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tv   Bloomberg West  Bloomberg  March 14, 2016 6:00pm-7:01pm EDT

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military to begin with drawing from syria. he said the pullout is expected to begin tomorrow. announcement comes as peace negotiations resume in geneva. russia possible five and half month air campaign allowed bashar al-assad's army to strengthen his position as head of the talks. syrian kurdish fighters battling islamic state are noting an increase in the number of militants going awol according to the associated press which site kurdish fighters making the claims as coalition forces continue to reclaim territory. another islamic state recruit, a palestinian-american caring a u.s. drivers license surrendered to a military unit today. president obama says he is confident he can make significant progress on foreign policy in the next 10 months. the president says the u.s. will frontsghting isil on all and will work to close the military prison at guantanamo bay. he says he will work to enforce a global climate agreement.
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new poll has donald trump ahead of senator marco rubio in florida one day before the winner take all republican presidential primary. global news 24 hours a day powered by our 2400 journalists and 150 news bureaus around the world. i'm mark crumpton. "bloomberg west" is next. ♪ emily: i'm emily chang and this is "bloomberg west." analysts bumping heads on conflicting outlooks with apple. we will bring you the details. tesla gets a vote of confidence from robert w baird. we will look at what this new dose of optimism is about. reading the tea leaf of presidential primaries. how do pollsters stay relevant
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in the age of real-time data? a flat dayr lead -- for the markets but analysts are adjusting their notes on two major tech companies. anh apple and a product of next week, the new smaller iphone has experts divided with contradicting notes. --t, robert w baird out upgrading tesla to outperform on evidence of production ramping up. onbreak it all down, corey -- cory johnson is in new york. let's talk about the smaller iphone. if it happens, how big an impact could have on the bottom line? some are expecting modest sales and others are expecting it to be bigger. cory: i like what you did there with small phones and big sales. the real question isn't just about topline sales and how many they sell but what margins are going to be like. won't know until they report
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the quarter but that's the kind of thing we will be looking for with this announcement. the fact they were going to have a smaller iphone was out there but the fact he's margins might be better for apple could be interesting. that's one of the entry sting parts about this announcement -- if this phone is more profitable, can it help give the that a biggerost and more expensive phone with newer components doesn't often bring. marginses better literally with everyday components are on the marketplace. this phone could have nice margins for apple. how does apple balance going more downmarket with maintaining the prestige of the brand? cory: what we have seen his they have tended to stay at market and while that my generate -- might generate less than 20% of the margin, it accounts for 80% of profit.
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are the pride of the industry in that regard but as they have grown into so many different geographies and the geographies of ship earlier and earlier, you seen the slowing growth of the company is of great concern this year. at a point where there are questions about can there be any growth? i know you have your opinions about analysts but what is it about this event that has analysts so divided? cory: this is as closely covered a company as there is. you have a company very much at an inflection point. the company not introducing -- of such size that new products like the watch that have been cannotful and big just move the needle because of the size of this country -- size of this company. growthu have forward
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companies that are actually quite low because the question is will there be growth for the future? moving on to tesla -- tesla upgraded to outperform on evidence they say production is accelerating, which should drive deliveries and should drive margins. the person who wrote the note lowered his rating a few months back and now is raising his rating. in talking to him over the course of time, he still very bullish. he has remained bullish on tesla and among the more interesting things is there's concerns on the model x, a lot of concern
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about demand and their ability to produce it. he was comparing it to the model have a lot in fact of issues in the early days but is now shipping a lot of cars out there. they still lose money on every car they make, but a disaster is not in the cards and he thinks they will meet expectations even though tesla missed its own estimates virtually every turn. emily: cory johnson, thank you. newing with apple -- the iphone seven release is not expect it until fall. over the weekend, images that to be the new iphone seven were leaked. the pictures were on screen renderings. it appears the new iphone is similar to the iphone success. the biggest change is that there are no horizontal antenna lines.
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the leaked photos not provide any insight into the lack of a headphone jack. coming up, take two looks for its next big hit. the ceo is here for a look at the future of the gaming company. conversationive with shaun parker. his thoughts on who survives a music streaming wars later this hour. ♪
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emily: neighbors of airbnb host will be able to give feedback on the behavior of their guests. the company will roll out the new feature in japan, its fastest growing market and then go global. comes amidment complaints about so-called airbnb party houses that attract rowdy renters during major sporting events. industry showcase called the game developers conference is taking place in san francisco. on one of the biggest publishers in the world, take two interactive, the company behind megahits like grand theft auto. joining me for an exclusive conversation is the take two interactive ceo. good to have you on the show. you have been straight up that your holiday sales were not that great. what are you doing to make sure this year is better? holiday sales were phenomenal. our holiday release schedule was lighter than the prior year.
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but we have been crushing our numbers. we are doing much better than we expected and that's related to grandgoing success of theft auto, grand theft auto online in the entire release schedule. do you make sure take to does not become over dependent on grand theft auto and nba? tried towhat we have do is diversify the company. when we took over, it only had one big franchise and today, we have 11 that have sold 5 million units as an individual release. we have debbie w lee, borderlands, civilization, which has sold 33 million units. wwe, borderlands -- emily: how do you balance giving shareholders what they want and not giving gamers brand fatigue? toauss: we start by trying delight the consumers and
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everything else follows. we are one of the only leading companies that doesn't annualized our releases. it takes a long time to make the best stuff in the business and removingncerned about certain excitement when you want something to come your way but it wasn't just there. ship a title until we think it is as perfect as it can exceptwe specifically, for our sports titles, we don't put our titles i schedule. emily: when do we see the next grand theft auto game? theft onlined still has its highest revenues ever two years after launch. is still continuing to delight consumers everyday. at some point, rockstar will talk about its future release schedule but it's continuing to delight consumers. our 2k label has some releases
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coming up as well. just tried oculus for the first time. what are you guys doing in virtual reality and how are you thinking about it? strauss: we are not made any specific announcements. .e are intrigued we are working on some things we have not announced yet but oath of our labels are intrigued. there are three leading contenders. if there is a business, we will be there. no one else can produce our intellectual property. emily: why are you just intrigued? why are you doing more just yet? strauss: whether we are intrigued is not relevant. until there is a base to seller products to, there's nothing for us to do. when it becomes a software story, we will be there. emily: the number of developers
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working on vr has doubled. are you worried a bit -- worried about a talent brain drain? whether we have to see it turns into a future platform. we have 2200 developers in our company and hundreds of others we work with exclusively and we have a lot of interesting stuff for them to work with. we've seen a lot of people who want to work with us. emily: have you tried vr yourself? strauss: i have. it is early and there are challenges as far as one's comfort level. emily: you mentioned you are not a gamer yourself. strauss: specifically not. emily: how do you run a gaming company being a guy who's not addicted to games? strauss: most of our senior executives are gamers but i'm an entertainment executive. i've worked in every entertainment medium there is
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and this is the fastest growing, most important, most probably consumed entertainment that thats today and the ones -- the one that delight and excites consumers of all ages. the median age of our consumer is 37. we skew a bit more mail but it is almost 50-50. a healthy appreciation for what it takes to make an entertainment business successful, but i don't know how to play video games. emily: march madness is here and i'm wondering how much you benefit from people going online to pay -- two player basketball games? has changed our business. just a few years ago, we would sell our title and that was the end of our financial engagement. sales arel currency up 72% year over year. emily: you announced a $250,000 tournament. are you taking e sports more
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seriously? strauss: it's hard not to take it seriously. all of our competitors are concentrating on it. one thing they are working on constantly is league of legends. it the only game in town. is our first foray into the business and lot of tournaments are being played. emily: will we see more e sports committed? strauss: i hope so. we tend not to be people you make promises. we like to over deliver. emily: looking at the broader gaming landscape, social gaming and companies like zynga were all the rage but we've seen people aregle and calling for the death of the console. the next fiveink years in gaming will be defined by if it's not social or mobile
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gaming? where do you see things going? strauss: mobile gaming is a huge business. zynga and some others have struggled. companies that do well deliver the highest quality products to consumers. i think there's a big opportunity and free to play games. i think there continues to be an in a kindpportunity of aaa titles we specialize in. are massive multiplayer games as well and we have the leading sports title in china. we launched a massive multiplayer online game in korea , so there's plenty of opportunity that is in our core business and we see that as a wonderful opportunity or growth. today, we put out a title and always give consumers an
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opportunity to stay engaged and we monetize that engagement. more ofthe business is the same and new opportunities, some of which we see, some of which we are not sure about like virtual reality. gc.y: in town for the thank you for stopping by. , and a bloomberg exclusive, we meet the woman hoping to bring the theater experience to a mobile device near you. ♪
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emily: when you go to the movie theater, it's just as much about the sound as the sites. at that immersive experiences lost when you watch a movie on your tv or laptop. that is until now. angie lau introduces us to a young startup in asia that has just harnessed with skywalker sound that is bringing a galaxy
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far, far away right to your laptop. angie: this young woman from taiwan is meeting with the head of a hollywood giant. lucasfilm skywalker sound. >> one day i was watching "transformers" on my laptop. the picture was so huge like buildings falling down and robots running around and dinosaurs and the sound was so tiny. i felt sad about that. says this will keep it relevant as more and more people experience movies outside the theater. more anda concern if more people are experiencing entertainment on this small device.
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hollywood sound veteran with seven oscars under his film couldn't believe his ears. >> what got me excited was the ability that gives people in all sorts of venues and all sorts of mix.to hear in surround that is exciting. the more people that can hear the mix the way it should be, the happier i am. hand full of people have heard it and immediately invest in it. withjust signed a deal disney skywalker as well. experienceoundman the work for the first time. given theom gravity treatment. >> that's a trick.
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angie: we have encoded the audio for you so that you can, too. angie: as a sound guy, do you think it's going to change? >> definitely. it's like a theater experience on your laptop. emily: here to discuss this potentially groundbreaking technology is angie lau -- it almost looks like you got emotional there. who hast's like a man spent his entire career in the sound industry suddenly hearing sound for the first time. it was really powerful. what make sure technology different from what is out there now? : right now, stereo is designed for the fact that we have two years -- to ears. will address a little bit
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more on a connect and level. how do you guys see this changing? gaming, virtual reality, film? just being out at skywalker sound, the potential is movies and they are partnering with you to help with all their movie studio friends, but the virtual reality and gaming is exciting as well. iris: yes it will definitely create this helmet of sound. it will help them jump into this world. and it will engage people in the context. emily: it is especially interesting -- i went to a movie for the first time in years and it's an inconvenient experience.
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i'm much more comfortable watching at home were watching on my laptop. so much of that experience is lost when you are doing that. iris: that is where we come from. when we watch films or movies on the laptop some of the sound cannot match that experience. lots of people watch their films on a mobile device or let top we want to bring the experience to their mobile device. angie: you were in the movie theater experience, but there are 20 speakers around you and these sound engineers have put sound all around you. , it just blew me away and it will blow everybody away. you can get that stereo surround
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, that real life experience just like the movie theater right from your laptop. we've got an exclusive demo we worked on here in your studio in the san francisco office. we have it on bloomberg.com. emily: we will check at out. -- we willo much check it out. thank you so much for sharing that with us. coming up ahead of mega tuesday, we kick out the silence of polling and how it's changing the era ofof -- real-time data. ♪
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>> let's begin with a check of your bloomberg first word news. office,s than a year in
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president obama is looking to put the finishing touches on his foreign-policy legacy. the president highlighted some of his administration's diplomatic successors. historicma: an diplomacy with afghanistan. the iran nuclear deal. detained americans coming home. paris climate agreement. the cessation of hostilities in the syrian civil war. that diplomacy has worked. >> the president says he is confident he can build on those confidence over the next seven months. we can work with other nations to ensure stability. during a televised meeting with the foreign and defense ministers, president putin said the air campaign has allowed the radicallysident to
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turn the tide of the war and help create the conditions for peace talks. negotiations to end the bloody five-year civil war resumed in geneva. the head of the delegation called the talks positive and constructive. the president of ivory coast, cabinet ministers and the held an security emergency meeting today. saysy's prime minister that 11 people have been detained in connection with that suicide bombing in ankara. no one has claimed responsibility but turkey made clear who it blames.
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hours after the attack, turkish warplanes hit militant camps in northern turkey. kasichhow governor john pulling ahead of donald trump one day before the presidential primary. governor kasich poker earlier. >> this country is about us coming together. it is not about tearing one another down or having fistfights at a campaign rally. that is not what america is. global news 24 hours per day powered by our twitter 400 journalists and more than 150 news journalists around the world. emily: we are counting down to mega tuesday.
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five states will go to the polls. missouri,llinois, ohio, arizona. could we see some surprises? last year -- last week in michigan, bernie sanders pulled off an unexpected win. i spoke to mark halperin and john heilemann and asked, in today's smartphone era are some pollsters failing to reach young voters? are using cellrs phones, it is one of the things good pollsters from bad pollsters. it was recognized a long time ago that you will miss one big demographic chunk. there is a lot of bad polling. there is also some good polling.
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there are some that are really good and some that are not so good and a brave new world of online polling where people are just trying to figure out how to do it. the futurehing of but eventually we will end up getting there. -- is emily: how is polling different in this age? >> part of the challenge is there is this great appetite for polling now. isry poll on television treated equally even the other is a difference and there is an effort to figure out how do you poll so that you can afford it because most news organizations don't want to spend more than they have to. of 500 peoplepoll versus 400 people, your margin of error will be smaller. now you will have to do traditional telephone calls, calls to mobile phones but also
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online. emily: are some harder than others? >> yeah. there is a variety of things. is it marry or caucus. primary it's not always is accurate because you have a much smaller universe of people who come out. with a primary we all understand what that is. caucuses make it harder and because they make it harder to participate it makes it harder to see who is a likely voter. states that have had a long tradition of important primaries have a deeper tradition of good pollsters who do good polls in not state, states that have played as big a role for a long time tend not to be -- michigan, the pollsters there
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are not very good and that state longot had a primary for a time but its prominence is a little bit unusual so a lot of the polls were not to be believed because they do not have a great tradition of polling. emily: how much impact could a state like california have? >> california could have a huge role. it has been rare in our recent history, but if either bernie --ders is still alive, or on anyone has stopped donald trump, california could be massive. one of every seven americans live here. the general election at the presidential level and statewide offices is basically now a blue, democratic state. >> trump's presence on social media has been unrivaled and you guys have in covering politics for so many years. could things have played out
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differently? >> it is a hard hypothetical to answer. trump is a big personality and a masteryacter who has a of television as much as social media. trumphe old media, donald looked pretty great. in any race that donald trump rand, he would always be competitive. rich, successful, and he understands tv. >> if it was morse code, he would do pretty well. >> there is all this technology that shells out any candidate for raising millions of dollars on the internet. brand andders has a marco rubio raised almost nothing on the internet.
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was young and spent a fair amount of time out here and why would marco rubio's brand be as good to raise money on the web as bernie sanders? for some reason it is not. 2008 -- it is so much cheaper and easier to raise money but everyone asks, how do we do that russian mark it is not a matter of technology. that make get a brand people get that person to click? deep mystery as to white bernie sanders is so appealing to young people but that is the key. it is still the case that young people live their lives on the web more than older people. the republican party is still an older party. there has not been a great fundraiser on the web for the gop. the great ones have been democrats and that is because barack obama inspired young people.
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the mystery is why bernie sanders appeals to young people more than marco rubio. emily: thank you so much. >> they say that the web is the future. if that is true, republicans had better get with it. our bloomberg politics comanaging editor mark halperin and john heilemann. hassequoia capital partner left the firm. michael geoghan is his name. she says the venture investor agreed to pay her $40 million to avoid going to court but paid her $10 million and stopped. he has filed a counter suit sang the woman threatened to shame him publicly if he did not shame her to keep client -- quiet. i spoke to baptiste's attorney who says that they now plan to take the case to trial.
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up, a candid conversation with sean parker on the state of the music industry and -- and a spotify's spat with taylor swift. ♪
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emily: a new way for cord cutters to catch their favorite channel. sony announced a new streaming tv service going nationwide. playstation's view is expanding. cheaperoffering is $10 and it does not include over the air channels but it could make it more attractive to users on a budget. a playstation or amazon fire tv
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device is needed to sign up. i sat down with entrepreneur and philanthropist sean parker to discuss the state of music streaming and his role on the board of spotify. i started with the early days of napster and how he became a hacker. >> everything was going fine at the age of -- until the age of 14 when i discovered this world, and think goodness i did because i would not have learned to code or about the early internet, i would not have built napster. small great debt to that cabal of people who were essentially an underground community of cyber criminals. at the same time i drove my parents crazy. emily: at the same time, you met another hacker online and you
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moved to silicon valley and built napster. >> it was a great experience for us. we had nothing to lose. little did we know there was a criminal element of enabling copyright infringement. i blame myself only and that i was not a better negotiator and i cannot help them save themselves. but it is sad to watch the decline of this industry. it did not necessarily need to happen this way emily:. why not -- this way. emily: why not? >> consumers turn to piracy when they cannot get the project -- product through legitimate channels. they needed to have one coming from the record labels and they could not get their act together for years. it was frustrating to watch this long deleterious collapse of an industry producing something that i loved so much. that was never our intention.
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we never wanted to see that happen. emily: music sales peaked in 1999 and since then there have been years of decline. you are now on the board of spotify. do you think that streaming services can and bank that years of decline. >> i think we have turned the corner and are getting back to growth, based on what i have seen it spotify. that looks like it has bottomed out. wild, spotify could replace cd sales, a decline in cd sales and a decline in downloads. >> how do you convince people to pay for services when there is so much available online? >> the question of free versus paid is a question that has plagued the music industry going all the way back to radio. i would say that services like
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spotify that monetize at a really great rate, where we see users coming into a free channel. where we see at least one third of those users over time becoming paid customers, there is obviously added value and it is convenience, the ability to make a play list share playlist with the outside world. all the things we do to help service music. emily: how does spotify get over its taylor swift problem? it is not just taylor swift. how does a company like spot a fight get over this issue that artists do not want to give away music for free? with a consider offering a page dear -- paid tier ? >> there is a big difference between artist to these this make money by touring and doing
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ancillary things. download services are not doing so well these days. they get a little trickle from youtube, which is nothing, but the branding opportunities to stage large scale tors because so touring industry is healthy. that is the bread and butter. differentagement is a story. many of them are my friends so it is a necessary profession, artists would say a necessary evil. they're always trying to figure out how do we extract every last drop of value? i find it hard to believe that the artists you are mentioning don't want their music to be heard as widely as possible by as many people as possible. i would say they have managers would like to extract every last penny from the product which they had no creative role in producing.
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but their job in the ecosystem is to extract every last dime. emily: you think this is taylor swift's manager speaking? >> that is an interesting theory. it is very hard to tell. we know that from social media. i do not know what she really thinks. i have talked to other artists whose managers are on a vendetta who love streaming and just want the music to be heard as widely as possible. emily: next, more of my exclusive conversation with sean parker where we discuss his hacker style of philanthropy and where he spends most of his time and attention. more than 60% of adult smartphone owners use the device for health information but a study by the stanford university school of medicine finds that siri and other ai assistants trivializes some important increase on depression, mental health and domestic violence.
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for example, siri's response to the query for grape is -- for rape is, i do not know what that means. ♪
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missionhe xo mars blasted off from kazakhstan on monday. nasa was originally meant to launch it but the agency backed out in 2012 due to a tight budget. this is the first of two launches that will see the european rover on the red planet by 2020. mikening to studio 1.0 and conversation with sean parker.
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he may have disrupted the music industry as a cofounder of napster but these days he is focusing on charity. in part two of my exclusive interview i asked about the parker foundation and why he is giving away hundreds of millions of dollars to life sciences, global health, and public engagement. we are doing things that we feel extremely passionate about that we feel a need to get done youhe world and the reason are seeing so much of this hacker style philanthropy is because of this group of people who made their money by being disruptive, by being unconventional. there is a desire to see the same type of impact that they have had in their business career which, if you look at mover, it has been massively disruptive.
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opportunitiesind that are equally disruptive in the philanthropic world, but the type of disruption that has to happen if these entrenched social problems are going to be addressed? emily: you are giving money to advanced science focusing on allergies and cancer. what can you do differently than traditional venture capitalists? >> venture capital, when done correctly happens at a time when a business is ready for commercialization. it is not there to fund basic science. if you're going to fund immunotherapy and take money away from existing labs and researchers that have been built up over time there is a hesitation. the breakthroughs have happened quickly but they have been
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driven by private philanthropy because governments have been too slow to recognize that the technology is ready for investment. whether that is philanthropic investment or venture investment. emily: any crazy areas in biotech that you are thinking about that we do not know yet? >> pharma has done a really poor where pastrstanding drugs that have been demonstrated safe in phase one and phase two clinical trials could have been approved in a much narrower indication. but it may mean that you need access to a drug that only 300 other people need access to. we do not have a regulatory framework today that is good at getting those drugs to market.
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emily: what is next for sean parker? life sciences is the single most interesting area of reflection. to labhe ability to get on ship in so many cases where it is easy for a grad student to do something that someone would have spent 30 years of their life doing previously. i think that cost reductions -- because of new technology leading to faster and faster progress, the fundamental question of the 21st century is, how do we make sure that the technological novation's coming out of life sciences are available to everyone? emily: sean parker, facebook cofounding president, napster founding president, and founder
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of the parker foundation. it is time now to find out who is having the best day ever. the first place winner of the world drone contest in dubai. a 15-year-old from england named luke banister. more than two dozen people showed up to watch the pilots race against the striking backdrop of the dubai skyline. they were decked out in racing year and vr headsets. besides drone racing it will include robotic swimming, running, and wrestling. tomorrow, a skyhigh interview with richard branson, literally. do not miss. ♪
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charlie: admiral mike rogers is here, he is the director of the national security agency and also leads the u.s. cyber command. last month, the agency announced it would consolidate its offensive and defensive operations. a colonel said last week that isis would accelerate attacks on networks.

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