The Implications of Bloomberg’s China Stance
Bloomberg News’ admission that it is now tailoring its news reporting on China to avoid jeopardizing its commercial expansion there has come as a shock to many.
It should not have. Most of the western media is highly susceptible to such commercial pressures, whatever they publicly proclaim. Those with long memories will recollect how in the mid-1980s Singapore’s then-Prime Minister Lee Kuan Yew said that he would hit “in their pockets” foreign media which “interfered” in Singapore politics.
Over time, and with the assistance of his government-controlled courts, Lee brought all of the western media to heel, not least Bloomberg and the New York Times which now has now taken to attacking Bloomberg for its China policy. Others were effectively bribed by being offered cheap telecom and tax deals to base Asian operations in Singapore in tacit return for not offending the government or the Lee family. Critical reporting on Singapore has subsequently disappeared into a black hole.
So if little Singapore’s leaders can prevail over these mighty organs of “free media,” what could be expected in China if there were any chance of significant revenue from it? Clearly Bloomberg has a huge market there for its data and screens while the NYT can at best well a few thousand newspaper subscriptions.
The Bloomberg-China story saw an open rift between its corporate bosses and leading journalists. But this is a contest the journalists always lose. First came the resignation of a Hong Kong-based reporter, Mike Forsythe, following the spiking of a story about the wealth of certain Chinese officials. Then this week came the resignation of a senior editor of its Asian news, Ben Richardson, accusing the company of caving in to pressures from Beijing, which it certainly has.
Richardson is the third senior journalist to bail out of Bloomberg, raising complex questions for the whole profession. Bloomberg has been regarded as the employer of last resort as newspapers have either folded or downsized over the past two decades, paying high wages to attract some of the best and most professional, particularly from the Wall Street Journal but other top US publications as well, resulting in a further concentration of the profession.
Since Bloomberg ran a story last June about the wealth of the family of President Xi Jinping, the business news service has faced a loss of sales of terminals due to official actions, and problems in getting visas for its correspondents.
The reasons for the journalists’ departures were indirectly confirmed by Bloomberg’s chief executive Peter Grauer who in a speech to the Asia Society in New York said the company should focus on its business news product and not “wander a little bit away from that and write stories that we probably may have kind of rethought – should have rethought.”
The New York Times responded in comments by chief executive Mark Thompson who accused Bloomberg from stepping away from impartial news coverage, quoting the Times’ 19th century owner Adolph Ochs that news should be reported “impartially without fear or favor regardless of party, sect or interests involved.”
For sure the Times, which has suffered bans on access in China to its English and Chinese websites as a result of its own coverage of the wealth of the families of China’s leaders and faces difficulty in obtaining visas for journalists, can take the high moral ground for now. But cynics would suggest that this is only because its prospects of generating income in China are tiny compared with those of Bloomberg.
The Bloomberg episode shows up two crucial issues for the media. The first is that for two decades or more the general and political news emanating from the two largest western news suppliers Bloomberg, Reuters, now Thompson Reuters and to a lesser degree by Dow Jones has been cross-subsidized by the sale of financial information and even trading systems to stock traders, investment banks, currency dealers etc. as conventional wire services including United Press International and to a lesser extent the Associated Press have withered.
This has long had the effect of biasing more general news to the particular interests of those clients. It has also meant a news preference for quoting their clients. Thus, for example, they will get a quote on, for example, Indonesian politics from some Goldman Sachs analyst, possibly not even based in the country, rather than a local commentator and one not from the financial sector.
Cross-subsidization has been Bloomberg’s particular forte, often having given away its general news for little or nothing to newspapers to boost its own exposure. The Times-owned International Herald Tribune, now known as the International New York Times, used to rely almost exclusively on Bloomberg for most of its Asian general business news.
Also, last May, former Bloomberg reporters said the news service had trained reporters to use a function on the company’s data terminals to view subscribers’ contact information and monitor login activity to advance news coverage, according to a New York Times story, giving their reporters a jump against other news operations but violating subscriber confidentiality. The news service was eventually forced to apologize and stop the practice.
The net result of these trends has been to devalue the price that other suppliers of non-financial news can receive. It is at least part of the explanation for the decline of diversity in news sources despite the proliferation of news outlets, particularly with the rise of internet and mobile-delivered venues.
In Asia this contraction in diversity has been especially sharp since 2000 with the disappearance of Asiaweek, the Far Eastern Economic Review and regional editions of Business Week, Time and others. Business Week has been subsumed into the Bloomberg empire and is now called Bloomberg Business Week.
The second lesson is that diversity of news sources and freedom of information from the sort of commercial pressures applied by Singapore and China must come from new media. And those who want it must be willing to pay for it. They will mostly have to pay by subscription because in the internet and mobile age the volume of page views needed to attract advertising to what are poor advertising mediums, is too large even for all but the biggest (perhaps the NYT) or those – the Financial Times and Wall Street Journal which can charge relatively high prices to financial sector operators.
Bloomberg has a legitimate business interest in focusing on data and market-moving financial news. But in that case it should give up pretending to be an unbiased source of other news. It should henceforth end all its general and political news everywhere and make room for genuinely unbiased coverage in all countries, coverage not subsidized by the self-interests of bankers and foreign exchange dealers. That is the only honest course.