tv Bloomberg West Bloomberg August 18, 2016 6:00pm-7:01pm EDT
irradiance to keep their promises to release american citizens being held in toronto the money was oldest part of a settlement of a military equipment deal with the shaw of iran in the 1970's. the clinton foundation says hillary clinton is excepted president, it will no longer take foreign in corporate donations. yesterday on fox news, trucks of the american people should give the foundation of mrs. clinton doubt the benefit of the about my is received from foreign governments. homeland security secretary jeh johnson visited louisiana. federal governments issued a disaster declaration for 20 parishes. brazilian authorities are ofusing american swimmers lying about being held up at gunpoint. the country's chief of civil police says they four were confronted by armed security
guards after leaving a party in a rio suburb. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. crumpton. ♪ emily: i'm emily chang, and this is "bloomberg west." its push the gas on into self driving cars. all the detail on the company's biggest acquisition to date and its driverless car pilot in pittsburgh. can apple cut its smart watch free from the iphone? and, 10 centimes up with a new innovator in hollywood. we will speak to spf entertainment about their latest
asian backer. first come into our lead. cooper users in downtown pittsburgh will be able to summon a self driving car this month. getting a self driving, right hailing fleet on the road first. uber starting with a specially modified volvo suv's. we know uber bought the self driving trucks start up auto this month for an undisclosed amount. joining us to discuss, r bloomberg contributing editor, who wrote this exclusive story for "bloomberg businessweek." we're also learning a judge has denied uber's settlement with california drivers in the three-year-old lawsuit over whether or not drivers should be treated as employees or
independent contractors. it looks like even though uber lost the settlement, it's good for uber. can you explain what this means? >> uber is locked in this ongoing discussion over what its drivers are. are the employees, independent contractors, small businessman or women? keeponversation will going, which even if the settlement had gone through, there would have been more things, morecourt lawsuits, etc.. it's not a huge bit of news but it does show this is a problem that uber will face for some time. emily: how does it give uber the upper hand? >> i suppose because what happened in san francisco, a judge wanted uber's drivers to be able to get out of arbitration. he was saying he would not approve the settlement without this clause that would have allowed them to get out of
arbitration. uber said no, we will walk away from the deal if you do that. they won't have been forced to be in arbitration situations. emily: fascinating story you broke earlier today about uber pushing the self driving cars, people in pittsburgh will be able to ride in a self driving uber volvo this month. tell us the details. the acquisition of auto, we have a pretty good idea of price. it was $680 million, one of the biggest deal in the in pittsburgh, uber will be launching its pilot program, right now, in the next couple of weeks, where riders at random will be able to experience this new era. will be experiencing it with a test driver and also with a kind of copilot, a guide there taking notes.
it's very, very early, but it's exciting. i rode in one of these a couple weeks back. it's an experience. a google selfin driving car 4 years ago, but the technology has improved so much. what's your take on all this? >> it's stunning. in pittsburgh so soon. i'm really impressed by that, though i'm not sure if i would want to be one of the people to ride in them. uber has put all this money into its pittsburgh labs, where they hire these people away from carnegie mellon. it feels to me that they may be disappointed with the outcome of that and that's why they felt they had to buy auto. it looks like from the way
they're describing it that auto will be the center of gravity of uber's some driving efforts, which might be a negative for those people all the way in pittsburgh. are salvaging their self-respect by deploying cars in their hometown. emily: you specifically research decision-making by humans versus machines. i we letting -- are we ready to let robots take the wheel? our robots ready for the challenge? >> this is really all about establishing trust. i've written about this extensively, when should we trust machines with decisions. this is a bold move by uber. they are going out of the simulation mode and putting this out there into the real world. that's the only way to establish trust with consumers and even more importantly, trust with regulators who really need to be
worksced that this thing and it's better for society and it doesn't impose huge risks on individuals. there's only one way to do it, which is to put it out there. this is brilliant because it puts them in a position where they gather really valuable data that others don't have, so it gives them that first mover advantage of gathering data from vehicles operating in the real world. and that's different, and they need to do that to establish trust, which is key for these kinds of systems. emily: how will this work? to wanting to be picked up by a self driving car, or does one show up? >> you opt in, and use the platform normally. it's like being caller number 100. you get an alert saying, you will be in a self driving car. hope you don't have a lot of luggage, because the self
driving cars have giant computers in the trunk. there are practical considerations as well. one thing that's really interesting about this uber self driving thing is the data angle, which is that uber has driven many hundreds of millions, i guess ilion's of -- billions of miles. be able saying they may to use the data they're human drivers are collecting to train the robots, which is kind of an exciting thing for people who are deep in the space. >> thta's key -- that's key. in the world world, you get edge cases. other people refer to them as rumsfeldian unknowns. you have to have these machines experience as much of that as possible, and it's only possible when they drive in the real world. the other thing that hasn't been talked about, this is uber getting back into china, in a volvo isase -- because
really owned by keeley. point, on theting back of them selling their china business to their biggest rattle -- rival in china. what about people like you and me who may not opt into this right away who are on the road and did not choose to be driving next to a self driving uber volvo? to the's related question running through my head, which is that they better hope nothing goes wrong here. had more claiming they data about self driving because they have all these cars on the road. when teslat happened had one accident that was probably quite predictable, but these overly valued companies, whether public or private, they almost have this extraordinary pressure to prove they can do these things. that means they are in a if they gosition
wrong. from everything i hear, they're not going to get those two people out of the front seat anytime soon. if they did, they might be inviting disaster. emily: we will continue to follow this. we will continue to watch competitors like tesla and google. david kirkpatrick, you are sticking with me. storyaplin, who wrote the . it's a great read. check it out in "business week." david cohen was one of the company's earliest backers, an angel investor before the company had any cars on the road with bloomberg sat down him in berlin and asked what he was thinking when he bet on the company way back then. >> it was not a hot deal when i invested in it. the first employee, was mentoring tech starters. it wasn't hard to get into.
it was just an idea, like any other, but you are excited by the people and the vision they have. didn't seem any better than many of the other investments i've made. i just fortunate to be involved. emily: catch the full interview with david: tomorrow on "bloomberg west." up next, apple's next step for the watch hits a snag. the latesting up developments ahead of the company's major project event next month. ♪
second-quarter profit exceeded expectations. you will hear from one of those rivals tomorrow, the vice president of global operations. he will join us to talk about declining smartphone sales in china and the company's global expansion strategy. apple is hitting some snags in severing its watch from the iphone. currently in order for the apple watch to work, you need to have your iphone close by. to company still plans announce new models this fall with improvements to help tracking, but they won't be able to connect independently to cellular networks. my cohost,discuss, and mark gurman, who broke the story for bloomberg news. what do we know? will know this apple watch not be able to connect to networks from at&t, verizon, etc. and internationally.
apple plans to come out with a new version this year that can connect to cellular networks. they hit some snags related to engineering, related to the battery life. the cellular chips of today's age consume too much power for an apple watch, a small sized watch. the trade-off was too large to have that in there because the battery would drain too quickly for the users. emily: what do you make of this? >> i think it's not shocking. one of the things we have been looking at is, what is the modem technology going to be behind this rate we have been hearing apple is working on their own modem technology. the computer on the watch is -- they would need to design a mdoem onto that -- modem onto that. i had been hearing that was delayed for some of the reasons that mark said, we were not on the same track.
watch with existing owners, we have research data that suggests that they want that feature. it's a really question, like where is the value in it, is it a necessity. gps makes a lot of sense to be in the product. the modem, i'm not sure. he would be a nice feature, but i'm not sure that is why someone would go out and buy. emily: will the new watches be unveiled at the september 7 event? >> we know there will be a new watch unveiled this fall, without the cellular. emily: what will be new about them? >> new health tracking features. partly that will be because of a new gps chip. gps right now is in the iphone. if you want the most accurate data for running and walking, you have to either calibrate for a 20 minute process or bring the phone with you. intohe gps will be built the watch so you don't have to worry about that. you can get consistently accurate data with every
workout. emily: what do we know about how the watch is actually selling? you've had more positive analysis than some others. how are watches selling? interesting, because they are waiting to the fall to update this product that has been on the market for over a year, versus if they had done a refresh in the spring we would see more optimistic sales going into the momentum of this year. if you look back at this category in general but particularly watches, clearly it's a holiday product. it makes sense to do that refresh. for me, this is all about can they grow sales to new customers. there's a lot of techies and early adopters. can they bring it to normal people? what price points do they get to? do they do much on design? these are the things straight we still see most of this being a fitness and health market.
i would like to see it expanded is some other use cases. that's where the new software, new developers might expand it. we still think there's a lot of headroom in this market, and there's an evolution for watches. i do think it is going slower than we thought. that's the big question, what is the size of the market. emily: david? applelways thought overplay the fashion part of the watch. one of the reasons there isn't that much demand from non-tech ies is that they haven't explained it very well. i went to the dinner last night i was hosting, very busy. somewhereas unhappy in the room and i got a text message on my watch and it really helped me do my job in a way i could not have otherwise. i think israel benefits to the
watch -- there's real benefits to the watch that are not understood. it seems to me more than it was worth of to that point. battery, this is the thing that's holding back this entire industry, when of the reasons it's a problem with the watch. it's because they have a fairly big screen. there are watches out there that connect to cell phone networks perfectly fine. they just don't have as many features. it's apple's desire to have it all at a time when battery technology is not moving forward quickly enough. it's the one thing i keep finding disappointing about apple and his predictions of what the next iphone is going to be, it's not going to have dramatic improvements in battery life, which is the one feature that people really want. emily: battery technology has not improved significantly in a
century. >> i went to the lunch of this phone the other day. they have amazing technologies built into their phone to extend the battery life, to help you manage the battery, that i think will give some phones and advantage. it's desperately needed. emily: quick thoughts? >> on the watch aside, it's positive. we continue to see existing customer satisfaction be high. that hasn't changed. the battery and design stuff, we are in a different cycle in this industry. i think that for us is the key thing to keep observing. emily: as always, thank you. thank you all for joniing -- joining us. more of "bloomberg west" next. this is bloomberg. ♪
emily: shares of advanced micro devices surged after unveiling a refreshed product line aimed at cracking intel's dominance in the chip market. amd has been struggling to regain lost market share from rival intel. cory johnson sat down with amd ceo lisa sue to find out how the company plans to reverse the trend. >> think the way to think about is a foundation for high-performance computing. we are pleased with where it is. the key for us has been to hit our goals and we are right on track with where we asked acted to be. we have more work to do before we go out into full production, but i would say from our standpoint and customers we are pleased with where we are. cory: there's a notion it will hit deke -- peak pc. here you are entering a market that will have many outputs. how do you see the pc market that is shrinking, not growing? >> the key thing to think about
is what pieces of market are growing. if you look at high-performance gaming, pc gaming, game consoles, virtual reality, anything that requires a lot of competing horsepower, those are areas that are growing and they are quite profitable. we believe we have targeted our products to the segment of the market that are both growing and highly profitable. emily: -- cory: surely you are planning for subsequent versions of it right what you expect the cycles to be for upgrades of this going forward? are we going to do something more aggressive? market.pends on the the pc market tends to move faster, so you might see something on a 12 month cycle. the server market, 18 to 24 months is reasonable. zen gives us an incredible foundation to build on top of. we've already worked on not just as then, but the next generation to come on top of that, to ensure our customers we have a
long-term roadmap that satisfies their needs. cory: sounds like you are focused on the heavy processing that happens on servers and with games, and not mobile. >> where we are in terms of size, we need to pick the places we believe are the highest growth segments. in terms of high performance computing, both on the graphics and cpu side, we think it's a huge market. there is more than enough areas for us to grow. it's true we are not in mobile and i think that's totally ok. our editor at large, cory johnson with lisa su. as much as 8% on the report that scientific wants to buy the company for $30 billion. this latest bid is an all stock offer and would be $4 billion higher than alumina's current market cap. four years ago the cup rejected takeover attempts, and one offer
valued at nearly $7 billion. and a story we've been following, the final chapter for online media pioneer. the founder told staff that gawker's flagship site will shut down next week. earlier this week univision won a $135 million build to acquire gawker media, which includes gawker.com, jezebel, among others. moving ond he will be to other projects. gakwer was driven into bankruptcy after losing an invasion of privacy suit to hulk hogan. ♪
by four points nationally. with 41 has clinton percent, trump with 37%. libertarian gary johnson has 10% in the green party's jill stein has 4%. the poll has a margin of error of 2.8 points. president obama becomes the first u.s. commander in chief to visit laos. the white house says the president will make what is expected to be his last official trip to asia beginning september 2. he will participate in the g20 summit in china, meet privately with presidency jinping, -- with jinping, and participate in private conferences. jason van dyke, the officer who has pleaded not guilty to a charge of first-degree murder. the suspended brazilian
president said she made two mistakes while in office. one was a political error in choosing her acting president as her vice president. she said the other was imposing tax cuts which did not work as expected. i am mark crumpton. this is bloomberg. a: 30 friday morning in sydney. i'm joined by bloomberg's paul allen with a look at the markets. paul, good morning. paul: good morning, mark. looks like a flat end to the week. the index has been trading for 30 minutes and it looks flat. flati also trading pretty as well. we will be keeping an i on at theia's big 4 banks open. that's after moody's reaffirmed the double aa rating. outlooke revised their to negative, saying a challenging environment could lead to deterioration of profit growth and asset quality. energy stocks will be in focus as well.
woodside reported first-half earnings, net profit of $340 million. revenues down 24%. santos also due to announce first half profits. , santos announced a $1 billion markdown. weak energy prices are weighing on both of those stocks. one rate this vision today, look out for and in asia. likely to cut the cash rate from 25 basis points to 5%. inflation in india asia -- indonesia getting down towards the bottom of the target range. range. i'm paul allen for bloomberg tv in sydney, australia. ♪ emily: this is "bloomberg west." i'm emily chang. is time for series a, our weekly
roundtable on investing. this week where focused on funding construction across the media industry. we have seen now established players like netflix and amazon studios bring tv into the on-demand era. now the up-and-coming hollywood studio once in -- wants in. recently raise new funds to expand into tv, digital, video games, and virtual reality. stx succeed where others have failed? joining me to discuss stx entertainment is the ceo, and the cofounder of stx. really interesting partnership you guys have. can you explain how it works? >> when bill and i first came up with the idea for this, we realized if you are going to build an entertainment company today, it's not going to look
like the entertainment company that exists right now. their business models are 100 years old and a lot of things said, if we -- we are going to build a company today, a, it's going to look very different, and b, china will be an integral part of its dna. we are going to try to build a company that tried to push its product into china, we instead are going to have it as sort of a bridge where it is literally part of the dna. emily: how are you doing things differently from traditional studios? >> the main thing is to do with the product mix. the six major studios have films to being fewer but more expensive, classic sequels, remakes and franchise films, which is exactly what they should be doing. they created this interesting vacuum in the middle, $20 pricen to $80 million
range where you have a star in a signature role. we know that to be a profitable area. given the fact that we weren't burdened with legacy deals or massive overhead, we were able to go after that space. "bad moms" is an example of what we hope to do over and over again. emily: is "bad moms" a good example of something you are doing differently? if not, what are the movies that exemplify this strategy? >> "bad moms" is exactly what we are trying to do, a $20 million film that should do $200 million box office worldwide. it's a number of identifiable comedians in a comedy. it is these actresses the way you want to see them. as a whole bunch of different offshoots, tv and short form we can do. >> the other thing i would add to that, which isn't necessarily
is obvious when you see a movie like "bad moms," we built this company from the beginning with an eye to china. china will within four years be the largest media market in the world. this -- some of the most important chinese partners. from the beginning we had chinese partners we brought in. the notion was to build content that was leveraged more globally from the outset with partners that could help inform on the china side, when they were looking for in media as well. emily: the entertainment opportunity in china as well is clear. of challenges, and dealing with the chinese government and the things they want their people to see. how do you navigate that balance between making compromises to get your stuff into china and being true to the art? >> the kinds of content we are making, whether movies, tv, it's designed for global audience.
it's not designed explicitly for china. we are trying to make movies for the whole world. as for being able to crack the chinese market, as bill said, tpg growth incubated this company. it was literally just an idea that two years later we willed into being, but one of the first people we went to was one of china's largest pe shops. he's been a spectacular partner in helping to test and navigate how things should work there. also really successful, one of the most successful private equity firms in china. this is where companies like 10 sent come in. while we have tried to do is align ourselves with the best -- unlike a can normal american company that is retroactively push
their stuff in, we proactively try to align ourselves with people who understand the market, and that's what hopefully gives us an edge. emily: a lot of this new funding will be used towards new tv projects. what are the opportunities you see in tv when he have amazon, netflix spending so much on original content? you have people saying, we are in a tv bubble. we are ballooning into oversupply and that balloon will eventually deflate. i continue to believe there is greater supply of tv than can be produced profitably. business,ke the movie there's television content that would not be profitable and if you produce the right television content, it can be wildly profitable. netflix are doing the doubling in investment they've made between last year and this year in original content speaks to the fact that the way we consume tv is different right when we grew up, it was a linear broadcasting modality. the only thing left that is
linear is sports. people will sign on to their television to watch a sporting event, but the rest of content television is a different form of media, and the lines have really blurred. you see a list artists doing an individual episode of "game to thrones". the quality of it is like that of a movie. longer had the television comedy runt of the litter with hollywood lot busters being the blcokbusters-- being the high quality -- blockbusters being the high quality. and otherindia emerging markets having shown up makes for a fascinating landscape to invest. it still has to be good content. if you throw lousy production out there, it won't succeed. emily: what kind of tv do you want to do? >> it's a great question. what is tv, is what we are
grappling with. it used to be movies were 90 minutes, if you're telling a story it's 90 minutes and it will probably be a movie. if it's 22 minutes, it will probably be tv. now it's 2 minutes on facebook or 6 seconds on snapchat. we are trying to aggregate the world's best storytellers and biggest movie star brands who are incredibly interested in trying to tell stories across all these different platforms. trying to create this frictionless creative experience where they can tell their stories across all these different platforms and figure out which is the best way to go, but where we are right now is all these lines are completely blurring. theyind of tv were doing, are stars in signature roles. i think there's going to be a lot more overlapping and a lot more breaking down of those barriers in the last 3 or 4 years. emily: all right.
emily: welcome back to "bloomberg west." still, stx ceo and co-founders. i want to talk more about your relationship. private equity normally stays in a company for a finite amount of time in them leaves. will that be different this time? together after being at a board meeting together. we've known each other since college days.
we sat together and realized a lot of what we end talking about, which is the global landscape is so different that we can build a different kind of business together. our first check in this company was a hundred million dollars. partnerseen working as all the way long to create this. this is a company that was a function of the 40 invest once we've made in media -- inves tment we've made in media. roi ofbably has the best any hollywood producer. generates profits. he has a respect for capital which is important as an investor that you are working with someone who sees the world that way. it's been a great marriage from the beginning. we ultimately have to return capital to our investors but we tend to be fairly patient and our goal is to maximize return
at the end of the day. >> they don't incubated companies. started as a simple idea between us and it has grown into a multibillion dollar company, almost overnight. weibo andzing is the his team approach the risk bob andprofile -- way his team approach the risk reward profile and having the have and power to allow us to dislocate a lot of traditional majors is a combination i have not seen out there. only: stx isn't the company -- you have quite a resume, bill. you also have another company, evolution media partners. you are an investor in haybtm -- jaunt, virtual reality. what do you think is the potential for vr in mainstream entertainment? >> bob can talk about it as
well. we've made 4 investments in one or in -- what we think of the most interesting vr businesses and it's based on a lot of work that we've done thematically to understand how consumers are engaging with media, and we believe in sports, music, and media content, generally gaming vr will be a ubiquitous way we all engage. it's a meaningfully better experience. emily: when will i be able to enjoy a vr tv or movie experience comfortably? >> basically starting about now. at stx, we are not technology people. we don't know who's going to win. our goal is to aggregate the best storytellers, to figure out what the syntax is going to be in this space. with vr, and vr will be huge, you don't control the frame. it's tough to tell the story and take someone on an emotional
journey when you can't actually manipulate that story for them. it will be different language to storytelling. and, we are trying to throw some of the best minds at that. the biggest stars, the best directors are fascinated. we figuretandpoint, as the different companies are vying for dominance, they will all need content, and compelling content, and we want to be the one to provide that very -- that. >> the other side of it will be experiencing live events differently. you are not necessarily going to have this and what people spend to sit in the floor seats of the warrior final nba games. you will have an experience that is virtually identical, if not better than having those seats. emily: do you think there is room in the future for the humble movie theater? will we sill go -- still go to
the cinema? >> personally, yes. i think the movie theater isn't going to go anywhere. going back to the cave men sitting around tires telling stories, you want that communal experience. sitting in a dark room with a bunch of people laughing or being scared or being zed,rnalized, -- adrenali that is an awesome experience of won't go anywhere. there will be different types of stories you tell to achieve that goal. being able to watch something on tv in your own living room or even on a mobile phone, i mean, it's really interesting that demographically and culturally, people access stories differently. in china, it's actually very normal to watch a 90 minute movie on your phone. that's not normal for us yet. bleedoing to all start to and we are hoping as it bleeds,
the demand for quality content will continue to increase. emily: you announced cpg acquiring grande communications. how do you see consolidation playing out across cable? >> our bet, in putting the two together, rcn and grande created a top 10 cable platform. obviously we are excited about the company and the teams there. we fundamentally believe that cable represents a 21st century utility. everything we have been talking about, the way people consume exciting newthe developments taking place and the way we are consuming them, need that kind of infrastructure to allow it to exist. it is no different than the instruction put into water distribution, basic utilities. fundamental. is these businesses are going to be doing quite well in our view going forward, as they realize the macro benefit driving that consumption pattern.
emily: do content creators need to keep one foot in distribution to make their models work? >> that's our model. other people may disagree. view, we aret of convinced that -- if you are a great storyteller are you have a big rant -- brand, being able to control and be involved with the content from inception all the way to delivery is key. you're never handing it off. distribution is essentially -- from our standpoint, it's how you create enterprise value. >> studio incentive -- instead of a production company. >> normally when you make a piece of content, a tv show, it makes money, it doesn't make money, and you capture that margin. we are trying to build a company with enterprise value, which is very different. >> it has been a generation
emily: welcome back to "bloomberg west." in our weekly -- "west" in our weekly roundtable, series a. with spotify. when are they going to go public? >> that's not an answer i can give you. thanks for asking that. [laughter] emily: obviously there is so much competition when it comes to music streaming. apple is saying they will completely revamp their service. how do you see spotify's place in this super competitive world? >> we are big believers in spotify, evidence our recent investment that we and our cre
led.eam forou that there is a place a businesslike spotify in the future of music. if you look at the data, over 30 million subscribers at spotify today. last year we streamed 20 billion hours of music. discussed how the consumption habit of media content has changed, music is similar. 11oldest is 15, and 13, and -- they could not imagine buying music they stream everything, and that is the consumption pattern that now exist. there's no point in stealing music anymore, because they and model ofation exploring music that is delightful to the customer. the music industry itself is in an interest in place where it's becoming more compelling, and
spotify is and will be a leading player in that. emily: spotify also getting into video content. >> i think it originally started as spot and identify, which was a deal. i think they went after music an easieruse it was market to crack. they touched so many people and so many consumers. there's a gigantic opportunity there. emily: last question about uber, are you guys interested in calling and uber self driving volvo suv? would you get in that thing? >> i am a huge believer in that trend. i think it's inevitable. i think you will see it happen in commercial shipping and transportation first. emily: would you do it this month? >> as soon as it's ready, i'd love to do it. >> i'd like to try it too. i took an uber from the airport
♪ >> from our studios a new york city, this is "charlie rose." a contributor from cbs news but reside in order to endorse hillary clinton. you wrote an op-ed in "the new york times" that donald trump poses a threat if elected president. was released in paperback yesterday. i'm pleased to have him back at the table. welcome. you?does this book mean to