Why JPMorgan Is Cutting Its Bloomberg Terminals - YouTube

Chris Hill: Let's move over to financial services. JPMorgan is one of those big Wall Street banks

that makes a lot of money. That doesn't mean that CEO Jamie Dimon isn't looking to tighten

up the purse strings a little bit, and now we see reports that he's looking to cut the

Bloomberg terminals at his business. And when you consider that a Bloomberg terminal costs

$21K a year to rent, and they've got ... a couple thousand?

Bill Mann: They're spending easily a couple thousand! I saw a number, and you would hope

that I would have verified it before I came in to the studio, but I saw a number that

was in the 8 digits for how much they're spending on Bloomberg each year at JPMorgan.

Hill: I kind of like that Jamie Dimon is saying, "You know what? We don't need all these, and

maybe we don't need any of these."

Mann: Yeah, I think that probably, one, the folks at ... I'm trying to use a word other

than "mafia," but I'm going to fail at it. I think Bloomberg is the closest thing to

a mafia power that exists in finance, because it is such a default, and they have been able,

for years, to come in and say, "Well, this is our pricing. Discount? No. There's no discount.

This is our pricing." So, even for places like JPMorgan, there are now credible alternatives

to Bloomberg, and one that is very exciting to a lot of people is called Eikon.

Hill: It's not tied to Carl Ichan, is it?

Mann: No, but that would be awesome. Different spelling. So, Carl Ichan ... I bet he's going

to try to take credit for it now, like, "Why didn't I think of that?!" So, they may be

negotiating a little bit, but it may be as much a message for his staff inside, "If you

want this $21K a year terminal, you had best be producing. So, if you're a producer, we

have no problem whatsoever. But if you're not a producer, this is the beginning of a

list of things that are at question, probably including your job, but we'll start here."

Hill: And for those unfamiliar, Bloomberg, as general consumers, as retail investors,

we're much more likely to encounter Bloomberg the news organization, Bloomberg podcasts,

etc., and Michael Bloomberg built that media empire. But the goose that lays the golden

egg year after year for Bloomberg is these terminals, which cost $21K a year, and essentially

give you any financial information you could ever want at your fingertips. And in the 1980s

and 90s, I could see where, "This is a must-have, we have to have this." But now, I just look

at it, and I don't know.

Mann: Bloomberg is the closest thing that they have on Wall Street that is like the

owl network in the Harry Potter world. They have their own news service, and it's a closed

environment, but they also have a messaging service that is highly prized, because everyone

on Wall Street -- and by Wall Street, I don't just mean New York City, I mean San Francisco,

Tokyo, Kazakhstan, whatever, whoever's in finance -- they have a Bloomberg terminal

so they can speak with each other, it's a secured messaging system. And it's closed.

I think the vapor lock they have on that business is breaking a little bit, and Jamie Dimon

is swinging a hammer. But it's not something that people who are outside of finance are

necessarily familiar with, just how dependent people are in finance on Bloomberg.

Hill: And I can see, particularly for smaller outfits, not necessarily for something the

size of JPMorgan, one of the benefits is it's a little bit of a status symbol. You're bringing

clients in, "Oh, yeah, we're in touch with everything, because we've got a Bloomberg

terminal."

Mann: Every picture of every trading floor or every PM shop you've ever seen seems to

have a Bloomberg terminal in the back, and it has some chart or whatever. That's an expensive

backdrop. We don't have one. We don't use Bloomberg at all. I think we are ... yeah,

we're definitely out of the ordinary. Whenever we get asked by a broker, "Send us your Bloomberg

contact," and we don't have one ... But, I don't see the need for us. I really don't.

And I think the absolute need amongst people in finance is declining.