tv Bloomberg Business Week Bloomberg April 17, 2016 8:00am-9:01am EDT
♪ carol: welcome to "bloomberg businessweek." stars of the annual design conference. how states are paying the price for allowing discrimination, and why central bankers may be running out of ammo. let's go meet the editor. ♪ carol: i am here with the editor, alan pollack. you highlight super thinkers, working on the next big thing. that includes the folks at industrial light and magic. what is interesting is they are looking to build virtual reality for "star wars."
which is really cool. ellen: that's right. they have people all over the company. they have brought in people across various lines. they have put them under an executive and she is the leader to bring in the expertise and create entertainment you are sort of familiar with, but in a different way, using new technology. carol: when you see the millennium falcon, it sounds like it, it looks like it, it is as real as it can be. ellen: and it feels like you are in it. they are doing extensions of "star wars." they are doing the trials of tatooine. some of this is experimenting
with this so far. they showed us some clips and it really did -- you could imagine what it would feel like to be looking around as they -- the center of the action and see some of these characters you have seen. carol: you highlight the underground event planners. works. called sextant they create these crazy parties in unusual and illegal places? ellen: they are famous for having thrown a bar thing, a speakeasy thing in a water tower on an abandoned building. supposed toeren't be. they did this many, many times. it became well known in new york. they believe risk, that taking risks opens your mind to new experiences. that is what they embrace. at the design conference they took some of the speakers to this very strange boat.
it was in san francisco and they took all the speakers at the conference to this strange boat. all of the signs were in icelandic or norwegian. it was really bizarre. inside, it was a victorian bar and they were serving very stiff drinks. sips. i had a few carol: helen marriage is creating quite unusual spectacles in major cities. ellen: she designs experiences. she actually had her audience in tears. she talked about a project she did where she brought, in northern ireland, she brought catholics and protestants together and they built a plywood tower and people were able to go in and write messages. eventually, they set a bonfire and they burned it down. it was an emotional story. people were coming to me later
saying, i was crying. carol: it is emotional, what she does. i spoke to the reporter on this story, breadwinners. brad: she brings together artists to transform cities. she does this through lighting projections, through sculpture, a big, huge parade. she is a uniter of creative spirits who disrupts the public and the public thanks her for it when they are done because she delights them with what she has done.
when she proposes to stop a major intersection in london with a big parade, nobody says "sure." so, she has become really good at not taking no for an answer. they become tourist attractions and places that are often depressed. at the conference, she had everyone pretty much crying over a project. she brought david best out to londonderry, a place that has been in conflict for decades between republicans and loyalists. she built the sculpture up on a hill. it was neutral ground that no one went to. everyone came out and they expressed wishes for peace and then they burned this thing down and it became this catharsis for this community. it was thrilling, we were all pretty much tearing up. carol: it sounds really moving. you mentioned what she did in london, bringing traffic to a stop, it was called the sultan elephant. what exactly was that? brad: that was her first big project that formed the company artichoke. it was her 30-ton mechanical elephant.
a marionette that was three or four stories high. it came through the central districts of london, past buckingham palace. it was one of those moments when a whale goes up the river and everybody stops and says -- did you see that? everybody in london stopped what they were doing and had to get a look at it. pretty soon, there are a million people taking time out of their day. you see this magical moment it -- she called it a time to take over london. what she does is she makes people part of the art by recruiting them to help her do these things. often it is people that did not want to do them in the first place. here is her trick. she assigns them a task. she says we need somebody to bring the roofless bus in.
next to the marionette. and initially the person says, andnot going to help you puppeteers.azy but when he understood he had the expertise to take part in this, in the end, he was the biggest proponent. part of what she doing is the delighting the public. the part of what she is doing is converting people to become part of the art. in some ways, that is more powerful than the spectacle. carol: creating images is a big task. especially when you have to photograph 25 of the most painful until speakers. i sat down with creative director robert vargas. >> you want the pacing, a variety of photography, scenes, people, different visual experiences. a challenge for the design issue is it is more or less 25 profiles.
you need to think about each story, what is the way into meeting a person that will point out what is most interesting about what they do and give the reader a visual experience that is varied and surprising. >> give me an example. >> this profile is beautiful. is on stephen berkshire, a designer. that is what you want to see. you want to meet him. we asked our photographer to take a studio visit portrait of him. in a different case, we have a piece on this group that does experiential design. sextant works. >> that is a great image. >> that is a photograph of her near where she does her work. so much of what she does is about creating site-specific experiences.
rather than just show a portrait want to place her in an environment that matters. >> it looks like there is some energy. >> a little bit of dynamism and a scale shift in the issue. that is the way we thought about putting these things together. carol: robert, how difficult is it deciding ultimately among the pictures? >> it's very difficult. it's a good problem to have. if it's not difficult that means you don't have enough. carol: next up, north carolina learns the hard way. gay rights are not a choice. we will talk about the businesses providing anti-lgbt legislation. plus, more highlights on the design issue. a designer says people are more important than plants in his parks. we will show you how to sound smart at a technology conference. that is up ahead. ♪
♪ carol: welcome back. bloomberg businessweek looks at the corporate backlash of the north carolina lgbt law. deutsche bank and paypal already scaling back for their plans for the state. in light of this, north carolina governor is asking lawmakers to tweak but not remove the anti-gay law. i spoke to jeff green about the situation. >> you have heard musical acts say they are not going to play there. so far, they have not rolled back yet.
it is never clear whether governments are going to respond to this once it is a law. it's a lot more difficult. carol: we are seeing incredible momentum for legislation like this around the country. >> last year, there were about 100 laws introduced in about 20 or 30 states with this intent. this year, there are about 200 in 34 states. you will see this all legislature long. until the end of the year, this is going to come out again and again. carol: well-known companies are saying, we do not agree with these laws and we will back out our operations. talk about that. >> that works if you have one or two, but then you have 34 states and they are all proposing it, you cannot threaten to not do business in 34 states. strategy isr time, going to have to evolve.
it is unlikely they can stop doing business in every state that has this viewpoint. let's start out with 28 states in the country that already don't have basic rights. it is a lot of the commerce in the country getting done in those states. they are continuing to do business as is. this is a question of how far they are willing to stop it from increasing. congress or the supreme court has to decide whether or not this is a universal right that can be extended to lgbt people.
if it is, every state will have to comply. if they cannot determine that, what we will have now will continue. individual states will get to determine what happens in their state. that is where we are now. the momentum is clearly on the side of lgbt at the moment. most of these laws are not successful. governors have vetoed them in south dakota and georgia and there is a lot of pressure on governors in other states. carol: state laws versus city laws. do municipalities have any say over what happens in their cities? >> that was the argument in north carolina. north carolina said after charlotte passed the law that gave more rights to transgendered people, north carolina quickly put together a law that says cities cannot do that. that is one of the classes of laws being discussed across the country. you have the religious freedom laws, laws that are specifically dealing with whether or not somebody can use the bathroom on their birth certificate and then you have these laws that, whatever the case, it will be decided by the state and not the city. usually in places where cities have done this. carol: while some states are pushing back, creating these policies and laws, other states are seeing opportunity. >> famously the vermont governor tweeting at paypal that if you want to come out, we will take you there.
they are a state that has extended protections across the board. carol: does it end up in supreme court at some point? >> unless you have an election that results in a democratic president and a democratic congress, it will probably be the supreme court. the question is there are so many issues at the state level to get them brought forward and all decided. it will probably require a few more years of cases. carol: next up, why bankers may be running out of ways to boost the global economy, and why it and may not be bad. we will show you your money out of china without breaking any of beijing's rules. that is ahead on "bloomberg businessweek." ♪
♪ carol: welcome back. in this week's opening remarks we look at the limited power central bankers have when it comes to stimulating growth. >> they have worked hard with what little powers they have and have saved the world economy, but what they can do is provide a lot of money out there. people have to use the money and they are not. carol: you say that central bankers are not superheroes. there is a great cartoon. you have janet yellen and mario draghi in superhero costumes. he said we anticipate they can be superheroes, but they cannot. >> it shows him has superheroes but leaving defeated from the battleground. carol: i think about mario draghi. he says we're going to do whatever it takes, so they set a precedent. >> they set a precedent because there was no one else in charge. someone has to say -- to give
the boost and say we're going to save the things. ben bernanke did thqat, and mario draghi did that. carol: having laid that out there, what does whatever it take me for the european central bank? they have done a lot. >> they have done a lot but europeans have to learn to boost their own economy. people have to borrow, people have to invest, to build new things. they are not doing that. carol: what about the bank of japan? which you guys also include in this. but they have done a lot. but they have also thought about things to stimulate the economy. it is not just global central bank issues. >> in japan it is interesting. the political system has a lot to do with why the economy is not working. there isn't enough -- they are not changing the way people behave. that basically is a huge damper on the economy. that is why they face
deflation. carol: what is whatever it takes mean for the federal reserve? i feel like janet yellen and company have done a lot. they have done quantitative easing and kept rates low. >> yellen has done a good job. she has managed everyone's expectations. she says a little bit of this and a little bit of that. carol: a lot of transparency. >> she just moves ahead and it is a lot of making people call -- calm but making them ready for something that is going to happen. carol: you can pump a lot of money into the economy, but if companies and consumers do not put it to work, then what? >> people are having trouble borrowing money. because wages have been sort of low and pay raises have not been high enough. people are not spending money. they are afraid to spend money. carol: what else needs to be done?
>> it is not what they can do, it is with the rest of us can do. which is companies need to invest in their people, building new things, and they be willing to spend money. carol: a cartoon created as a friendly reminder to file your taxes. >> it was world war ii when everybody started having to pay taxes. they were really worried about it because they did not know if middle-class americans would know how to file taxes. they blanketed the country with all these posters, ominous, scary looking posters warning people. you need to pay your taxes. 50 million people must file taxes this year. they also created something called the w-2. it did not exist until that point. that was a tool to withhold the money from your paycheck during the year and had to file to get it back. >> tell us how you decided to tell the story the way you did. that being graphically with
comics. >> it seemed a fun way to explore the history because taxes are such an unpleasant topic. let's try to show it in a different way. carol: next up, can stock trading be free? we have test out an app that has helped one million people save $70 million in trading commissions. plus, why you may soon see more females in the cockpit. all that ahead on bloomberg businessweek. ♪
carol: welcome back. we are inside the magazine's newsroom in new york city. still ahead, getting your money out of china one swipe at a time. why baseball fans may hear campaign slogans, and how to sound smart at a conference. it is all ahead. businessweek." let's go meet the editor. ♪ carol: i'm here iwth the editor, ellen pollock. there are so many more must reads. let's start with markets and finance. you have a story about the chinese mainlanders getting money out of china. ellen: right. many people want to get their cash out, just for safekeeping. if you are a citizen of china, there are restrictions. if something like $5,000 per transaction. it is difficult to do.
the one way they are getting money out is they are buying insurance money out. they do it with credit cards. you buy the insurance products with a credit card, but it takes many swipes. you have to do it in individual transactions. we had one example where someone had to swipe 800 times. carol: it's $5,000 increments. >> that is a lot of swipes. carol: it shows some of the worries they have trying to get their money out. let's talk about something in the companies and industries section. it is a story about air traffic in asia, the demand is growing at crazy levels. that means they may need female pilots. ellen: that our something like 100 million new air travelers a year in asia. as people move into the middle class, they travel more. there is a lot of demand for pilots and planes.
they are running out of male pilots. which means they may have to turn to women. who would have thought? there are not even that many women pilots. carol: it's kind of a white man's world. ellen: it is. the people sitting in the cockpit are mostly white men. they are beginning to try to recruit women. you have to have a lot of time in the air to become the pilot of a big airliner for a major airline. it may be a while before women actually reach the cockpit, but they are actually, actively recruiting women. carol: you talk about robin hood, which is a trading app. ellen: they are dedicated to providing a free way for people to buy stocks and sell stocks. carol: no commissions. ellen: no commissions.
carol: we spoke with matt phillips. matt: robin hood is a mobile app that is a commission-free trading platform. it offers zero commission on stock trades. it sounds simple. it is simple. this is an industry ripe for disruption and these guys are going after it. carol: how do they make money? let's get to that. >> zero commission, how do they make money? money? they make interest on cash accounts to they charge small amounts of interest, they invested and get a little bit of interest, just like every other broker. they are getting ready to roll out margin accounts. they loaned money to their customers. it is like having a credit card for the stock market. carol: there are companies that do this already. how are they doing it differently? >> so the online brokerage
industry was one of the first innovations of the internet. that basically stopped innovating. they started at $10 or $12 a trade. 15 years ago. that innovation basically stopped. the fees you are paying today is -- are not a lot lower than what you paid in the 90's. these guys are disrupting the entire thing. they are saying zero trade commissions and they are after the millennials. this is a demographic that it -- has not been big in the stock market and they are trying to get people to invest their cash little bit by bit into the stock market. carol: these guys come from a background where they were working with the big institutional guys. >> the founders, they were roommates at standards -- stanford. they are physics graduates, supersmart, running their own business. basically building trading platforms for hedge funds and large institutional investors. they were impacted by the occupy wall street movement and they felt they needed to do something to address the concerns people in their generation had over their ability to have the finance industry work for them. carol: you are looking at this model, it is different, to get an idea of whether or not it works.
he went straight to traders and high-frequency traders. what did they have to say? >> the hft guy, an og in the hft world. he ran his trade works for a long time. he basically said this is a fantastic idea. it has been tried a couple of times before. it did not succeed. he likes what they are after. he says that the e*trade are right -- ripe for disruption. they have not pushed their price down at all. this is not who they are after. he wants to push his algorithm on to whatever platform he uses. they don't support that yet. this is in the realm of someone who has a day job and wants to put their money into use in the market. a couple hundred dollars a week or something like that. carol: time will tell how successful robin hood will be. having said that they are smart because they have gone mobile with this. >> mobile first. it keeps them clean and simple. they really wanted to tap into what is become second nature for a lot of people in the 20's and early 30's.
tell us what is involved in doing something. you have this one, build a chair in three minutes. what does it involve? the visuals are compelling. >> thank you so much. this chair company, they are trying to take a regular chair and make it so it fits in a little shipping box and arrives and there are no tools. it is supposed to come together in three minutes. myself, tracy, and a few other members of our team got a studio in brooklyn and assembled the chair. we assembled it and disassembled and then assembled it again. carol: how many takes did it take? >> only four.
carol: pick another one. they are all such great visuals. >> i like this one, the architect of highline. he's doing the presidio park in san francisco. what i thought was interesting he was talking about was how he built his park around tourism and exhibitionism. our idea was to hire paparazzi and shoot his park in l.a. we hired a paparazzi and he walked around the park over the weekend. carol: when you have to do an individual, how difficult is that? what is involved? >> it definitely takes a minute for the photographer to make a real connection and get a solid portrait. it's often you were working against the clock. people at his stature have got to go.
they don't have a lot of time to spend with you. this was a studio visit and we photographed him with a model of the proposed design he is working on. it was probably very fast. carol: next up, the gadget review startups spawning copycats from hot media companies. we will tell you what is so hot about wire cutters commission policy. and how they plan to bring politics to baseball. if you're worried about when to apply the term millennials, we will show you how to sell my be smartest guy or gal at the conference. that is all ahead. ♪
♪ carol: welcome back to "bloomberg businessweek." in this week's technology section, the magazine profiles wirecutter. a gadget review website that is had so much success it is inspiring copycats. here is jerry smith. >> they have an interesting business model where they have the reviews and a button where you can buy the product they are reviewing on a third-party site like amazon.com. and they get a cut of the sales. that is how they make money. they have some advertising, but most of their revenue is generated by e-commerce. they did about $150 million in e-commerce sales. they get a cut of that between 4% and 14% of the sales. they only have 60 people. they do not publish that many articles, but that is not with -- what their articles are about. it is about recommending things you like to buy and they get a cut of the sales. carol: everyone is trying to make money on the internet.
it's very much an ad-based model at this point. >> gets getting harder and harder on the ad-based model. it is about getting as much traffic as you can. the more eyeballs you get, the more clicks you get, you can -- some are advertising. carol: they don't get that much traffic. >> they don't get a lot of traffic and they don't publish that many articles. here were concerned about recommending a product you are actually going to like. if you buy the product, they get paid. if you don't like the product of -- they recommend they do not get paid. some people might say they have a conflict of interest, but they are recommending these products. they get paid on if you buy it or not. but their responses we have a vested interest in recommending the best products we can. if you don't like it, we don't get paid. carol: if you recommend garbage, you might do that once as a consumer but you will not go back and they will lose credibility. and they really do -- they have become the consumer reports for the digital age. they do some really in-depth testing, don't they? >> generally it is technology, but they had done everything. they did a review of windshield wipers. they have done reviews of bike locks. they actually hired a bike thief to test the bike locks. they have tested waterproof iphone cases.
they have swam of the ocean to test the iphone cases. they go to extreme lengths to really enlist the experts. they do interviews with engineers and chemist and all sorts of experts to get the smartest people to review these products for them. carol: gawker media, buzzfeed, they are getting involved in the same thing. >> hearst is getting into this. they have a website called
bestproducts.com. the web is maturing. sustaining on advertising alone is getting harder and harder. you are starting to see these very big publishers saying wait a minute, maybe this is a business we should try out. carol: is it working for gawker and buzz feed? >> buzz feed has just started testing this out. gawker says they make more than $150 million in just generating e-commerce activity. they get a cut of the sales as well. wire cutter is a smaller site and they are doing about as much as what gawker is making in e-commerce. carol: interesting. >> it is a small site with an interesting business model and people are trying it out now. carol: and the politics and -- section, fox sports has a plan to get a piece of campaign advertising dollars.
>> what we saw in 2012 was the use of big data to help decide where they can buy ads. we saw the obama campaign buying ads in off-peak hours, targeting people through that way that maybe they would not have reached elsewhere. now the campaigns out there, most of them are using this data analytics to help decide things. the problem with fox news is their data -- they are not part of the traditional data set. they are having to fight to get consideration. carol: what does research show about folks that watch sports teams in terms of them running a political ad campaign? >> they found that in a lot of ways local sports viewers are similar to local newscasts, except they are more likely to be undecided voters. that they are more likely to remember that ads and more likely to be persuaded by that. the study would say they are better than local news on viewers. they are making the case that if
you are wanting to reach the folks that have not made a decision, not made up their mind yet about who they are going to vote for, local sports is the way to go. carol: what does this mean in terms of dollars? something like a fox sports? >> we are talking about $4.4 billion estimated for political ad spend this cycle. a bigger share of that is going into local cable. perhaps $800 million this cycle which is a lot of money. fox sports is competing against hgtv and fox news all of those. even if they can get a small share, they will be better than they were a few years ago. if you look of the ad spending already through the cycle, we have seen heated contest in places like florida and the
share going into local cable versus the broadcast stations has increased compared to 2012. the analyst i talked to expect that to continue throughout the rest of the cycle. carol: don't despair. we will show you how to impress your peers at your next conference. that is ahead on bloomberg businessweek. ♪
>> welcome back. i'm carol massar. contributor sam grobart schooled himself on how to sound like the smartest guy at a conference. >> jargon is employed or deployed to make people sound smarter than they are, to make jobs and tasks sound more important than they are. and do a nice job of alienating a lot of other people so you don't really know what we are doing. carol: you feel left out. >> that is the point. -- what jargon is for. carol: i feel like i need a translator when i go to a conference. you highlight words. which ones jump out at you? i feel like so many of these we hear often on a daily basis. sam: we hear it a lot. particularly if you spend time around tech companies. they are quite enamored of their own jargon. they talk about making things immersive. schedule: what does it mean? >> it just means not bad. there is no opposite of immersive. it just means good and people want to use it. instead of saying good, we call it immersive. we used to call it dynamic. carol: i've been able to look at the article.
"internet of things." we talk all the time about the internet controlling everything in our lives. he say what it really is -- sam: access points for iranian hackers. carol: that is terrible. sam: is also potentially true , if we are talking about expanding the internet, we have to make sure it is secure. if you start putting it in places where you have not locked down the securities -- carol: look at the battle apple has had with the government. millennials comes up a lot. it's a huge market. the biggest part of our workforce right now. sam: i am not a millennial. i feel like too much time is spent thinking about the millennials. we talk about them everywhere. every company is all about the millennials. we are targeting millennials. it means anyone under the age of 30. it's much cooler to say millennials. carol: maybe it means we do not understand them, or making sense of them. sam: i feel generational definitions are usually pretty lousy.
within each age group there is diversity. a gorgeous mosaic of different kinds of people. you cannot give them one label. carol: i want to pivot to something else. what does that mean? i'm getting motion sickness with all the pivoting going on. sam: it just means plan a did not work we need a plan b. i think we described it as to retreat or cower assertively. it is to make something bad sound good. it's not that something messed up. we are pivoting. this idea was a terrible one but we will pivot and hopefully to a good idea that will make money. carol: so what if we spent $400 million in r&d? >> sometimes you have to be wrong to be right. carol: maybe big data will help. sam: big data, which we used to call databases, you can't call it that.
it sounds boring. that sounds a green box in a lab somewhere. big data -- hey hey. it is like saying our technology is a carbon-base. carol: it is a different kind of data. sam: it is different data than the small data we used to work with. carol: that sounds so true. everybody thinks big data is just a solution. >> big data is just data. carol: block chain. got a primer on that one? sam: nobody actually knows what it means. we just use it. it sounds great. carol: it is true. we have no idea. sam: it just sounds like an important thing with bitcoin maybe. carol: it is true. i am guilty. i think i have used it once or
twice. sam: it uses block chain based -- you know, the preferred currency of internet criminals. anyway it's just a way to again sound like you know what you are talking about. carol: if you want to have success in this world, you put in an elevator pitch. can you give me a line from that? sam: it is poised to take advantage of the coming wearables tipping point. how about that? would you invest now? carol: bloomberg businessweek is available on newsstands and online. we will see you back here next week. ♪
emily: this is the "best of bloomberg west." coming up, peter thiel speaking out on the bubble that may be everywhere. we will bring you the highlights of my exclusive interview. how does one spot the next elon musk? i will speak to the venture investor, who is on the search for the next big entrepreneur in china.