First, to our lead. Netflixs second 40 secondquarter Earnings Results exceeded expectations. There is little room for error. Shares climbed 30 this year. They delivered on a key step, adding subscribers. With the big portion of that coming from outside the United States. Caroline hyde sat down with cory johnson. Cory johnson they dont see the financial results. What they see is a business that might someday generate the results. How do you have the cash loan to pay for all that content . By having subscribers that pay every month. What they see from these numbers is an accumulation of numbers and subscribers who are sending credit card numbers in and the payments keep flowing through. The hope is there will be a geography like the United States and canada that are profitable, and that the be the future of the rest of the world for netflix. Caroline amazing. 104 million users now. For the First Time International users will bring them some sort of profit. We are looking at the financial analysis. You can see at the moment, the Revenue Breakdown is substantially in the u. S. You are looking at 2016. 36 is coming from international streaming. They want to get that to 50 50. Is there any idea of when revenue will come into line internationally speaking and how they do so well with content . Cory i am always a pessimist. When i look at these numbers and i look at how little of the u. S. Population netflix has, when it looks like that market is pretty full for them, it suggest there may be a lot of growth internationally. We will see how the spending patterns are different. They dont give us a lot of country by country detail. That might be to much to ask. They were asked about doing this with sudan. U. S. Companies are banned from doing business with sudan. They pointed out revenues are as low as 8,000 in sudan for the 16 months that proceeded their letter to the fcc. The thousand dollars in sudan not moving the needle. The 8,000 in sudan is not moving the needle. I think its kind of important because what it tells us is not every place is going to run netflix like they do here in San Francisco or london. Different parts of the world are different. Its not just about the way the internet exists in different countries. People will not be able to stream as much in certain places, they are not going to want to stream the netflix content as much. It is still a hitdriven business. Theyve done a good job with some good shows whether it is luke cage and house of cards. They have done alright with some of these things, but a lot of this stuff is missed the boat has missed the boat. That is hard to do when you are dealing with so many different cultures. Caroline there was an amazing array of content. Orange is the new black, if you dig into the letter you are getting from the ceo to investors, it seems he is trying to deflect competition. He said there is room for everyone. They make the internet tv market expand. They say hbo has exclusive content and more people are using hbo. We have exclusive content and more people are using us. More people are using youtube. Is he right . Wife he trying to downplay the Competitive Landscape . Why is he trying to downplay the Competitive Landscape . Cory its ridiculous. Its flatout ridiculous. Its true. Its great for us as viewers and its great for us if we are creating content. But it is horrible for netflix it would be more fun if we were in hollywood doing that. It is horrible for netflix because the cost of the content is going up. The number they dont throw into the Balance Sheet is the longterm costs for content. At the end of the last quarter, they had over 15 billion, billion with a b, in longterm commitments to content. That number is going up. How high is it right now . Right now, we dont know. What is really interesting about todays report is that they put a separate presentation on their Investor Relations page, extending the accounting for those tenure commitments and content. I will tell you for a business in the 50 million profit every quarter, and has 15 billion worth of content, it is hard to pay for for 15 billion worth of content. They are going to have to jack up profits a lot. The problem where they are raising the cost of content, they are raising it for netflix when it netflix does not have cash to burn. This quarter, netflix lost over a billion dollars in free cash flow, and that cannot continue forever. Emily that was Caroline Hyde inner editor at large cory johnson. The Fortune Brainstorm tech conference was in aspen this aspen, colorado this week. A big topic was the state of cybersecurity. As the scale and frequency of major hack attacks continue to rise around the world, i spoke with someone with expert knowledge on the subject, retired fourstar general and former director of the an essay director of the nsa keith alexander. He is now at the helm of iron net cybersecurity. I asked him about the boldness of Russian Hackers in the u. S. Election. Keith its not just that its blatant, they were not prepared to defend. You know, so if you left a bag of money on a park bench, and then surprised if somebody stole it, you would say secure your money. And where i think that gets us to a secure your network. We should not be pummeled with this. We got to make these changes in cybersecurity. It cannot be done by the industry itself. It has to be an industrygovernment partnership. Actually, i think this is an area that the trump demonstration has taken on. It is important government and industry Work Together for defensive architecture that can block these kinds of things in the future. So, actually, whether they are blatant or not, we should not be faced with them. We cannot have people losing intellectual property to lowprofile hackers. Emily what is your impression of whether or not the Trump Administration is taking the threat serious enough . Keith i have met twice with the president. Both meetings have been great. He has asked all the right questions. He has pointed to his officials to help. And his comment to the industry and government is what you need from me . I think he takes it seriously. He understands the threat. He has an amazing lead person. I think what they are doing trying to put this in the right place. So, i am optimistic that the government will move forward. I think as an industry we need that. No, there is only so much you can do as a cybersecurity company. For sectors in the nation, it takes the government to weigh in. I think we can get there. Think of it is an air Defense Network over our country. You know, if we had everyone if we had each state with their own system, that would not be a viable defenses infrastructure. Thats what we are trying to do in cybersecurity. We have to change that. Emily we understand you have been advising the administration. What kind of advice are you giving them . What kind of advice and be given to President Trump . Keith great advice. Its always been great. We have to Work Together. I think the interesting part is my experience in the financial sector, and in the energy sector. They are willing to pay and do what it takes to get them secure. Thats great across the board. They have been great to work with. Their Cybersecurity Team in the industry, and the financial and energy sector, are weighing in and doing great work. So, the missing link is when they are being attacked, who do you call . You down 911 and there is no answer to stop the attack. We have incident response, but we dont have a way to block the attack. So nephew jump for to the election, and the elections are being attacked, who do you call . And the answer is always after the fact. Well, you need to have a way of defending it at network speed. And that takes industry and government to Work Together. Emily if President Trump is taking this industry seriously, why hasnt he publicly acknowledged russia hacking the election . Keith i think that is a more strategic question. I gets back to what do you want to do with russia . And how does Administration Work with russia in the future . Do poke them in the eye, or talk to them quietly on the side . And when i think my way through it, the comments i would do is to say, publicly, i am not going to make this harder than i need to. How do i privately engage putin and the russian government to get to the right place . You know, we do not want to create another cold war, and we dont want a war. If that is the outcome we want, we have to have some kind of partnership with russia. The member, 40 years in the military, russia was always the adversary remember, 40 years in the military, russia was always the adversary. At the same time, we have to be conscious. Its like that movie where you are looking up at them. Right . But you have to figure out in the middle east and other areas, how to be work with and not against them . I think every administration, the Obama Administration, the bush administration, number Trump Administration, is trying the same thing. If you remember, the Obama Administration went in with a reset button. And so, i think we got to give this Administration Time to work it out. That means dont poke them in the eye yet. Emily that said, you got all the u. S. Intelligence agency saying this happened. It seems like the president is at odds with his own intelligence agencies. Keith he is giving himself the ability to deal. And you know, it comes from i think, when you are a ceo, and you want to have a strategic deal, your people do certain set of things, and you leave yourself enough room to negotiate. Now, i dont know specifically on these things. I have not asked on the russia stuff. I am giving you my best thoughts. But my experience in dealing with him on cybersecurity is he is very thoughtful. I thought he was wellred. He knew all the facts. He had read everything. I expect on russia he is doing the same thing. As you would see a ceo doing. The question for our country, weve got to ask strategically where do we want to be with russia and china . Emily that was former director of the nsa keith alexander. Facebooks Whatsapp Messaging Service has been partially blocked in china. This coming after the government began cracking down on virtual private networks, or vpns, which allow data to be routed overseas. Authorities have an ramping of social Media Censorship in china as it prepares for its 19th communist party congress. Coming up, our interview with millionaire businesswoman Penny Pritzker on the approach to trade in the white house. This is bloomberg. Emily lets return to our coverage of aspen. I sat down with Penny Pritzker. And she spoke about the Trump Administrations approach to trade as well as the future. Penny first of all, we took transition very seriously, and tried to get our successes the benefit of what we have learned over are tenure. What is challenging his, as it relates to the issue we are working on here at the fortune conference, is i think the future of work requires a focus, not only by the private sector, but also government to work on workforce training in dealing with the Skills Mismatch in the short run, but also to deal with the long run and making sure we are training people for jobs of the 21st century. But the second role of government is really one if you were thinking about a comprehensive plan for the United States and an economic competitiveness plan, it is opportunity. Trade, for example. It is challenging to watch is walk away from multilateral trade agreements, and to narrow our focus to either bilateral or smaller trade agreements. Emily are we at risk of a trade war . Penny well, i would not bet on a trade war as much as i think the narrowing of our focus and educating our trading partners is not useful to creating opportunity for americans and for american business. And so, i worry about that. I think that we are you know, i want us to make progress. That is important for the United States, for us to have good and functional, open, free and fair trade agreements. But we need to get those in place because the more we talk about it and not take action, the more opportunity we are creating for competitors. Emily what are your other big concerns . Penny well, it is not so much the Trump Administration. You think about how we have a competitive america . We need to deal with trade. And we also need to have tax reforms are companies can be competitive. We need to be investing more in infrastructure then we are. Both physical and digital infrastructure. Frankly, conferences about Immigration Reform is a moral responsibility and an Economic Opportunity that i think we are letting languish right now. So i think, you know, creating greater opportunities is one part of the conference of the Economic Strategy for the country. We need to have a social safety net that acknowledges what 21st century work is like. Weve got 55 million americans out of 140 million working americans in the ondemand economy. We got to make sure the social safetynet is supporting all americans. Whether its health care, we just cant repeal health care and uninsure 20 million americans. We got a make sure americans have access to health care, that they have access to workforce training that will allow them to be successful. In the fortune conference today, we were talking about the fact that americans want to know they have stable earning capacity. And they want security and that. So, social safety net is a part of that opportunity. Part of that workforce training as a part of that. Emily former u. S. Commerce secretary Penny Pritzker there. The British Government needs a few more weeks before deciding whether to let Rupert Murdochs 21st century fox takeover sky. This is according to karen bradley. She says she may still refer the deal to the competition and markets authority for investigation of murdochs media influence. Coming up, we bring you a sitdown with an uber executive on the prospects of growth after a tumultuous few months. Plus, we will have more coverage from aspen, sitting down with the ceo of priceline. How they plan defend up a competition and maintain the companys growth . This is bloomberg. Emily uber is trying to break into Business Travel. Bloomberg editor at large, Erik Schatzker caught up with peter jonas at the Global Business travel Association Convention in boston. The Worlds LargestBusiness Travel event. He started by asking about the corporate program, uber for business, and how it differs from the usual right offering . Peter uber for business is a techlayer, platform he put on top of the existing application. Where that came from was in the early days of uber, we saw a ton of momentum coming from the businesstraveler community, and as a result, we realized there was a lot of friction for Business Travelers that we could remove. Uber for business was initially intended to remove that friction, and we are continuing to expand that move outside of that in and to other avenues. Erik you are trying to appeal to corporate customers. What services do you need to add . Or is this fully baked already . Peter i think of it is uber moves people and things, right . In the most fundamental sense. We are putting people in cars, and moving people in cars. Uber for business is about your employees and your customers. Moving your customers to an event like this or sending them home from the auto dealership when they drop off their car for repair. And then finally, there was a movement of goods. So you want to get to get goods customers. As we start to build this business out further and the platform out further, we look at we focused on the low hanging fruit, which is Business Travel, which we know the most. There are so many people already using it. Its a 250 billion market globally. Uber has been prospecting for growth on a lot of fronts. Flying cars for example. How fast does uber for business need to be growing to remain a strategic priority . Peter you know, and uber, we really focused primarily on the customer experience. Are we solving big enough to spirits our customers . And the answer is yes. The roadmap that we have is going to continue to have a solving more interesting problems as we evolve the business. Erik do you see growth accelerating . Peter we see growth accelerating. Erik there were deals that neil michael did. He was instrumental. Now that he has left the company, where does that leave uber . Peter we are set up for success. The work that is been done by the tema the last five plus years the work that has been done over the team over the last five years has set us up in many ways strategically, domestically, internationally, for success. So, we are in a great place. Erik and what about travis . How have things changed as he left the ceo . Peter its been a very short period oftime. Period of time. The company is focused on solving the issues we have in front of us. We are solving the cultural issues. The leadership aspect we are focused on. The leadership aspect we are focused on. And finally, from a driver perspective, you have probably seen t