Transcripts For BLOOMBERG Bloomberg Technology 20170701 : vi

Reinstatement of the travel ban as a truly shameful exhibition of blind hostility and a measure that will prevent iranian and mothers from seeing their grandchildren in america. Travel suspension, which heightened restrictions on immigrants from six majority muslim countries went into effect on thursday. The Illinois House has adjourned until tomorrow without passing a budget. Setting the stage for the Third Straight fiscal year without a budget. It has until midnight to reach a deal. This will now push illinois into becoming americas first junk rated state. Day,l news 24 hours a powered by more than 2700 journalists and analysts in more than 120 quote trees countries. This is bloomberg. Emily mrs. Bloomberg technology, coming up a recap on the tech Second Quarter after stocks hit a snag in june. We will dig into the threemonth roller coaster covering all of the highs and lows. Airbnbs response to the opposition. Breaking down a new report that claims to save travelers 27 million and disrupt price gouging tactics by big hotels. The fitbit new smart watch might be in peril as key talent leaves. We will show you the road ahead. First, to the lead the market closes the book on the Second Quarter. U. S. Tech stocks gaining about 4 in the quarter, continuing a recent winning streak. After a strong start to the year, volatility hit tech stocks in june, leading to big losses. Two big tech stocks, apple and netflix rose marginally in the quarter, after posting huge gains at the start of a 17. Here to wrap up the Second Quarter in the markets we are joined by Caroline Hyde in london and Abigail Doolittle in new york. Abigail, lets start with you. Wrap up a snapshot of the Second Quarter for us when it comes to tech . Abigail it has been a interesting quarter for tech in the Second Quarter. We had very nice gains up until about june 9. That is when the nasdaq hit a roadblock. It was up about 7 , close to gaining toward what it gained in the First Quarter about 9 . We also have this mysterious tech bailout. While the nasdaq is up nearly 4 on the quarter giving some of those gains back and partially, or mainly this has to do with the weakness we have seen in june. June being the first down month for the nasdaq in 8 we have a great chart that exemplifies it is g btv 490. It shows the last time we had a monthly decline for the nasdaq was in october. If you recall, that reflected the election, a lot of tech stocks selling off a little bit. We have seen some uncertainty in june. While streeters are not sure what is behind it. Some of it could be the end of the quarter. , taking profits and trying to really take advantage of the fact that tech has been hot. It is still the top sector. I think you nailed it, emily, with the volatility word. Very volatile quarter. Emily caroline, how have a job and europe compared asia and europe compared . Caroline asia managed to post 14 of gains in the quarter. We have g btv if you want to get in, type in his magic letters and a number 669. In the yellow, it is how asia has outperformed. Index ineck out asias terms of technology we have not seen this long of a winning streak on a monthly basis since 1999. Meanwhile, in the white line, that is how much the euro underperformed the rest of the market. We had a brutal week, the worst one we have seen since everywhere a 2016. The chipmakers, equipment makers, like nokia, underperforming. On the month it was down. On the quarter, European Tech stocks were down. Is it because they are one of the out performers . Emily abigail, biotech, offset some of the losses in the shang stocks. Abigail that is a good point. If it were not for the biotech sector, their best month was in june in quite some time we could have seen much bigger losses for the nasdaq, and perhaps the quarterly gains would not have been great. Lets go back into bloomberg and look at the chart that shows this well. This is g btv 655. It is a yeartodate chart. In white we have the shang trade. June had been up, all of the sudden the decline. In blue, the weakness and ships. Chips. The stocks have had the worst month in quite some time. If you take a look at the yellow, the nbi, it had its best month since july of last year. Up more than 5 . Big gains their. Behind those gains for biotech, a Bloomberg Intelligence analyst told me there is a confluence of positive influences and data point considering the data points for some of the Biotech Companies have come out very positive. The sector had come until recently been in a bear market. It is a little bit of catchup in terms of investors going back. That has been a saving grace for the nasdaq for june, and perhaps the quarter, making that quarterly gain bigger than it had been. The second apron, way trading, below its ipo price. On the other hand, in europe, having an opposite and better kind of day on its first day. Tell us what happened . Caroline what a sigh of relief for the European Tech sector. We get the biggest german ipo of the year. It is how you get your food delivered. It actually rose on the first day of trading. Nineoint, up 9 percentage points, pleasing the investors. One of the main ones, rocket internet big sigh of relief for their children shareholders. It is interesting, the size and scale of delivery here. It is bigger in terms of its rival, the restaurants. Markets, 150,000 restaurants, that is about three times the amount of restaurants that growth hub had. Ub hub. T seeinto bloomberg, you will how it appears how the peers have performed. In the blue line, that is the u. K. To delivery company. We have seen it really outperform. It really has jumped up some, doubling since april. 14. Likes of thethe whiteg,r upu two thirdsb hub. Delivery hero, the German Company hoping for that as well. Emily blue apron investors seem to have gotten the jitters with the amazon whole foods deal. Is blue apron going to have to raise money some other way . Caroline abigail blue apron trading below its ipo. The bankers it. Perhaps the amazon whole foods deal but just the idea that perhaps this company was not ready to go public. Somewhere market watches are saying that perhaps early shareholders pressure becomes any to go public at a time that perhaps it should not have come a by the fact the price came down. Time will tell. Right now they had cast for about a year. It would seem that the may in fact have to raise c and because the ipo price was lower than initially expected a few weeks ago. A left turn into a tale of two stories from a company that caroline was talking about. Emily indeed. Abigail doolittle, the bloomsburg Bloomberg Stock reporter, caroline hi, thank you. Up, airbnb says it will save customers at least 27 million is Holiday Weekend in the United States. We will get the details from the head of Global Policy, chris lane, next. Bloomberg tech is Live Streaming on twitter. Check us out 5 00 in new york, 2 00 in san francisco. This is bloomberg. Emily qualcomm is heading up the california coast. Based in san diego, they are setting up shop in silicon valley, according to axiom. Qualcomm will continue to focus on the core areas of interest by global and emerging technology in the auto and connected device sectors. The group has seen success in both areas in the past, including the exit of one of the portfolio companys startups cruise, which sold to gm for nearly 1 billion last year. Much of the u. S. Is gearing up for a long july 4 weekend, including airbnb. In a new report, the Home Rental Company documents how it plans to fight price gouging and save consumers at least 27 million on what they would have spent on hotels over the Holiday Weekend. This comes off the heels of reports airbnb plans to launch a new tier for luxury rentals. Joining us, chris lehane, head of Global Policy and former aide to president bill clinton. Chris, great to have you back on the show. Chris always fun to be here, thank you. Emily you say you are saving consumers 27 million on hotels this weekend, more than double what you saved them last year. How do you know . Chris we are able to take a look at what the prices were last year on airbnb and compare them to what the prices were on hotels. Going forward, looking at this weekend, you are able to pull some of the available data that we have come to what our are charging, and compare that to what hotels are listing. With all of the data, last year we save people over 12 million. This year it will be 27 million. That translates for the typical American Family staying in airbnb over july 4, they will save about 100 a night. That is real money. We talk about how our platform democratizes travel and makes it for the middle class, particularly for families. Like you, i have a couple of boys. In 2013, i stumbled across airbnb. You get a kitchen, if youre are like my boys, you need a washer and dryer. You get free wifi, it all comes with the package. I think it is why our Value Proposition is so compelling. Emily this is part of a broader campaign. You are taking a more aggressive attack against hotels. Airbnb has a reputation as being the nice company. This is a little more aggressive. Chris it is trying to drive the consumer comparisons for folks. Earlier this year, it came out the Hotel Industry was mounting a massive effort at every level to go after the airbnb middleclass hosts. There is a reason for that, it gets down to something called compression nights. In the Hotel Industry, they try to limit supply so in busy weekends like july 4 they can jack up the prices. They have acknowledged it. You dont have to read our report. Just look at their public comments. A former head of ahl a political wing, he said at one point the reason theyre concerned about airbnb is it is impacting the Hotel Industrys ability to quote unquote gouge consumers. Those are his own words is a representative from the Hotel Industry. We want to draw the comparison because it is important to families traveling. You save money on airbnb. Emily speaking of the American Hotel lobbying association, as you say, they are not going away quietly. They say it is not a level Playing Field and hospitality. They have to spend millions of dollars to renovate their buildings they have to spend , money to accommodate people with disabilities. They say it is not fair. What is your response to that . Chris i love this conversation. we are in the middle of this conversation about economic inequality and the middle class. Typical american middle class family is about 40,000 with typical growth rates. Beautiful airbnb host, our middle class, and they make about 6,000 a year having to close and overcome that gap, without a single taxpayer dollars being spent to create that opportunity. More than that, about a year ago we made a pledge because the Hotel Industry was talking about this. We said we want to pay our fair share of taxes. Since then, we have put in place 250 tax agreements in the u. S. Almost 60 of our hosts are covered by tax agreements. The great irony is now the Hotel Industry a year ago was telling us to pay taxes, now they are opposed because they realize we are committed to making this work as well as possible for everyone. At the same time the focus on , the tax conversation has created a focus on the fact the Hotel Industry has historically gotten massive tax breaks to build and come to different cities. 600 million in los angeles over the last couple of years. As we get into this conversation, it comes back to a build and come to different cities. Value proposition conversation. We are a platform for the middle class. We are communitybased platform. We have a compelling message. Emily what about their point about people with disabilities . This has been a complaint about airbnb. Rutgers published a report talk to me about that. Chris we are a platform that is eight years old. We are constantly looking to evolve into things in place. We have a significant amount of Housing Available for people with disabilities. We want to make sure as many people as possible can stay anywhere. Our mission is anyone can belong anywhere. We are working with disability groups to come up with solutions on this. At the end of the day these are , regular people making their homes available. We want to make sure this works as well as possible for everybody. Emily bloomberg has reported you are launching a new, higher tier service. Mansions instead of this homes. Just homes. What can you tell us about this and what it might add to the bottom line . Chris in january, we acquired a Company Called luxury retreats based in montreal. A lot of their properties are in traditional Vacation Rental destinations. A large number of their properties are in the caribbean. I came back from a trip to the caribbean. I know it is a tough job i have. Part of the trip was talking about how we can take advantage of the fact there is a lot of empty homes in the caribbean. You have people who are very successful who go down there and buy homes, but they are there for a month or two and the properties are not being used. The luxury retreats model makes them available. It helps bolsters tourism in the markets. Think about it Global Tourism is , about 10 of global gdp, growing faster than the rest of the economy. Even bigger in parts like that, and how are we able to use things, particularly with sustainability, use those homes and particularly for the communities that depend on travel and tourism. Emily any news on the exit strategy . Chris i am waiting for you to tell me. Our focus is making sure we get the basics right and delivering on our Value Proposition. Emily have a wonderful fourth of july. Chris i am shocked you asked. Emily thanks so much for sharing that report with us. Chris lehane, airbnbs head of Global Policy. Thanks for joining us. Coming up, fitbits upcoming smartwatch is already facing major setbacks. The outlook for the companys as the popularity of the fitness tracker fades. This weekend, we bring you our best interviews from the week, including our exclusive conversation with kirsten green, her outlook on ecommerce as consolidation heats up. Tune in this saturday for the best of bloomberg tech. This is bloomberg. Emily we are looking at south korea. A it is leading an investment in a ridehailing startup to be spun out of the social media giant. It grows the fleet behind a competitor to uber which the equity firm also backs. It gives that a cash infusion to expand their portfolio. It aims to roll out new Services Including corporate taxis, parking, and automatic payments. The global wearables market is expected to grow at 20 this year with over 125 million devices expected to ship. Now a company trying to capture some of that market share is fitbit. The san franciscobased company is betting big on the upcoming smartwatch as popularity of the fitness tracker dwindles. The company may already be facing major hurdles with the upcoming device, months away from its debut. Putting the most important product for the company in peril. Joining us, selena. Tell us what you have in finding out. Selena fitbit has a lot riding this new smart watch, it is part of their turnaround strategy as the core business has been struggling. Ive been learning from sources they have been facing one hurdle after another. They had originally been planning for a spring launch which has been pushed to the fall because of issues with figuring out the g. P. S. Tracking, making it waterproof. Now i am hearing they may not be ready to have an app store in time for the launch which is something they have been talking about for a long time. The app store is a key component of the smartwatch given that it makes it more useful for consumers and it is something competitors will have. Emily what are employee is saying about the products prospects . Selena sources tell me there is a lot of skepticism internally this will match up with the competition. Fitbit has fallen behind apple in the wearables market in general. The apple watch has been picking up steam. It looks like the price point is going to be similar to the apple watch. But it looks like a lot of the features will not be quite up to par. There is a lot of skepticism the can build the ties they need with the Developer Community and get the market share they need. Emily fitness trackers are actually sinking in popularity across the board. This is not unique to fitbit. Selena definitely, fitness trackers are starting to see a lot of saturation in the market. That is why fitbit has been struggling so much. The smartwatch is supposed to be really to be there really big turnaround strategy. If you talk to developers and ask if you are excited about the prospect of a new platform to develop on, theres not a lot of enthusiasm. Part of it is developing for smartwatches in general is a difficult thing to do. It is a smaller interface. There are more constraints developers have to deal with. Given the option between developing for an enormous platform like apple or android, which one are you going to go with . Developers are saying it will take a lot to convince them to develop for the fitbit. Emily to what extent is the success of the apple watch , even if it is muted hurting , fitbit . Selena it is definitely hurting fitbit. Fitbit had been planning to have this smartwatch compete with the apple 2 watch. By the time it comes out, it will probably be competing with the apple 3 which will be problematic because it will have more features and be more updated. The value of a smartwatch now is tied to the ecosystem of devices and apps that surrounded. Surround it. Part of what makes the apple watch so attractive is it is tied to the iphone and works seamlessly with the device. Fitbit does not have that already created ecosystem. It will have to build that and also the app store from scratch which is a technical challenge. Emily what edge, if any, would a Fitbit Smartwatch have . Why buy it . Large groupit has a of users. It has the demographic of more fitness focused people who maybe want this watch is a more fitness and Health Focused wearable in general. The other potential advantage of building its own operating system is it is not android or iphone platform specific users. It can target both types of users. At the same time, it means it does not have the existing developer ties if it were to stick with an android operating system. Emily selina wang, great stuff on fitbit today, thanks so much. Coming up, apple celebrated the 10th anniversary of the iphone this week. A look at the smartphones impact over the last decade. Plus, other headlines that grabbed our attention in the week in tech. This is bloomberg. [ noises inside can ] [ laughing ] its driving me crazy come on. [ spitting from tongue ] time for my secret weapon. Sports, movies, tv, ah, show me music to distract a minion. [ voice remote click ] oh [ pharrell starts to play ] [ minion so happy to see screen ] ahh im pretty smart. Ahhh [ lots of minions ] [ mooing sound ] show me unicorns. [ click noise for tv ] ahhh that works too. Find your awesome with the xfinity x1 voice remote. See despicable me 3. In theaters in june. Alisa i am Alisa Parenti in washington and you are watching bloomberg technology. Lets start with a check of your first word news. Police say the gunman and at least one other person are dead after a man wearing a lab coat opened fire inside york citys bronx lebanon hospital. Several others had been wounded. No word yet on a motive. Police say he may have been a former employee. President trump says a change of tactics is necessary for dealing with north Koreas Nuclear and Ballistic Missile program. He spoke today alongside the south korean president at the white house. President trump the era of strategic patience with the north korean regime has failed. Many years it has failed. And frankly, that patience is over. Alisa trump also said the u. S. Is renegotiating what had been a rough trade deal with south korea. Meantime next month, the u. K. , and u. S. Will open negotiations on a trade deal. President trump has told theresa may it will be able to keep trading with the u. S. On at least the same terms as it does now. Russias foreign minister hopes pragmatism will prevail at the upcoming talks between president Vladimir Putin and President Trump. Both are expected to meet on the s g20es of next week summit in germany. Germany has joined other e. U. Nations in legalizing gay marriage. Lawmakers approved the legislation after chancellor Angela Merkel unexpectedly dropped her partys traditional objection to samesex unions. The u. N. Secretarygeneral says progress has been made and has been slow in talks to unify cyprus. It was split in 1974 when turkey invaded. He arrived in switzerland on the third day of talks and says outstanding issues remain. All participants have declared they are here to find a solution. They have demonstrated they have an awareness of this historic opportunity and the responsibility they share for a successful outcome. I call on the leaders and participants in the conference to heed the call for peace. Alisa in france, Marine Le Pen has been charged with misappropriation of funds. The National Front leader and other Party Members are accused of improperly paying aides with funds from the european union. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am Alisa Parenti and this is bloomberg. Emily this is bloomberg technology. I am emily chang. The global threat of ransomware came to the forefront this week as a new cyber attack hit dozens of countries across the globe. There are still questions about the origins of the attack and what exactly the goal was behind this massive breach. We discuss the latest, plus other tech headlines grabbing attention this week with reporter alex webb and tom giles. Right now, it is about how much did they get and how much were our operations disrupted. You saw a wide range this is not a traditional rant somewhere give us money we will give you back your data. This seems it was more about this was more of a disruption of infrastructure, specifically things like shipping. This big danish shipping company, one of the worlds larges, if not the worlds largest, they were getting their goods to port with screwed up because their data got locked. They are still assessing how big the impact was. Wpp, the advertising company. Fedex, they said they may have a Material Impact on one of their shipping businesses as a result of this. The attackers have become more sophisticated. Using something that looked like ransomware. It looked like wannacry. It looks like give us bitcoin but it seems to be about more than that. How can we disrupt infrastructure . Emily the attacks range from russia to the u. S. To europe, specifically the motivation seems to be to wreak havoc in ukraine. It is hard to define exactly what region they wanted to wreak havoc in because it was widespread. We got reports on grain shipments in latin america. It started to affect parts of india. How much was it targeted on ukraine and how much of this is Collateral Damage . It is hard to say because we do not know who is behind it yet. We do know with each one of these attacks, they are learning from it. They are learning how we can take what we have learned here and apply it to the next one. Emily also a huge story out of europe, google getting slapped with a 2. 5 billion fine from the e. U. , a record fine. Talk to us about the fallout from it. There have been question marks about googles propensity and willingness to give its businesses priority in search, particularly relating to online shopping. There has been a certain echo wondering what it means for the rest of googles business. The alphabet universe is extensive. It has its fingers in a lot of different pies. There was perhaps the expectation maybe google would start to parlay more businesses into its search results and see a Snowball Effect on how it is able to capitalize on Different Industries. This puts a check on that to hinder their ability to do that. The one caveat is prior examples of these kinds of fines have ended up in years long court , court cases, and ultimately not reached conclusion. Ibm is the other example with intel. Intel has a similar example and theyve been in court eight years. Emily what are googles options . 2. 7 billion to google is not a lot of money. This is a company that has a lot of cash. The bigger thing is how they change their behavior. They do have a ticking clock right now. They have 60 days to start showing they are making good on what the e. U. Antitrust commissioner wants them to do. They will have to change the way in europe you access shopping. Right now, google shopping results appear very high on your search page. It is very lucrative real estate. Other shopping comparison sites are much lower. Google has the option to bring those up, maybe give them more prominence without charging those shopping sites. On the other hand, they could go back in time. We talked about the 10 blue links from 10 years ago and beyond. Do you take away the prominence youre giving to your own sites . My sense is they will do some sort of compromise where they give their own stuff prominence but also start to elevate other shopping comparisons. Emily there are other investigations ongoing, specifically one pertaining to android we will be watching. Also want to point out, the 10th anniversary of the iphone. He believes iphone sales will peak in 2019 and be replaced by augmented reality glasses. He believes that will be apples next big product. What do you make of that . Tim cook is very bullish augmented reality. We are starting to see how the growth map of apple is formulating. They have unveiled ar kits for developers to build augmented reality into apps that go into the iphone. We have reported apple is working on glasses, smart glasses of some sort that could surface over the next couple of years. It builds the runway two words towards that. If they can have a pallet of augmented Reality Software going into the hardware, it sets them up nicely for something a couple of years down the line. With the 10 year anniversary, there are two elements. The constant question, what is their next big thing . 10 years after the iphone it still accounts for 63 of their total sales. The other thing you have to think about with the iphone is one thing people do not talk about as often as they ought to. It is apples ability to keep the iphone priced as a premium product could massively change the technology industry. Think about play stations and consuls of the past that the client in three or four years over price the next one comes , along and pops it up. Apple has been able to keep the average sales price of the iphone increasing. There are whispers the next iphone could be above 1000. The first iphone was 500. That is quite a remarkable trend. Emily what is in store for the next three years . We are expecting a new redesign this fall, but what next . People talk about a super cycle. Every two years, they come out with a new flagship iphone. Each time, it boosted sales. The iphone later this year, there is a hope from investors that is the case. The ability to add some iterative or incremental improvements for the next generation will prop it up. Perhaps by then, they will be ready to unveil the huge ar product if there is one. That is the kind of ramp investors hope Product Development is leading towards. Emily that was alex webb and tom giles. A new warning from Morgan Stanley analyst says he is seeing risk to the Auto Industry in china which he sees as a greater source of competition then demand. He was a perennial tesla bull but downgraded the shares on the threat of larger companies. He reiterated the downgrade after our exclusive interview, in which tim cook elaborated on apples ambitions when it comes to cars. Up, a space startup claims it has the largest operating fleet of satellites in the world with over 140 in orbit. We will hear from c. E. O. Will marshall on what is next for the company. Go, our new interactive tv function on the bloomberg. You can watch us live. You can go back to an interview. You can play along with the charts on air. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. Emily President Trump has signed an executive order to form a National Space council which will be led by Vice President mike pence. This will revive a council last in place in 1993. President trump says the revival of the Space Council sends a clear message to the world that the United States continues to lead in the space race. Trump says Space Exploration would help the economy and national security. Staying on the topic of space, one startup upgrading the technology that orbits the earth is planet. Earlier this year planet , successfully launched 88 shoeboxsized satellites into space earlier this year. Into space. That makes them the operator of the largest satellite fleet in history with 142 total. Here with me in the studio, will marshall, c. E. O. And cofounder of planet. 142 planet satellites are orbiting the earth. What are they doing . Will they are imaging the planet landmass once per day. Historically, satellites have taken pictures of the earth but it has taken a few years to take a snapshot of the whole planet. With 142, we can take a snapshot every day and see changes as they happen around the planet. Emily what are the actual use cases . Will there is a wide variety of industries interested. Agriculture, finance. We can help understand commodities being traded, stockpiles, oil levels, all that sort of stuff. Emily you are sharing your data with all these Different Industries. Will yes. We work with agriculture companies, consumer mapping companies, Consumer Finance companies. Emily you get so much data. How do you comb through it all . Will we get about seven terabytes of data per day, about one million images come down from the satellites to our ground stations around the world. The important thing is now Machine Learning analytics can be applied to the data. Satellite imagery used to be the province of just governments and big companies, but nowadays by , assigning Machine Learning the Smaller Companies in Different Industries can get access to the data and make it useful for them more than just being able to query how many trees are in the amazon. Emily give us more specific examples of what is possible now that the technology is more affordable. Will take deforestation. It used to be the thing that at , the end of a few years, we would wake up with a big hole in the amazon. Now we can literally count every tree on the planet every day. Emily talk about your longerterm plans. What is next . Will we continue to improve the Satellite Technology in space. In two weeks, we are launching another 48 satellites on a russian rocket. Later in the summer, another six highresolution satellites. We keep on improving the technology. Later in the summer, another six highresolution satellites. We keep on improving the technology. Perhaps more importantly now, what matters is the data we are getting down and making it useful for people. We are doing that by adding Machine Learning technology to that to make it simpler for people to ask the questions they want and get that out of the imagery. Emily one of our colleagues has a great piece on planet in this weeks issue of bloomberg businessweek. It talks about how the relationship between humans and space is changing. There is a new ecosystem of space startups. What kind of startups do think will succeed in what will not . Will that is a great question. i think there is a greenfield opportunity because of the changing cost point and being able to put in more capability in each kilogram we put up into space. That has changed by several orders of magnitude. Massive disruption in the industry allows you to put hundreds of satellites up. They can be used for g. P. S. , better communications. Able to get internet to people that do not have internet. They take images to help us take better care of the planet. We are only seeing the beginning of a big shift in space for satellites to do lots of things to help on planet earth. Emily how do you navigate geopolitical issues . Will our data is very relevant geopolitically. I think it is super important that this was typically the province of the government. Now we are seeing private enterprise able to get into it. That is enabling a lot more commercial applications for the technology and humanitarian applications for the technology, not just government use cases. That broadens and democratizes access to space. Emily do you plan to take this Company Public . Are you going to raise more money . Will i think this is a standalone type of company. Emily fascinating. Great video of the satellite. Will marshall, c. E. O. A planet, thanks for joining us. Another story we are watching, facebook internet beaming drone completed its second test flight. The goal is to bring internet across the globe. It clocked in at one hour and 46 minutes. That is about 10 minutes longer than the original flight. More importantly, Facebook Says the drone landed perfectly in the arizona desert. Coming up, we talk about album releases as jayzs first album in four years drops on tidal. A programming note. Tune in to bloomberg on july 4 at 8 00 p. M. Eastern, the boston pops fireworks spectacular will be live from bostons historic esplanade. This is bloomberg. Emily jayz released his 13th album, the first in four years, on the streaming service tidal. It will be exclusively on the platform. It has become the new norm for artists like kanye west and beyonce. How does it impact the Music Industry . David spoke with vonnie quinn. The Music Industry has experienced growth the last few years, mostly because of streaming services. We have become a streaming industry in everything but name. I think the economics still have not been worked out properly so songwriters and artists are getting a fair share. But the growth in streaming is definitely saving the industry. How much more of a share do artists and songwriters need to get . How far are you down the track of persuading the streamers to make that happen . We are a ways away. The problem for a songwriters is unfortunately they are not in a free market. They do not get to negotiate the value of their songs with the services regulated by the federal government. I think it will improve in the near future. Im excited to see so Many Companies invest in the music business by wanting to enter the streaming market. There are two ways to look at it. Tidal entering, nobody wants to embrace tidal in the beginning, the artists were not interested because it was not doing well because the other services have taken market share. Now the artists are signing exclusively to this particular streaming service. Down the road, that could be really bad for the artists that are big names, no . I think you will see a lot less of the exclusives on one particular streaming service. Even the jayz album, a lot was made about it being exclusively on tidal. But i think that is only for a week. I think the trend as you will start seeing this music on all the services. It is great you have so many Large Companies that want to be in this space. Three of the five Largest Companies in the world, apple, amazon, and google, operate music streaming services. You have other Companies Like spotify, pandora, and tidal. We dont mind lots of competition. What seems to be the most important part is consumers are embracing the idea of paid streaming. If that is done in a high enough volume, the decline of the sales models is not going to be the problem people thought it was because there is going to be Growth Opportunities with eight streaming models. Before paid streaming models took off the way they have, and we witnessed the decline of physical music sales, live events stepped up and artists were getting more money from those. Is that something we still see happening . What is the share of their incomes that comes from that side of the business at the moment . Very much so. For an artist, the Live Performance revenue is a significant part of the equation. Unfortunately for many songwriters, they do not perform live so that is not an income source for them. Im very happy to see the growth and streaming, in particular the paid streaming model because there is a huge difference between Services Like youtube and the spotify free service in terms of the economics versus the services where the consumer pays. You seem to be happy with everything so far. What are you writing to President Trump about . I would like to see the prices we get paid from these services negotiated in a free market. You have giant Companies Like amazon that sells prime memberships and echo devices, or apple that sells phones ,or google sells everything. Music is an important part of these companies ecosystems. Unfortunately, the amount of money they are sharing with creators is not proportional to the value of the music to their company. Emily david israelite on bloomberg markets. That does it for this edition of bloomberg technology. We will be back on monday ahead of the fourth of july holiday. James shot clock will be on the show how amazon may be eyeing the restaurant industry. Bloomberg technology is Live Streaming on twitter. Have a wonderful weekend. That is all for now. This is bloomberg. Announcer the following is a paid advertisement. Beautiful downtown burbank. It is the best of the laugh i from time life. It has been 50 years since america heard this. Sock it to me. One ringy dingy. Two ringy dingies. May i suggest you look that up . 20 years from now, burbank,