Bloomberg Terminal is a subscription service that has multiple levels of add-ons designed to aid investing, asset management, or finance. The Bloomberg subscription can be combined with proprietary matching hardware for added convenience and security features.
Keep reading to learn more about how Bloomberg Terminal works and why so many investors use it.
- Bloomberg Terminal began as hardware, but is now a subscription service designed for serious investors.
- Bloomberg Terminal provides fundamental information about companies' financials and early access to Bloomberg news stories.
- Many competitors have sprung up, but Bloomberg Terminal benefits from the network effect of being the oldest service with the largest customer base.
Definition and Examples of Bloomberg Terminal
Bloomberg Terminal is a tool designed for serious investors who want an all-in-one solution for research and analysis. It offers data and news stories on markets, charting tools, trade analytics, and communication services.
- Alternate name: Bloomberg Machine
Using a Bloomberg Terminal subscription, investors can access, analyze, and store information on their favorite companies, going back generations. They can do this while teleconferencing with a colleague and monitoring the relationship between the United States dollar and the Japanese Yen.
The user can pull up the balance sheet and income statement of a firm that was acquired in a merger, review a dividend record, or screen for investments that fit specific criteria or financial ratios.
There are other benefits, too. Stories released by Bloomberg news are often available on the Bloomberg Terminal before being published to the general public, allowing those with a subscription the chance to read and act on the information first.
Billionaire Michael Bloomberg, former mayor of New York City, controls the company that offers the Bloomberg Professional Service. It's the source of his substantial wealth.
How Does Bloomberg Terminal Work?
Bloomberg Terminal was first introduced in 1981. In the pre-internet era, market makers reveled in Terminal's unprecedented level of access to data and fellow market makers.
While it originally came with its own hardware, Bloomberg Terminal is now a software service. The standard software is designed for PCs, but Terminal accounts can be accessed on Macs and mobile devices with the Bloomberg Anywhere companion software.
Many people who work for mutual funds, hedge funds, private partnerships, insurance companies, bank trust departments, and other financial institutions consider Bloomberg Terminal to be essential. Some consider it every bit as necessary to conducting business in modern times as typewriters and telephones were in the 1960s. Bloomberg claims that "325,000 of the world's most influential decision-makers" use the Terminal.
You must request an order from Bloomberg to learn the true cost for your situation, but estimates peg the annual fee for Bloomberg Terminal around $24,000.
Alternatives to Bloomberg Terminals
Multiple competitors have attempted to take Bloomberg's market share by offering similar services at substantially lower prices. These Bloomberg competitors face a significant challenge in the so-called network effect. Since Bloomberg terminals were first adopted in the 1980s, they've become an industry standard. If someone wanted to give up their machine and go to a rival, they wouldn't be able to use the Bloomberg user network to contact someone. It's a bit like someone who shuts down their Facebook account and doesn't have any other contact information for their Facebook friends.
Here are a few of Bloomberg's competitors:
- Eikon: Thompson Reuters and Refinitiv offer this competitive option. It offers a wide range of services and add-ons, including news from Reuters and analysis from Refinitiv.
- Symphony: Backed by Goldman Sachs and other major investment banks, this Bloomberg Terminal alternative allows businesses to sign up for 10 accounts per year for just $4,800.
- Money.net: Money.net was established by former professionals with the likes of Bloomberg, Wall Street Journal, Morgan Stanley, and more. This service offers a free 14-day trial and runs on any device—Windows, Mac, Apple iOS, and Android.
- IHS Markit: This publicly traded company offers a range of services, including portfolio modeling, third-party risk assessment, and sector analysis.
- FactSet: Another niche Bloomberg competitor, FactSet specializes in financial information on businesses, workflow solutions, and analysis on environmental, social, and governance (ESG) investments.