Transcripts For BLOOMBERG Best Of Bloomberg Technology 20170

BLOOMBERG Best Of Bloomberg Technology August 12, 2017

Valleys diversity problem. Lending club could be shaking off its losing streak, Scott Sanborn joins us to discuss their improving fortune and earnings report. First to our lead, disney is once again shaking up the movie industry, saying it will begin offering espn sports programming and some of its family films directly to consumers via two, new streaming services. Underscored sales and profits fell due to the division big cable tv where subscribers and ad sales shrank. We sat down with bob iger and discussed their streaming plans and the outlook for the company as a whole. We have seen a dramatic shift in how media is consumed. It is becoming more appbased. I see it with my kids and grandkids. A lot of the appbased consumption is done direct to consumers. You need the technology to do that as well and that is no easy task. It is not simple. Particularly when it comes to streaming live sports, we have consumption at a high level and all at once. So we bought a third of bam tech a year ago. We have accelerated our purchase of controls that we can move into this space at a faster pace and a faster rate than we initially anticipated, because of the opportunity we see and the marketplace. Combination of brands, technology, and consumer trends. I know the Walt Disney Company, you focus on the consumer and consumer experience. Who is the target audience . Who do you think will use this most often, the espn or the disney pixar . You are looking at the sports fans and at the espn fan as well. Sports is the most popular programming out there. If you look at the top rated shows in the United States, 94 were top were sports. Service will provide an additional 10,000 additional live sporting events in its first year of operation, so we are looking to reach the passionate sports viewers, passionate sports fan who wants to be able to watch sports on mobile devices that you describe as over the top consumer userces with quality interface, essentially that is what we are providing. On the disney side, we have a global fan base. Kids,families, parents, even teenagers and grandparents. Everyone and it is worldwide, not just in the United States. We are going to serve that fan well. Sportsicularly Live Programming has been a mainstay of television, going back to broadcast television. Certainly, everyone knows of it because of cable. Because of that, cable providers have been very reliant upon espn. What do you expect the reaction to be from cable distributors . We are going to continue to distribute the espn linear channels through the cable distributors. Together we have managed to create a highly profitable business. The distributors and programmers alike have been experiencing the disruption that the home market is seeing and multiple businesses are seeing from advances in technology and changes to Consumer Behavior because of that. We feel we have to react accordingly. My guess is that the distributors will look at this a threat over anything else, but it is not intended to be that. We taking advantage of Market Conditions and the passion product we create, and the technology that allows us to reach consumers directly. If you look at disneys businesses, except for the theme park business most all of our , product is distributed to products is touched by consumers through thirdparty distributors. This is 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 major, strategic decision like , they inevitably have to ask themselves do i build it or buy it. Did you go through that process . Did you decide to buy Something Like a netflix . 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 Platform that allows us to get into the space as it is faster than if we would have built it. I am not going to look at netflix or other acquisition opportunities we have had. We have the financial wherewithal to do a number of things, but this seemed to be the best step for not only the Walt Disney Company but for our shareholders in terms of creating a growth strategy, really growing the company longterm, taking a longterm view which is very important. But also addressing the nearterm issues we are seeing which is all about the disruption created by digital technology. In the espn app, you have some major sports in here. You have the nhl, mlb, major league baseball, college sports. I do not see nfl at this point, i do not see nba. Are there plans to add those and under what terms could you get them in . Sportsntend to license specifically for this app, beyond the sports that have already been licensed either by bam tech or espn. This creates an opportunity for a steam on in more effective ways through subscription revenue as well as advertising revenue, and all the ways that a direct to consumer relationship can generate revenue. I think we can expect that this product will be in the marketplace for license more aggressively from multiple sports organizations possibly , including the nfl and nba where we have great relationships. I noticed in your release you said you plan to make original investment in a slate of original movies and shortterm content for the disney app. Are we talking about an investment we have seen from other Companies Like hbo or netflix . You have got to be careful because netflix, i cannot comment on what an biz on amazon has been investing but it is wellknown that netflix has been investing billions of dollars in original content which they have done rather , effectively. You mentioned hbo, maybe this is a little more akin to that. We are going to produce original movies and Television Series specifically for this disneybranded service. It will be incremental investment to the investments we have been making in television and Motion Pictures in the past. Emily that was david westin speaking with disneys ceo bob iger. Alibaba and marriott are teaming up to feature Marriott Hotels on up for a chinese travel boom. China is now the Worlds Largest source of outbound travelers who spent over 100 billion in 2016 sparking changes over the Global Tourism industry. Coming up, a google employees antidiversity screen raises concerns about diversity. This is bloomberg. Google has fired the male engineer who wrote a controversial memo about diversity in the Tech Industry. James damore authored an internal 10 page memo about gender inequality. Emily chang spoke with the him iny chang spoke with a bloomberg exclusive. It is hard to regret it, because i do believe it. Im trying to make google and the world, in general, a better place. By not confining us to our ideological echo chambers where only one side of the story can be heard and is totally intolerant to other viewpoints and even Scientific Evidence. Emily what Scientific Evidence are you talking about . Because in the followup to your piece, there has been plenty of discussion about this. And discussion about the fact that there is no research to support this idea that there are biological causes for the lack of women in tech or the lack of women in leadership positions. I spoke with megan smith who worked at google, the former ceo of the United States. She says this is a myth. Among psychologists there is prenatalus that testosterone does affect a lot of personality traits. In particular, our interest in people versus things. I am not saying that all men are different than all women. There is a distribution of these personality traits and that distribution differs between men and women. There are very many capable women at google and im not try , to say that any of them are any worse than average male engineers at google. I was just trying to address why we do not have equal representation from the population. Ly steve wood just ski carolyn wojcicki wrote a very impassioned response to this. It said, if the memo was about black people or latinos or the lgbt community, you would not have anyone defending you. How do you respond to that . I think that is a false analogy, and she is trying to lump me in with racists and bigots, which i am not. Racist. A big it or a that seems trying to smear my image rather than looking at the evidence. Barry few responses have been actually looking at the science. They have just been calling me names, or nitpick that the format was wrong, or the original leaked document did not carry any references which my original document did. Emily you are arguing for ideological diversity and inclusion. Tot you think that extends women and minorities and other kinds of people . Google is making products for the world. Dont 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 diversity has hurt our products. It makes us think, for example, just the stereotype that all conservatives are stupid, for example. That is widely held within very leftleaning circles. That was the former google employees begin with emily chang. We have another statement from google. Our job is to build great products which make a difference in our users lives. The ideas that a group of our colleagues have traits that make them less biologically suited for that work is offensive and not ok. Joining us is ellen hewitt has been reporting on this story and diversity at large. Talk to us about the town hall meeting that will be held with all of google later today. Andhis a rare occurrence what do you think he wants to achieve by this . The town hall meeting is the tgif that typically takes place on fridays. It will now be moved to thursday and it will be a hotly debated meeting. Ahead of time, you can see google is internally vote for questions they want to be addressed at the meeting and it seems like they are very interested in how can we make sure that we make google a place that feels comfortable for everyone . And how can we make sure it is a place where x test employees can express their views without being fired which is a concern , that that former employee brought up in his memo. Do you think there might be some way of issuing and easing the concerns that were even brought up at the Shareholder Meeting back in june or earlier this year, a shareholder brought that they thought conservatives are not welcome at google. If you talk with people who ,re supporters of james damore and he said the same thing in his memo and afterwards there is , this idea that there is a sort of silent minority of conservatives who really do not feel safe speaking of about their political points of view which is because they are not commonly held at google. It totally has implications for how google is viewed. Very powerful Silicon Valley companies tend to lean to the left, and that has had an effect in how they have dealt with allegations like they suppress conservative content. It extends a little further than just one engineer and his time at google. Emily tech was making its debut market. Orporate bond this comes as elon musk is making plans for a more Affordable Electric car. The automaker plans to spend 1. 5 billion in bonds. It will bolster its balance sheet. They burned through a record 1. 2 billion in cash for the second quarter. Coming up, on the hunt for more deals. What is next for the massive vision fund. Plus highlights from our , exclusive interview with the french 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. Emily japanese tech giant softbank reported earnings this week. Sprint helped softbank Beat Estimates with an operating profit of 4. 3 billion. That is good news for softbanks chairman and ceo 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. The fund was included in the results for the first time. He says he is mulling over various deal offers including from sprint and tmobile. Our bloomberg editor at large and bob odonnell joins us to explore the options. I think that is exactly what we are seeing him do and he has talked about this for years. Ironically, i worked for a company he bought 25 years ago when he first started this vision of building up media. It was a hightech music magazine. Watching him over the years and seeing this vision evolved he is , driving himself to be sort of the tech version of a Warren Buffett. He is creating this conglomerate of all these Component Companies that he sees as being critically important to drive forward this vision into the future. I do think it is a smart plan. Not all of them are going to work but i think he is placing them in good places. Emily cory, Warren Buffett of asia. What you think of that . I mean, come on. Warren buffett is Warren Buffett because he has proven to be successful. Thatis the opposite of taking enormous amounts of debt with tremendous risk on that date 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 for the fences. Anything but low valuations, he it. Sing a lot of debt to do to userying very much politics and use connections to try to make these deals happen. In particular, think of the image of him and the trump tower, visiting president elect donald trump talking about the createof jobs he would at the same time, he is still thinking about that tmobile merger that the Obama Administration 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 coopt these deals. It is very ambitious. To be clear, im 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 on building and buying these core components. People do not think about the fact that he owns arm. Arm is the semiconductor rp company that has this incredible amount of inputs that most people do not recognize. He has got telecom, internet, robotics, he is buying a lot of Core Technologies which he thinks can be driven forward. The debt is a big issue clearly, but i think he is being smart in developing a vision. He has what he calls his 300 year plan. Obviously that 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 we have been talking about a potential sprint tmobile merger for years. How do you see this playing out . Well, there is this notion of mean. What that will how the landscape of more than half of the mobile phone 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 that you are looking at now in a world of 5g. I also think it is worth noting that he wants to be number one and is not satisfied with being number three. Look at the rear view mirror, number four is not too far behind. 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 have the best choices. He does not necessarily want u. S. This is is to have the best options. Businesses to have the best options. So, we could have fewer competitors 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. If there are fewer competitors, we know prices will be higher. Going to mean for businesses and consumers going forward, and will the Trump Administration care about that and come to a conclusion different than the Obama Administration saw . Emily bob, this would not just be another big tech deal, but it could impact directly hundred of millions of customers. Yes, it could. Clearly he is going to need to get all of those pieces together. As well as piece tmobile and sprint in order to be competitive against the other two. So, there is that question of if he can really pull it off. I think in the Current Administration there will be less governmental pressure than previously. There clearly are going to be challenges to the consumers or other Governmental Agency entities may step into this to say this is too big to make happen. Cory, we heard talk about that Division Fund still being raised. What did you see about how this is going to be spent . It is way too early to see. We are going to start to see perhaps some fees. 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 from the venture side of things. Whether it was investment on the game side of things or 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. Whether it is money from other investors or sprint itself. Emily that was bloombergs cory johnson and bob odonnell. Coming up, an exclusive interview with lending club ceo Scott Sanborn on the companys latest earnings report. How they were able to turn the corner after the surprise ousting of their former ceo. A reminder all episodes of , Bloomberg Te

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