Podcasts

Money.net’s Morgan Downey: ‘You can’t compete solely on price’

  • Many have tried and failed to knock Bloomberg off of the mountaintop of financial data.
  • Money.net's Morgan Downey is familiar -- he used to run one of Bloomberg's largest divisions.
close

Email a Friend

Hundreds of millions of dollars — and in some cases, billions – have been spent trying to create a Bloomberg killer. So far, no one’s come close to succeeding. But there’s a chink in Bloomberg’s armor. Except for 2009 in the throes of the financial crisis, for the first time since its founding in the early 80s, Bloomberg terminal sales declined last year.

To Money.net‘s Morgan Downey that’s Bloomberg’s “Blackberry Moment,” the inflection point that shows that consumers are now able and willing to leave a legacy product. Downey should know — until relatively recently, he ran Bloomberg’s commodity division before stepping out to create his own Bloomberg competitor, Money.net.

Downey joined on the Tearsheet Podcast to discuss the market for financial data, Bloomberg’s strengths and weaknesses, and where he things the market for financial data is headed in the future.

SubscribeiTunes I SoundCloud

Trends in financial data
“If you’re working in any part of finance — a hedge fund, a bank, or a CFO in a corporation— the raw materials to do your job (financial statements, market prices, economic data) has to be delivered to you via some type of mechanism to do your job. Whether you’re working on a merger or an acquisition, or a investment or trade, you have to get financial information to your desktop or your mobile device.

It’s not an industry that many people outside of finance know about. It’s a $28 billion a year industry. The biggest players include Bloomberg, a private company and my former employer, Thomson Reuters, and Factset. The industry is dominated by a few, very large entities with a very large demand for a disruptive company to deliver a more intuitive, affordable product.”

Why it’s so hard to unseat Bloomberg
“It’s a market where the last major disruption happened in the 1990s when Quotron went out of business. You have two major players — Bloomberg and TR — with roughly 80 percent of the market. It’s a duopoly to a certain extent.

Financial terminals have very high fixed costs which acts as a major barrier to entry for new competitors. There’s a huge number of things you have to build before you get a single dollar of revenue from a customer. There’s a whole back end system which needs to deal with huge amounts of data and news in ultra real time. We’re kind of like a cable company in the sense that we have to license all this data on behalf of our customers.

It’s a very daunting industry to enter. People have tried. Some have spent hundreds of millions of dollars, billions even, building new entrants.

But Bloomberg is going through its own ‘Blackberry Moment’. Last year, 2016, was the first year (except 2009’s financial crisis) since the founding of the company in the early 1980s that Bloomberg’s terminal sales — their software licenses — declined by a couple of percent. That inflection point is similar to what happened with Blackberry in 2011. For a technology company, it shows that the market is willing and able to move away from legacy products.”

 

What wins over clients in a bakeoff
“The challenge with the financial data industry is that you can’t compete solely on price. It’s great being 10x less expensive, but you have to have a compelling reason for someone to use you for your job. Our customers aren’t using us for entertainment — they’re using us to do their jobs better. You have to have a better product and be significantly less expensive.

I always bring the analogy of NASA to SpaceX. NASA lifts a payload for $300 million. SpaceX tried to do it for just $30 million. But SpaceX also tried to land a rocket. That’s what we’re trying to do: be a more affordable product and much more intuitive product than incumbents.”

0 comments on “Money.net’s Morgan Downey: ‘You can’t compete solely on price’”

Payments, Power of Payments Podcast

Power of Payments Ep. 19: Stripe’s Josh Ackerman on the changing nature of online checkout

  • Josh Ackerman, Product Lead at Stripe, joins host Ismail Umar on this week’s podcast.
  • He talks about the existing gaps between consumer expectations from online checkout and what most merchants currently offer, as well as how the checkout experience has evolved over the years.
Ismail Umar | December 02, 2022
Green Finance, The Green Finance Podcast

The Green Finance Podcast Ep. 14: COP27 – is finance ready to move from pledges to implementation?

  • COP27 ended around a week ago, and by now we've all probably seen the headlines – an agreement was finally reached to create a loss and damage fund. But what about GFANZ?
  • To help us get a better sense of what happened at the conference, today we're chatting with Lubomila Jordanova, the founder and CEO of PlanA.
Iulia Ciutina | November 30, 2022
Podcasts

‘Everything else is just digital, digital, digital’: Wells Fargo’s Ulrike Guigui on enterprise payments trends

  • New rails and changing customer demands are challenging enterprise payments players.
  • At Money 20/20, we sat with Wells Fargo's Ulrike Guigui, head of enterprise payments strategy, to discuss where the industry and her firm are headed.
Zachary Miller | November 28, 2022
Where Credit's Due Podcast

Where Credit’s Due Ep.13: The growing popularity of virtual cards, with Deserve and M1

  • Plastic is making way for virtual when it comes to card technology.
  • Host Iulia Ciutina speaks to two experts on the future of virtual cards, both in and out of the financial industry.
Iulia Ciutina | November 23, 2022
Podcasts

Steez Podcast #1: What financial services has learned so far trying to capture, delight, and retain the hearts and minds of today’s youth

  • Understanding what makes Gen Z tick is imperative for financial services firms in positioning themselves for future success.
  • With a series of 3 interviews, Tearsheet's Steez Podcast explores how this generation is already impacting banking, investing, and payments.
Tearsheet Editors | November 23, 2022
More Articles