tv Best of Bloomberg Technology Bloomberg August 12, 2017 6:00am-7:00am EDT
it's part it conversation about diversity in silicon valley. plus, we will discuss in your records earning report for another tech giant coming up in giantrning report -- tech coming up. disney announcing that it will soon offer sports programming and its films and tv shows directly to consumers with two, new streaming services. due tond profits fell the companies cable tv division where subscribers and ad sales track. we sat down and talked about the andany's streaming plan, the company as a whole. >> we're seeing a shift in the way that people are consuming media.
it is becoming more app-based. -based consumption is done with direct to consumer services. you need the technology to do this as well, and that is no easy task. it is not simple. especially when it comes to streaming live sports, we have consumption at a large level, and it is done all at once. so, we have accelerated our purchase of controls that we can move into this space at a faster pace and a faster rate than we anticipated, because we see the opportunity in the marketplace. nds, the marketplace, and the consumer trends. >> you really do focus on the o-consumer experience.
more specifically, who was the target audience for these services? >> you are looking at the sports fan on the support side and with usb and as well. espn is one of the most popular sports programming out there appeared espn obviously provides a lot of -- of their. obviously -- sports programming out there. espn obvious that provides a lot of live sports programming. so, we are looking to provide it as a streaming service with a large and easy to use consumer bait -- service to a large consumer base with an easy to understand ui.
we basically reach everyone, and it is not just in the united states. it is worldwide. we are going to serve that sport s fan well. >> live sports has always been a mainstay although it back to broadcast television. certainly, everyone knows of it through cable. because of that, cable providers have been very reliant upon espn. what do you expect the reaction to be from cable distributors? >> we will continue to distribute the espn lanier -- linear channels. the distributors and programmers alike have been experiencing the disruption that the home market and multiple businesses are seeing from advancements in technology and changes to consumer behavior because of that.
we feel we need to react accordingly. my thoughts are that the distributors will look at this change as a threat over anything else, but it is not intended to be that. we taking advantage of market conditions and the passion around our brand. we are taking advantage of the technology that allows us to reach our consumers directly. if you look at disney's businesses, most all of our product is distributed to consumers through third-party distributors. an opportunity for us to reach the consumer directly, and that is an important step for the company in terms of growth. >> when a ceo like you makes an important decision like this, you have to ask yourself if you are going to build it or buy i t. did you go through a similar decision process?
why did you decide to build it rather than buy it? >> well, in some ways, it is a buy as well. we are buying the technology platforms to allows to get into the space as it is faster than if we would have built it. we have the financial wherewithal to do a number of things, but this seemed to be the best that for the walt disney company and our shareholders in terms of creating a growth strategy and really growing the company long-term. to do a long-term view which is very important, but also addressing the near-term issues we are seeing which is all about the disruption created by digital technology. espn app, you have some major sports in here. however, i do not see the nfl at this point or the nba.
are there plans to add them at this point? at what terms do you expect to get them in? >> we do expect the license this at to the other sports which have not already licensed. this creates an opportunity for us to monetize in more effective ways through subscription revenue as well as advertising revenue and all the way that a direct to consumer relationship can generate. i think we can expect that this product is going to be in the marketplace and licensed more aggressively from multiple sports organizations. possibly including the nfl and nba where we have great relationships. >> you say that you are planning a significant investment in movies and short-term content for the disney app. are we talking about an
investment we have seen from other companies like hbo or netflix recently? >> i cannot really comment on what amazon has been investing in, but netflix has been investing will you dollars in original content which they have done rather effectively. hbo produces content little more akin to that. we are going to produce original movies and television series specifically for this disney-branded service. it will be very similar to the investments we have been making in television and movies in the past. emily: that was david westin speaking with disney's ceo bob iger. two companies are teaming up to feature marriott hotels on alibaba's travel site. largest now the world's
place. i do not want us to be confined to our ideological echo chambers where only one side of the story can be heard and is totally intolerant to other viewpoints and scientific evidence. emily: what scientific evidence are you talking about? in follow-up to your piece there has been plenty of discussion about this. the fact that there is no research to support this idea that there are biological causes for the lack of women in tech or leadership positions. i spoke with megan smith who works at google. she says this is a myth. >> among psychologists there is testosteronehat
does affect a lot of personality traits. in particular, our interest in people versus things. i am not saying that all men are one way and all women are another, but there is a different does to be shipped in personality traits which are different between men and women. there are many capable women in google, and i'm not try to say that any of them are not worse than average male engineers at google. i was just trying to address why we do not have equal or presentation from the population. emily: we have a very impassioned response to this. it said, the memo was not about black people or latinos, or the lgbt community, you would not have anyone defending you. what you think of that?
>> i think that is a false analogy, and she is trying to rope me in with other races -- bigots, and ind am not. that seems to me more try this mirror my image rather than respond to the evidence. have beenesponses about looking at the science. they have just been calling me names. leaked document did not carry any references which my original document did. emily: don't you think these conclusions extend to women and minorities and other types of people. forle is making products the world. don't you need to have all kinds of people making those products? >> i support diversity and inclusion, and i think also that
our lack of ideological products.has hurt our it makes us think, for example, just the start that all conservatives are stupid. that is widely held within our left-leaning circles. >> that was the former google employee speaking with only chang. we have another statement from google. our goal is to build great products which make a difference in our users' lives. that a group of our colleagues have traits that make them less by leslie suited for that work is offensive and not ok. is this a rare occurrence? what do you think the writer
wanted to achieve by this? weeklypanel meeting is a google meeting that typically takes place on fridays, but it will now be moved to thursday and it will be a hotly debated meeting. many are interested about what the ceo has to say about this. away short soak that he could spend time on this. the questions that they will want to address at the meeting, and it seems that they are very -- how can we make sure that google is a place that is comfortable for everyone? wheret is a place employees can express their views without being fired which is a concern that that former employee brought up in his memo. >> you think there might be some -- easease the consents
the concerns that were even brought up at the shareholder meeting earlier in this year where shareholders felt that perhaps conservatives are not welcome at google? >> if you talk with people who are supporters of that former google employee, there is this idea that there is a sort of silent minority of conservatives which really do not feel safe speaking of about their political points of view which is because they are not commonly held at google. silicon valley companies tend to lean to the left, and that has they haveect in how dealt with issues like suppression of content. it extends a little further than just one engineer and his time at google.
tech giant is making its debut in the corporate bond market. this comes as elon musk is making plans for a more affordable electric car. the auto company is planning to support new bonds to support the spending on its new electronic -- electric car. musk's crumbs and $1.4 billion in cash in the second quarter. on the hunt for more deals. we will discuss what is next for the funded. highlights from our exclusive interview with the finance minister. what he is promising a big change, and what that could mean for tech giants doing business in that country. this is bloomberg. ♪
softbank'snews for chairman who is on the hunt for more deals and investments. the billionaire is in the process of creating $100 billion division fund to speed up investments in technology abroad. he says he is mulling over various deal offers including from sprint and t-mobile. bob o'donnell joins us to explore the options. >> i think that is exactly what we are seeing in do. he has talked about this for years. ironically, i worked for a company he bought 25 years ago he first started this vision of building up media. watching him over the years and seeing this vision evolved, he is driving himself to be sort of the tech giant version of a warren buffett. he is creating this conglomerate of all these component companies
which he sees as being critically important to driving this vision into the future. i do think it is a smart plan. not all of the investment are going to work come up i think he is putting them in the places. , warren buffett of asia. what you think of that? >> i mean, come on. on enormousng amounts of debt with tremendous risks on that debt. if you watched the way the ceos traded in sprint over the years, he would see that it has brought them to the edge of bankruptcy over and over again. these are big swings at the fences. anything but low valuations, he has a lot of debt to do withl. he is using some connections to make these deals happen.
thek in the interests in trump tower, visiting president-elect donald trump announcing the amount of jobs he will create. at the same time, he is still thinking about that t-mobile merger that the obama administration had not said -- had said was not good for u.s. consumers. he felt that his personal appeal to donald trump might get that deal through, and now we are still talking about this. emily: bob, there is some discussion if he could co-opt these deals. it is very ambitious. >> to be clear, i'm not saying he is a warren buffett, but that his goal is to be a warren buffett. his approach is not on value. his approach is building and buying these core components. arm is the semiconductor rp
company that has this incredible amount of inputs that most people do not recognize. he is buying telecom, robotics, a lot of core technologies which he thinks can be driven forward. smart ine is being developing a vision. he has what he calls his 300 year plan which is a bit overkill, but even having a 25 or 30 year plan is a big deal these days. i think he is making bets based on those decisions. emily: how do you see a t-mobile merger playing out? >> well, there is this notion of 5g and what that sort of means. how the landscape of more than half the u.s. mobilephone market is basically between two companies with virtually the same market share at&t and verizon. now, when it comes to 5g, things could be very different in terms of who has the spectrum and who
does not. maybe there is a chance to sort of rewrite the market share pie chart in the world of 5g. that he wantsing to be number one and is not satisfied with being number three. i think, as u.s. consumers, we think about it in terms of how the government is looking at this. what he wants is to be number one. he does not want u.s. consumers to necessarily have the best choices. he does not necessarily want u.s. this is is to have the best options. -- want u.s. businesses to have the best options. fewer could have providers in the u.s. providing fewer services in the world of 5g when so many technology services will be based on the availability of 5g. with fewer competitors, we know prices will be higher. so what does that mean for businesses and consumers going
forward, and will be trump administration care about that? emily: bob, this would not just be another big tech deal, but it could impact directly hundred of millions of customers. >> yes, it could. you will need to get all of those leases together. the charter peace as well as the t-mobile and sprint pieces in order to be competitive against the other two. so, there is that question of if he can really pull it off. i think with the previous administration, there was that mental pressure early on. however, cory raises some good points. or are going to be challenges to the consumer. -- there are going to be challenges to the consumer, and other governmental entities may step down to say this is too big to make happen. about cory, with her dark talk about that division fund still being
raised. -- what donk that you think of that? >> we are going to start to see perhaps how they recognize those from an accounting basis. if you look at the history of sprint, you will see a couple of bets which have paid off fantastically in the venture category. whether it was alibaba in china or yahoo! japan, there were such great returns from those investments. you can see what he has some stars in his eyes and that he wants to pull that off again. , coming up, an exclusive interview with scott sanborn, how they were able to turn the corner after the surprise ousting of the former ceo.
emily: welcome back to the best of bloomberg technology. i'm emily chang. after the san francisco-based company posted its second highest quarterly revenue in history, seeing that spike 35% year-over-year to $139 million. this comes a year after the former ceo was ousted after the board found problems with lending practices and his lack of disclosure surrounding personal investment. scott sanborn joined us for an excuse of tv interview to discuss the future of the company. interview tove
discuss the future of the company. >> it is about putting in the right controls and putting investors back in the platform. a critical piece is banks and we announced in q2, 40% of our money came from banks. emily: when it comes to the scandal, do you feel like the company is back in a good place? >> i think both the results we delivered this quarter and what i just talked about, having our investors back on the platform, are clear signs that we are looking ahead. emily: your main competition is credit card companies. no small opponent to take on. where are you gaining ground? >> if you look at the broader market, there are over a trillion dollars in outstanding reddit card that. over half of americans have had debt in the last 12 months. off yourve not paid
credit card and you have alone it is probably not a good one. we make it easy for them to save on average 24% on interest versus that product. that is the core audience we're going after. emily: lending standards could be getting looser -- where do you think we are in the cycle? $100 trillion in outstanding credit card. >> it is higher. one of the powerful things about our model as we make all of the performance on our loans publicly available so investors can see every loan we have ever issued over credit attributes for that long. what is it look like but what is the payment history? seeing, we did see deterioration in credit months ago.about 18 we talked about it and took swift action.
what we are now a stabilization and performance and our loss our forecasted returns for investors remain in line. emily: when you think we will see things turn? will we see things turn? >> that is hard to predict. what you are hearing now is in certain markets, the auto market is starting to see signs of deterioration as is credit card. on the flipside you are seeing a lot of things to like four macro consumers, unemployment is low, inflation is low, oil prices are low. household formation is up. these things are counterbalancing the thing to ability toonsumers service the debt they have accumulated. that has moved away from mortgage and moving into student, auto, credit card. emily: what risks are you being vigilant as you grow, from origination? >> it is critically them porton to be good stewards -- it is
critically important to be good stewards of performance. they are aided by the data we generate and we are the largest provider of personal loans. we have been doing this for 10 years. last quarter we had over 100 and investors.titutional aresigns are looking for the consumers that appeared to be accumulating debt and not doing what they intended which is to pay down or pay down or pay off the debt they took on. board includes people that have weathered the financial crisis. what are they telling you about risk? >> it is an exceptional board there been useful to guide the company and set the course forward. illustrate what the risks are in terms of the market
and make sure we are executing pertinently and deliberately. in q2 is about product experience and marketing experience. it is not related to credit. emily: he launched the first securitization -- how big was the funding? >> the loans contributed were loans that have taught historically. in terms of the overall funding mix, it remains a small percent but what it does do is introduce us to a whole group of investors -- we had over 20 new investors who participated. that was great to see. it showed a lot of demand for the lending climate. club'sthat was lending ceo, scott sanborn. continuing global expansion centering on southeast asia, the world's largest provider of shared workspaces says it will invest $500 million in the region and will acquire a
singapore-based startup. this comes on the heels of the announcement to expand to china, japan, and another location in seattle. us todonnell joined break down the details. >> this is the first time they have acquired another type of co-working space. the previous acquisitions have been for related services. this was not likely very large. a local team with local expertise. based in singapore. the company says they wanted to do this acquisition for the talent and local expertise. they have been expanding rapidly. they're taking this approach where they are finding people who are already there and have expertise and finding investors together so they can rapidly scale in the region. head of rviewed the spacemob last year. , evenes are blurring
corporate's are looking at co-opting as well. to bes a way for them flexible and to the nimble a small companies. we are helping companies, small remain --big and be remain nimble at the same time. emily: $20 billion here. >> it is impressive they have gotten this far and there are a lot of concerns people have once they started actually do this. what you find is they are very noisy environments. it is hard to get work done. when i look at trends of where people expect to be working, type of situations were growing but then stalling. those were concerns. this has traditionally been a
u.s. business, tech focused attraction. you find a lot of u.s. based tech companies working in these environments. whether that can transfer culturally and in other industries remains to be seen. tech startups are not the only kind of new businesses out there. how is wework addressing concerns? >> they've a high valuation and they need to live up to it. iraq badly -- i rapidly expanding globally. softbank in japan. in china. a lot of concerns are that this is a cyclical business. when tech startups are doing well they will have a lot of business. they also made changes in their strategy to incorporate larger businesses -- like microsoft that once flexible working space. they are trying to diversify their revenue stream globally and with their existing co-working strategy. uber is said to plan on
unloading its subprime car leasing program. exchange leasing, a wholly-owned subsidiary, is unsustainable and should be sold or consolidated to a smaller unit within uber. an estimated loss of $9,000 per vehicle. the board continue to wind down the program last month after cost revealed to be much higher. facebook is bolstering efforts in combating hate speech. we dive into the tech giant's latest move impossible impact. netflix makes its first ever acquisition. we talk about why the streaming service sought out a comic book publisher. this is bloomberg. ♪
on efforts to combat hate speech. they're adding 500 content control staff in germany. this comes amid pressure in the country to a hack -- to crack down on offensive posts. recent legislation threatens fines of up to $59 million. that fine would be levied on large social networks that fails to report hate speech. i cut up with caroline hyde from london, and asked what was behind the uptick in staff. >> we heard as recently as may and june that we would see a beefing up across the world of content control that would be working on behalf of facebook. that they would be expanding by 3000 new content control staff. notably most of these people tend to work in outsourcing companies. this is what will be happening in germany.
500 being added in the west of germany. they have already got 700 and the capital, berlin, working for a different outsourcing company. has thetable, germany him and hatred for hate speech. there been toss -- they have been tough legislatively. the immigration crisis of 2015, you saw neo-nazi sympathizers taking to social networks like they spoke to put anti-immigration views across. this is why there is focused to tackle this in germany. also the key election about to happen in september. emily: what you make of how facebook is handling this issue now? >> i think they are trying to do the right thing. if there are 2 billion people on the platform, a good percentage are saying things periodically , it are not very sociable
will possibly take more than 3000. they are focusing on ai is a way of surfacing the conversation and comments that these people ought to look at. focusing on germany is actually very smart for them. it is the country of all on the planet that is most sensitive to this issue. maybe china for other reasons. i think they will learn things there that they need to learn. other countries going to be doing the same thing or will he be seeing this elsewhere? >> we have heard in the united kingdom and in france, talk of ringing in legislation , themselves.ines this came after the terrible attack in manchester and london and the atrocities in paris. we saw france and the u.k. announced that they would be doing an anti-terror campaign that was announced in june. much of it was focused on social
networks, on facebook. u.k.l sandberg came to the and spoke to the home secretary haduple months ago and she just been in silicon valley talking to the social networks and how they could crack down. really it is germany that has led the charge. social networks, facebook, google, they have thousands of workers around the world not just dealing with hateful content but offensive content, inappropriate content. >> suicide risk. emily: they've been criticized for outsourcing this work -- some of the hardest work to other countries where employees don't have the same protections -- what do you make of that? >> i've never been a big critic of outsourcing. jobs are jobs and people if they are capable should be allowed to do work. , doese question here is facebook have sufficient control and guidance capabilities over
the people who technically work for outsourcing companies deco i suspect --? i suspect they do. those people are talented and well trained. it is hard work. it is the kind of work that americans don't want to do. involves looking at things over and over again, looking at pornographic photos, looking at awful things. givetalk about the need to these people psychological counseling to do the work. i don't criticize them for using outsourcing firms. maybe for not having enough people and making fast enough action but i think they are trying they just need to try harder and they know it. caroline, what do we know about the resources these employees are given and what sort of counseling or psychological help that they are also receiving? >> concrete evidence is few and far between emily and i went back to the post that announced this hiring in germany and three times they mentioned the need for necessary support.
they clearly realized there is this concern -- when people are staring into the abyss of human depravity, what support can you give to these people from a psychological point of view? that thatto reinforce they will be having counseling available and training. these people are eventually hired by contractors. how much control of the have? the contractors are based in germany and will be working closely in a network that it is hard to know exactly what sort of a support system these people will have? emily: david, 30 seconds. in the german language they will now have 1200 of their 7500 people. think of all the other languages happening around the world. if they were to have a proportionate number of people working on this problem in every language, it would probably be hundreds of thousands. hyde and david
kirkpatrick there. europe, tech giants have taken advantage of tax loopholes in the region. grabbing market share from local competitors. exclusively, countries are gearing up to propose new rules that could have big implications for the tech industry. >> it is always a strategy based on -- the same rules for everyone. when you are doing business in france or europe you have to pay taxes. you cannot take the benefits of doing business in france or europe without paying taxes that other companies, french or european, are paying in europe or in france. the same holds for all companies and all states. >> does that mean that you want to lower company tax to 25%
everywhere in the eurozone? >> we would lower the corporate , in 2022.3% to 25% the second step, we want to have tax harmonization among members of the eurozone. 19 members of the eurozone -- one currency, the euro -- and you have 90 levels of taxes. 19 different economic policies. we cannot go this way anymore. that is why we are advocating for tax harmonization. on thest step of that european level would be a harmonization between france and germany. no later convinced ton 2018, we should be able have a common corporate tax between germany and france. this could be the basis for
harmonization of all corporate taxes at the level of the 19 member states of the eurozone. >> what concessions do you expect from the germans to further this european integration and in exchange would you accept a german as the head of the ecb for example? >> be patient. and the decision must be taken in 2019. it means we still have time before deciding who will be the next chair of the ecb. before takingwait decisions as far as integration of the eurozone is concerned. i think we should be able at the end of 2017 to make the first step towards more integration within the eurozone. was the french economy and finance minister in an exclusive interview with
emily: david letterman is making a return. for ag up with netflix series that will feature interviews and field segments. there will be six hour-long episodes which will premiere next year. yearsman spent 30 three as a talkshow host. netflix has made its first acquisition. the company announcing it millerworld. is the latestn
decision to bolster its own content. this comes as other companies become wary of dividing content to streaming services. we discussed the next move. a big part of it coming off that disney segment, disney, time warner, they have pipelines of comic book materials from which they can use. all of the tv shows and movies that netflix offers are from disney. marvel owns and produces, movies that netflix licenses after. netflix wants its own pipeline of original, and material that it can develop and own and exploit down the road if it wants to make t-shirts or lunchboxes or themepark rides. emily: what is your take bob? smart.ink it is
you mentioned netflix as a media company. that is different than netflix as a streaming company. for them to become a media company they have to buy and create original content. if you want to create stickiness in your service, that is the kind of move you have to make. amazon is doing that for prime, netflix is doing this, i expect we will see more of this. i expect this is a challenge for apple who has talked of doing it. emily: it is not clear with their commitment is there yet. emily:it is interesting because when i -- emily: i asked tim cook about that. he said it was very experimental. what do you think this means, lucas, for other big media players and unconventional players like apple? >> the traditional guys, disney, fox, time warner, viacom, they are intrigued by this.
a few people asked me to explain it today. netflix has never bought anything before. , this seems like an outlier. it doesn't mean they will be buying a bunch of libraries but it opens the door to that possibility. it reinforces that netflix wants to be ready for a world where no one is going to license them. we have seen these companies retrench and revise their strategy because they felt like they were giving valuable idea way to let netflix build its service. as for the new players, we report on companies like apple and facebook and google but we have really reached a point where in terms of media creation and production and ownership development, netflix and amazon are on another plane. asy are making as much tv the biggest media companies out there. they are streaming over the world. apple and facebook are still dipping their toes. its firstu just had
hit, the handmaid's tale. being far ahead meaning no one else stands a chance? >> the content creation business is tough. there is history about how difficult it is to make that successful. it is a hard skill to acquire. you're seeing a lot of efforts -- the tech industry marrying up with hollywood. bollywood, other places trying to come up with original content. all that content being given to netflix, licensed to netflix to use, that may go away. they have to be prepared if they want to survive as a media company long-term. shaw and bob o'donnell there. that does it for this edition of the best of bloomberg technology. we will bring you all the latest in tech throughout the week. tune in each day.
>> welcome to bloomberg businessweek, i'm oliver renick from new york. some of the most dynamic cities across the globe and how they are addressing unique challenges. we will also look at moscow's massive renewal program and how refugees are flowing into the amazon. all that ahead on bloomberg businessweek. ♪ oliver: we are here with megan murphy to lk