tv Bloomberg Go Bloomberg March 25, 2016 7:00am-10:01am EDT
let your freak flag fly. don't miss the grooviest trip at sea. >> coming up on "bloomberg best," the stories that shape the week in business around the world. a terror attack in brussels. >> clearly it is in our business interests that borders remain open. >> we should not overreact to this. nejra: twitter celebrates a big anniversary. bloomberg covers it all, from apple -- >> it was a profitable company for a long time. speak influentials people
on topics of critical importance. >> i am never going to rule anything out. nejra: it is all straight ahead best." mberg never kill hello and welcome. i am there at k rich. this is "bloomberg best. in retrospect, this week has been dominated by tuesday's tragic terror attacks in brussels. monday, attention was focused on silicon valley with a major product announcement from apple. a apple unveiling the sc at event in cupertino with a smaller screen and a smaller price tag, starting at 390 nine dollars per the cheapest new iphone ever. what are your big takeaways? >> i was making an analogy with
the golden state warriors. they found the small ball works well for them and they want a world championship. they got to 30 million people lester and that was a shocking number. 30 million people bought an iphone five last year per they have dedicated users who want to use smaller phones and pay less. they are being slightly more aggressive, maybe appropriately aggressive, that should be -- with a price that should be more in line with emerging markets. it will not be at the cost of their margins. europe wakes up to the threat of terrorism, once again in belgium, and we have to understand the scope of what we understand with coordinated attacks and how big it will get. tom: you really wonder how they will adapt, how europe will
adjust. >> this certainly seems like a coordinated attack. it certainly seems in response to the apprehension friday with the main suspects, the main living suspect in the paris attacks. the belgian government has been under continual criticism since itsmber, in terms of terror, anti-terror campaign. why did it take four months to apprehend some live absalom? abdeslam? beginning on friday, they thought they had made a major breakthrough in the terror campaign, and this seems to be a big setback that we have today with these multiple explosions. >> belgium is on the highest terror alert after three bombings in brussels today. at least 30 people are dead, 180 injured.
police are at a standstill as they search for more bombs. in theeople were killed two attacks that took place in brussels today. we had one attack here at the subway station, which, to put things into context geographically, we are right in the heart of the european union, the european commission. i am surrounded by buildings that belong to the european commission. this ishink about it, the first large-scale terror attack, the largest terror attack that has taken place in this country since the second world war, and at least one of the attacks happening right in the middle of the e.u., the european commission's headquarters. credit suisse is accelerating its restructuring, with cost sinces of 1.7 billion 2016, costing at least 2000 jobs. back in october, credit
suisse said we have to kind of triage what we are going to tackle here and we need to improve our macro business first. credit is doing ok, but then the fourth quarter came and credit is off the cliff. that continued in the first quarter. now they are saying this is moving up the priority list. >> you said you were surprised by your illiquid glitches. why was this not clear before? >> as i said on the record, this was not clear to me and to many people inside. there needs to be a cultural change. there have been inconsistencies around that. francine: are the people trying to withhold information? tidjane: it is a very interesting question. if your costs are too high and you are not taking them down, a lot of the problems with
investment bankers is that people try to generate revenue at all costs to save face. it was a high-yielding book, and generating a lot of revenue. so people were reluctant to reduce it because it would expose the cost problems. premier -- looking to asia to be the growth engine of the world, calling age of the growth engine of the world. he really kept bragging on about growth, didn't he, steve? aggregate outlook of chinese leaders tends to be a little more sunny than in recent months. mostly it is a chinese conference, but it is intended to kind of be china upon version of the world economic forum for
asia. he kept on hammering the point that they are seeing stability. the quality of economic growth, according to him, is improving. he emphasized that china has "stableools to ensure economic growth," and he is confident that china can maintain that pace of growth, 6.5%, over the next five years. he says the fiscal deficit is not too high. he also said on the yuan, they will not he value the yuan to boost exports, and all the property market he says we want to avoid major fluctuations in the property market. he is aiming for steady development. nejra: coming up on "bloomberg st," a close-up look at tuesday's terror attacks in brussels. ♪
nejra: welcome back to "bloomberg best." the investigation into tuesday's terror attacks in brussels continues. go to bloomberg.com for the latest details and analysis. checking the impact of the bombings on global markets and gathering insight from experts around the world, let's look back at the best of that coverage. francine: when we first heard about a possible explosion, futures did not do much. then we saw a clear but shy risk-off mood. our people now dealing with this kind of thing in their stride? are we mispricing terrorists? mispricing -- are we mispricing terror risk? >> economics always point to the fact that economies tend to survive these things.
however, near-term you do see flows and price actions, such as the one we are seeing at the moment. we look back, whether we are talking san bernardino, have, or 9/11, the markets taken a leg down but we have seen a strong rebound. we are asking, is this time different? >> the market that seems to be reacting most is what we will call the brexit trade. a,the widening of the bund the sterling, too. now you have political sides that can take advantage of this. if this happened a year ago, there is no political opposition that could take advantage of this. but now, not only do you have been in the united states, but because of brexit you have it in europe, too. they will take advantage of this, and that is why you see political trade having a bigger move than the standard playbook
. >> the markets have been pretty resilient to these terrorists. >> that is the right thing to do and it also turns out to be the more profitable thing to do. we should not be terrorized. the actions of a few sociopaths, it is horrible and we have a member of my team in brussels -- at the same- but time, the reality is it does not change the overall movement of the global economy, the outlook of profits and interest rates, so people should not overreact to this. >> borders will be strengthened initially. the topic of schengen will come up again. as anportant is schengen agreement and as a pillar of the e.u.? do you consider it under threat, and what does that mean for business europe-wide? -- as a european and
also u.s. media company, we operate in many countries. it is in our business interests that the border remains open and free trade continues. clearly, our objective has got to be that despite everything and despite concerns about security, borders remain open and people continue to travel and trade continues to flow. stephanie: could an attack like this or in paris get those governments around europe to point fingers or to try to act more in a unified way? to see theuch hope latter. with regard to the euro crisis and the refugee crisis, i very much hope that this is one positive thing that will come out of brussels, that this will lead to a more unified approach combating terrorism. >> i do not think this has
significant implications for europe's policies in the middle east, which of course is the reason why we are having so many of these problems, nor does it have an impact on a divisive presidential election in the states. >> you do not think it is? >> i do not. we have already had these two major paris attacks. we have had a number of major terrorist attacks in turkey. we had the german assault, and now we have brussels. i would be surprised in the united states, this is the kind are notine that we actively talking about. ured togetting in this kind of event. certainly a number of the political candidates, trump included, will try to make a little bit of hay on top of
these headlines, but i do not think it will significantly affect the elections. >> there are statements from leaders all around the world, including from president obama in havana, a response to terrorism. i think we have to identify with what has happened to the europeans because it has happened in this city before. god for bid if it happened again. the terrorist group islamic both to thehreat and canada as well as to all the europeans. what it means is, we have to rally around them. so judicial cooperation, and making sure that our intelligence agencies are working together, that is the best way in a situation like europe, where you have homegrown terrorists in the city of
brussels, in the suburbs of paris, the best way to help europeans. >> pound falling today, posting its biggest decline in major currencies, all of that on speculations that the brussels explosions will boost the situation for brexit, closing more borders, curbing immigration, all of that fear potentially permeating what we might see in the june referendum. that was reflected in a sustained selloff in the pound, against the euro. the repetition of that seems likely in the near term. some of the negatives are already in the price, so if anything, unless we see a very significant swing in the polls, the pound downside from currency levels will not exceed what we have seen so long ago. >> most people talking about the future of schengen and the political pressure european
leaders are under. what does the euro trade tell us about how safe it is to put money in the euro? >> what we saw yesterday was the euro not performing well at all. you can explain that by saying that concerns about schengen and the e.u. have been going on for a little while. i think positioning explains why the euro did not perform well. it confused the market at the time, but we must remember that if we go back to the start of last year, the market was very short. the euro. and i think what we've had is a big correction in positions since then. the market has recovered to more normal levels, meaning that the euro is more tolerable -- more vulnerable.
i think it is very difficult to say that euro is a safe haven. it was exhilarating safe -- it was exhibiting safe haven behaviors. >> david cameron making it clear --terday that we should not other people not taking that view. you look at the financial market reaction, that line was drawn fairly quickly. does this story play into what happens with that debate as we work our way through the next three months? attacks like this, how do they impact the story? >> the impact it as the market showed yesterday. line, will draw that whether rightly or wrongly. david cameron has been out in recent weeks saying that the e.u., being in the e.u. makes britain safer and stronger. the situation in brussels challenges that view. there will be a thick line drawn between that, and others that
will draw in inference or raise an eyebrow. >> what is the mood like in the belgian government, ambassador? the spotlight has been on belgium since the paris terror attacks in november. it has led to the question, how is this allowed to happen? >> we may be, given the openness of our society, we are one of the most open countries in the world. we happen to be the most open economy in the world, and that openness normally is an asset, but sometimes it because becomes difficult. you are subject to problems, as we right now face. >> what needs to be done on a europe-wide level to combat thatrism? >> it is exactly
the cooperation among european countries has to be strengthened. most of the countries are fully aware of that. our prime minister spoke with mr. hollande yesterday. what is the point? the point is that intelligence should not only be gathered, it should also be exchanged and beyond the exchange of information, the intelligence should be actually destinations.nal that is not always the case. so there is some work to be done, but i think the awareness is --
-- toer for starwood top marriott's offer for starwood hotels. >> starwood shares of the hotel company soaring today after it accepted and improves take over bid. are we in the middle of a takeover battle here? >> very much so. sawassic takeover, where we them coming with this improvement after less week -- this improved offer last week. marriott has come in to match it. i think what is interesting is the dollar has clearly been -- the door has clearly been left starwood for they come back. >> is there a game changing price? what is the ceiling here? how high can both companies go? >> it is a really good question. we think that marriott would have put more money on the table if they really wanted to put this knockout did on there.
on there.ockout bid it suggests maybe they have some more room to go, but maybe the chinese come back in first and there is more of a bump for marriott. they have done the strategic hotel deal with blackstone. i think this is going to be one that will run for a while, and i think we will see another one for sure. the first chinese company to a major also has been theme of the football body since the corruption scandal. what is behind this move? >> last year xi jinping made football of national prominence. founder has and been aggressively investing a 20% stake.
running through until 2030, worth hundreds of millions of dollars. a good use of that money? >> they think it is indeed worthwhile. he says other chinese companies could sign up to become top fifa sponsors also. valeant ceo mike peterson is stepping down after controversy with the 61% drop in shares last week alone. , but theren is out is not a new ceo yet, correct? >> we do not have a new ceo yet, and pearson will be staying in until they find one. shiller,r cfo, howard has been asked to resign because they have accused him of financial impropriety. >> shares in valeant rising
of news thatd day michael pearson will be stepping down. ackman will adjust hundreds of workers in the new jersey office. what do we know about what they said? >> months ago bill ackman was talking about how they were involved in interest -- and interested in bill ackman himself is sitting on this board after yesterday's announcement and doing a town hall style meeting with mike pearson, who has been outed as ceo and chairman of the company. they are saying there will not be major layoffs. they are looking for somebody to replace pearson as soon as possible. >> what is happening to former cfo howard shiller? can he be made to leave the board? starts to get really messy. howard shiller, former cfo and current board member, they have
accused him of impropriety and how everything is handled with some of the restatements there and have asked him to resign from the board. he has refused. he has $26 million in bonus he is sitting on. it is probably a lot easier to find a clawback from inside the board than from outside. >> shares tumbling in tokyo nearly a month -- sharp .hares tumbling in tokyo is there a risk that the deal could fall apart? >> there is. as you mentioned, we are coming up on a month now since sharp's board approved of the deal from foxconn. it is a growing list of issues that foxconn is going through before it signs this definitive agreement to proceed with the deal. they looked at some contingent liabilities that sharp has had. they are looking at some of the loans to see if they can roll those over at lower interest
rates and perhaps get more favorable terms. they are also looking at the company's performance in the current quarter. there are reports that foxconn may try to decrease the amount of money it is putting into sharp, in additional equity. att was originally proposed ¥489 billion. we may see that number go down a bit. timeline, when can we expect a decision or an announcement? >> march 31 is a big day for them. they have credit lines and loans expiring for them on march 31, and exmouth we will probably see some movement on the front to see if this acquisition does indeed proceed. value is saying they will nominate nine new members to the yahoo! board, effectively trying to replace the current board entirely. this is the 1.7% shareholder that is growing in fron frustra.
we know a little bit about star board's plan. they plan to take over, basically, right? >> yes, it is effectively a palace coup. before,rd has done this in 2014, when they nominated new investors in starwood restaurants. since then, darden shares are up 50%. way it is going to play out at yahoo!, because star board is not interested in a turnaround. what star board wants yahoo! to do is to sell core business. vonnie: it is interesting to see who star board is planning to put on that board. of would be the former head tech m&a at deutsche bank. for: the question shareholders, and it will be for shareholders to decide if the proxy fight goes forward, is
whether they like these directors better, whether they think they can do a better job in the current board. the current board does not have a great track record over the past 18 months. , and: still to come anniversary assessment of twitter at 10 here it up next, the wii's most important interviews, including a conversation on terrorism with u.s. presidential candidate donald trump. ♪
you have to get the respect. >> you have to have people respect the west. are there any other elements? mr. trump: i don't not think you will be doing anything unless they respect you. >> you asked if you would rule weapons.cal nuclear mr. trump: i would be late to my opponents running. >> you would rule in the possibility of using nuclear : i am nevertrump going to roll anything out. at a minimum, i want to think we would use them. when we dohing, these interviews, with everybody, and you ask a question like that and everyone comes clean and is honest. we need unpredictability. we have enemies. it is an enemy not wearing a
uniform. we do not know who the enemy is. we need unpredictability. when you ask a question like that, it is a sad thing to have to answer it. the enemy is watching. i don't want the enemy to know how i am thinking. with that being said, i don't rule out anything. nuclear weapons are a last resort. i want you to speak to the people in st. louis. where do we get the growth? drive central bank cannot the growth process. there is a business cycle. if you run good monetary policy, it is not quite as big as the previous business cycle. the growth rate is driven by factors in technology and human capital. what the u.s. needs is a better medium-term growth strategy.
tom: can the next president do that? does it come from congress? >> our rates are close to the zero bound. are they still effective? i think they are still accommodative. we are providing an accommodating policy. think you want to edge closer and closer to something of a normal setting so you don't get stuck in this environment the way japan did. >> when it comes to monetary policy, how do you see it? >> for eight years, it has been cutting rates.
we brought forward spending from the future to the present. passes, we have dug a hole in spending. cyclists pedaling up a hill getting steeper and steeper. that is why there is diminishing returns to monetary policy. >> you mentioned they are trying to -- i look at the bank of england, the bank of europe, the bank of japan, how effective have they been? >> there are limits to it. in essence, the central banks were trying to push down the exchange rate. most countries can say if only the rest of the world was
growing normally, we would be fine. but since it is not, we are not. not everyone can push down the exchange rate. most countries have been trying to do that at the expense of the u.s. dollar. stocks have been on a tear recently. energy stocks are trading at their highest. >> in this period, in terms of supply is demand, going down. , in thend is increasing same speed that we hope. the situation will be changing.
stock, and depends. 2016,e are seeing, during we can reach a balance. physical stock is still high. -- 017, >> i am curious to bring it back to the equity stock. the earnings story is going down. earning are downgrading estimates. >> because of the price. that is what is happening. >> something's not right there. >> we are not looking at the price. at our stock at the moment.
you can't do anything about the price. on your costork and be resilient. trying to understand what is going to happen is wasting your time. >> china had a national people's congress. there was concern the chinese government is too focused on stimulus and short-term growth at the next -- at the expense of growth. we believe china will continue to grow. our assessment is six .3%. we have to assess the decisions made by the chinese of 40's to factor in those decisions.
nerja: apple in the u.s. government were scheduled to continue their battle over privacy. a hearing was canceled at the last moment. said it may not need apple's help unlocking an iphone. the news has led a judge to postpone a court hearing over the issue. do you think the battle is over? >> not at all. this will go on for a long time. day's developments in brussels will ensure that. when there is an atmosphere of fear, there's going be a can to short the -- there will be a intoituency for intrusion our privacy. troops,overnment said -- the government said we may have a way and after all. does that undermine apple's position that these phones are not as predicted -- as protected
as we thought they were? earlier phones are less secure. for future phones, it has no bearing. on the other hand, there is a lot of posing on both sides of this issue. what is really new about this, the fbi went to court to make apple comply. been a lot of has -- we know there has been cooperation. probably they did not need to do it. apple probably can do things and has done them in places like not want towe might talk about publicly. twitter turns 10. as we discussed on bloomberg , its performance has not celebration.r
stephanie: jack dorsey faces a barrage of problems as he tries to navigate the next 10 years. shares are close to an all-time low. yes -- user group -- user growth has stalled. >> a big problem. growthve the user stalled out. the other problem is so me people have tried twitter and decided they don't like it. part of the challenge is getting those people back. stephanie: what is his recipe? what is the game plan? felix: convincing people you don't have to tweet to use twitter. you can sit there and listen and
twitter is the best place to listen to whatever world event you are listen -- you are interested in. stephanie: is that working with advertisers? they need to make money. felix: advertisers like the product. they havee best thing going for them. advertisers want a bigger group of users. they want closer to what facebook has. stephanie: if you think about facebook and the acquisitions they have made, you cannot compare it to twitter. a whopping 86 million bucks spent. are they even in the game? felix: jack dorsey has high hopes for periscope. story about long how people can get together and dashes point was basically that era scope can
create live events out of canhing -- that periscope create live events out of anything. stephanie: a puddle of tears, one could make the argument. what does he think his company will look like in 10 years? felix: he thinks it will grow and remain independent. he thinks they will get users back and advertisers will follow. part of it is convincing people be active one to there. part of it is adding editorial controls. oami -- we asked
whether the company plans to raise more money. >> we are not raising. our last raise was in december 2014. us a huge amount of firepower. we have been investing in content. the business is self-sufficient. we don't need to raise more money beyond the round we did. do you think this will last? >> the company can keep itself going operationally. >> when have you become profitable? for ahave been profitable long time. when you look at how much money we have raised, you know right away that we have been a profitable company for a long time. you sold a little bit more than -- you sold a little bit
less than estimates. our china at business, we were number one in china. number one for the second year in a row. ,ven though the market in china at 430 million phones a year, is not growing fast anymore, we are maintaining our leadership position. it is a competitive market. we are doing well. back. we will be
creation of the semiconductor industry. spoke to emily chang about his life and legacy. emily: you were very close. you called him the greatest teacher and greatest ceo ever. i would love to know more about your relationship and what he meant to you. it started with me reading his book. it is amazing. here is this guy who came here the mostgee and built important technology company in the world, intel. him sittingtime, as ceo, he wrote a book. writes books like that. ceos write books about how great they are or what an awesome company they built.
he wrote a manual on the right , that isn a company one of the best management books written. , to have amy career book like that. reigned at intel through fits and starts. what is so important about him when it comes to the history of silicon valley? how did he shape this place we know today? ben: he built the foundational company, the microprocessor. memory business the first years of its life. usually, that is an attorney, once you get to 13 years. -- he faced brutal competition from the japanese. to switch the
in its lifet late to microprocessors, something he foresaw might be a big market. at the time, it was tiny. ended up being the center of the microprocessor market and the pc, which led us to be the center of the internet. he was the foundation for the u.s. leadership in technology. that was a big thing. beyond that, he was the cultural foundation of silicon valley and that his leadership in turning around once he achieve what he did and making sure other people knew how to do it, it was unprecedented. it as welldone since, but we have all lived off of it and it has made every company built, read that book,
by google. iphone unveils the iphone se with a smaller screen and smaller price tag. starting at $399, the cheapest new iphone ever. they are appealing to those loyal to the iphone 5 and new buyers in high-growth markets like china and india. dipped as the event got underway, but investors are typically slow to digest apple product announcements. looking back since steve jobs died in 2011, shares rose 1.5% after launches, but retreated -- 1.8% three months later. i started by asking how will investors look at apple? >> investors are concerned. they should take away they are
being more aggressive. maybe it appropriately aggressive with pricing that should be more resonant with emerging markets. this is a great price point. it will be more attractive, but not at the cost of their margins. investors should feel good about that. gave, manye they investors believe that included ae anticipated lower on phone sign that it will not be out until march 31. the quarter ends on march 26. that means the march quarter doesn't benefit. one of their takeaway should feel better about the march guidance based on the timing of when the phone is available. emily: this is the lowest priced iphone ever. will this help reinvigorate iphone sales? >> i think iphone sales are doing well, just not growing.
there are a billion devices out there, not all of them iphones, but we are looking at a huge audience that will expand. perhaps slower than we are used to, but a billion people potentially using apple devices here at how much faster can they grow? how many users are non-consumers of iphone? probably most of them will have smartphones in the next few years. there will always be the green opportunity. i do not know if this is it. we will see more iteration. they will keep improving this product. emily: who will buy this phone? is it for people in emerging markets, people who already have an iphone but want the smaller screen? to: when we look at an tent purchase and the install mix, we see a portion of the base that
has not moved. it is not always price-driven. 20% of our panel said they wanted to upgrade but are not sure about the size. do they like the small? i think the existing base, the holdouts, that are adamantly set , that is relatively small. if our panel indicates correctly that is 10% to 15% of owners. areimportant thing is they bringing the platform to current generation technology, but they weren't intentional in saying that a first time buyer by zen at this screen size. it also has to do with the screen size. china, india, indonesia -- it is the price point. this is indicative of a maturing middle. consumers, as they grow and mature, saying i'm drawn to
apple and like the apps, they will pay more and apple is meeting them at the mid-share price range. emily: his apple's looming against the tide? there's an economic slowdown in china and a potential economic pickup in russia and brazil. the smart phone market is saturating. to what extent is this outside of apple's control? >> a lot of it is. they're doing well in emerging markets. grew at 18%its year-over-year, and deceleration since december but better than a overall industry growth of smartphones in china, close to 10%. the are up against headwind. everyone is against the head went. the shares reflect that given the multiple it is trading at. this should be a mid-to high
level growth business with the benefit of emerging markets. even with the headwinds, it should be a growing business. emily: we are seeing a low priced iphone and iwatch cut, lowering the price by $50. could this impact the brand? on thethinking is not price at the device -- the price on the device at purchase, but per day basis. if you work out how long they stay in use, are upgraded, you get to an interesting figure. i used to say that an apple per day.s $1 i have refined that, and now it is $.70 per day. saw per product basis we $17 for the lowest iphone and up --$31 for the most expensive not the most expensive, but the
high-end model. $30 a month, it is $1 a day. $17, that is $.50 a day. that is how we should take about these products and think about how many of those customers there are and how many will add services. ofre looking at $20 a year additional service revenue per device. i can be boiled into one model and reduced to how many users you have, how much they spend on each device, and you get a valuation. emily: you have done a lot of work on the watch. you are wearing yours. my two guests earlier have them but do not wear them. we are now seeing a price cut. can this be more than a niche product with an update or redesign? >> their couple of ways to think about the watch. notring is that this was
something preceding it that gave us a frame of reference. the iphone, most of us had feature phones and understood cell phones. the ipad was successful because we were familiar with the iphone. this is so brand-new it takes time to get your brain around it . we see higher levels of consumer satisfaction within the mainstream markets, every day buyers who are finding value. this is just version one. we are optimistic that this product goes. the question is, how big is the size of the market. we will have this are all new categories, how big is the opportunity for the markets? the research continues do suggest there's something there. how big will be a debate. they will continue to evolve the product. putting a modem and it and unbundling it from the iphone
would make sense, better improvement of native apps. that will come as it matures. what we are seeing in the market is positive. there's something there, but it is in its infancy. coming up, we remember one of silicon valley's founding fathers. intel's former chairman andy grove who died on monday at the age of 79. we will look back at his legacy. ♪
emily: of the tech world has mourned the death of andy grove who died on monday day at 79 years old. he played a central role in the creation of the semi conductor agents the on which the internet age is built. he was a mentor to steve jobs, larry ellison, and mark zuckerberg. i spoke to tech leaders who knew him, including craig barrett who
took over as ceo of intel. he told me about the impact andy grove had on him personally. craig: i worked with andy for 35 years. i greatly respected his insight, wisdom, strategic thought and how straightforward he was. i think he was the most direct human being i've ever met. was comingere he from, and he always had a great strategic idea of what to do next. emily: intel was known as the world's best managed company, yet he was also known as a ruthless leader. people still followed him. what would you say were the hallmarks of his style? craig: i do not think "ruthless" is the right word. he was straightforward and practiced constructive confrontation. that is an intel buzz word. you always knew where he was
coming from. he would not tolerate shallow thinking. he wanted every strategy well thought out and considered. he did not mind challenging anyone in the company or the industry. emily: but was it like trying to fill his shoes? he continue to try to influence you even when you were the ceo and he wasn't? craig: intel has had such a tremendous history of leaders -- icons in the industry. following those three is a daunting task for anyone. andyked very closely with in a consultant his basis -- and a consulting basis after he left the ceo position. he was helpful. he was respectful of decisions i
made. he was a wonderful mentor. he did not overreach. he respected the next generation of management coming into play. emily: young ceos revere andy grove. his book on management is like the bible. to think his leadership style survives generation, or can other styles be just as successful? craig: there is not one way to manage a company. andy m printed his style into the culture of intel. -- m printed his style into the culture of intel. the newdoctrine all of hires into that style where strategic style is important. addressing issues, running communications up and down the company, the lowest level employee feels free to contact the ceo at any time with an idea. all those things and he put into
company, and to get to the microprocessor intel was in the memory business. to 13s usually a 20 get years. he faced brutal competition from the japanese, including subsidies from the japanese government to his competitors which forced him to switch the business that weight in its life to microprocessors -- something he first all might be a bit market but at the time was tiny. ended uplt, the u.s. being the center of the microprocessor market and the pc industry, which led us to be the center of the internet. he was the foundation for the u.s.'s leadership in technology. that was a really big thing. beyond that, he was also the cultural foundation of silicon
valley, in that his leadership in turning around when he achieved what he did and making sure others knew how to do it was unprecedented. no one has done it as well cents, but we have lived off of it and it has made every company that has read the book or followed andy grove better. emily: the idea of a turnaround is still elusive to most baked tech companies out there, with truly turningpple itself around. we are seeing god who, ibm -- we are zynga who -- we're seeing and ibm going through difficult times. what do you think andy grove's advice would be to them? i will say that the thing
that andy and steve jobs had in theon was that they had courage to take the company in a direction that may be nobody at the time thought was a good idea. i think what you see in leadership now is what i would , whater more followership do the shareholders want to do or the analysts think is a good idea? jobsou look at what steve did with apple or andy did with .ntel, no one reported on it no one was an armchair strategist. neither would have sent them in the directions they took. they knew what the right direction was and were ok with whatever happened then. they were ok with doing what they believed was right. i think that defined andy as a leader. the thing that people who follow him take away is that courage
and determination to do what is right. so manyt seems like young people want to be entrepreneurs, come to silicon valley and live the silicon valley train. blech was his take on young entrepreneurs who might be whatd overly arrogant -- was his take on young under bernoulli semi i be called overly arrogant or naive? what was their take on andy grove? ben: he continue to believe in people. he spent time with a lot of the younger ceos, mark zuckerberg, if you look at mark's career and what he has done with the company and philanthropic lee, you can see that he has learned a lot from andy. he knows the importance of
getting back. andy's career was so influenced by how grateful he was that this country took him and as a refugee. at 18 years old he had nothing and came over on a boat. he got a few dollars from us and we let him be a citizen. he never stopped trying to repay that. he paid it forward to all of us. it is an amazing thing. that level of gratitude and belief in humanity is what we all try to take from him. horowitz, speaking to me about the death of former intel ceo andy grove. , our inteluss reporter. i want to touch on something het ben mentioned, how became this way. how did he become so great? share a little about his story. >> he wrote a moving book about his childhood growing up in
europe during the war in eastern europe, being jewish, what happened to his family when the nazis occupied hungary, and when it was fought over by the soviets and they took it over. how is family was persecuted and he had to escape. emily: you met him many times. what was he like? .> scary inspiring, but scary. they all talk about his intellectual honesty, love of the truth. that was absolutely what he was like. you cannot have a flirty and flattering conversation. he was not interested in his own celebrity or power. all he cared about was getting to the truth. he would push people's buttons until he got what he felt was useful out of them. emily: i'm sure you have your own stories about andy grove, having covered silicon valley for so many years. how do you remember him?
>> listening to all of these wonderful comments, one thing that has not been mentioned is that he played a key role in building the ecosystem that is silicon valley now. the relationship between microsoft and intel that led to the success of the pc, of which he was a great champion. l gates is not a pushover. andy grove was a formidable match for him. it was necessary in those years that both companies were led by strong, intelligent, rational, but feisty leaders who wanted to win and push each other he round. in the end, they knew they had to win together. he was not mean, but he was gruff and straightforward. incredibly nuanced thinker. there are so many wonderful things about him. he was generous, too. when i first started covering tech he got to know me and gave
me pointers on what i should think about. your profile of andy opens with an amazing antidote about a conversation with steve jobs and larry ellison. share that with us. >> they went to his house on his birthday to celebrate. tributeught by way of they would tell him that he was the only man in silicon valley that they could work for. his response was that he would not have hired either one of them, he thought they were flaky. >> that sounds very much like andy. he was not going to sugarcoat anything. he was it mean, he just told it like it was. you had to be braced for unpalatable truths when you hung around with you. he was not going to waste your time. he wanted to make a great company, industry, and he was
ultimately a great american that wanted to build the country up. up next, we will speak to adobe ceo about the areas of focus beyond products like photoshop. we go to las vegas next. if you like bloomberg news you can listen on the bloomberg radio app on bloomberg.com and in the u.s. on serious xm. ♪
oh, hi! micky dolenz of the monkees here, getting ready to host the flower power cruise. (announcer) we're taking the love generation to the high seas and reliving the '60s. we'll celebrate that unbelievable era with the music that made it so special. there'll be over 40 live performances featuring eric burdon & the animals, micky dolenz, the monkees lead singer and cruise host, the 5th dimension, the lovin' spoonful, rare earth, spencer davis, three dog night, and many more! imagine enjoying all that great music
on the fabulous celebrity summit, leaving fort lauderdale and making ports of call in jamaica and the bahamas. you'll be back in the days of bellbottoms, peace signs, and so much more, with special theme parties and 20 fun-filled celebrity interactive events. cabins are filling up fast, so come on, relive the era you remember so well. the flower power cruise, february 27th, 2017. let your freak flag fly. don't miss the grooviest trip at sea. emily: welcome back to the best of "bloomberg west." one of the hottest startups disrupting the industry is pulling in hundreds of millions of funding. they're racking up $3.5 billion in valuation. i spoke to cofounder orion hindawi who took the reins of
ceo from his father. doing whatink we are i have wanted to do for eight years, tilt something we are customers,hip it to and have 99% of them renew. the interesting thing is that they of says about things like revenue, cash flow, and i do to, but what is important is that our customers love what they do. every year they are able to pull out technology they do not like and replace it with tanium. you raised another hundred million dollars in addition. why take new money if you do not need it? year ago thata what was happening in the valley will not continue. that we were running in a profligate environment. people were spending money like they didn't know what to do with it. they were wasting it.
i thought there was going to be a turn. we were raising money primarily because we did not think we would be able to do it again. in the market, it looks like people will not be able to raise money at the valuation they want . i'm glad that we have the cushion to execute without worrying about the dynamics of the market. to execute the way we want to irrespective of that. emily: who gets left behind? orion: people are being left behind already. emily: what companies? orion: in the security industry there is point solution after point solution that are desperately trying to raise money or be acquired. eyesight was just acquired by fire eye. sometimes the acquired as mrs. unsustainable and will be a target for acquisition. a lot of the security market does not deserve to exist.
that will shake out soon. emily: adding age where we are more at risk than ever, are there a lot of companies and people in danger because their cyber security firms are not doing their job? orion: 100%. people are relying on a foundation that is crumbling. take antivirusto and firewalls, some of the companies they deal with, and upgrade them if they want to prevent the next attack. our attackers are stealing billions of dollars every day in credit cards and health care data. they will not stop. if we do not provide solutions, our customers will lose that information at an increasing clip. emily: apple versus the fbi, your take? orion: it is more complicated than people give it credit. in the valley it is popular to say apple, but the reality is
our society is based on the idea issued,arrant, when should be followed. if fully and up with a black box of everyone's pocket, law enforcement will have a harder time. at the same time, if you put backdoors into products, that does not stay secret. it is a difficult problem to solve it will ever and wants to shake their fists and say encryption is awesome, if you do not have law enforcement, the society breaks down. bely: should tech companies able to create warrant free spaces? should the government be able to look at this? orion: i think the government has a reasonable need to get to data to prevent the next attack. if we build systems that are so closed that it is impossible for them to do their jobs, i'm afraid we will all suffer. emily: is not something we will see this year? orion: that is hard to answer.
i don't know what will happen with the market. i think people are realizing it is frozen. i have seen the nose counting on going public that are terrified. they are losing money, but that the market would make up for it. they are realizing that won't happen. we are in a luxurious position where we are making money. we can choose when to go so we aren't forced into an unfriendly market. i believe our investors, employees, and customers deserve to have us go ipo. i think they want to see we are running a tight ship. they want to know we will exist in five years. some companies that have gone public are paying the price. when customers look at their financials, they realize they are non-substantial. clea. very taniu
with the adobe ceo. the company is in the midst of a effort to shift its product lineup from desktop to the cloud. adobe shares were higher after .he latest report shares and profits beat estimates for the first quarter. adobe boosted its forecast for the year. and laswith the ceo vegas, asking him how he looks at his business. >> we had a strong quarter across the board. all three businesses -- the greed of cloud, adobe marketing cloud, and adobe document cloud did well. we have reimagined the creative process i'm moving the business to the cloud. in the marketing business, we .ad a strong quarter what is driving it is every business around the world is talking about the impact of digital and putting the customer front and center.
we enable them to make that transition. we are seeing demand for digital here that is boding well for adobe. you are close to creating the shift. what particular areas of business are seeing the most strength? shantanu: i would say that we are through the heart of the transition. that is why we have talked about how the creative business will grow greater than 20% this year from the peak. the marketing cloud will grow at 20% this year. i think both businesses are steadily fueling growth. in creative it is about the mobile applications, the video being consumed. on marketing, it is about re-platforming the core infrastructure to deal with the demands of digital. are theonger-term, what
areas of competition you are worried about? we have been talking about andy grove today. his famous line "only the paranoid survive." what are you paranoid about? inntanu: we're paranoid terms of how technology will disrupt the entire industry. i think the good news for adobe is that we have always been a product company at our core and dna. as long as we continue to innovate. we have transformed our businesses are focusing on the customer. you are looking for the next innovative startup and individuals with a great idea. we have been innovating well within the company, and will continue to do so. in las vegase hosting a digital marketing conference, one of the lesser known areas of your business.
why is marketing a big focus for adobe? shantanu: we have always been about art. impact ofk at the photoshop, illustrator, design, and premier has had, there is not a piece of communication out there that did not have some use of adobe software. recognize theo we world was moving to re-platform its web infrastructure. every business had to put the customer's digital journey front and center. we recognized that if we have done with art with the science of marketing, that would he a unique opportunity. hr has been automated. known was targeting the chief revenue officer, the chief marketing officer with technology. leader in undisputed
that category. it is a business that continues to grow north of 20%. we were first to recognize this large opportunity that we think will be something like a $25 billion plus opportunity. emily: that was shantanu narayen speaking to me from las vegas. expanding is partnership even as it may be an acquisition target for a silicon valley power player. we will hear from toby luca. then we dive into the world of space startups. ♪
they are not stopping the software maker from forging new partnerships, announcing new platforms like the coupon app ebates and house. tony lucca joined me to share more. tony: it is going well. they picked us up the year ago inh the idea that let's get more places. let's get to a place where they can show their products and buy directly. it has been going amazingly. great partnerships. the continuation. emily: facebook has tried e-commerce before. it has always fizzled. do people really want to shop on facebook? ads are behind a lot of facebook's business. shop of fire is for advertising anyway. closer together with
the identity and may be the credit cards that they spoke has on file -- a compelling experience for the people shopping. emily: what about amazon? how much, in terms of sales, has been generated by the amazon partnership? tobi: it has been about their web store business. they have had a lot of promotions that are better selling on the platform. platform that has enabled payments directly through amazon, the ability to ship the product directly into the amazon marketplace. it is meaningful for the people on our platform. about google? what have your talks with google been like? for me tos hard comment. i know where you're going with this. emily: let's talk about the elephant in the room.
is google trying to buy you? company, ipublic cannot comment. about google as a competitor? tobi: google and everyone else is finally taking e-commerce seriously. everyone realizes what an important role it plays. what we want to do at shopify is be the neutral office. we want to power the merchants. we love helping entrepreneurship . we want to make it easier to build businesses. no one paid attention to how difficult this was. we built the back office. we are getting your orders and, and we integrate. we give you online stores to where you can sell directly. that is our role. emily: you're getting so much
information about the payments business because you work for these businesses. who is winning in payments? is it paypal, stripe? tobi: they have a good place. acquisition through in stripes' case it is more home built, but it is a sign of how products like retail is very important. we have looked closely. if you sign up for a new shopify , you get shopify payments, which is related to stripe and we automatically set you up with paypal as well. emily: the justin trudeau government is making tech part of their plan. how does the canadian government keep entrepreneurs from moving to silicon valley and taking their ideas here?
coming here you get a lot of canadian friends. it is the ambition of the canadian government to get everyone to keep building the company's canada. in canada.0 people it is suddenly a great place to build long-term companies. the new focus is very welcome. justin trudeau is savvy on technology. he understands it. it is fun right now. emily: that was shopify ceo tobi lutke. we dive into the world of space startups and the accelerator for the aerospace industry. ♪
emily: this week, i looked at the world of space startups. the starburst accelerator, after starting in france, is coming to our late helping aerospace companies off the ground. i spoke with the founder about what he is excited about. why did you start accelerator? ,hat support do startups need besides cash? by mym an engineer background. i worked for the u.s. air force research labs. i'm passionate about aerospace. you are in paris, l.a., munich. why these places? >> we wanted to be global. the startups need to be connected to grow their business. us, the major have, science, aerospace, corporate aerospace, money, and
entrepreneurs, we wanted to be in a location where the startups can meet and collaborate with large collaborations. emily: where does he's talent talent cluster? do they come to you? is a combination. we start in university, whether it is in the l.a. area, m.i.t., asia, europe -- these people with phd's want to do something different. they do not want to work for large corporations. i want more entente ami. they want to be more empowered. they want to put their name into the industry like spacex. emily: they're not only trying to build rockets like musk? francois: there are so many different subjects and startups. we are working with more than 300 across the globe. out of the different areas, we
, verticallectric cars takeoff and landing capabilities . we have 20 startups working in that area. a lot of them want to work on satellite constellations, whether it is through observations or communications. or's, a lotircraft is going on. more connectivity with the startups that want to do the big data. there is more sensors. thatnt to operate aircraft are smarter and more efficient. emily: a lot of people think of spacex as they only space startup. there is also sierra nevada. do you think we will see more space and aerospace startups on the main stage? , people: beyond spacex
are spurred by what he was able to demonstrate with a proper business model and good valuations. he showed the way to many more of them. with that, there is one more in investment. there is one more entrepreneur who wants to be successful with their own products. there are 300 to 400 mature startups with strong technological world-class products coming to the market. not all of them will succeed, but the landscape in 10 years to 15 years will be different. emily: and elon is helping? francois: absolutely. he has announced that he wants to launch a logical cars. by showing the way. emily: that was the starburst accelerator founder francois chopard. that does it for this edition of the best of "bloomberg west." we will see you next weekend. ♪
thank you for joining us. david: thank you for coming. you came here. emily: what was it about billions that made you think this show could the a hit? david: it hasn't been explored so much on television. it touches all of our feelings about wealth and class, which is a hard subject in america. so, this is very much a zeitgeist and it deals with all of our complicated issues with the super wealthy. emily: you launched homeland and the affair -- when it comes to spotting a hit, is it all art? is there any science? david: there is not a ton of science. first of all, it is some combination of who are you betting on? it is an stinks about people, about creators instincts about
, actors who will be able to grow and create a role. it is the good script that it's a good actor which gets a good director which makes for a compelling show. and it has some sense for feeling where the culture is right now. where people will sit up and take notice with, which is ever-changing. emily: is it a good thing? -- gut thing? has there been times where people have said -- david: we don't really do testing in any way. emily: really? that is kind of scary. you are taking a huge risk. david: it is 80 people, there is nothing scientific about it. i like to watch our pilots in different groups of people over and over. i can start to feel. i learned that from ron howard. ron would always watch his movie with different people. and i remember the first time he showed it to me and i tried to be polite and say it was great, he would let me get away with
that. he wanted to really know what i thought and where it liked, lagged, i thought it where things were confusing. so you do this over time. you develop a feel. emily: you have recently taken over for matt blank, who was in this seat for many decades. he had this job longer than any other executive in television. and now you are on the business side. david: this is the rare orderly transition in this business. it is carefully planned over the course of the last two years. matt has been the architect of it. he has been great of it. -- about it. he is now the chairman and i came up through the creative side, then the business side was very motivating. to become ceo at this moment, it
in such intense flux, it is a very exciting time to do it. we are now selling ourselves over the internet. there is a whole new way, we have a direct relationship with our customers. television has reached the top of the totem pole in terms of its place in the cultural hierarchy. emily: is this the golden age of tv? david: i think so. it is an overused term, but how can you say it is not? movies are no longer on a higher pedestal. television gets the highbrow conversation, the highbrow criticism and critiquing that you just couldn't do when it was simon and simon and matlock. you have had showtime to near parity with hbo. what distinguishes showtime from hbo or netflix? what is the showtime brand? david: we are all doing very similar things. for better or for worse, the
premium, high end area is where everybody wants to go. so what distinguishes a showtime show? i want it to be culturally relevant. homeland has things to say about america's place in the 21st century world. even masters of sex has a lot to say about gender and conjugated -- and complicated relationships with sexuality. so, cultural relevance, entertainment value, characters with complicated, adult psychology. emily: some would say that you have all of these hit shows but you haven't had your major, major hit. what is going to be your game of thrones? david: i don't think you ever plan for the big hit. we didn't know what homeland was going to be. we are delivering consistent shows that people want to watch. i would love to have a game of thrones.
emily: does it keep you up at night? david: no. no. we have a lot of shows. so, you know, we try to figure out how to make each one in percent bigger than it is right now. that is what keeps me up. emily: how do you view something like hbo? are they your nemesis? do you think of them? david: no. the world is bigger than showtime and hbo. there is fx, netflix, amazon, hulu launching shows now. there is amc and one million people are trying to get in the game. generally, what is good for hbo is good for showtime. emily: what is showtime's biggest threat? david it is a complicated 21st : century media world with a lot
of people clamoring for attention. we have to stay at the top of the list and continue putting out shows that feel like they have messages that will make people pay attention. even in the traditional universe, we are still only in 23,000,000-24,000,000 homes. the traditional way. almost three quarters of the homes in america don't have showtime. we have a lot of running room. it is a moment of great opportunity. emily: how disruptive has netflix been to your business? david: they have seemingly unlimited amounts of money, that is a challenge to compete with. they buy our programming. so they are a customer. they buy our programming internationally. it is a complicated relationship. emily: have you ever considered throwing all of the episodes out there at once? david: there is great value in having the conversation
sustained over the course of a couple months. i think the world is going to come back to a little more measure. although different shows have different ways. when we put twin peaks out, we thought it would be fun to do it in a different way. who knows. that is something i will talk about with david lynch. there are all sorts of possibilities. but the idea of throwing it out, having a week of buzz or two weeks of buzz i don't think that and having it die down makes , sense for us. emily: how me people are paying for showtime? -- for the streaming service? david: i will sell you, it has grown every week since we have launched. well more than doubled since homeland and it has gone up again with billions.
emily: how many more seasons does homeland have left? david: well, it reboots itself every year. it is a new story and a new place. it is changeability and it works really well. i don't feel like we are at -- i don't know, exactly. my guess is three. emily: three more seasons of homeland? david: it is really claire danes, they will make a decision when she is sick of doing the show or playing that character. when alex is sick of writing that show. do you think the story of america's complicated place in the 21st century won't be relevant in 2015, 2019 and 2022? of course it will be relevant. this just a question of how long we keep going. emily: what has it been like working with david lynch?
david: when we got the deal done, and got started, he is an incredibly efficient director. he is now more than halfway through. he is kind of a genius. watching him work, i have been down to the set couple of times. the crew is largely people he has worked with through his entire career. the actors i'm not allowed to , say who they are, but many of them have worked with him for their entire careers. so it is really watching a maestro. i am incredibly excited. i think it will be a work of, dare i say, genius? i don't use that word often. emily: a work of genius? david: i should not on wood but i feel like it will be really special. emily: what about china? this is a question that netflix is being asked all the time? ♪
emily: there are more scripted tv shows than ever before. there are also more canceled tv shows than ever before. are we in a tv bubble? david: i don't think so. a bubble implies that there will be a puncture and we will be down 25%. the number of shows -- i definitely do not see that. it is possible to not succeed. microsoft, yahoo!, they went in and they went out. they decided after a certain amount of investment, it is not for us. there will be other people and
there will be shows that fail. that said, it is robust. the demand is there and the desire is there. we are in expansion mode and i don't feel like we have too much. if you ask a showtime subscriber, they wouldn't say we have too much. they would say, give me another show. emily: is it scary that amazon can make a hit original show? david: anyone can make a show. whether it is a hit or not, we don't know until we know how to people are watching. emily: like transparent. we don't know how many people are watching. david: it is a terrific show. i personally love transparent. so, it is scary and mock -- so it is scary and democratizing. i think it is good for the
creative process and for the business. it keeps us on our toes. we have to compete harder and better and make this a creative home for creative people. would i like to keep out the competition? i don't really have that instinct. i don't look at the world that way. we are in the club and will shut the door behind us. no one else can come in this club. i don't think that is good for storytelling, creativity, or the consumer. it is not. that is not how the world works. emily: what about international expansion. i know you made a deal in canada. do you want to sell showtime streaming? in other countries? david: it has been a big push that we have been making, that i have been making. we have more shows that work in the u k and france compared to some of our competition. we made a big push starting in canada. starting in the english-speaking
international territory. then we did u.k., sky. germany, italy, we just did australia, stan in continental europe. and the showtime brand is starting to mean something. so rather than selling our shows in a one-off way, billions is over here and dexter is over there -- we put them all together on the same networks. it makes a big difference. it is a factor of five and 10 times what were making. emily: what about the ability to -- what about plans to sell streaming service independently? david: we haven't done it yet. we can. there is such interest in premium programming right now that we made a decision in the big territories to sell. we will see what happens. emily: what about china? this is a question that netflix is being asked all the time?
david: go figure, i think billions has a real potential in china. there are conversations going on and i'm hopeful that billions gets a real deal in china that will be potentially the biggest deal ever. r -- for china. china is becoming a real market for us. as recently as when we were selling ray donovan, we sold it in there for pennies and now, there is a real real interest. it is the first major sale we have made in china. it is significant. emily: can you win the world without china? can netflix dominate without china? david: china has always been a terrible market for american television. piracy is so rampant. you know, the movie studios figured out how to do stuff in china five years ago. now they are making real money
emily: in a volkswagen beetle? david: in an oldsmobile. my grandmother's oldsmobile. i came out soon after college. i was actually when i was in scotland. glasgow. year in i found a bunch of hard-core film geeks who would have given their right arm to move to hollywood and i realized, i have no immigration problems. i'm american and has an american -- and have an american passport. i can just drive there. and i did. i wanted to be in the movie business. it worked out well. television, in the turn between the 1980's and 1990's -- that was not the golden age of television. now, there is no place i would rather be. emily: you worked your way out.
-- your way up. you have worked with ron howard, you works at fox, i am curious about network television in particular. since parenthood ended, and i know you were behind parenthood and friday night lights, i don't watch a single show on network television, except for the bachelor. which i am embarrassed to admit. david: don't be embarrassed. i love reality television. emily: do you watch the bachelor? david: i fell out a couple of years ago. emily: what are your favorite reality tv shows? david: master chef, project runway, i was watching real housewives for a while. but then it made me feel bad about my masculinity. so i stopped. emily: it takes a real man to admit watching real housewives. david: i am very secure. emily: thank you. i know showtime is on cbs, but what is wrong with network television? david: network television still gets big audiences. you can now, what is harder to
hide five or seven years ago, before people had really reallyre cable had developed, particularly pay cable was such a volume of premium shows you can now -- satisfy yourself living over here with mad men and homeland and billions and silicon valley. you don't have to leave that neighborhood. but there are a lot of people who are very satisfied with the neighborhood that is the big bang theory, chigo fire, blackish -- interesting stuff. the networks are starting to innovate more. out of necessity. emily: should the cable companies be worried? david: they are under pressure to innovate.
they are under pressure to change the way people -- the way they make things available. and the way people are able to watch them. and serving broadband, that is where the growth is coming from. emily: what about espn? david: espn is suffering right now from the law of the can numbers. numbers. they are still an incredibly healthy cash machine and they are trying to recalibrate growth. emily: what about apple? what do you think is apple's future in television? david: if you had asked me a year ago or nine months ago, i would have thought that they would be having tried to figure out their own version of a bundle. a lot of people are rooting for them. emily: what happened? why didn't it work out? david: i think it is challenging to put the pieces together with the content owners.
there were a lot of conversations going on about how and when. i cannot comment on, but apple is an incredibly innovative company and they make products that people want. i think that they have enormous potential to crack the television world. emily: in tv, could they end up being just a set top box? david: i think that is possible. they could also be a tv or a box next to the tv, there are a lot of different ways. emily: have you heard about -- david: the fight over the living room has not been set up yet. -- been decided yet, who controls the living room and who controls the house has not been decided yet. the tv is a huge part of who controls the living room. who controls the electronics in the house? emily: what about the entertainment industry in
general? where is it in five years? what are you watching? david: you will continue to see the blurring between movies and television. you will see television shows, stuff produced primarily for television that will play in theaters. four and occasionally out of home collective experience. i'm already feeling interest and people are coming to us with this. when twin peaks is out, people will want to put that in theaters. so i see those lines blurring. but fundamentally, the movement is for bigger screens in your home. consumption in the home. it has been television's great strength. the desire for great, complicated storytelling. the ability to come up with -- the ability to comprehend sophisticated stories is growing
exponentially. shows a getting more complicated and more sophisticated. it rewards good writing and good acting. i expect that to only increase in the next five years. emily: david nevins, ceo of the showtime network. thank you so much. david: thank you. emily: and for admitting that you watch the bachelor. david: it was never my favorite. ♪
in a fashion industry. thank you for joining us. let's start the focused on asia. is there still chinese growth for the luxury market? michele: i have no doubt. the number of people who are entering the middle class, the ,verage income of the people the culture, how they have been , fromo develop very fast luxury, traveling, it is great potential. the traveling aspect. there are more travelers, more curiosity.
francine: -- the chinese consumer travels. i am trying to understand where they travel and where they will go. there has been a clear evolution. from the beginning, only hong u were theaca achievable destinations. do notes in mexico, you understand. a love of traveling. recently inside asia. francine: what surprises you the most about the chinese consumer? michele: the speed. francine: at which they shop or travel? michele: the speed of evolution. they have been traveling from group to individual traveling. they learn languages fast.
all of the journalists speak to her three languages easily. -- speak two or three language easeily. this is also an issue sometime. -- with a staff, which was a little cold. .t is becoming more pleasant there is more to come. francine: there is a crackdown on bribery, or gifts related to luxury items in china. has it affected ferragamo? in a certain moment, it affected everybody. you saw different behaviors in every area. insome months of last year
the year before, you could see the streets empty. not many more people are carrying shopping bags. the people, when they were asking carried in the second and first year cities, you could still see the normal behavior. even corruption was high. you could see how people from certain companies were not going to master or were not allowed. people were controlling their behavior. with the time going on, it meant a lot. the small bag. francine: talk to me about the market turmoil. does it impact your sales?
i am not sure how it translates into your sales. not an immediate relationship with the stock market. there is a thing about the number of chinese, i don't believe there is so much direct involvement. i think the stock exchange is .loser to gambling this has been a mood towards , in kong, a strong impact terms of growth of account, you keep finding everybody convinced
six oridterm growth of 6.2. you see that kind of confidence. in the short time, sometimes the moment is more difficult. francine: there has been a huge fall in the price of oil. is that a concern for you? michele: if we talk about asia, -- has been impacting. you should think in terms of consumption. they are not producers. if you take japan or china, there will be consumers. the political risks after some time impacting, they don't know if korea is far from us. only a couple of hours from the
major chinese cities. with the evaluation concern -- francine: so much volatility. michele: exactly. southern, there were movements. probably iscting the size of the movement. you have the other -- moving percentages. francine: are you brave enough to make a call on the dollar? no.ele: what is more interesting is trying to understand the challenges. there will be a lot of challenges next year. it is very difficult to work with a time frame that is longer than six months.
francine: welcome back. we are speaking to michele norsa . he is the ceo of ferragamo. it was founded back in 1927. it was family-owned until it went public in 2011. the company has expanded to become a key player in the global industry with shops in over 90 countries. thank you for staying with us. we were talking about the challenges. you are talking about the
opportunities, geopolitics. what is the one opportunity you cannot miss? is there a target consumer you need to reach? michele: the most difficult is millennials. 2.3 billion people age 18 to 30, they are moving fast, spending money in a different way. francine: why different? michele: they are always connected and they are always comparing prices. time, they behave conservatively. sometimes they buy products which have already been six restful. this is what would be interesting to understand. also, the destination of how they will spend time.
probably, leaping in a different , the other we will reserve for the future. francine: this is a game changer. how much do we know about how much they look at celebrities, how much they are influenced by what they see on instagram or twitter? somethingelebrity is that always works. from hollywood, also the local celebrities, the people who have considered important in the asian life. i think they are also moving the young people faster. they thears in the way
places they are visiting and also traveling. they are traveling to resorts, not only to the big cities. have a lot of background on where they're going. they could become better consumers than the generation before. have you had to adapt your style? we don't have the four seasons. michele: i am not in favor of changing the industry like of whatou have to think this produces. in italy, we might not facture 100 -- we might not factor 100%. imagine fast fashion if you just want to win back the
consumer. people need to see new products in the store. want to seehey something new, sometime you may .ave even products you do not need to wait six months. ofhave to change in terms changing faster the store, inside the store, having more alternatives, more sizes, more things in the same team, but different. francine: made in italy still sells. michele: even something more important. made in italy means sustainability. the younger generation appears to be careful on sustainability.
even more important, you don't know where it comes from. francine: ferragamo has spearheaded the fight against fraud by micro-chipping the products. michele: in terms of privacy, we don't follow the microchip after it leaves the store. we are not tracing the customer. we are trying to trace the product along the world. there has been a phenomenal source. trying to understand product which could be mixed. a gives the consumer
guarantee that we do what we can do. helps in closing stores, stopping operations, and giving me feeling that you are present everywhere. lawsuits.vorable in the united states, you can --. this is the area where the cyber -- rity is becoming francine: how much does it take up in your time? michele: the consumer is probably the number one. geopolitics is number two. .ou must try to anticipate you take out what is happening. you do not want to gamble. that is whatg, everybody is following on the web.
francine: we continue our interview with michele norsa. he has just been elected to stay in his post until 2018. we continue with a look at the company's future. what worries you the most? i talk about risks and rewards. you need to make sure you give back to shareholders. there is also speculation of being an m&a target. the concern for the ceo of a family public company is to create value, but create value from a long-term. we are not companies running after the quarter or we are under pressure to go over turnover.
what we tried is to have the confidence of the market. we believe we have been very we are still small. we are the company which is one half of some of the major competitors. we have room to grow. francine: do you feel vulnerable? these companies are buying everything up under the sun. how much time do you spend if you have to defend yourself? i feel vulnerable with each 1.5 billion. i don't think it is big enough in terms of the potential to invest.
the market has appreciated the focus of the company. companies can be focusing on their own brand. you have to know how people move inside the companies, this is information you must have every hour. francine: you must have plans to retire at some point. how must he think about your succession plan? michele: i don't want to say anything. the family has gone public because they knew the number of shareholders was getting bigger.
when i joined in 2006, it was ceo, you have to have more, to do more of the same time. it makes sense to think about somebody who is like you. other side, the ceos tend to be very centric and there is something you should do. doing it in a good way is also often the most important objective in your mind. what you like about your job? you must love it. michele: i enjoy working with people in a global way. is tost interesting thing see what did they buy and what did they do? why the chinese are going to put
--. why you cannot change a new parish shoes. -- a new or of shoes. -- a new pair of shoes. francine: how do you do your research? do you look at sales figures? watch -- we have 380 stores. i watch the figures of all of the stores every day. i would go to the biggest one, definitely. end of the day, all of it, not so when i joined the company. i will call the ceos and try to understand why macau was doing well or not. this also creates pressure from the people who are working.
you get all of the information, the detail about the traffic in .he stores, the ticket to see howesting these consumers are spending around the world. francine: because it has changed? -- a ticket which is five times and then at the end it is $50 or $100 different. it is surprising to me. i would have expected a bigger difference. when you look at averages, they tend to -- was a great pleasure to have you in the program. thank you. michele: thank you very much. ♪