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Bloomberg Media is expecting to bring in at least $100 million in consumer subscription revenue in 2021, according to an internal memo sent to staff from CEO Justin Smith.
Why it matters: Prior to the launch of its consumer digital subscription business three years ago, Bloomberg LP made pretty much all of its subscription money from enterprise subscriptions to the Bloomberg Terminal, a data and content platform for financial professionals.
- "We see a clear path toward making subscriptions a nine-figure business in 2021, following a 135% revenue increase in 2020," Smith writes in the memo.
By the numbers: Bloomberg Media expects to approach 400,000 consumer subscriptions in 2021, up from roughly 250,000 in 2020.
- By comparison, The Bloomberg Terminal has around 325,000 customers.
- An annual subscription to The Terminal is at least about $20,000, while an annual consumer subscription to Bloomberg Media is about $415 per year, barring any deals or discounts. (The Terminal business is worth around $10 billion.)
- Bloomberg Media has introduced subscription bundles with niche media outlets like the The Information and The Athletic for cheaper upfront costs.
Between the lines: The launch of niche verticals over the past year have helped to bolster subscriptions.
- According to the memo, the company's new personal finance vertical in September called Bloomberg Wealth has been an important driver. Wealth saw roughly 5 million uniques in December.
- Other new verticals launched in the past two years include health care ("Prognosis"), auto ("Hyperdrive"), climate ("Bloomberg Green"), cities ("Bloomberg CityLab") and the business of entertainment ("Screentime").
- The company plans to build on its niche vertical strategy with the expansion of Bloomberg Equality this year.
The big picture: Subscriptions are becoming more important for digital media companies as digital advertising flows from publishers to big tech companies.
- According to the memo, Bloomberg Media hasn't seen its ad business lose much momentum, despite industry headwinds during the pandemic.
- Digital ad revenue for the company was up 15% in 2020 and 44% in Q4 year-over-year.
- Some of that growth can be attributed to the company's OTT video platform, Quicktake, which had its best revenue quarter in Q4 of 2020, per the note.
Be smart: Bloomberg's biggest advantage heading into the post-Trump era is that it's never been dependent on political traffic. Its core focus on business and finance has helped boost its numbers, especially as the economic recovery of the pandemic becomes a bigger story following the rollout of a vaccine.