x Abu Dhabi, UAESunday 21 January 2018

The FT shows commentary can be lucrative business

The debate about the commoditisation of news is still raging, with the two sides lined up behind formidable media players.

Spot the difference between these two advertising slogans: "Comment is free", says the British newspaper The Guardian; "No FT, no comment" said the Financial Times in their highly successful ad campaign. The first implies that commentary and analysis of news events in The Guardian is unfettered, open to anybody, and - more relevant here - is not paid for. The second implies that commentary is an integral part of the high-kudos package that is the FT and has a value beyond that attached to simple news. "We can tell you what this piece of news means and expect you to pay to hear it," is the message behind the FT slogan.

The debate about the commoditisation of news is still raging, with the two sides lined up behind formidable media players. On the one hand there is the magnate Rupert Murdoch, who thinks the handout has gone far enough and wants to charge hard cash for the content of his newspapers, TV stations and websites. On the other there is the internet search service Google, which wants to continue being an aggregator and bring news free to the laptops of the world.

Recently there were two intriguing developments in the field of business news that show there is a third way. Perhaps because of the impact of the financial crisis and recession, when there was a huge demand to understand the significance of a news event such as the collapse of Lehman Brothers, the media business is waking up to the fact that business news and commentary does not fall into the strict demarcation of the Murdoch-Google divide.

A couple of weeks ago it emerged that Breakingviews.com, the financial analysis website, was in talks to sell itself to Thomson Reuters (TR), the financial news giant, for US$16 million (Dh56.7m). Soon after, the FT announced a deal with the other big financial news group Bloomberg to put the influential financial commentators of its Lex column on to Bloomberg TV. The message from the two deals is that business and financial commentary has an intrinsic value above and beyond that of mere share price movements or company announcements, the grist of the everyday mill of business news.

Of the two deals, Breakingviews-TR is the more complicated. Breakingviews was founded in 2000 by Hugo Dixon, a former editor of the FT's Lex column, and his colleague Jonathan Ford. Since then it has managed to amass some 15,000 subscribers, and - thanks to publication deals with newspapers around the world (including The National) - lays acclaim to some 4.5 million readers. Like the curate's egg, it is profitable in parts, with established operations in Europe and North America paying for investment in the new financial centres of the east. To have created $16m of wealth over nine years is no small achievement for Mr Dixon and his backers, especially from such a comparatively small operation.

There is no guarantee the deal with TR will go through, although talks are said to be at an advanced stage. Intriguingly, Mr Ford parted company with Breakingviews in 2007 and was hired by TR to build up a global commentary team for the media giant. If TR does finalise the Breakingviews deal, Mr Ford could find himself in the embarrassing position of again working with the man to whom he said goodbye so recently.

While the FT-Bloomberg deal is more straightforward, it again illustrates the added value now placed on business commentary. FT analysts - long hidden by the anonymity of the Lex handle - will be broadcast on Bloomberg TV daily to explain and elaborate on their views. Bloomberg will pay for the privilege of having Lex input, which will help it sell its terminals in the ongoing competition with TR. The FT will get increased exposure for its flagship comment column and some cash where it now gives its services free, in the form of the many interviews of FT experts on other news channels.

Both deals come as The Wall Street Journal and Dow Jones are beefing up their own commentary section, the Heard on the Street column. What has this all got to do with the Gulf? Well, we saw just recently with the sale of Maktoob to Yahoo that the rest of the world is waking up to the online potential of the region. With a price tag as high as $150m, that deal showed there is value here on online commentary - though that is just a small part of the Maktoob offering.

The only other outfit that performs a business commentary role is Zawya-Dow Jones, the Dubai-based website, although it has so far not got around to producing a branded product along the lines of Breakingviews. In a region that has steered clear of rigorous financial analysis in the media for historical and cultural reasons, surely there is a growing demand for such a product, especially as the ratings agencies are now held in such low esteem. The rest of the world clearly sees money in it.