It’s not just lobbyists who are willing to pay for that insider info. The amount of money spent on federal contracting more than doubled in less than a decade, from $206 billion in fiscal year 2000 to $537 billion in 2011. Another big customer base—one more squarely in the targets of populist outrage—is Wall Street trading. The sector’s growth in the 1990s and 2000s meant that there was a considerably bigger pool of potential readers willing to pay for reporting on the latest information on, say, regulatory filings by the Federal Communications Commission—intelligence that might enable them to make smarter trades on communication company stocks.
At the same time, the amount of primary information available online has exploded. The Federal Register, Congressional Record, all bills offered in Congress, and every proposed rule and comment are available online. Almost all congressional hearings are live-streamed on the committee websites, on CSPAN, or on both. Even press conferences with the White House and the State Department are available online. Everyday Americans might not know or care to look this stuff up, but for trade reporters—or all reporters, for that matter—the pool of source material from which stories can be drawn has broadened and deepened immensely.
With an almost unlimited amount of source material to draw on, a rapidly growing set of potential elite readers, and fewer competitors in the form of newspapers and newswires, it’s no surprise that the paywall press would blow up while newspapers faltered. “It’s just simple economics, it makes total sense,” says Nicholas Lemann, dean emeritus at the Columbia School of Journalism.
As demand for well-reported insider news has grown, new players have entered the market. One is Bloomberg Government, a subsidiary of Bloomberg LP, the media giant founded by Michael Bloomberg and best known for providing market data to Wall Street traders via proprietary terminals. Bloomberg Government, or BGOV, was established in 2011 to provide subscribers—lobbyists, contractors, and investors—with the kind of fine-grained data and analytics about government that Bloomberg’s other operations provide about companies and markets.
The company also has free web products, like Bloomberg News and Bloomberg/Businessweek, with reporters in D.C. All told, Bloomberg has increased its news operations from seven correspondents in 1991—when it first applied for accreditation in the Senate Daily Press Gallery—to 193 in 2013, not including the additional 185 employees of Bloomberg BNA.
The same year, 2011, that Bloomberg entered the D.C. trade market with BGOV, another new player emerged: Politico Pro. The subscription-only arm of the upstart political news outlet Politico, Politico Pro has grown to 12 separate verticals—including technology, agriculture, and energy—and to 81 dedicated reporters and editors in just under five years. Each vertical offers three kinds of products: a morning news tip sheet modeled after the Politico reporter Mike Allen’s hugely popular Playbook; short and quick dispatches of news throughout the day, called “Whiteboards”; and occasional lengthier, more in-depth pieces. Politico Pro has quickly become a major source of revenue for the company, which projected in a 2013 memo that subscriptions would account for nearly half of the company’s revenue by 2016.