tv Bloomberg Business Week Bloomberg March 10, 2019 12:00pm-1:00pm EDT
carol: welcome to "bloomberg businessweek." i'm carol massar. jason: i am jason kelly. we are here at bloomberg headquarters in new york. carol: this week, how theresa may survived the worst loss for a british government in more than 100 years but managed to keep her cool and keep working. jason: it is a great inside story. plus, how effective or not have trump tax cuts been for economic growth? carroll: and i have got another question for everybody.
can at&t's corporate mindset transform hbo? jason: and will hbo be hbo without its kingmaker stepping down? editor joel weber is with us now. you and i were talking about this earlier this morning. joel: this is one that was in the media world and is a big, big deal. the at&t merger with time warner has been months coming. it got delayed because of the u.s. justice department. maybe not being willing to do this, and all of a sudden, it happens. on top of that, he steps down. he had been basically the architect of the hbo empire, and now, all of a sudden, ahead of its popular show, game of thrones coming to an end next month, not only is he out, at&t is the new overlord at hbo. the story is all about the tension. carol: it was about everybody wanting to be hbo. now, everybody wants to be
netflix. joel: that is the elephant in the room. the night is dark and full of netflix. hbo knows that, and that is an attempt to pivot and become much more of the streaming service than the cable one it has been. carol: very timely with everything going on. we have got more on this story from our reporter felix gillette. helix: richard resigns this past week, the longtime head of hbo. carroll: 27 years of the company. helix: right. it is the end of an era. he would tell everybody, we are a media company, not a technology company. along comes at&t, which is now seizing control of time warner media and assets, is moving forward with this plan. their big plan for the future is that they want to roll out this direct to consumer streaming service by the end of the year that will compete with netflix and
pull in all this programming from the warner media assets, tnt, tbs, warner bros., and hbo's going to be a huge part of this. what i wanted to set out to do is like, ok, hbo has been dabbling in this world of direct to consumer and streaming products for almost a decade now. yet, somewhere along the way, they fell way behind netflix. why was that? what is it like to work on the technology side of the business? it says explicitly they are not a tech company. what i found talking to people who have passed through hbo is that a lot of people have been both enchanted and ultimately frustrated by this challenge over the years, of trying to optimize hbo and the internet. a lot of it has been cultural. a lot of it has been, at key moments, things almost happened were you could almost see hbo really taking over the internet and owning the internet in the way netflix does. it is this fascinating counter history of what went inside.
while all the programming was great and all of the innovation was happening on the programming side, why didn't it translate to the consumer and streaming product? jason: it is so interesting, because we think about some of the players, and we were talking about it before we even came on air. i recall one line from curb your -- "curb your enthusiasm." larry david says, what do you mean it is not hbo? it is tv, but to your point, they mentioned a great quote. he really set it up. felix: he has the famous quote he said in 2013, right around the time netflix was rolling out house of cards, one of the first big dramas, kind of hbo style programming. he said that we need to become hbo faster than hbo can become netflix.
jason: that says it all. carol: but what does that mean? felix: i think what that means is that netflix was this culture of data science, engineers, figuring out the science of television, and that is what they were good at. hbo was really good at the art of television. what is fascinating is that over the past five or six years, what you have seen, is that netflix has mastered the art of television much faster than hbo has mastered the science. jason: one of the catalysts is the departure of that leader, so what is his legacy? he was a taste maker nonparallel in a lot of ways. felix: and he will take a well-deserved victory lap with game of thrones coming out, the final season is coming out in april, and people love it, it is a great program, and hbo
programming will be remembered fondly. at the same time, part of his legacy was that -- carol: did he miss the mark? are people going to say you missed the mark? felix: he did not solve this very challenging problem that is they had solved it, it would have been worth a huge amount of value. had they solved it, hbo would be more in control of its own destiny. they would not be vulnerable to now it is at&t-vision. carol: we just got the words for the u.s. cover story, now let's talk about the pictures behind it, the actual cover. joel weber and krista sends her are here to talk to us about that. tell us about the hbo story. joel: we knew it had cover potential from the moment we started to think about it. the images from game of thrones, which is its flagship show right now, are so arresting and powerful. and iconic. so, we wanted to lead into that. chris: we start with this idea about
the classic hbo title screen. it is this staticy thing. joel: you go from mergers cut deeper than swords, we're still not there. chris: and that was like, maybe we can do this silly thing. jason: where do you end up? chris: after all the stuff, we were like, where is the fun energy of game of thrones? it brought us back to something like that would match up the business side and the game of thrones side in a way that is funny. carol: up next, how amazon is winning the influence game when it comes to washington, d.c. jason: plus a high-stakes antenna battle over one of the most important spots in global financial markets. hint, it's in suburban chicago. carol: later on, we survey the recruiters, the top 10 business school brands. jason: this is "bloomberg businessweek." ♪
carol: welcome back to "bloomberg businessweek." i am carol massar. jason: and i am jason kelly. join carol and me every day on the radio from 2:00-5:00 p.m. wall street time. also catch up on our daily show by listening and subscribing to our podcast. get that at itunes, soundcloud and bloomberg.com. carol: and of course, you can find us online and our mobile app. jason: the politics section takes a special look for -- look into amazon's growing footprint and its clout down in washington d.c. carol: we have got a chart for you, amazon's lobbying efforts are now second only to google. there you have it, oracle, microsoft, facebook, and amazon in second place in terms of spending and lobbying in washington. google takes first place. jason: you can see them all accelerating so dramatically.
what is also accelerating is what they are lobbying about. carol: amazon specifically. jason: amazon, look at that. these are the policy areas for which amazon has hired lobbyist by year, all the way down 2018. they are knocking on doors for everything. carol: and covering all the issues. really fascinating chart in the magazine. we got more on this story and amazon's growing influence in washington. >> among the top competitors, amazon outspends almost everyone except for google. last year, it broke a record for its federal funding by spending more than $14 million. that was up for more than $12 million the year before. it really is quite a sizable lobbying in washington with just the numbers. jason: it is interesting as we talk so much about influence and money in washington, and as you described, the numbers are pretty high, but it is also this world of ex-government people, other lobbyists, who have been working for other companies.
take us inside the effort here because it is very inside the beltway it deals like. >> yes. so what amazon has done lately is it has hired people with connections to either congressmen or folks in federal agencies that might be able to help it achieve its business priorities. for instance, now that the house democrats have taken power in the house, amazon has hired a couple of lobbyists. they have connections to the black congressional caucus, which is likely to be raising questions about the company's diversity force. amazon is also hiring folks in the antitrust space. right now, they are increasing questions being raised about whether amazon is too big.
whether it is being anticompetitive, so amazon has poached people with connections to the justice department who could help it navigate any sort of antitrust inquiries. carol: it is interesting that in its pursuit of doing more lobbying in washington, it is not necessarily aligning with some of its tech brethren. and a big part of the reason why is you've got a couple of business ventures, one is accessing more of the government to get on to the amazon cloud. we're talking about of the contract with the pentagon, i think it is $10 billion, and then you have amazon who wants to be kind of a portal for the government to buy all of the things that it needs. >> yes. amazon is trying to dominate lots of sectors across various industries. one of those sectors is the federal market. we have seen that in two cases. one is the pentagon deal that you alluded to, a $10 billion contract. not only will the winner get all of that $10 billion pie, they
will have a lead in that market to get future business from the department. and other federal agencies, and also, the general services administration is creating a new program to help federal agencies buy products like office supplies, and furniture, and amazon has a lead in that contract as well. other competitors like oracle or microsoft, and ibm have been fighting tooth and nail in washington. they are trying to unseat amazon's lead in those areas. that has created conflict, especially in trade groups in which those companies would normally be aligned on policy. what we have seen is really like a civil war in some of those trade groups, and amazon lately has been winning. jason: in the feature section, stock traders have spent years and piles of money using antennas could try to shave a
millionth of a second off of each trade. carol: that race has led to a battle over communications towers out of chicago. jason: a great story, ferris bueller, wayne's world, here is our reporter. >> the world's biggest exchange, worth more than $60 billion, a giant market cap company. the stock market on the other hand is based in several data centers in new jersey. if you are a traitor and you want to be a player in the market, you have to be a superfast communicator and they wrote about this company that laid a fiber-optic line between chicago and new jersey that was faster than other available means of conveying information. very quickly, that service became obsolete for traders because they realized you can send information 50% faster through the airwaves using microwave radio transmission.
over the past decade, they have been building microwave networks to shoot information really fast between the chicago suburbs and new jersey. this latest story is about the fact that those networks have gotten really good and people have inched their radio close to data centers because it gives them an edge. the closer they are to the data center with the radio equipment, the more the information stays in the air, the faster they are, and the more of an edge they have in the competition. carol: but the airspace has to be clear, right? >> yes, so the data center built a new tower that is right next the data center, and the point is that people can put their dishes on there and it will be closer. it'll get rid of all the gamesmanship to buy land near the equipment center, but the thing that got thrown into the equation is another company
announced plans to put their own power across the street. cyrus one says that towers going -- that tower is going to be in the way and will ruin their plans to level the playing field. carol: we mentioned there were politics involved. it has to be politics if it is chicago, so tell us about that part of it. >> one of the fascinating things about this is with these networks, they go across the country. there are a lot of municipalities you have to get permission from to build a tower or by land, so in this case, the city of aurora initially turned down the plan to build their own tower. but they did a little lobbying behind the scenes, and with perhaps help from the mayor, the city council flipped. they actually voted a couple months later to change their mind and approved the tower. jason: up next, everything is awesome for private equity until it is not. my take away from the most important annual gathering. carol: speaking of private equity, we have the pe giant
jason: welcome back to "bloomberg businessweek." i am jason kelly. carol: i am carol massar. you can listen to us on the radio. on sirius xm channel 119, 106.1 in boston, 91 fm in washington, d.c. jason: in the bay area and dab digital in london and through the business app. carol: last week, you were at the davos of private equity. jason: it is this super return conference in berlin. everybody dutifully goes there, and we are talking 2500 people descending on the german capital.
it gave us a good chance, i was talking with joel weber, to really remind people how big an influential this industry is. check out this chart that breaks it down. these are firms you have heard of. blackstone, brookfield, apollo. these are their assets under management. the green bars. but listed there, that is how many people work for companies that they own. carol: that is amazing, and i also look at the drive. $1.2 trillion they are looking to put to work. jason: definitely top of mind for everyone there. what is so interesting is that literally moments after this went to press, as it was going to press, a good scoop from bloomberg reporters about how blackstone has already got $20 billion lined up. carol: so they have got more
money to put to work. fascinating, and pretty upbeat, overall. jason: upbeat. a lot on the horizon. carol: great story. everyone should check that out. speaking of private equity, titans in the finance section with a story about apollo global and its plans to become the next ge capital. jason: that's right, potentially recreating what used to happen at general electric without the taxpayer bailout. carol: our reporter has that story. >> apollo is one of the biggest private equity firms and is known for its buyout prowess, but not known for what it is bigger in, credit. now, they have multiple insurance companies, they have a stake in directly in a mortgage lender. they have commercial real estate lending. they actually lend to deals for other buyout firms that are much smaller. they have a huge conglomerate that operates in lending markets that are unregulated. jason: part of this happened because the financial crisis, and a lot of big banks got out of these businesses and into much more lightly regulated firms like apollo. blackstone also in this business, and others.
why has apollo been so especially successful? >> partially because of its leadership. josh harris, leon black, mark rowan. they came from the junk-bond titan. they know these markets, but on top of that, even on assets led -- left from the banks, talent also left, so the person who runs the business that apollo was formerly at citigroup. he knows these markets well and has brought on city talent as -- citigroup talent as well. even the banking talent has moved over to these firms. carol: your point is that this guy once to create the ge capital of tomorrow. specifically looking at the former ge capital assets. >> something interesting about this is that they would tell you that this is a metaphor. could have said citigroup, he could've said anything else. the thing about ge is after having $500 billion in assets,
it is selling some of them. apollo is in a really good position, and at least a small group of players that can take the assets on. carol: what is it about seltzer and apollo that they will make their version of ge capital work when we saw what happened to the former ge capital? >> the insurance is no small piece of the puzzle. it is something that equity firms are trying to replicate. blackstone and carlyle are trying to get into the business. they are able to invest in credit assets more heavily. this is a huge part of the strategy. they got into it right after the crisis and bought the insurance assets on the sheets. now, they are expanding globally and that headstart is helping apollo catapult above everybody else. carol: in the economic section, we have a scorecard for president trump's tax policies. jason: bloomberg analysis showing that they have done little to boost growth and tax rates may not be that important when it comes to corporate investment.
carol: we have got more from our economist. >> this is a very hard thing to measure. a lot of people have taken a stab at it and the range of investment and impact is quite broad. that said, i put a lot of time until looking at we had a lot of promises from the white house about what this would do for the economy. we have heard about consumer spending. we heard about investment, but are we actually going to see this second piece from investment? the takeaway is yes, it's just not very big. this plays into the supply-side argument a little bit that you will see something from tax cuts, but also puts a cap on it. even if you get something, we are only talking about .1 percentage point of growth. last year and this year. jason: carol was an economies -- economics major, i was an english major. this is where it would take a step back and you remind us of the supply and demand side, basic definition. >> supply-side economists believe that if you deregulate and give tax cuts, it will help
incentivize businesses to invest. their view is that what is keeping businesses from investing is the government. demand side will tell you that matters, but what matters is where we are in the economic cycle. is there a for the products? that is the framework we started with and we put together a model that looks at both things. it puts components and from both and it turns out, the demand siders win in this case because the demand-side capacity complaints output gap, those things matter much more than tax cuts. carol: it is important to have this discussion because, as you say, the white house has come up with estimates saying hey, we did this, we cut the corporate tax rate, businesses are spending and look what it did. i think they said a full percentage point. and as you said, there are lots of different estimates out there, so we kind of have to be smart when we hear this stuff. >> absolutely, and it is hard because there are so many estimates, and because these things are so easy to fudge around the margins and the models are all different. i think the important thing to note is that, the results came out, i would not say to my expectations.
we did standard scientific theory, testing a hypothesis. when you get these kind of things, if you can find other types of work that support these hypotheses and you results, you start to build a house out of bricks. one piece at a time. these results are similar to results others have found which makes me think that, ok, there's something going on in the white house. i do not want to get into why, but it is leading them to maybe put bigger numbers around their tax cuts than maybe they deserve. i think that is an important thing to understand as we enter into a phase with the deficit is widening substantially. which is very rare this far into expansion. did we get what we pay for? carol: later in our program, the rockettes fueled inauguration president trump dreamed about. jason: and next, how britain's theresa may pushed past a
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>> welcome back to "bloomberg businessweek." carol: still ahead, the business schools recruiters pay most attention to. >> fitbit tells us about the company's future plans. two months after the brexit deal suffered a historic defeat, the u.k. prime minister is pursuing a second attempt to persuade parliament to back her deal.
carol: tim is joining us from london. i feel like we move day-to-day, but behind all, theresa may staying cool, calm, and collected. tim: even though two months ago she suffered perhaps the worst defeat in history, perhaps -- certainly for a hundred years. the one piece of political decision-making she needed to win on, her brexit deal. she still does not have a deal that has got to the house of commons. she is going to try again on march 12. the u.k. is due to leave a couple months after that.
with or without a deal, we still don't know. jason: what i love about this story is you take us inside downing street and into the mind of theresa may. so much of what has happened reflects who she is at her core. tell us what you learned. tim: what we found through talking to ministers in the cabinet and officials who worked with her in the past and now is it is difficult to get inside theresa may's head. to understand exactly what she is going to do. she's a private person. she lost both her parents when she was in her 20's, met her husband at university and has been with her ever since. he is the one man on the planet who can claim to know what theresa may might do. they are a tight couple. they do not have kids and they rely on each other. she relies on him. celeb may, he is one of her
chief -- philip may, he is one of her chief advisers. the two policies her colleagues identify as being the key to her survival are perseverance and fortitude. she has come through political pain in the last couple years since she has been the u.k. prime minister and is still there soaking it up and plowing ahead. carol: is interesting. i feel like her perseverance and fortitude, you wonder if she will be able to carry brexit through the finish line. what are you hearing in terms of how it plays out? tim: it is not impossible, whether negotiations are in brussels. there are two sets of negotiations. one is the u.k.'s talks on whether it can get a different deal out of brussels and the other is theresa may's negotiations with her conservative party in london. in a sense, that is the key, because if she can persuade enough of those hardline purist brexit supporters in her conservative party to back down and support her deal, she has got a chance. without them, her plan is dead. we are going to find out in a few days when a vote comes how that it gets for theresa may. -- how bad it gets for theresa may. jason: help us understand and you do and you do a nice job of this, the key issue between the u.k. and the negotiators in brussels.
is this irish backstop? we read about it. remind us what that is. tim: you have to take a look at the island of ireland. there is northern ireland and the republic of ireland. that is an independent country and a member of the european union. when the u.k. leaves the european union, northern ireland leaves. then you have a real issue at the border. what happens? currently, it is open and free flowing. goods can come and go. there's no need for customs checks. but the peculiar history of northern ireland politics is a violent one and the concern is if that border becomes policed with borders officials, it will revive memories of the kind of checkpoints there in the past and potentially spark sectarian unrest between communities. that is really what people want to avoid. the backstop was the agreed compromised to do just that and
what it means is the u.k. as a whole stays inside the european union's customs union for as long as it takes until a new answer can be found and there is no need for that threat of a hard border with custom checks. carol: just really quickly, because we keep moving around dates and votes, what are the dates investors need to be focused on? tim: next tuesday is the date where we expect theresa may to put a revised brexit deal back before the house of commons to vote on. after that, we have another vote of the 13th of march. we're expecting when the comments will decide if they rejected her deal , whether they want to take her out of the european union with no deal at all. the next day on the 14th, there will be another vote, a third vote in the week next week on whether to extend those negotiations, to push back that deadline and delay brexit.
you can catch us on our daily show. check out our podcast at bloomberg.com. jason: find us online at business week.com. in el salvador, an era of gang violence has given rise to a thriving coffin business. carol: one city is getting a reputation as the city of coffins. here is more from jeff musket. jeff: it is for pretty grim reasons that el salvador is one of the worst sites of homicide per capita. supposedly the highest rate in the world. this traces to gang violence has been exacerbated by ms 13 and barrio 18 over the last eight -- the last few years, as the incoming presidential administration blew up a brief truce, a short-lived one.
a few years between the two gangs. it was brokered by the roman catholic church. jason: you bring us details about this. take us to this story. these brothers, who were in a different business before they got into making coffins. jeff: that is right. they were running a bakery in what is now their funeral parlor. two of the three brothers have now tried to take the money they have made first by selling coffins on their own and then by buying coffins from other sources and running a funeral parlor to make the parlor into next to what was once their bread oven to make the principal involvement facility for the surrounding area. carol: forgive me for getting into the financials, because this is a country, an area that -- the individuals,
the average family does not make a lot of money. i'm curious about what this is as a business. jeff: the brothers who are running the funeral parlor in the city, their younger brother and dad have gone off to start a different business elsewhere in el salvador. they are making between $2000 and $4000 in a month. it does not sound like much, but it is a decent payday by el salvadoran standards. jason: in being successful selling coffins, they insulate themselves from the violence that surrounds them because these gangs often prey on the economically disadvantaged? jeff: true. it also keeps them from standing out in a certain way. there are so many factories running all the time, it keeps margins down enough that you are not standing out in -- standing out as a viable target.
carol: what struck the individual there on the ground? what struck him as he was doing this story? i'm interested in the conversations you had. jeff: the thing that was most shocking to him was how accustomed to the sheer gore and the grisly nature of the job that brothers seemed and their relative comfort with death. up until you get to the last scene in the story, where one of the brothers is at a funeral for one of his lifelong childhood friends. jason: the white house denies president trump made a role in his inauguration planning. carol: but, simply put, he was involved, very involved in fact down to the tablecloth. jason: the event is being looked at by federal prosecutors. here is more from our reporter. caleb: this is about planning a
party, a huge party, a party that cost $100 million. that effort is under a bunch of investigations. the latest is the letter from the house judiciary committee asking questions but there are also federal prosecutors in new york and attorneys general in d.c. and new jersey who were looking in a broad-based way of how the committee for the inaugural party raised the money, deployed the money, its relationships with donors. carol: it was $107 million. a record, right? caleb: a record. about twice as much as obama's, which had been a record before it. the white house has recently said trump had nothing to do with the planning of the party in his honor.
we knew from sources around the campaign, the transition and the inaugural that that was not quite true. we set out to tell the story of how trump helped plan his own party. jason: anyone who has been following trump as president, candidate, businessman of the last 30 years probably could ascertain that he is going to be involved because he is a showman. he understands the power of visuals and -- tell us how he got involved. he went deep. caleb: he went very deep. some very broad top level things, as they were planning this from the earliest days, he would call his good friend, a chairman of the inaugural, in real time as they were having meetings trying to figure stuff out so he could weigh in. he also was curious for a while in the idea of selling exclusive rights to either some or all of
the inaugural. to broadcast companies. his favorite for a while was fox. carol: to be fair, president obama did that too, didn't he? caleb: obama sold certain parts to hbo and abc. that would not have been unprecedented. he personally had calls with the president of cnn where he discussed it might be cnn and fox. no exclusive rights deals ever came to fruition but a lot of discussions were taken care of by trump himself. carol: but that alone is not a problem. where did the problem arise? some people are listening and they say, who cares? he cares about these things. make the connection for us. caleb: that is totally reasonable. it only becomes weird when trump's spokeswoman at the white house sarah sanders denied he had anything to do with this other than going to the balls, raising his hand over the bible,
and everything. that is just a weird, relatively easily disprove a bull thing to say. you have to wonder if that in turn exposes him in any of these broad-based investigations. carol: that is what the problem is. in terms of how the money was raised or whatever. caleb: that is the thing. investigators' questions are so broad now. it is hard to figure out what they are after. they are asking about how the money was raised, how it was spent, interactions with donors. it all seems to be on the table. carol: up next, choosing a business school to get the best career advantages. jason: plus, the next generation of products. we talked to a ceo. carol: a restaurant trend where a chef offers rooms to stay the night. jason: this is "bloomberg businessweek." ♪
carol: welcome back. i am carol massar. jason: i am jason kelly. you can listen to us on the radio. 106.1 in boston. 99.1 in washington, d.c. carol: and of course on the bloomberg business app. in the solution section inside job recruiters on the best business goals. jason: an editor walked us through the latest look at the b school rankings. >> it is about the jobs ultimately. what are you going to do? even if you are aspiring to start your own business, most of the time you're going to go down the route where you want to get a job, get experience and then apply that. what recruiters think and what they are looking for and candidates is important. this is the same data pool that we built the global ranking on.
we release the u.s. rankings, then the global ranking in december. this was a deeper dive into several key questions about what recruiters are looking for and they are assessing the quality of the candidates from which schools they are coming from and that is what leads to these many rankings. -- these mini rankings. jason: it is interesting because i looked at this and thought, before i dove in, thought it is going to be the same names. it is not. dimitra: several of these -- we picked six questions we felt were important so this is by no means like every single question and category they looked at. there are differences and you will see many schools pop up on these that are not in the top five or 10 of these global rankings. we are in the top 30 because that was the selection we made. we pulled the top 30, we applied these questions across the board to each of them and came up with these results. carol: what i find interesting is the trends we have been talking a lot about at bloomberg
over the years. innovation, entrepreneurship, diversity. these are important. dimitra: very important. creativity and innovation, absolutely more and more which goes hand-in-hand with entrepreneurship. what are the ways in which schools are enabling individuals to go beyond the basics and the very standard curriculum that we know out, and really break out of that and be creative thinkers and apply interesting problem-solving solutions to things they are coming out with. jason: before we get too far away from schools, tell us about stanford. you mentioned -- even though i did not go to the business school -- to see georgetown representative -- represented well in a number of categories. you mentioned the international names. what did seem to -- what were you able to elicit trend wise in terms of who popped up more
repeatedly from the recruiters? what types of schools? dimitra: it is not surprising that stanford did come out on top in several categories of because in a way, that global ranking result, you see the connection. but also stanford, very tech driven, so on the innovation front, on the entrepreneurial front -- entrepreneurial in terms of what are you teaching but also in terms of what do we actually see in the students? jason: every week, we go deep with a guest. we put it out as a podcast. this week, we are joined by james park. carol: the company came out with new devices, different goals and it aims to keep ahead of a crowded field of wearables. jason: here is part of that conversation with james park. >> we announced a a few new products and inspired h r, which
are affordable low-cost trackers. along with our successor to an amazing kids product we launched last year. carol: tell us about the strategy and where you see fitbit going as a result of new products. james: a large focus is about growing our user community, what we call our active users. last year we grew active users 10% to 28 million active users. that is one of the largest online health and fitness communities in the world. our strategy is to increase the number of active users we have. later this year, to monetize our user base with a paid premium offering. carol: i am curious about, once you get a user, how sticky is it? how often do they stay with you?
james: health and fitness is a challenging thing for people to stick with but we have been incredibly happy with retention of our users. that is a testament to the innovation we are bringing, both hardware and software. our active users are increasing every year. carol: what is the retention rate? james: we do not break that out. carol: but you are happy. does it continue to improve? james: it has been improving over time as we roll out new features. both on hardware and software. jason: let's talk about the software side because you mentioned this paid premium product coming up later this year. i am wearing my ionic now. i use the app frequently to check in being a data geek. what needs to come for that, how do you get people even more addicted to the app? james: a lovell we have delivered from the app historically has just been data. numbers, graphs. what we think will bring them value is going beyond that. what do i do with the data? it will be about coaching, guidance and premium content around nutrition, sleep, mindfulness, etc. and bringing together holistic solutions that tells people, what should i do next? carol: for more of our chat with james park, check out our podcast. find it wherever you download your podcasts and at
bloomberg.com. jason: this week, pursuits takes a special focus on upscale food trends. carol: including how chefs are building hotels to complement their foods. jason: here is ever reporter. >> you have seen restaurants in hotels but it is getting hard to be in the restaurant business. margins are shrinking, rents are rising, minimum wage is going up. chefs have been clever about figuring out other ways to make money and one of them is to cut out the middleman and opened their own places. it is working. some of them have new models, so a couple of them have been in the business for a while. one of the most famous chefs in the world started this in the mid-1990's.
he opened a country restaurant in france and he has at least one more property. it has not worked out too well for gordon ramsay who opened a place in london and had to close it. presumably he yelled at himself. [laughter] carol: we can only imagine. kate: now it is cool because you see more chefs decide they want to be the property owner. carol: it is smaller properties, right? kate: exactly. smaller properties. exhibit a of that is a chef called henrique. he is always near the top of the world's 50 best lists. he has a restaurant in mexico city. he opened up this tiny place. it is like an airbnb. it is an apartment above his original restaurant. it is light and airy, plant filled and they make you breakfast and you can hire the chef to make you dinner and it is a great way to immerse yourself. carol: i love this. as you mentioned, the margins are better on
the hotel business. kate: the margins on a restaurant are less than 15%. they are basically around 12%. if you have a hotel, it goes up to 30% and if it is the destination outside the city where you can combine them where you have customers who are not going to leave, you have a captive audience. the margins go up higher. carol: bloomberg businessweek is available now. jason: and also online and on our mobile app. what is your must read? carol: i want to maintain a relationship, i have got to say jason's remarks. they are fascinating. the private equity industry continues to grow and the influence on our whole investment environment is not to be missed. jason: joel weber assigned that story to me. my favorite story, nick baker in chicago talking about that little spot outside chicago where so much is happening. also you get a wayne's world and ferris bueller reference in there. carol: i love that story as well. you can find more stories on businessweek.com. jason: check out our podcast.
♪ francine: legal & general was founded as an insurance company by six london lawyers in the 1830's, but now has businesses around the world. it is one of the largest institutional managers in europe. so what does it take to manage a company with this kind of complexity? today "leaders with lacqua," we meet nigel wilson, chief executive of legal & general. nigel wilson, thank you for speaking to bloomberg. legal &