What Is a Bloomberg Terminal? Functions, Costs, and Alternatives (2024)

What Is a Bloomberg Terminal?

A Bloomberg terminal is a computer system that allows investors to access the Bloomberg data service, which provides real-time global financial data, news feeds, and messages. Investors can also use the Bloomberg terminal's trading system to facilitate the placement of financial transactions, such as stock and options trades.

Bloomberg charges an annual subscription fee, with the price for the proprietary electronic trading system at an estimated $27,660 per year, as of 2020.

How a Bloomberg Terminal Works

Bloomberg terminals are one of the main product offerings from Bloomberg L.P. They are one of the most heavily used and highly regarded professional investment systems to be created for the financial marketplace. Institutional investors are the typical customers of this product since the relatively high ongoing cost makes it unfeasible for individual investors with relatively small amounts of capital to purchase.

The system provides news, price quotes, and messaging across its proprietary secure network. It is well-known among the financial community for its black interface, which is not optimized for user experience but has become a recognizable trait of the service. It's not uncommon to see Bloomberg's rather bland visuals carried into their television station, although they round their media empire out with visually rich content in their flagship magazine Bloomberg Businessweek.

Benefits of a Bloomberg Terminal

The Bloomberg terminal was developed in 1982 by New York businessman Michael Bloomberg. The terminal was originally a "piece of dedicated, all-in-one hardware for connecting to a network." Now, the terminal operates on any PC via Windows-compatible software, a custom Bloomberg keyboard, and fingerprint scanner. Based on design, the system is compatible with the popular Excel program, a very important aspect of the system for those in the finance industry.

Bloomberg also offers users access to the application online and through mobile devices, via its Bloomberg Anywhere service. For portfolio managers and brokers, having the ability to access real-time market information from almost anywhere in the world is an incredibly convenient and important advantage of a Bloomberg subscription.

Bloomberg's instant messaging service has become popular among traders, who use it to post quotes, updates on trades, and news about market activity. The tools included in the Bloomberg terminal are widely used by portfolio managers, sell-side finance professionals, and buy-side analysts. Bloomberg's data sets are comprehensive and quickly updated to reflect current market activity. Bloomberg's treasure trove of fixed income data appeals to bond traders.

Bloomberg Terminal Competitors

The largest competitor to the Bloomberg's Terminal is Thomson Reuters, which started offering its Reuters 3000 Xtra electronic trading platform in 1999. Then in 2010, they launched the Eikon platform, which officially replaced its predecessor in July 2012. In 2018, Thomson Reuters completed a deal with the private equity firm Blackstone, selling a 55% stake in the company for approximately $17 billion in gross cash proceeds.

Bloomberg and Thomson Reuters split the market share in by 2010, each coming in at around one-third of the market. In 2018, Bloomberg's market share remained at around one-third compared to Thomson Reuters' drop to 22% market share. In 2018, Thomson Reuters sold its financial data and analysis platform to Blackstone Group under the rebranded name "Refinitiv," and announced a renewed focus on enhancing the firm's flagship products, the Eikon desktop platform and the Elektron data platform.

Refinitiv was later sold to the London Stock Exchange (LSE) Group. Bloomberg still commanded a one-third market share as of 2022, with Refinitiv holding its own at 19%. The rivalry between Bloomberg and its competitors continues, as competitive pressure from smaller firms that offer financial data and analysis at a much lower price point. Two such firms are and FactSet. The proliferation of big data, analytics, and machine learning look to cut into Bloomberg's stranglehold on the financial data space.