tv Studio 1.0 Bloomberg March 20, 2016 9:00am-9:31am EDT
emily: he revolutionized the way we listen to music, even if it was not entirely legal. sean parker cofounded napster in 1999, then went on to the founding president of facebook. justin timberlake famously portrayed him in the movie, "the 's bad network," as tech with your he has since settled down and dedicated his life to
political activism and philanthropy. me today on studio 1.0, napster cofounder, facebook founding president, and chairman of the parker foundation, sean parker. thanks for having us at your pad in l.a. i want to start by talking about who you are, how you got here. you started coding when you were seven years old. what kind of kid were you? sean: i think generally, i was a pretty good take, up until a certain point. emily: what point is that? sean: we call it hacking now, which has positive and negative acc connotations. this was computer underground in the 1990's. it was a breeding ground for people who went on to be successful on maneuvers -- entre entrepreneurs. danger.s an element of
as i became involved in that world, i became less involved in my day-to-day life. everything was probably going fine until the age of 14, when i discovered this world, and thank goodness i did, he says i would not have learned to code, about the early internet, i would not have built napster. i owe a great debt to that small cabal of people who were essentially an underground community of cyber criminals. at the same time, i drove my parents crazy. mety: when you were 16, you another hacker online. you didn't go to college, you moved to silicon valley, and you built napster together. sean: it was a great experience
for us. little did we know, there was related.liability i perhaps blame myself only in that i was not better negotiator, and i could not help them save themselves. it is sad to watch the decline .f this industry consumers turn to piracy by large when they cannot get the product through other channels. there needed to be a legitimate theet offering coming from record labels, and they cannot get their act together for years to put that in the market. it was frustrating to watch this long collapse of the industry that was reducing something that i loved so much. i was never our intention. emily: music sells pizza -- peaked in 1990 nine.
since then, it has decline. you are on the board of spotify. can the decline and? sean: i think we have turned the corner, and are back in growth. it looks like it has bottomed out. for a while, spotify could replace cd sales, the decline in theales, and the decline in downloads, but not both. emily: had you convince people to subscribe when there is so much for free online? sean: the question of free versus paid if the question for the music industry all the way back to radio. for services like spotify that monetize at a really great rate, where we see users coming in to a free channel, we see at least
one third of the users becoming customers. there is obviously added value. that added value is convenience, the ability to make a playlist, outsideaylists with the world, organize your library. emily: how do spotify get over the taylor swift program? -- problem? it is not just taylor swift. how does spotify get over this issue that artists do not want to give away their music for free? sean: there is a big difference daysen artists, who these primarily make money by touring -- they get a certain amount of money from substitution services. download services are not doing so well for them these days. trickle from
youtube, which is really nothing. is so healthy.ry that is the bread and butter for these artists. artist management is a different story. these are people -- many of them are my friends -- it is a necessary profession and artists would say it is a necessary evil. always trying to figure out how can we extract every drop from the artist. managers want to extract every last penny from the product which they frankly had no creative role in producing. their job is to extract every last dime. emily: you think this is taylor ift's manager speaking?
emily: you are known as the guy from facebook. i know you and mark were very close. give us a status update. do you talk? sean: we don't talk nearly as much as we used to. there was a time when we would consult every day. generally speaking, it is a good relationship. emily: there is a scene in "the social network" when you and mark meet for the first time. after that, i believe you go and
ang out with the ceo of uber. is that true? you go to a club, or something? sean: i think mark went to a club. travis has not changed at all. thes sort of in some ways perfect ceo of this company he feedshe enjoys -- off of the conflict and controversy. he is very good at dealing with complex situations where he is being attacked by all sides. as ank he would thrive wartime leader. emily: a general? sean: he is very good under those circumstances.
there are a lot of companies that would have been too boring for travis. emily: how impressed are you accomplished? has do you think it is worth 62 and a half billion dollars? sean: die think any of them are worth -- do i think any of them are worth their valuations? it is hard to say. companies wait too long to go public, then they don't do so well in the public market. you see the breakdown. there have been a number of high-profile breakdowns. emily: dropbox -- in these close-knit private markets, you can do various things to engineer violation. emily: do you think companies like uber should go public sooner? sean: something happened post
facebook which was the development of this robust secondary market where suddenly hedge funds and private wealth managers and various sovereign wealth funds began to invest heavily in private companies. emily: you started the secondary market? starti certainly did not secondary markets, but we encourage, at facebook, a robust secondary market. ing are open to have secondary market, in part because we had a long-term vision. emily: what do think is the biggest threat to facebook? sean: i think facebook's business has so much growth left in it. .t is really value extraction it is value that has been stored for a long time.
there are a lot of very smart people trying to figure out how we unlock that value. it is another 10-15 years until we see what that starts to look like. emily: how big of a threat do you think snapchat is to facebook? sean: there has never been one network that dominated everything. functions.different i think mark zuckerberg has done a great job, and i applaud his ability to identify which companies pose a threat and opportunity to facebook. the interesting question is how does snapchat iterate into the coming of a communication platform that enables communication that is not necessarily ephemeral. emily: nonessential vacati communication?
sean: i don't spend that much time thinking about it. emily: whether it is whatsapp, ocular, etc., which has the most thential to being threat to facebook? sean: the question for facebook is that next big thing somewhere else entirely? is it google x? isn't self driving cars? is it something that is very close to the home, the core of what facebook is? emily: do you think facebook should go beyond the core? sean: i think mutation is the biggest market in the world. communication cannot be undervalued. are there a lot of other communication paradigms and ways ?f communicating does it make sense for facebook to buy something like snapchat,
to expand more into real-time communication? injure is really no different from instant messaging, which we have had mid-1990's. facebook is very good understanding the core communication network apps that they should own. are there more of those out there? absolutely. there are enormous opportunities left and communication. emily: in terms of what facebook goodbye? sean: in terms of what facebook could build or buy. emily: do you think facebook should consider buying snapchat again? it will be interesting to see where snapchat takes their
user base. a great analogy is when facebook launched a paradigm that is to you because, every company thinks they need to have a feed. snapchat, everything is a flammable, messages are distracted. i do not have a crystal ball. i wonder about where they could take things. emily: twitter. do you think twitter survive struggle sean: i think twitter is a victim of their own success in so many ways. they are a company that, had it not been for the media's infatuation with twitter, twitter never would have built its user base. that came at a cost. deepost was the lack of close-knit community between its users. twitter was never an accurate rea reflection of the
social network. i don't think twitter would have existed had it not been for its relationship with celebrity and media. at the same time, i think it's relationship with celebrity and media is its biggest weakness. emily: how does that play out? does twitter survive the next wave of innovation in social network? sean: the question of does it is maybe too dramatic of a question. it is a question of do they props for -- prosper, and become a much larger company, or remain the same size and part of our lives in a narrow way. i don't think twitter goes on to take share from other players. i do think they will continue to exist. debatethere is a huge
emily: there is a huge debate between privacy versus security, and how much silicon valley can help with that. cookuckerberg and tim have said, we will not help the government spy on users. should they be more accommodating? sean: the reality of the relationship between large industry and government should not be underestimated. of course there is collaboration. to think that communication , social mediaork companies are not cooperating with the federal government is
naive. we're living in a world where anonymous economic value comes from finding connections. i never would have met mark zuckerberg had it been for the internet. i would have never met shawn fanning. we met in an underground chat room. had it not been for that ability to communicate, that freedom, we never would have met each other. we would not be having this conversation. , by that same token, the more accessible and available these communication technologies are, and the war accessible and available encryption technologies are, these tools are going to be used to foment necessary revolutions against dictators, and they will be used by the nine crazies who
never otherwise would have met to organize into a homegrown .error cell every major shift that happens in the way we communicate is a double-edged sword. emily: what is your current act? what are you spending most of your time on now? sean: about 50% venture investing, startups, and 50% in philanthropic endeavors, most of which is life science related. emily: what do you think of the new zuckerberg initiative? it has been controversial, criticized for not giving to charity. is that unfair? sean: i don't think anything mark does -- we should not excited to be anything but controversial. his intentions are entirely
altruistic. it is very hard to criticize , when they is saying give away the vast majority, 99% that thertune, i think goal of saying it the way he said it, and laying it out the way he explained it was the spark -- to spark under she. the media cycle is dominated by terrorism, and a lot of really scary things. i think mark felt an obligation to create a conversation around the role of someone who has vast resources to try to reshape the world. i think he succeeded in doing that. emily: you founded the parker foundation. you are giving away $600 million to life sciences, global health, civic engagement. how has your own strategy evolved?
sean: the parker foundation is doing things that we feel extremely passionate about. the reason you are saying so much of this kind of new hacker style philanthropy is because this group of people, who they made their money by being unconventional, there is a desire to see the same type of impact that they have had in their business career, which has been, if you look at uber, for instance, has been massively disruptive. how does one find opportunities that are equally disruptive in , but thenthropic world type of disruption that has to entrenchedhese social problems are going to be addressed. emily: you are giving money to
advance science. you are focusing on allergies, cancer. what do you think you can do differently than traditional venture capitalists? sean: i think we can get ahead of venture capital. when venture capital is done correctly, it happens i time went the business is ready for commercialization. i think that is this middle ground. for instance, immunotherapy. if you're going to find it, you will take running away from existing labs and researchers .hat have built up over time there are breakthroughs that have happened very quickly, but they have been funded by private philanthropy. emily: any crazy areas in biotech that you are thinking about funding that we don't know about yet?
sean: i think pharma has done a oflly poor job drugstanding where past safehave been demonstrated in phase one and phase two clinical trials could have been approved in a much narrower indication. it may mean that you need access to a drug the only 300 people other people need access to. we don't have a regulatory framework today that is very good at getting drugs to market. emily: what is next for sean parker? sean: i think life sciences is the single most interesting area of expiration. it is what social media was to meet in 2002-2004.
is easy for a grad student to do something that someone would have spent 30 years of their life to do previously. i think cost reduction, because of new technology, leading to faster and faster progress, are an enormous opportunity. i think the question for this waiver century is how do we make sure that the technological innovations coming out of life sciences are available to everyone. emily: sean parker, think you so much for joining us today on studio 1.0. thank you for having us at your fabulous house. sean: thank you. ♪