Sometimes it takes a really big event to remind us of underlying changes that we should have recognized more prominently at the time. With BNA, The Bureau of National Affairs Inc, in Washington DC (and seldom is a location so important as this one) being acquired by Bloomberg a real shift is recognized. It is not solely or only the case that Bloomberg want to move closer to law practises in the US and around the world, or that many of those practises might at some future point become Bloomberg terminal users rather than Thomson Reuters WestlawNext users. It is that law and regulation pervades every branch of business, from finance outwards, and that the idea that paralegal or quasi-legal had fundamentally different needs from “qualified ” legal are gone. My colleague at Outsell, David Curle, has been particularly good at pointing out this democratization of the law and the wide and free availability of primary legal content. BNA built a very successful company around the idea that lawyers and others should have a closer view of how law was being created in Congress, and how embryonic law might affect the interests of their clients and their companies.

First, the details. Bloomberg have apparently offered $990m for BNA, which is around 2.25 X the current stock price, 3 X current revenues of $331 m and about 13 X EBITDA. This is a very good price at this time, though a pre-recession valuation might have been a shade higher. BNA was an employee-owned company with an eighty year history of democratic process (to attend an AGM, with its board election involving some 1500 shareholders, was always an impressive demonstration of this). Its founders, New Deal lawyers, all shared a principled view of the importance of participation and the sharing of information. Now it joins another (intensely) private company, younger by 50 years but also founded on the idea that content should and could be shared more effectively.

So what does all of this do to the balance of power? For Thomson Reuters, comparatively little, given that it has moved decisively (through its GRC developments) into that wider view of legal and regulatory relevance stated above. BNA’s two great assets would be its brand, forever associated with the reporting of embryonic law in committee in DC, but actually much wider in content and significance, and its tax services, a market leader in conjunction with CCH (Wolters Kluwer) and Thomson Reuters Tax (RIA). It is notable that Thomson, Reed Elsevier (Lexis), and CCH all license content from BNA for access online. This will presumably end after current contracts expire. Thomson will be hurt least by this. But note how important contextualised news is now to everyone: BNA gives this to Bloomberg in a way which helps to neutralize the Reuters/West advantage.

But both Lexis and CCH will suffer collateral damage. The loss of the tax content will cause real hurt to both, and the wider impact of the loss of the BNA brand and full content set will be hard for Lexis in particular. BNA content was important in that context in particular, since previous attempts to absorb and use highly branded legal content (Matthew Bender) seem to have petered out in terms of user recognition. Given that private equity was unable to enter the contest at these valuations, Lexis would have been the obvious candidate as a counter bidder, and the fact that it felt unable to match a high but not astronomic bid points to possible future environments. It may be that Reed Elsevier see their future with Lexis in risk management rather than in legal as such, and if that were the case then we could well, in the next five years, see a new order of things, with Thomson Reuters and Bloomberg dominating legal and regulatory marketplaces, and CCH and Lexis forming a sort of second division in positions increasingly hard to maintain outside of specialist niches. There is only one shoe left to drop in US legal marketplaces. Analysts will now look closely at whether ALM (owned by Apax) will be the last major play.

Bloomberg appear to be indicating that they will hold BNA as a separate wholly-owned subsidiary in the first instance. This makes sense: they have distinctive cultures and need time to get to know each other. It is however interesting to think where the optimum first linkages will take place. Certainly management in the nascent Bloomberg Government unit will be salivating: they will rightly see the congressional law reporting as a key element in bringing more widespread usage in government at all levels. And everyone involved in the business of proliferating Bloomberg terminals more widely in the tax advisory marketplace will be exultant, since this is a real game changer for them. If the claim that we are all moving to workflow is correct, then BNA is vital to Bloomberg in its wish to move into adjoining, content – related markets like legal and paralegal.

And a final and personal note on culture. As an advisory director to BNA’s international marketing (Bloomberg will transform that with their global coverage) I have, for almost 25 years, worked with quite the most civilized publisher on the Planet. The values of the founders were exemplified by their successors, and while employee ownership sometimes caused problems of its own, those who worked there were embued well beyond the normal with a sense of purpose, and indeed, a lifetime commitment, to what they were doing, and a belief that their purpose was part of the public good. This cannot be bottled, so Bloomberg must be careful to preserve it. Having tried to enter security law in the early years of this century, and made very slow progress, they should know how difficult it is to get very high level editorial intervention and commentary to work properly. The biggest property they have so far bought is BusinessWeek, which was not strictly comparable. BNA is different, and to get the real value they will need to treat it very differently.

Here on the South Shore of Nova Scotia, where I find myself in annual joyous residence, we are all  fairly laid back about the big issues that seemed so front of mind in frenetic London. Let the market decide (a good philosophy if you have a strong economy based on extracting much-needed natural resources, and well-regulated banks that stayed upright when the rest of us fell over) seems to be the order of that day. Nova Scotians do not appear to panic easily so the absence of crisis-creating media exposure is part of the joy of being here. And being in Canada I have revisited the excellent website of the Toronto IP lawyer James Gannon. And I would in particular recommend to anyone the masterly satirical essay entitled “How I Learned to Stop Worrying and Love the Copy “. (

Towards the end of his piece Mr Gannon quotes Michael Geist as saying “The truth is that you can compete with free if you provide value” and this simple  statement has been giving me pause for thought as I walk the beach on my morning constitutional. What is it about this simple statement that has proved, in the last 30 years, so very hard to understand in the pre-internet content industry? We have, after all, a superb communications pipeline at our disposal, and it efficiently allows us to source all pre-existing media content through that pipeline. Those who do not wish to communicate in this way would be wise to withhold their content entirely from the network, since if they do not then one of two things will happen: they will be marginalized by competitors or, if the content has interest or relevancy, “outed” into the open web and illicitly re-used for free.

So “content” for its own sake is not a valid business model anymore? I think this is true now and will become much more obvious as time goes on. This is why putting firewalls around things only creates a temporary windbreak, not a permanent end to the forest fire. The valid business model is now service, and if we pitch the service solution correctly then we get adhesive customers, renewable revenue flows, and distance ourselves from that commoditization of content that increasingly afflicts the content value model. In fact, we should struggle to make our content available as widely as possible, implanted in our customer’s web environment, and maintained as a constant reminder of the tiered service value we can add. Tiers of service which begin with the App, and move forwards through customization and personalization of content to customization of analysis and focus. And that ziggurat of value is a climb where we cannot slacken for a moment, since competition will be fierce, and where we can never quite glimpse the summit, since value requirements will change over time.

Quite soon in this process much of the underlying content which we are so busily trying to protect will become a shadow presence, referenced and referred to but seldom read as such. Its presence will be taken for granted and content derived from the network process itself will assert its importance. As we move to this point it will appear absurd to be worrying about the underlying ownership status. I was reminded of this when looking at Amazon’s social reading initiatives, which seem to have edged into the market earlier this year without much public comment. This development ( competes with Amazon’s own Shelfari acquisition, and sites like Goodreads or Library Thing. If you were a publisher of general consumer books, surely this is the value point at which your acquisition policy would be focussed? And once you had readers who recorded all of their purchases and shared them with others on your site, including your books as well as your rivals, and you opened up the site to allow users to make comments on what they are reading, add footnotes, review, argue and correct, and then (as Amazon has done) you connected all this to Twitter and FaceBook, or in education to emerging social spaces around rentals like Chegg, then you are beginning to climb that value chain.

And then comes monetization. Some service values will be select, minority interests with strong membership and therefore subscription characteristics. Others will be populist, sponsored or maintained through online advertizing. The value we will seek to protect here is the service value, usually a function of underlying software and the way it works on content. And between visits to the patent courts to try to secure the unsecurable for 15 years, we will keep enhancing, changing, building the customer experience and competing through our ability to analyse the user experience and improve it.

Publishers used to do that last bit very well. They could do it again if they would relax around the content and follow the game. At the moment who do you see emerging on top? Amazon or one of their major publisher suppliers? No comment on that from my end of the beach, but you can always see who is winning by their willingness to be reasonable and offer concessions to the flagging pack following them.

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