Merrill Lynch turns its analysts into net stars
Its a far cry from the Victorias Secret webcast last year instead of skimpy, diaphanous outfits, picture Wall Street gurus with market forecasts and pie charts.
Merrill Lynch & Co. has launched a broad new streaming media initiative, and in doing so, it is in effect becoming more like a media company. The financial services firm hopes to capitalize on its analyst talent to attract institutional investors and viewers: Merrill Lynchs 900 analysts, strategists and economists double as talk-show hosts and anchors to deliver research in real-time.
"We felt it was increasingly important to deliver a media capability to complement what weve done for years in print," says Don Ullmann, chief operating officer of Merrill Lynch Global Research. "We think streaming media is a very effective way of doing that. It enables the portfolio manager to look and listen while they sit at their desk, as opposed to having to go through a pile of papers."
In a partnership with iBeam Broadcasting, Merrill Lynch delivers audio and video streams to individual and institutional clients around the world through its Web sites.
So now Henry Blodget, Merrill Lynchs powerful Internet industry analyst who has been a poster boy for dot-com irrational exuberance, has become a star on the Internet. Blodget, along with several of his colleagues, serves as an on-air personality for the firms digital programming.
With the streaming media initiative, Merrill Lynch becomes more than just a manager of financial assets. Its homegrown content features keynote speeches by analysts at conferences, plus market overviews, news and analysis. The programming also includes a talk show, called Tech Talk, produced in iBeams New York studio.
Streaming media is also helping Merrill Lynch comply with a new Securities and Exchange Commission rule called Regulation Fair Disclosure, which bars public companies from disclosing market-moving news to a select group of investors. The SEC requires companies to release announcements simultaneously to a broad, public audience. Since the rule went into effect last October, 89 percent of companies have opened up their conference calls to the public through toll-free numbers or Webcasts, according to a study by the National Investor Relations Institute.
"Weve been very mindful of [Regulation Fair Disclosure], and thats one of the reasons were trying to do more of this," Ullmann says.
And with its foray into online programming, Merrill Lynch has also changed the model for research distribution. Instead of the typically bland, text-heavy reports that financial analysts produce, Merrill Lynch is creating the concept of regular multimedia programming. IBeam, which has a multiyear, multimillion-dollar contract with Merrill Lynch, says it produces 12 hours of streaming content per day for the financial services giant.
Ullman says Merrill Lynch chose iBeam because of its global presence, technology infrastructure and ability to customize its offering.
It was also natural for Merrill Lynch to select iBeam because of their longstanding relationship. Merrill Lynch was an investor in NextVenue, which iBeam acquired for $375 million in July 2000 to expand its Webcasting offerings in financial and corporate markets. Merrill Lynch was one of NextVenues early customers, back when distributing basic audio content online was considered groundbreaking. When NextVenue filed an IPO, Merrill Lynch was the lead banker. Thanks mostly to the NextVenue acquisition, about half of iBeams enterprise division revenue this year will come from financial institutions. It will certainly need the business: Last year, iBeam reported revenue of $18.1 million and a net loss of $482.1 million.
Nick Balletta, senior vice president and general manager of iBeams enterprise division and formerly CEO of NextVenue says what appealed to Merrill Lynch was that iBeam offered a complete array of production and hosting services. "We were able to provide a solution for them that included content acquisition or capture, full production capabilities and then, obviously, we have the distribution network for the streaming media content," Balletta says. "And were able to do that on a global basis."
As a result, clients can hear analysts discuss breaking news and deliver commentary from Merrill Lynchs morning call, a meeting that traditionally has been aimed at the firms internal sales force.
Ullmann says the streaming media isnt changing the message or the nature of the analysts role, but rather is creating a more effective delivery vehicle. At first, he says, clients needed help in learning how to download and install a media player. Other wrinkles included unexpectedly high demand for the content, which forced Merrill Lynchs information technology departments to act quickly to address internal bottlenecks. Access to bandwidth varies geographically, and Merrill Lynch has had to consider that some clients can access its multimedia content more easily than others.
Much of Merrill Lynchs streaming content is audio accompanied by a slide presentation or static text. But some of the content is streaming video, which can still be tricky to deliver over the Internet. Many people think its going to be TV-quality from day one, and most often its not, Balletta says. In addition, there are technical issues that have to be worked through on the production side, such as bypassing corporate firewalls. Experts advise companies planning to enter video production to do so with baby steps. Even some of Merrill Lynchs star talent had to be eased into the idea of going "on the air" online.
"There were some [analysts] that showed up, and it looked like they had it in their blood," Balletta says. "The Internet guys tend to be a little more savvy and out there, and some of the other folks were a little more squeamish. But its amazing over time, they start to snap their fingers, looking for the makeup person."