tv Bloomberg Technology Bloomberg March 25, 2019 11:00pm-12:00am EDT
paying with their phones. capital is still best at hardware. having a card with no numbers, it totally reshapes the way you think about credit cards and the app that goes with it. that to me was apple at its best, taking something that is pay points and makes it simple for apple magic. how many other industries and capabilities are going to see apple do this on down the road? that will be a bigger story on the long-term, but looking at how you pay things come up people want to know. emily: let's talk about something we know the price of, the new subscription service, $9.90 a month. this is building on what apple has already done in news, and listen to the vice president of apps.
>> over 300 great magazines. the wall street journal, the los angeles times, these great premium digital subscriptions, there has literally never been an offer like this before. if you would subscribe to these individually, it will cost you $8,000 per year. with apple news plus, you pay $9.99 per month. emily: if you look at the subscription price for the wall street journal alone, it is over $20 per month. make sense of this for me. mark: there's some debate online. apple is telling people you get full access to the wall street journal whereas the wall street journal issued a statement from its ceo that it would not cover the journal in its totality, that some businesses would be reserved for people paying the full subscription rate to the journal itself. until that is sorted out, can't
comment completely on that but apple is going to get its way here. that is what they are telling people will happen. emily: these magazines look amazing on the ipad but you are talking about an industry that is already resource starved. do these magazines and newspaper have the staff to build out a new apple experience to make it worth it? >> it is a great question, emily. like you said, they showed great as apple does, like the floating city video on the cover of national geographic. all these things that brought the magazines to life. but there's a lot of work involved in making those happen. people had opportunities to get digital magazines before. it hasn't really become a huge business. so i think this is a good thing apple is doing. it is interesting. i am not sure it is a huge hit in terms of economic impact. emily: the idea is attractive, right? >> it is attractive but apple bought a company that was essentially offering this service before. mind you, they weren't apple.
that does change things a bit. there's a question mark about how much they are really going to get from the wall street journal, as mark pointed out and these other magazines, and how long they can sustain the interactive versions of their magazines, and frankly how many people are willing to pay for that despite the supposed value. at most, you will read a couple of them anyway, the most any person could do. emily: thanks for your excellent reporting leading up to this , event and i'm excited to see , what comes next. we are also going to talk about apple's new gaming subscription service, apple arcade later in , the show. coming up, ipo fever pinterest , files to go public, posting more than 250 million active users. this as lyft meets some resistance to its roadshow. uber chooses the new york stock exchange for its ipo. we will discuss. if you like bloomberg news, find is on the radio, the bloomberg
emily: welcome back to "bloomberg technology." now to lyft. disgruntled drivers showed up at what was supposed to be lyft's roadshow location and the problem was that it had been moved to another location. which just so happened to not be staged by -- besieged by protesters. eric, who covers lyft for us in new york, is with us. what happened?
eric: what a coincidence. you know lyft and its investors , as part of the roadshow were supposed to go to the omni. and sort of a group of themsters, who -- some of drivers -- were upset about how lyft pays its drivers were out to protestant signal to investors that they need to hold lyft accountable. lyft relocated to another location to meet with investors in a more private place. emily: so did lyft move the location because of the protest? know one person told , us it was a matter of space. it does seem sort of a bit convenient lyft was able to sidestep the protest. either way, i think the protesters were able to get their message out by being in front of a very public hotel where many people thought lyft was going to hold its roadshow. emily: how do the issues of how
uber treat its workers, treat its drivers have , those come up at the roadshow and are investors concerned about them? yft willthink uber and l have to compete over drivers, but often they worry in the other direction, worry that competition is going to drive pay for drivers up. for lyft and uber to be more profitable, they would need to take a larger share of the bookings. to some degree investors would , need to be at cross purposes with the drivers are at least individual drivers because there is a pay split. overall obviously investors want to see uber and lyft grow the pie, so that would mean sort of more economic opportunity for drivers of the class, but not the share they are taking on any individual ride. emily: meantime, you are also reporting on uber's plan to buy its middle east rival for
$3.1 billion. you were the first to report that this deal was in the works, and now they are making it official? eric: it is sort of final reports here. the deal could be close. sort of my colleagues reporting, this $3.1 billion price tag which would mean uber is, in a rare case, expanding. sort of taking over the competition instead of selling out like it did in china, southeast asia and russia. this is soon going to be a moment where uber is sort of inserting itself in the middle east ahead of a sort of planned public filing in april. emily: all right, bloomberg's eric newcomer for us on the , roadshow with lyft, thank you. eric: thank you. emily: now i want to get to the larger ipo market because it is on fire.
it is not just uber and lyft. pinterest also filed its f1. and in an ipo leader, new york, bloomberg's elizabeth fournier who covers the ipo markets. jackie, friday was a big day. we got pinterest and zoom, in addition to the robert mueller report. what is your take on which of these ipo's will have the best start out of the gate? >> we are really excited about the fact we really think this is going to be the best year for ipo's we have seen in ages. emily: ipo's or tech ipo's? >> i would say both. i mean, i think the tech ipo's will get the market moving, but we have ipo's across the board looking at the tech group and saying if they perform well, i'm , going out, too. emily: so what about the fact that lyft is losing half as much money as it is making? market investors -- are the investors concerned?
jackie: investors are worried they will not get as much ownership in these companies as they want to. these offers will be oversubscribed. retail investors, or traditional institutional investors, everyone is excited about the deals. emily: elizabeth, is that what you are hearing? as lisbeth -- elizabeth: yes, absolutely. the roadshow today, the sentiment out of the investors we were able to speak to was very positive. like you said, it is oversubscribed. they are in a pretty good position. that is going into the second week of marketing. pinterest? about we've talked a lot about uber and lyft. what do you think about pinterest? jackie: we have a lot of unicorns besides the ones we are talking about today that are in the registration process. this is a very big pipeline of companies. we have companies who were planning to move to 2020, they are moving to 2019. late ready 19 moving up to
spring. there's a big group in the pipeline. emily: right. we are also expecting slack potentially to go out this year. elizabeth zoom video quietly , filed a prospectus on friday , it wasi understand pretty strong. elizabeth: they had some good numbers. you were talking about pinterest. they are one of those numbers that are still making a lot. it has narrowed. not quite profitable but slightly more friendly in numbers coming at you from the unicorns. and with zoom, we had analysts say once it starts trading, it could shift to valuations north of $10 million quickly. .mily: wow jackie what do you think will , set these companies apart? they are all very different, even uber and lyft. eric: i think that is what is really great about this, we have a diverse group of companies coming to market. this is a trend in tech, these companies, a lot of them are
platform based companies that have options to take the platforms they have today and really diversify the revenue streams, you know, really hit a very broad market. not just consumer levees very , heavy consumer facing but b2b plays, late stage, all of them have really interesting growth stories. emily: if investors are concerned, and there must be some concerns what are they , concerned about? jackie: i think that what is going on right now is the markets are almost back to some of the peak levels. these companies are coming out in times where markets are strong, volatility is low, we've got great news on jobs reports, interest rates. there is a lot of positive momentum. it's a great economy. but folks are concerned about, can this hold? emily: elizabeth, there was a big merger drop on friday, -- market drop on friday, some recovery today. of course some political issues going on with the debate around the robert mueller report, but trade talks restarted between
the united states and china. i mean, how is the political environment going to impact investors' appetite? elizabeth: i think the political environment has already impacted the ipo pipeline this year. i mean, we had the shut down at the beginning of the year really -- that really set this process back by a couple of months. we see them rushing now. with the ipo market, we always talk about a window. we talk about a good opportunity for companies to get out there. get investors when they are hungry for these new stocks. there is a huge amount of supply coming into the market. and i think the real question with how markets are looking is whether demand will be there when they get there. if you think back to when alibaba listed, that was the last time people were talking about a market top and whether we could use ipo's as an indicator for that. it did not happen then, but in terms of now, it is wait and see. emily: i have a chart here in my bloomberg which shows sort of the dotcom bust in the rearview mirror. we have come a long way come a
, long way up from some lows. i wonder, jackie if there is , anything that could set this off-track. is there a chance that lyft, uber or pinterest could be the next snap? goes out with great fanfare but then the market cap is now one third of what it once was because a lot of optimism didn't pan out? jackie: yeah, i think what is going on right now is these companies have been able to look in the rearview mirror on companies that have gone out in the past 12, 24 months, most of them have focused on, i will be presenting metrics to the market, not just financial but nonfinancial. let me make sure that is backed up. let me make sure i have robust forecasting, i can support from both financial and nonfinancial metrics. there's a lot of focus on growth stories and more. so these companies are coming to the market very well prepared. emily: but could anything throw them off? jackie: market conditions could definitely throw things off. the growth plans are
aspirational. emily: ambitions. jackie: very ambitions. investors need to take a long-term view. this is not a short-term investment. this is a long-term investment. emily: all right, jackie kelly, e.y. america's ipo leader. and elizabeth fournier, who is pounding the payment -- pavement on these ipo's thank you for , your reporting. still ahead, youtube bows out while apple jumps in to the tv race. youtube pulling back from its grand plan to produce high-end dramas. we will explain more. this is bloomberg. ♪ omberg. ♪
players like netflix, amazon and now of course apple. without it, youtube is still making a lot of money on ads. the supreme court will let a lawsuit against amazon's zappos unit go forward. the clothing retailer had applied to the court to dismiss a suit against a hack exposed information of millions of customers. zappos argued that customers could not sue without proof of concrete injury, such as pending misuse of their information. most in seventhe months after they resolved their draft with at&t. this staved off a blackout that would have kept customers from seeing cable channels like nickelodeon and mtv. tensions between programmers and carriers have increased in the age of cord cutting as providers try to squeeze more money from shrinking pools of subscribers. coming up, apple in hollywood. more on its plans to take on netflix, amazon, disney and the
emily: this is "bloomberg technology." back to our top story apple's , streaming vision, the text are introduced one star after another to announce their plans to win over their content -- your content dollars. reese witherspoon, steven spielberg and big bird. ands called apple tv plus, outside of apple only content, it will tap into hbo and showtime. to discuss, at apple's headquarters in cupertino, california, we have a principal analyst at creative strategies and in new york we have andre swanston, and here we have lucas shaw who covers hollywood for
us. lucas, what surprised you about this offering? lucas: on the plus size, the level of star power. other tech companies, they start with media or streaming, and they have to prove themselves. most people already know and love apple. from the footage we saw oprah winfrey, jj abrams, some people who still will not work with netflix. on the downside not a lot of , information and details. we don't know how much the tv plus service is going to cost. we don't know how they will roll out shows, what devices they are going to be on. there is a lot to figure out. emily: even tim cook got a little starstruck when he was thanking oprah for showing up. stars aside, how much of an impact do you think this new streaming service's push will have on apple's bottom -- tim cook is actually wiping away a tear.
carolina, how much of an impact do you think this service could have on apple's bottom line and how will it compete with the likes of netflix? carolina: i think given one of the few information aside from prices that we got today was the fact -- so you are assuming their services and content is going to be available to 100 plus countries, when it is available in the fall. it shows that they are really going for the broadest market that they can reach. also the fact that the app will be available not just on apple hardware but smart television, it is another indication the opportunity is bigger than the base of users that have -- and yes tim cook did get emotional , with oprah. i think if you look at the content of some of the stories that they have talked about today, there was a lot of curation on the content they
want reviewed and get conversation on difficult topics as well. very: now apple has been secretive about its streaming plans until this point, and there is still a lot we don't know. some of my sources in hollywood say, we don't really know what apple is doing. we don't know if these new shows are going to be a success. i mean, what do you think? some of their original content so far has totally flopped. even if it has jennifer aniston and steve carell and is called the warning show, that sounds amazing. do you think they can pull this off? andre: i think they can. apple is showing a shift from being typically mostly a hardware company into a services provider of solutions. and so it wasn't just the apple tv plus but also apple arcade. there was a lot of things apple is doing to make their devices compelling and differentiate them from other services and
then being very aggressive in terms of making them available in other places. and so you know, going back to a specific question if they can be successful apple news will be on , 100 million users by the end of this year. apple music is going to be well over 60 million. even if they are half as successful with the apple tv plus rollout as they have been with other services it would be , compelling. and furthermore the sheer pressure it puts on solutions like netflix to spend even more than they have already been spending with disney and hulu and others in something to -- something critical to realize. emily: even though there are outstanding questions oprah , winfrey put it succinctly and summed up why this could be so big. take a listen to what she had to say. >> the apple platform allows me to do what i do in a whole new way, to take everything i have learned about connecting to
people to the next level. because they are in a billion pockets, y'all, a billion markets. emily: a billion pockets, y'all. do you think netflix is feeling pressure? lucas: a little bit. the ceo of netflix has been pretty consistent, that on the one hand a lot of people can , succeed. hbo has grown, hulu has grown, netflix has grown, there can be space for a lot of winners. and so he is not going to believe that apple coming into the market kills netflix or is a problem for them. but if you listen to him speak about competition, it is about screen time and leisure time. there is no question apple can feed into that. that could be a problem for netflix especially because apple can use this to push its services. andre made a good point because apple can introduce an ok
service and probably still get it to tens of millions of customers. but music the success hasn't , blunted spotify. spotify has actually quadrupled in size since apple came along. my guess is we will see something similar where in video apple can succeed and netflix can too. emily: netflix is going to be part of this, you can access it through the current apple tv storefront. andre, what does this mean for netflix? they are the giant in the room. andre: i would say the two biggest losers today were netflix and roku. the reason for netflix is because -- there is so much fragmentation in tv that content discovery is becoming more and more critical to help people discover and monetize content. and so if all of the other services and the originals from apple will be easily found along the home screen of somebody's apple device and the other devices, and netflix is left out of that, and people have to log
in to netflix separately to discover new content -- and new original content will be more and more critical to netflix's future because they are losing content from disney and warner media and others. and why i would be concerned if even if they were included as one of the devices where the solution will be available from apple, it puts them in a place of device -- being another device manufacturer, where they have been working hard the last year or two to be this operating system of choice and help with content discovery. they are kind of going back to being more of a provider of other people's apps. emily: carolina what are you , watching over the next year to see if apple can pull this off? certainly the sheer size of the platform gives apple a huge advantage even if the service isn't the favorite service. carolina: specifically for the tv content, i am going to be
looking for more than the stars we saw today. i think one of the things we have seen apple do over and over again with content from the app support even music is smaller names, support smaller franchises. given they can't always make the big hit with big hollywood stars, who else are they going to support and how much original content are we going to see? the other critical part is pricing, and how is apple going to be bundling these services that they have. it is hard to see now because they will all roll out at different times. in a year from now when we are going to be assessing what their overall portfolio is, how much as a user can i buy with one purchase? can i bundle my tv service, my music service, my news service and cloud all in one easy payment? some: it is going to take
iphone maker also announced gaming services. it is known as apple arcade and will be integrated into the app store and includes 100 exclusive games, this just days after google announced its gaming platform. joining us is an independent game studio planning to release two new games on apples arcade -- on apple's arcade gaming platform. tell us a bit about what apple arcade means to you and your games. how will it change your business? >> well, it is a fundamental transformation because it developersependent like us to compete on equal footing and reach an audience that will be more involved with the games we make. it will be certain all of the content that is offered is free from ads and market transactions. it is freedom we wouldn't have necessarily on the regular app store and still achieve a good
result economically. emily: a bunch of other game makers like ea, activision fell on the announcement like -- announcement of apple arcade. how does this compete with google's stadia? >> it is a very different proposition altogether. here we are talking about being relaxed with family sharing devices in your living room and playing games which are resonant inside those devices. you have a created selection of games where you will have access to freely. studio is a -- stadia is a streaming service which is very different altogether and serves different areas of market, hard-core, high-end up to mobile devices. the games are not running on the devices themselves. they are being streamed from google's data centers into the devices. emily: can you share details on how much this will cost? we still don't know.
>> i cannot. you will have cupertino to get that, i am afraid. we are still waiting on pricing information for apple arcade, but you also produced one of the first games for the apple watch. how impactful was that for your company? is that a big gaming platform? >> no, it wasn't but it was very interesting to experiment. we were trying to figure out what people were actually going to use it for. people tried fitness and health monitors, but also music and small notifications. there are still very successful games, but we don't -- and new proposition that comes to the market, and try something new. developers like us, always on the hunt for the next big thing. emily: apple has for a long time
talked about -- it has been talked about as a lot of potential in the gaming market untapped potential. , how do you think apple arcade could or will change the gaming market? >> i think there is a potential to be a transformational step. on the traditional game market you have very little movement on the top 10 most popular games. we are talking about these big franchises that are generally free to play, which is a lot of -- which spend a lot of money to buy people into the apple system. the more people that buy the game the better they rank. , it is a self-fulfilling prophecy. for independent developers it is difficult to break into that. the second aspect is of course how you relate to the game media being offered on things like arcade. we are talking about an ad free experience and an experience that is focused on the player's,
the player behavior and how the player interact with the game rather than how you monetize the game. this is a fundamental shift in the approach of how game developers create, and one that i think is going to be the premium, the first choice for people who are discerning about what kind of games they want to play, what kind of experience they want to have and what kind of emotions i want to feel when i am engaging with an interesting story. emily: we will be watching to see what you and bossa studios deliver. thank you for joining us. still ahead, the sec is calling on the federal court to hold tesla ceo elon musk in contempt. how the decision could impact musk's claim over the electric carmaker next. this is bloomberg. ♪ ♪
a new judge was asked whether the tesla ceo violated his agreement without holding a hearing. the sec is holding elon musk be held in condemned -- in contempt after a production forecast they claimed -- as required by the settlement. elon musk defended his twitter use, saying the sec relies on radical interpretation of the order. joining us to discuss, max chafkin. the story continues to develop very what is the latest as of today? max: the latest is the sec has responded to elon musk saying the judge should offer a hearing on this and decide whether or not this tweet from february that elon musk put out without the assistance of his twitter sitter -- this is the person who is in theory responsible for vetting tweets from the ceo of tesla to make sure they don't contain any material information, whether that tweet was ok.
musk said it was ok based on the fact it echoed something tesla had already put out and didn't move the stock price. the sec said it is not in the spirit of the agreement he signed, which was a settlement in connection with this 420 tweet, the plan which nothing happened to take tesla private. emily: are the experts weighing in on who has the better argument? max: it kind of feels like the subtext here is, the particular tweet we are talking about where elon musk said tesla was going to make half a million cars this year which he then corrected , himself and said it is the run rate for 2019, starting in february, it feels like a ticky, tacky complaint. the thing that has been underlying it is a pattern and lack of respect you might say for the sec. emily: maybe or definitely.
he has said the sec is basically an embarrassment. max: he called it the short seller enrichment mission. and that sec is supposed to protect shareholders. i think most shareholders for all of the antics still want him to be ceo, still think the company is worth more with him as ceo. so it kind of puts the sec in a box where they can try to wrap him on the knuckles again, but the real punishment that they could enact would be banning him from being ceo for some time or banning him from the board, those feel like not really realistic punishments given what is going on. it is hard to see how this shakes out. emily: what is next? what next move are we waiting for? max: we will see if the judge requires a hearing or a ruling you know basically saying tesla's right, it wasn't that big a deal. or coming up with some
additional sanction to put on the company. in the background there is all this question that tesla's stock price has been volatile, and there are questions of demand for these cars. tesla has been sort of changing the price every couple of days it feels like with the model three, which is there mid range sedan. we are waiting to see how all of this kind of negative press or kind of chaotic press affects the demand for cars which tesla really needs to have good business going forward. emily: absolutely. max chafkin, as always, thank you for keeping us updated on the play by play. all right, i want to bring in our bloomberg tech senior editor now brad stone to wrap up today's big apple event. this hour, every one of these news services, and apple said with this service, you get your privacy and security. with this credit card, we don't know where to buy or where you buy it. we don't know with ms. magazine
subscription service what you , read. we will not tell anyone. do you think that alone will attract customers? brad: you know tim cook has been , drawing that distinction that , juxtaposition with facebook and twitter for a long time. he made the argument with the new services, they won't track what you read. they are not going to serve up ads for anything else across the web. is it a difference maker for the majority of people outside the bubble, i don't know. i have not seen much in the way of data it is. i think they could have been better served adding specificity to some of their announcements today. what do you get with the news plus service? do you get all of the content from partners like wall street journal or the tv plus aap? people were puzzled over the announcement. how much is apple charging? to what extent are you getting programming, new programming from apple and other content providers? those are the questions that will make and break these
services. emily: are you saying oprah is not enough? >> they brought out the firepower. oprah winfrey and steven spielberg, reese witherspoon. it is very impressive but now the people that watch apple closely are puzzling over it, wondering why some of these services appeared to be so half-baked in the introductory day. emily: that said, i wonder if the sheer size of apple means so many people will use these services anyway, like apple music? you know, sort of like, well, it is convenient. brad: but remember that has never been enough. apple has 50 million subscribers, far fewer than spotify. but is why they have been pushing music and other platforms like alexa. they want to do the same thing with the apple tv app, putting them on samsung tv's and fire tv's. clearly the ecosystem is not enough. the minority of people of smartphone users have apple. apple needs to get these on other devices. emily: that said, i mean apple
, is saying the services business can get to $50 billion. by 2021. how important are these offerings? >> hugely important. as a growth company, iphone revenue fell in the fourth quarter. i investors have always been -- the investors have always been hitting hopes on the maturation -- it is why certain things like the apple -- the new apple credit card looks promising. apple pushing deeper into people's financial lives, that was one of the most promising announcements from today. and look, apple fans are going to want an applecart. emily: it is made with titanium. brad: we can argue as to how low those rates are or how innovative the card is. other banks and other companies offer something very similar. emily: i have a chart that shows iphone revenue falling along with the global smartphone market slowing down which shows how important all of this is for apple to pull off, but the
question is, we still don't know a lot, even with the teasers of the new original shows, there is not much there. brad: you know, i think -- and it reinforced my belief recently that apple is not being authentic in these recent event days. you know, the apple tv app, they have redone something that has been sitting on people's iphones and ipads already for years. it is like, big deal. now they are moving further with bringing in channels like hbo and showtime. you can subscribe to those in a million for in ways. now apple is getting the content bug like youtube and amazon have before it. it is not necessarily innovative. i don't necessarily see what they are doing other companies haven't done before. emily: we will see if these can be hits. a big hit can make a big difference. brad stone, senior executive editor for bloomberg tech, thank you for wrapping it up with so much authority. that does it for this edition of
♪ our top stories this morning. highpan leads asia as they do just u.s. signal from treasuries. series the brexit drama theresa may lose control as she admits she doesn't have the votes for her bill. the college will not decide. trump president recognizes israel's sovereignty over the golan heights, meanwhile, violence flares in gaza after a cross-border rocket strike. yousef: and apple plans a post- iphone