Commentary

Yahoo Finance's Subscription Service Must Focus On Value-Added Content To Challenge Rivals

Yahoo Finance’s upcoming subscription service is long overdue. For years, the website has provided ample free resources to help mom-and-pop investors do research and follow news updates. It has rightfully earned the nickname as “the poor man’s Bloomberg.”


I worked at Bloomberg News for about five years, and a nondisclosure agreement prevents me from saying anything about its internal workings. But I can say that the $20,000-a-year subscription fee for a Bloomberg financial data terminal is way out of reach for most folks.

And that’s fine. Unless you’re a professional who needs to be plugged in to the handful of other traders willing to price out that speculative Jamaican 10-year paper you’re trying to unload, Yahoo Finance is a good source of news and information.

When I worked at Lehman Brothers before the crash, its award-winning team of about 100 stock analyst teams shared only a handful of high-priced Bloomberg terminals. But everyone had FactSet as a less costly source for financial data and analysis.

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At the lowest end of the scale, the Securities and Exchange Commission still provides a ton of information for the unbeatable price of free.

Yahoo Finance’s subscription service – due to start this quarter -- reportedly will cost about $100 a month, which is still pricey for the average retail investor who may glance at their 401(k) balance every three to four years. But there are plenty of professionals who would willingly pay that fee as part of the research costs they write off every year.

CNBC had the same idea to start charging for access with CNBC Pro in 2010, and Bloomberg News added a paywall to its mostly free website last year.

As with every publisher of financial data, the key for Yahoo Finance will be in creating exclusive, value-added content that can’t be found elsewhere. To do that, the company is beefing up its editorial teams, and this week expanded its live video programming to cover market hours, as Publishers Daily reported yesterday.

The growing reliability of broadband service, especially when cellular companies start offering next-generation 5G service starting this year, is opening the market for more streaming media content that Yahoo Finance can provide.

Every financial publisher likes to boast how they move markets — in a good way — versus incorrect reporting that triggers an algo-driven flash crash. Yahoo Finance will need to work hard to get that information, especially deal news that will make its content indispensable to investors.

Reporter Andrew Ross Sorkin helped make The New York Times a must-read for Wall Streeters by starting the Dealbook blog that rounded up M&A activity and other articles from sources. Yahoo Finance has an opportunity to do the same, even if the number of publicly traded U.S. stocks has dwindled to about 3,600, from more than 7,000 two decades ago.

Rivals like CNBC will still insist on first-time access to TV guests before other networks, even if Fox Business Network has more viewership. CNBC reporter Becky Quick’s lock on extended one-on-ones with Warren Buffett also looks unassailable at this point.

But access journalism isn’t nearly as useful as real reporting. That field is still wide open.

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