes in Mozambique or Hungary appoints a new central banker or, say, a senior executive of a major investment bank has been forced out of his job, the news will pop up on a Bloomberg terminal first.

“Which brings us back to the events of the last few days. The practice of letting journalists access information about when subscribers had logged in and what broad categories of data they accessed pits the two imperatives of Bloomberg’s strategy against each other. On the one hand, it wants to do everything it can to ensure that its reporters are drumming up information that the competition isn’t. On the other, anything that discomfits the subscribers who are paying the bills could endanger the whole enterprise.”

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