IROs can now deliver sounds and pictures direct to a wired-up globalinvestment audience – and give that audience a chance to answer back. Neil Stewart takes a look from the users’ point of view, and profiles some of the key service providers
In the War Room at T Rowe Price, analysts, traders and portfolio managers flock to follow their universe of companies. Electronic pipelines pour data into this wired nerve-centre
of information, providing the raw material for decision-making on a host of securities. Until recently, the War Room was paper-dominated, and towering stacks of company reports are still fixtures in the working lives of these investment professionals. But now multimedia is being added to the mix at the Baltimore-based War Room, and life will never be the same.
‘The best part is analysts don’t have to go to New York as often,’ says Carole Patrick, responsible for T Rowe Price’s online information services. ‘If the New York Society of Analysts has an interesting presentation on screen, our people can see everything and get a feel for management without travelling.’ Programmes are usually watched on television sets at T Rowe, although one desktop PC receives the multimedia feeds.
On-demand retrieval of digitised broadcasts is available, and Patrick videotapes key shows to be watched later.
In the insane info-packed world of an equity trading room, multimedia news is becoming an invaluable commodity. Gaining the edge may mean finding and evaluating market-moving information just moments before competitors do. When news is breaking, seeing the CEO grimace to a difficult question in real time can mean the difference between a buy and a sell for trained viewers. In other cases, in-depth research and a long-term vision of a company as seen on the video screen can support the buy decision.
For the IRO supplying the pipeline with maximum depth information, multimedia offers a chance to tell a story directly to the financial community. Management can make unfiltered pitches through multimedia, getting a company’s long-term story to the Street with a punch far beyond traditional mailings or roadshows. To facilitate this process, the biggest names in business news are wiring trading rooms, transmitting video releases, news conferences, company presentations and analyst conferences straight to the desks of investors and analysts.
The reach is impressive by any standards. Dow Jones estimates that its multimedia services will eventually reach 1,000 institutional customers, representing as much as 75 per cent of the value of the entire US equity market. One outside estimate has six Dow Jones News Desk beta sites alone representing some $400 bn in assets under management.
With this kind of clout, and the latest in video twists and twirls, IROs can have an impact on the financial community like never before.
Steve Smith, investor relations director at John Malone’s giant cable company, Tele-Communications Inc (TCI), says the delivery of information is moving to the electronic medium at an ever accelerating rate. As one of the first companies to launch a Bloomberg Company Connection page this summer, TCI is on the multimedia frontier.
TCI’s annual report, earnings, press releases, and audio/video messages from CEO Malone are instantly available on Bloomberg terminals worldwide. ‘It is speeding up the process of getting information to investors,’ Smith says. ‘Bloomberg users are our target audience, and the service gives us a direct route to investors.’
Technology has brought a dramatic change to IR, according to Margie Baigh, partner at the Financial Relations Board (FRB), the largest US investor relations agency. ‘In the past, earnings went by messenger to news outlets, followed by mailings to the financial community,’ she recalls. ‘It was a seven-day cycle, and it was impersonal communication, with investors relying on the printed word for everything. Now investment professionals get the instant gratification they expect and demand, and communication has evolved into a multimedia dialogue with the CEO.’
FRB uses Dow Jones Investor Network (DJIN), NBC Private Financial Network (PFN) and the Bloomberg Forum to support its clients’ IR campaigns. Baigh says that while the coverage has proved invaluable for breaking news, more often a video presentation will be tied into managements’ roadshows. ‘Multimedia links have proven to be a marvellous opportunity for the CEO to present his strategy and detail what’s special about the company,’ notes Baigh.
Baigh cites the case of Stewart Enterprises, a Louisiana funeral services company whose recent annual presentation to Wall Street was covered by DJIN and PFN. The conference attendance was, in effect, increased by added coverage. ‘This is where multimedia is filling the IR gap,’ Baigh says. ‘Presentations for broker-sponsored conferences and analysts’ meetings are reaching a much larger audience. For IROs, it’s a way to reach new investors as well as reinforce the company’s story for existing investors.’
Baigh adds that the beauty of DJIN and PFN multimedia networks is that there is no cost to the company. Back when FRB recognised the content value of analysts’ meetings and began taping and distributing videos in the 1980s, the client absorbed the cost. For her part, Baigh won a Mercom award for finding such a cost-effective way to expand the reach of presentations. But these days the subscriber-supported financial networks foot the bill.
‘There are nuances in video that are lost in text-based news,’ says Michael Raneri, director of technology development at the Schwab Active Trader Group of Charles Schwab & Co, the leading US retail brokerage. ‘Subtleties like voice inflection and facial expression can influence investment decisions.’ The Schwab 500 group of brokers has a digital video feed from NBC Desktop Video integrated into its network of news and trading screens. Audio, text and bullet point summaries are stored digitally for on-demand viewing.
Raneri notes that having video on PC screens lets brokers work while monitoring broadcasts. ‘Video can be dangerous. A broker can’t watch TV all the time,’ Raneri warns. ‘With alerting and on-demand storage, we point and click to get straight to the news that counts. It accelerates the market and, for us, helps close the information gap between retail and institutional investors.’
Among the leaders in the multimedia financial news business are National Broadcasting Corp (NBC), Bloomberg Financial Markets and Dow Jones & Co. These three pioneers have combined video with audio, text and graphics on the screens and televisions of US securities professionals, with live, taped and on-demand news and company information. Together they have access to hundreds of thousands of investors, analysts and bankers worldwide.
The Big Three are not the only ones gearing up for the multimedia revolution. The world’s largest news gatherer launched Reuters Financial Television on trading room PCs and TVs in North America and Europe in May. Reuters focuses on foreign exchange, debt and treasury market news, but does not offer on-demand retrieval.
Other news providers have gone the Internet route. Turner’s Cable News Network (CNN) launched CNN Interactive on the World Wide Web in August, while Time Warner’s Pathfinder homepage is oft-quoted as the hottest site on the Net.
However, custom-made company presentations have yet to reach these exclusive screens. And, although Reuters is planning to increase its equities coverage, at the moment it only covers breaking news in the fixed income market. The reach of Reuters and CNN may be impressive, but at the moment these networks are beyond the scope of IROs planning a proactive multimedia campaign so this survey concentrates on the growing provision of multimedia IR facilities from the NBC, Bloomberg and Dow Jones stables.
One would not normally regard the mass market NBC as a top financial news provider, but NBC Desktop Video draws from a wealth of material. Besides conferences and analyst meetings, NBC Desktop has access to over 60 hours of business news a day from NBC News, NBC’s 214 US affiliates, NBC News Channel, CNBC, CNBC Europe and Canal de Noticias NBC. A new addition is CNBC Asia, which produces 16 hours of live Asian business news daily. With all this to choose from, Desktop Video provides twelve hours a day of uninterrupted business news, more than Dow Jones or Reuters multimedia services, whose programming days vary.
Mike Wheeler, president of Desktop Video, points to the power of visuals. ‘We know video can play a part in investment decision-making, and that digital and on-demand video can become a part of the financial services working environment,’ says Wheeler.
‘When we surveyed the community we found out they wanted video because they can see sources and read nuances. Economists wanted to hear how something was said. Analysts wanted to see a conference and hear the questions asked by the press. And securities brokers wanted to see the things their clients were seeing. NBC’s response to this is Desktop Video.’
That is one reason why the retail discount brokers at Schwab, along with a growing legion of other multimedia groupies, have cast their vote for NBC Desktop Video Professional for trading room viewing. NBC Pro has live coverage of market moving events, breaking stories that affect markets, such as government and corporate speeches, as well as corporate announcements. The service is designed to give traders the advantage of live, breaking news.
Of more interest to IROs is NBC Private Financial Network (NBC PFN), which covers entire financial presentations. It includes over 60 CEO interviews and corporate meetings a week, exclusive coverage of New York Society of Security Analysts presentations, and regional industry conferences. Investors can submit e-mail questions in advance of a live broadcast.
PFN was launched with First Call Corp, 52 per cent owned by Thomson Financial Services, which provides online company information and sell-side analysts’ notes to Wall Street. The marketing agreement ended this year, and while Desktop Video is still offered in Windows-based First Call Notes, First Call is working on creating its own offering for the investment market.
With the force of the R&D power of parent company General Electric behind it, NBC Desktop Video has been fast off the multimedia mark. In fact, NBC was the first open architecture service with on-demand capabilities. This lets subscribers retrieve and watch stored digitised broadcasts at will, though video appears as still pictures. NBC licenses the software so companies can use the technology to create in-house communications over a PC network. For example, when the CEO of NBC talks about ratings or earnings, NBC employees can tune into an on-demand version on their local LAN.
Each Desktop Video user creates a profile that determines what kind of news triggers an alert on their screen. That way an analyst following a portfolio of companies doesn’t have to sift through the programme listings to find items of specific interest. All alerts are stored, and can be scrolled through at the user’s convenience.
The latest development to come out of the NBC-GE labs is software that allows users to click and play picture, audio and text multimedia on the Internet with no downloading time.
With the new technology, NBC Desktop Video is launching PFN and Pro World Wide Web sites with on-demand information in December 1995, going live by early 1996. Wheeler says the Internet makes the services more universally available, letting investors access Desktop Video any way they want.
NBC Desktop Video has over 100 subscribers, most of them top-tier financial services firms, including 18 of the top 20 investment banks, eight of the top ten retail brokerages, and seven of the top ten buy-side institutions. In Wheeler’s vision of the future, analysts never miss the news and a company story never falls on deaf ears: ‘An analyst gets off the plane and his beeper goes off telling him about an important news conference. He plugs his cellular phone into his laptop, dials in and listens to the conference on the PC. It’s a digital world.’
Becoming a household name is no small task. Yet, in a dozen years, Michael Bloomberg has managed to do just that. One need only stand in the middle of New York’s Times Square, surrounded by Bloomberg billboards spewing out the latest financial data, to understand the growing popularity of this company. Today, the Bloomberg terminal is a ubiquitous and indispensable source of data to some 250,000 investment professionals. And over the years ‘the Bloomberg’ has spawned a host of offspring: including business news, radio, magazines and TV.
‘The IR department is an important segment of the Bloomberg world, with specific demands,’ says Lou Eccleston, director of Bloomberg marketing and sales. ‘Whether a blue chip or a small cap IPO, companies can use Bloomberg to make communications a proactive, ongoing and consistent strategy. It’s a cost effective way to reach potential and current investors.’
Through proactively meeting customer needs on as many levels as possible, Michael Bloomberg, a former Salomon Brothers partner, has himself become the hallmark of the hottest business news in the US. The company started out offering pricing information for fixed income investors, before expanding coverage to all securities. Equities news is the fastest growing segment for information providers, and corporate investor relations officers are a new and fast-expanding target market for Bloomberg.
‘IROs have two jobs,’ says Madeline Hardart of Bloomberg. ‘One is to keep track of the information, the other is to get information to the right people. Bloomberg helps with both tasks, giving an IRO ammunition to explain a company in the language of traders and portfolio managers.’
Bloomberg has always been ahead of the game. The Bloomberg Forum, for instance, pioneered executive interviews on the Bloomberg in 1992, years before competitors mastered the same technology for the PC. Bloomberg Forum users access indexed audio and video stills, with multimedia reports letting them see and hear players while viewing text, graphics, charts and calculations. Besides being archived on terminals, Forum content finds its way to virtually every Bloomberg outlet.
The latest IR tool to come out of Bloomberg think-tanks is Company Connection.
Launched in June, the Connection offers the Bloomberg reach for IROs with their own company ‘page’. The Company Connection page assembles a description of the company, a multimedia annual report, recorded audio messages from the CEO, pictures of management, audio press conferences and teleconferences. All this is also available on an archived basis.
‘Company Connection ties together research on Bloomberg, as well as bringing in new information,’ Hardart says. ‘It uses Bloomberg’s interactive capabilities to the utmost: IROs can record audio messages that are immediately available online to people worldwide. Then investors can react and speak directly to companies via Bloomberg e-mail.’ In fact, out of all the buttons on Bloomberg control panels, one of the most often used is the ‘message’ key.
With a page on The Bloomberg, a company joins a legion of interconnected information outlets. The first step is getting a Bloomberg, which is leased at a fixed rate regardless of usage. Then comes corporate advertising in Bloomberg Magazine and Bloomberg Personal, and Company Connection is rolled into the deal. ‘An IR department can dovetail their communications with institutional and retail investors through different outlets,’ says Hardart. For example, the September edition of Bloomberg Personal featured a page of annual report advertising. Investors could call up and get annual reports or stock summaries mailed to them, or even listen to audio messages from CEOs.
This integrated news delivery is a common theme running through Bloomberg. When Bloomberg was launched, it represented a different mode of sending, receiving and analysing information. Instead of paying for information, Bloomberg customers pay for the gateway.
And, instead of sending massive amounts of data to be stored locally, The Bloomberg is supplied with the right data for the job at hand. While Bloomberg users can integrate a Direct TV satellite feed, other multimedia programmes are archived and indexed for full audio and video still retrieval.
‘No one else has the information and analytic capabilities of Bloomberg,’ claims a confident Hardart. ‘Our aim is to give everyone the flexibility to see, hear and read the news they want, whenever they want.’ Other information providers may dispute this, NBC and Dow Jones, to name just two.
There is no name on Wall Street more respected for news than Dow Jones & Co. For decades, keeping an eye on the news meant watching the Dow Jones broad tape, or ‘the Dow’. Over the last two years, investors have been tuning into Dow Jones Investor Network (DJIN) to stay on top of news. With desktop video barely out of the starting gate, DJIN began delivering live full-motion analog video to the PCs of Wall Street professionals in 1993.
According to Martin Schenker, managing editor of Dow Jones’ multimedia division and the man responsible for DJIN, the company was producing multimedia even before the word was invented. ‘Multimedia is a logical extension of what we have done for over 100 years: provide business news anywhere, any way people want it. Now professionals are demanding the kind of functionality and immediacy that video can provide, and we’re delivering it.’
Aside from fast breaking news, DJIN has speeches, panel discussions and individual corporate presentations from trade shows, broker conferences and analyst meetings. Dow Jones comes to the multimedia game with the heady editorial reputation of the Wall Street Journal, Barron’s and the leading US business news service behind it. Subsidiary Dow Jones Telerate is already a staple on traders’ screens, supplying real-time prices, news and analytical applications. All in all, Dow reaches over 150,000 screens in the US, and has the largest market share of any equities news service.
The corporate and consumer news markets have been targeted by Dow Jones since 1978 with News/Retrieval’s dial-up news and quotes. A recently added real-time feed dubbed Personal Journal has sophisticated filters to protect the user from information overload. The Wall Street Journal is testing a World Wide Web site featuring a constantly revised version of its Money & Investing Update; and a Web service called Ask Dow Jones – featuring a multimedia component – is being planned for the Internet.
Schenker, who has 20 years experience on the Wall Street Journal and came to the multimedia division from the top US editorial post in 1992, never lost sight of the storage and retrieval capability of digital video. But at the time DJIN was launched, computer technology made full-motion video too expensive to deliver digitally. After a year-long test, Dow is ready to launch an on-demand version of DJIN called News Desk using the Internet as a distribution platform. Uniquely, News Desk will digitise broadcasts on-the-fly, making them immediately available for retrieval. Other services have a lag time and only have video stills on-demand.
One of the principal attractions of on-demand is the ability to store more information than the broadcast day allows to go out live. ‘We’ll double our broadcast day without broadcasting,’ says Schenker. The advantage is also clear for companies seeking air-time on DJIN. Through third party programmers like Medialink (see box opposite), companies can tailor-make their investor relations video broadcasts combining video, text and graphics, which will then be tied in to news and made available to the Dow multimedia audience.
Having DJIN material stored digitally also opens the doors to connections with Dow text-based services like Telerate, News/Retrieval, Personal Journal, Ask Dow Jones and Money & Investing Update. ‘At some point, all this digital information comes together through links to look like one seamless service,’ Schenker adds. At the moment, Schenker won’t give out DJIN subscriber numbers, saying it’s not the size of the audience but the quality that is important. DJIN targets ‘the most influential investors’ at top financial institutions.
Whether it be NBC, The Bloomberg or The Dow, it seems that there is still room for growth and innovation in this dynamic marketplace. Yet some cynics would suggest that the appetite for this kind of information is limited in an investment arena that is already saturated with all kinds of information sources. Nonetheless, the shake-out may be some way off, as new investment continues to pour into the sector.
For the latest developments, keep watching your screen.
Offline with CD-Roms
Of course, going multimedia and interactive doesn’t have to mean going online.
CD-Roms offer a cheaper, more accessible way for companies to round out their annual
reports or other financial information. And they avoid excluding the mom & pop investors who don’t have access to the expensive, networked online systems available to analysts in investment institutions and securities houses.
IBM’s CD-Rom annual report was made available to all 1.6 mn recipients of the company’s hard copy report: they just had to fill in and return a request card included in the print version. Then, when they inserted the CD version into their CD-Rom drive on the home computer, they got to see Lou Gerstner talking to them and answering questions in a videoed Q&A session, along with all manner of computer graphics, text, original music and so on.
IBM is not the only company to issue its report on CD-Rom, although it remains one of a minority that tends to be made up of either technology-based or media companies. And, in fact, a similar version of IBM’s report is also available online on the company’s Web home page.
But CD-Roms are certainly not a cheap option, at least not yet. Firms that offer to help companies create CD-Rom reports tend to be coy about how much it actually costs, but you’d be lucky to get much change out of $150,000.
If it’s being done instead of a print version of the annual report, that’s probably an acceptable figure; as an additional cost, it’s something most companies would have to baulk at.
Medialink Paves the Way
Using multimedia for IR may require a tough transition for some but there are now services offering user-friendly ways in to this new world. Medialink, for one, has taken to
multimedia like a fish to water. As the world leader in video PR, Medialink developed Desktop Business Broadcast for corporations to get their messages to DJIN and Bloomberg audiences.
‘The markets have gone global and the world changes much more quickly than it did a decade ago,’ says Larry Moscowitz, president of New York-based Medialink. ‘The analysts and investors a company needs to reach are everywhere, not just New York.
Traditional IR no longer meets the needs of the financial community. Now technology gets information straight to the desktop of the analyst or portfolio manager in a flexible form.’
The cult of management personality has come full circle since the days of Henry Ford and JP Morgan, Moscowitz says, with cable, satellite and digital TV bringing the reemergence of the financial personality in the 1970s and 1980s – after a period in the doldrums. ‘The importance of packaging and marketing is critical to modern day IR,’ says Moscowitz.
‘The financial community wants video so they can get a feel for the person steering strategy.’
Medialink pioneered Investor Video Release (IVR) for corporations to reach the investment community with a product announcement or news conference on DJIN and Bloomberg. Subscribers to Bloomberg are notified of IVRs by alerts on keywords – a company name, an industry or a stock symbol. DJIN viewers are alerted online and by fax a few minutes before broadcast. In addition, the 110,000 subscribers to Dow’s News Service and News/Retrieval, plus several online services, receive an alert via an 800 number to receive the audio portion of the IVR. And all media subscribing to Bloomberg and Wall Street Journal bureaux have access.
Rebecca Iveson, Medialink director of IR services and a former IR consultant, walks IROs through the multimedia process, acting as both TV producer and IR counsel. She points to a small high tech company that came to Medialink after sweating for nine months to reach analysts. A few minutes on TV with a concise and informative message provoked several calls from buy-side analysts.
Iveson says three minutes is the best length for an IVR. As Dow Jones and Bloomberg view Medialink as an independent news provider, there are strict guidelines to measure the value of company news. Every piece must be newsworthy for investors, and every company must be exchange listed. At least part of every IVR has a senior executive speaking to camera, and some have other videos or interviews. The cost? Medialink says it is less than a postage stamp per network subscriber.
Medialink is now offering new multimedia channels to investors. Companies can do special event videoconferences and satellite media tours or multimedia annual reports and IPO presentations. After that? As businesses flock to the Internet, Medialink will be there offering to help structure the message, despite Iveson’s view that, for now, at least, retail investors are more likely to be Netsurfers than their institutional big brothers.