Jeff New has six-and-a-half hours each trading day to juggle three mutual funds and dozens of stocks. How does the senior portfolio manager at Van Kampen Funds keep up on the most relevant financial data and analysis? Four or five times a week, he clicks through a series of live, Web-exclusive broadcast reports from Wall Street analysts.
No joke. Merrill Lynch, Lehman Brothers, Credit Suisse First Boston, and Morgan Stanley are among the first investment banks to Webcast their own content to larger institutional clients. Internet video streamed directly to select client desktops is just the latest method used by the banks to get their analysts in-or at least near-clients’ faces. Merrill Lynch also is introducing this new financial channel to retail investors.
Today, Merrill Lynch transmits 4 to 12 hours of live content around the world daily. Clients receive 5- to 10-minute audio clips of morning calls, video market updates, company reports, or interviews with executives. Money managers can visit Merrill’s site, sign in, view the Webcast of their choice or choose to receive upcoming reports by email. For now, the Web is best at streaming brief audio and video segments-CEO interviews and market and sector updates work well, for instance. Longer, more interactive Webcasts may involve slides of charts and graphs that highlight the key points of a particular report. And money managers can dial in and ask analysts questions in a conference call format. Even users running high-speed office connections, however, may find the Webcasts halting-unless they like twitching, pixilated images of analysts and tinny voices.
Merrill Lynch sends nearly 80 percent of its live content exclusively to its institutional clients, those who manage assets for investment and mutual fund companies. The remainder goes to Merrill’s retail customers who receive time-dated versions of Merrill’s Webcast financial show, TechTalk as well as other time-dated analyst offerings. While the investment bank won’t disclose traffic data, it claims the programs have been wildly successful. New says the Webcasts saved his hide at least once. One analyst report prompted him to reduce some of the funds’ semiconductor holdings before the sector took a dive.
Lehman Brothers launched morning-call Webcasts from its London offices last year. Although morning calls Webcast at the New York office are for internal use only, the office plans to roll out more daily content to clients by summer. Indeed, Lehman is constructing its own Webcasting studios in London and New York.
At first, transforming analysts into talking Web-heads hardly seemed like a winning idea. But time-strapped institutional investors such as New are paying attention. “It’s more engaging than sitting and looking at a piece of paper,” New says. “You get the best of both worlds. You get the bottom-line conclusion, the supporting data, and all the background data.”
Whether it’s an audio clip of an analyst’s morning call informing fund managers of the day’s coming market fluctuations or a new company report, institutional investors need instantly digestible information. Webcasting certainly won’t eliminate the need for investors to study mountains of reports, but the Web gives money managers the choice of plowing through paper or catching the Cliffs Notes version online instead. So far, only Merrill Lynch is providing this high-level research to everyday investors. “We hope a busy portfolio manager or analyst will get the key info and a more insightful message,” says Don Ullmann, Merrill Lynch’s chief operating officer of global research. “We could create a report with the same content that’s not timely-it might have less impact and less value.” While retail investors can’t expect the same kind of access to research that a professional money manager receives, banks such as Merrill Lynch will continue to send out time-dated information. Other brokerage banks may charge retail customers willing to receive this once-privileged knowledge in a more timely fashion.
For the pros, nothing yet beats personal contact between a money manager and an analyst. But the Webcasts appear to be the next best thing. “Information is better coming from the investment bank itself, it gets away from sound bites, and analysts now have 20 minutes to say what they want,” says Patricia Walters, senior vice president with the Association for Investment Management and Research. Webcasting might also allow analysts to streamline their exhausting schedules by limiting the need to fly to conferences around the country.
Don’t expect Hollywood-style productions, though. “Some guys are way uncomfortable. They’re stiff and wear white shirts that have too much glare,” says Nick Balletta, senior vice president of the enterprise group with iBeam Broadcasting, a company assisting Merrill Lynch with Web production. “But [later on] they start asking for makeup and hamming it up. We’ve created mini-monsters.”
Merrill Lynch’s frequent Webcast stock jockeys:
Coverage Area: Global technology strategy
Recent Webcast: Host of TechTalk show; interviews of PC hardware analyst Steven Fortuna and software analyst Chris Shilakes
Coverage Area: Satellite companies, such as Hughes and EchoStar
Recent Webcast: Preview for satellite industry’s first-quarter results
Coverage Area: Oil companies, such as BP Amoco and Exxon Mobil
Recent Webcast: Presentation on oil stock valuations, with fellow analyst Sue Graham
Heather Hay Murren
Coverage Area: Household and personal care stocks, such as Revlon and Clorox
Recent Webcast: Industry overview
Coverage Area: Latin American Telecom, such as Telmex
Recent Webcast: Interviewed OptiGlobe CEO Scott Puritz, with analyst Whitney Johnson
Coverage Area: Chief Economist
Recent Webcast: Monthly outlook for the U.S. economy
Coverage Area: Specialty retailing, such as Gap and Tiffany
Recent Webcast: Interviewed Barry Erdos, the COO of Ann Taylor
Coverage Area: Hospital management stocks, such as HealthSouth and Omnicare
Recent Webcast: Industry overview