Although distant in terms of revenue, the fastest growing major data providers in the industry were FactSet, Interactive Data Corporation (IDC) and SIX Telekurs which now enjoy 2.5%, 3.3% and 1.2% global share respectively. The fact that the third, fourth and fifth biggest players hold less than 4% market share each only serves to underscore the duopolistic nature of the current market data industry.
Asia led all regions in 2008 with a 20.3% increase in spend, while Europe, Middle East and Africa (EMEA) grew at just under 7% and the Americas contracted by almost 10%. Thomson Reuters is the market share leader, with Bloomberg second, in each of the three regions. Quick sits third in Asia while SIX Telekurs is third in EMEA and IDC third in the Americas.
Burton-Taylor data shows that exiting 2008 the largest segment, in terms of total information and analysis spend worldwide, is Fixed Income/FX Sales & Trading. Investment Management is second largest, followed by Equity Sales & Trading, Corporate, Wealth Management, Commodities & Energy and a dramatically smaller Investment Banking segment.
A challenging year in 2009 is projected by Burton-Taylor, with negative 1-3% growth seen for the industry. The Americas will continue to contract. EMEA will remain flat but be supported by growth in the Middle East and Eastern Europe. Asiaâs growth rate will be significantly less than recent years but still reach the low to mid-single digits, fueled by external investment from Japan and internal investment in China.
âThomson Reuters and Bloomberg will face differing challenges and changing business focuses in 2009,â says Douglas B. Taylor, Managing Partner of Burton-Taylor. âAt TRI, feeding the appetites of the growing âlow latencyâ and risk management monsters, as well as continuing to establish a foothold against strong competitor Dow Jones in the machine readable news market, are key priorities. At the same time, launching a new financial video service and rebuilding equity news to leverage their desktop dominance in the North American Wealth Management space will test the Companyâs ability to both invest and seek overall margin improvement.â
âAt Bloomberg the attention is directed at finding new revenue outside the core terminal business,â Taylor says. âCommitments to high margin datafeed sales, and to improved news coverage in China, are seen as significant opportunities, but successfully capitalizing on the strategies without cannibalizing existing revenue will require creative commercial models and deft execution in areas that are relatively new to the company.â
According to Taylor, âBoth TRI and Bloomberg are facing these challenges at a time when the revenue insulation provided by their dwindling two and three year client contracts is rapidly eroding. Additionally, IDCâs continued aggressive approach to pricing and SIX Telekursâ continued strong organic and acquisition-based growth may begin to dent the market shares of the âBig 2â. Maintaining revenue by Thomson Reuters and Bloomberg over the next 12-24 months will be strictly on the merit of their strategic planning and execution. Both companies are leaning heavily upon their proprietary news capabilities to help drive growth, which is one reason that Burton-Taylor in the coming weeks intend to publish the first ever, detailed comparative study of Bloomberg News versus Reuters News.â
âBecause market participants are finding it increasingly difficult to differentiate services, we believe that our study âBloomberg vs Reuters News â Analysis of International Services 2009â; a quantitative and qualitative analysis of Bloomberg News and Reuters News including regional and international content, daily and hourly volume, 3rd party redistribution, coverage breadth, coverage depth and commentary comparison, will provide a transparency and illumination that improves competition between industry participants and profitability of industry clients,â say Taylor.