Don’t Fear The Future – Invest In It, Bloomberg President Suggests

The business of news, just like other businesses, is going through a tough time. The traditional newspaper is in decline, a model to make money out of online news has yet to be discovered, and any Taro, Dick or Henri is able to set up a blog that at least appears authoritative, even if it isn’t.

But while there are those who predict the end of the world as journalists know it, Daniel L. Doctoroff, president of Bloomberg L.P., says there will always be a place for the editorial function. We just have to adapt to a changing readership.

“The industry is in a clear state of transition from one in which the vast majority of revenues were generated from print products to one in which there is a declining amount of print,” Doctoroff said at a lunch event at the Club in September. “It is inevitable that in that transition there will be considerable pain, because consumers are not willing to spend for online information, especially as they are able to get it from other sources.

“But will print go away entirely? Absolutely not,” he reassured his audience. Print costs will climb and publications will work with a smaller reader base, but technology and changing tastes will lead to major changes in terms of online content, Doctoroff believes.

“I believe there is always going to be a need for great journalism, and in a world in which the sources of information are overwhelming, the editorial function will play a much greater part,” he said. “People require to be told.”

Turning to the question of paid-for online content – an approach that Rupert Murdoch is apparently planning to implement for his stable of publications next year – Doctoroff agreed that the question of whether to charge or not to charge is an intriguing one.

“I think what we are going to get is that there must be a perception of value for the content if it is paid for,” he said. “We already have some good examples of that in action – the Financial Times and The Wall Street Journal with 100,000 paying customers – and people will pay for content they deem to be of value.

“The question is how to create greater value,” Doctoroff said, indicating that still depends on sound editorial decisions that are based on “good, old-fashioned journalism.”

And while the recession has been a disaster for many, ravaging organizations and corporations in every sector of industry, those that use the same downturn as an opportunity to innovate will emerge stronger, he added.

Dismissing suggestions that Wall Street or the global economy are finished, Doctoroff cited the example of New York, the city where he served as deputy mayor for economic development and rebuilding, coming into office shortly after the 9/11 attacks.

The evidence shows that New York has suffered 11 major crashes in the last 200 years, so what the world is now going through is not unique, he emphasized.

“What lessons can we apply from this? The first is to remember that despite the dire predictions, these periods do end,” Doctoroff said.

Some things will change – tighter regulation of the financial industry and increased powers and funding for regulatory agencies, for example – but anyone who thinks the bankers will agree not to take their huge bonuses every year is likely to be severely disappointed. Ditto the bureaucrats, which might come as a warning to the new Democratic Party of Japan government.

For a company looking to stay ahead of the competition, Doctoroff said the best strategy is to spend as much money as possible now on new products, investing in increasing your share of the market.

That is exactly the approach that Bloomberg is taking, he said. While others cut back on personnel costs and mothball new projects, his company is hiring 1,000 new employees this year – a 10 percent increase in staffing levels – and using fully half of that total to devise new and innovative products.

“This year, we will sacrifice short-term profits to invest aggressively, bring on new talent, to increase our market share, so that when the recovery does come – and we believe in the inevitability of the recovery – we will be better positioned,” Doctoroff said.