Financial data providers are a key part of a finance professional’s workflow. For the investment banking analyst who needs to find historical data and forecasts to build a 3-statement model or for the currency trader looking for real-time quotes, having access to up-to-date and accurate financial data is critical.
As it currently stands, the financial data industry is dominated by 4 large providers:
- S&P Capital IQ
- Refinitiv Eikon (Subsidiary of London Stock Exchange Group, Formerly Thomson Reuters)
All four attempt to offer a one-stop-shop platform that provides all types of financial data services (with a massive price tag, as you’ll see below).
The goal of this article is to provide a thorough comparison of cost, industry relevance (buy-side vs. sell-side), and apps and features that might push users to favor one data provider over another.
Price Comparison at a Glance
|Platform||Pricing||Market Share (1)|
|Bloomberg||The cost of a Bloomberg Terminal is $27,660/year for one license, and terminals are leased on a two-year basis. The price drops to $24,240 per terminal per year for two or more terminals. See below for academic pricing.||33.4%|
|Capital IQ||The cost of Capital IQ is not published publicly, as the pricing model is tier-based and tailored to meet the specific needs of each customer.
The lack of transparency around Capital IQ’s pricing stems from their product offerings being customized solutions for the customer profile and specific use-cases.
|FactSet||The cost of a FactSet subscription is $12,000 per year for the full product.||4.5%|
|Refinitiv Eikon||The cost of Eikon is $22,000 per year, but a stripped-down version can cost as little as $3,600 per year.||19.6%|
(1) Source: Burton-Taylor International Consulting 2020 Financial Market Data Report
Bloomberg is the 800-pound gorilla in the financial data world, with financial data revenue of approximately $10+ billion. It controls more than ~33% of the financial data market. Its closest rival is Refinitiv Eikon, with ~20% of the market share.
The cost of a Bloomberg Terminal is $27,660 per year, and terminals are leased on a two-year basis. The price drops to $24,240 per terminal per year for 2 or more terminals.
Academic discounts: For universities looking to power their finance labs with the famous terminals, Bloomberg offers significant incentives. For example, once schools commit to 3 terminals, they can get nine additional machines for free, dropping the total per-terminal cost to as little as $3,000 per year.
Bloomberg is best for …
Buy-side, sales and trading, and asset management. While the Bloomberg terminal is used across the financial services world, it is used predominantly by portfolio managers, buy-side analysts, and sell-side finance professionals within the sales and trading, and asset management functions.
You absolutely have to go with Bloomberg if …
You’re in any way involved in the bond market. Bloomberg’s fixed income data is second to none. Its data sets are more comprehensive and are updated more quickly than any of its peers, making it especially useful for credit research analysts, fixed income sales and bond traders, and professionals in debt capital markets.
Then there’s Bloomberg’s instant messaging service — one of Bloomberg’s arguably stickiest features. Bloomberg’s IM service allows anyone on the terminal to IM with others on the terminal. Why is this exciting? Because if traders at all the trading desks are posting quotes on Bloomberg IM and nowhere else, you simply have to be on Bloomberg. It’s basically the same reason you’re on Facebook and not on MySpace.
This is a sticky feature for Bloomberg as it faces competition from the Eikon platform and chat-only startup alternative Symphony. In an effort to kill Symphony, in October of 2017 Bloomberg surprised many observers by decoupling IM from the rest of the terminal license. It now charges $10 per month for IM only (your company has to own at least one terminal to be able to get this service for additional users).
You could probably live without Bloomberg if …
You’re in investment banking. Investment bankers do not use Bloomberg as widely as some of their sell-side peers and buy-side professionals. For example, the M&A team at an investment bank might have a couple of Bloomberg Terminals available, but it’s unlikely that each banker will have their own machine.
Instead, investment bankers are far more likely to have their own dedicated FactSet or Capital IQ subscription. That’s because Capital IQ and FactSet have developed specific capabilities such as a click-through function to audit data in source documents, Excel plugins that increase productivity, and company and transaction screening tools designed specifically with the investment banking workflow in mind (more on this below).
Capital IQ was founded in 1998 and was acquired by McGraw Hill’s S&P division for $200 million in 2004.
Unlike Bloomberg or FactSet, Capital IQ is a web-based portal accessible from any machine.
The Capital IQ offering was strengthened further in July 2015 with McGraw Hill’s $2.2 billion purchase of rival SNL. While Capital IQ and its largest rival FactSet provide financial data across all sectors, SNL’s strength has been unparalleled financial and transaction data sets within specific sectors, namely insurance, banking, real estate, energy, metals and mining, and media.
While S&P does not disclose Capital IQ and SNL revenue separately from its other data products within the “Markets and Commodities Intelligence” segment, it’s likely that Capital IQ and SNL represent the vast majority of the segment’s $2.2 billion in subscription revenue.