Hundreds of cruise ship passengers milled about George Town Central on a recent Wednesday afternoon, browsing through the jewelry and souvenir stands, or taking a break at one of the downtown restaurants.
Above them, on the second level of the Flagship Building, staff for the financial media company Real Vision worked to produce the latest content for the Cayman Enterprise City-based company.
Real Vision founder Raoul Pal, who owns a house on Little Cayman, has ambitious plans for his firm, aiming for it to “disrupt” the media industry and replace outlets like CNBC as the financial journalism outlet of record.
Real Vision has grown exponentially towards that goal over the last nearly five years, making it one of Cayman Enterprise City’s best success stories.
In January 2014, Pal said, his company was operating with four people out of a Cayman Enterprise City office.
Now, Real Vision has 25 employees in Cayman, another 40 in New York, and about 10 scattered throughout the rest of the world.
According to Pal, Real Vision has around 20,000 subscribers paying an annual subscription fee of $160. By the end of the year, Pal expects that number to grow at least threefold, due to a recent deal with Thomson-Reuters to put Real Vision content on that platform, which is in dealing rooms around the world.
“We’ll be in millions of houses and offices by the end of the year,” he said.
Real Vision is unlike most media companies, which have most of their content available for free and are trying to shift to move to a paywall model. Instead, Real Vision started putting most of its content behind a paywall, and is now starting an appropriately named platform called “The Edge” to provide a taste of free content.
Pal said his company can flourish under the paywall model because it provides subscribers insight from some of the world’s leading thinkers.
“We do it differently because, if you’re going to pay for subscription, you want quality content,” he said. “And we have the best in the world.”
As a former hedge fund manager and Goldman Sachs executive, Pal has a rolodex of contacts who have the combined net worth of a small country.
Past interviewees include celebrity billionaire Mark Cuban and Stan Druckenmiller, a hedge fund manager who has not had a down year in three decades. Real Vision also has industry leaders conduct the interviews – people like hedge fund manager Kyle Bass, who has his own Real Vision series. This is why Real Vision is able to get the tycoons who would either never appear on mainstream media, or only appear for quick, three-minute soundbites, said Pal.
“They trust us. It’s peer-to-peer,” he said. “They’re interviewed by someone like myself, who’s been in the industry and knows them personally, or by someone else in a similar situation.”
Along with long-form interviews with the giants of the financial industry, Real Vision also does on-the-ground reporting around the globe. Pal likened this content to the financial version of VICE, the outlet that has made documentaries from some of the world’s most dangerous places, including North Korea, Syria and Somalia.
“We just did a piece in Venezuela that covers every aspect of what’s going down there. We have a journalist filming and interviewing people, showing what hyperinflation is all about, the food crisis, the medical crisis – all of that – and then the finance guys involved in the debt restructuring,” he said. “So, from the most in-depth finance to the broader humanitarian story, bringing it all together.”
The in-depth content is not aimed at providing breaking news and trading tips for investors to make a quick buck, Pal added. Rather, Real Vision aims at exposing users to a broad range of financial, geopolitical, and philosophical ideas. “There is no such thing as a tip that consistently makes you money. That’s basically for fraudsters. The idea is that you’re giving people the tools to learn. So, even if we have a hedge fund manager come on and say his or her best idea, he could be wrong too,” he said. “No one is 100 percent right, so the idea is that you’re learning how to think about things yourself. If you develop your own way of thinking, then you develop your own way of doing better.”
According to figures provided by Pal, Real Vision’s subscribers are lapping up all the content produced. In an era of shortening attention spans – where the average viewer watches about 4 percent of a Facebook video, 20 percent of a YouTube video, and 71 percent of a World Cup game – Real Vision users watch 88 percent of a video, said Pal.
“And it’s the same whether we do a 10-minute program or an hour and a half,” he said. “They’re fanatical about it.”
Subscriber loyalty played a key role as Real Vision scaled up from four people in a Cayman Enterprise City office to the dozens of journalists, producers, editors and business experts working for the company around the world, Pal said. Real Vision has recently raised $15 million just from offering friends, family and subscribers equity in the company, he said.
“We have [the] holy grail of audiences – young, rich, smart and super engaged,” he said.
But while Pal is optimistic about the future of Real Vision, he has a less rosy view of the future of the economy. He explained that the U.S. economy is in the midst of one of the longest expansionary periods in recorded history, and that the boom is bound to turn bust eventually.
“So, in probability terms and you know [the economy is] cyclical, you know there has to be a downturn soon,” he said. “And [the downturn] always corresponds with rising interest rates, and often with a rising dollar.”
As Pal was speaking, U.S. stocks were plummeting, with the Dow Jones Industrial Average falling by roughly 830 points – the worst drop since February. Markets have greatly fluctuated and have had several other large losses since then, leading to some financial pundits to speculate that a bear market has begun.
But whether the boom is over or some of October’s losses were just a part of a short-term correction in a continuing bull market, Pal said investors should protect themselves from an “all-time overvaluation” of the stock markets.
If Pal is correct, Cayman’s economy would be affected, too. The financial services industry would likely remain strong, said Pal. Even if a global recession hits, a shrinking funds market will be replaced by a growth in accountants and lawyers who have to liquidate the funds – indeed, some of the lawsuits and liquidations stemming from the last financial crisis are still ongoing.
However, tourism would take a hit, and the property market could suffer even more, said Pal.
“In Cayman, there’s lots of building going on, and borrowing to fund that building,” he said. “I think people should just be a little bit careful, knowing that even if this is the longest business cycle ever and it extends another two years, half of these building sites now are still going to try to be selling property in two years.”