live from pier three in san he early welcome to t blog n of blagojevich west. In new york our focus is always innovation and technology and future of business. Lets get to the rundown. Spotify gets the lead out ce and led a tpnew servi step lin catalogue available for screening. Can you live off this . We showed you how to buy a bitcoin. We will show you the nuts and bolts of in this works. The new y is opening free streaming mobile service and partnership with led zeppelin. On the road to kashmir. Insert your pun but today in an announced a free service meaning customers no 10 a month. To pay avoided has thus far all digital streaming rights but t is them to spotify and i making pandora investors nervous. On the selling off newly robust spotify. Chman is in los angeles. What do you think of this . M somebody who had already been testing the limits of what spotify was offering for free. Their Radio Service paying . Were not im cheap. You will hear it here first. You think you want the premium subscription. Of what e them a taste streaming is all about. Restrictions compared to what you get if you were actually paying. Is you will try it and maybe you will become a paying subscriber. They had told us they had more than six million paying subscribers. We dont know a lot about the financial story because they are private but there is talk they ic and they want the Business Model that netflix has. Subscribers aying generating review which a lot of ying the talentpa that you are listening to on spotify. They also are launching 20 new markets. What does that mean . It tells you the story of spotify versus pandora. Latin america, europe. This is a company that from the beginning the owner said to make it successful i will have to have these specific deals with the music labels. That became very helpful came to rolling them out around the world. Y ndora is not ver international. It is a company that has operations or offerings in zealand. A and new but because spotify goes directly to the labels to had tiate the deals it has more flexibility on that side. Obviously everybody has international ambitions. We had the c. F. O. Of pandora who said if they can get better licensing terms they would like o be doing a more spwpl strategy. Not knowing their financials they did talk about the fact they put something on the website saying they had spent the last year paying rights to artists and that is is 70 of revenues. Them at about 714 million in revenues. Nd one to watch. I know you will be watching them. E event this morning. I talked to their chief content im to r and asked h describe how the service works. Take a listen. Allows free users to experience the service on the device of their choice. They usually do it on a mobile device. When we launched in europe it clear ifferent world, thing with computers and desks and they were introduced on the desktop and upgraded to get it on the mobile. The majority are now on board on the mobile device. It is important we keep themmen beginninged. It is all about an offering that gaged. People en it also increases what they can access on the mobile devices. Yes. You dont get all the benefits of premium. Get get the experience and the bill collection and play listing and all of those cool features while maintaining the clear benefits of the premium of no ads and off on cash. They can create their own play list and listen to ads intersperse e interspersed . Thats correct. But it is different and better than radio in that if you want to listen to nothing but been marley you can do that. It doesnt have the limitations that dmca has. I remember the story that rank sinatras concept of capital with his columbia contract said he was specific as m. Mediu when c. D. s came around they had to renegotiate a deal. G time there was no sinatra catalogue on c. D. s. Contracts like that that you have to wrestle with . There are some. Certainly it is a short list of artists that retain the rights to say yes or no. The vast majority of them dont enjoy that. For some it is not uncommon to have the approval rights which makes it gratifying to us if hey said we want to embrace this model and introduce our catalogue to a new generation of fans. Is there going to be a time when you dont need a record label . A are talking about catalogue but new music is a big thing. K about not really promoting labels. You surely get approached by hat want to go direct. I think that is exaggerated. They are our most important partners today. That will be true for years to come. It is true that it is easier to make a record today than it used to be but still the label system provides a valuable source of capital to mac records and marketing make records and Marketing Muscle to cut through exists. Ter that they are an important part of cape. Ands book an look at pandoras and know their cost of goods. I cant look at yours. I wonder what the progress has been about lowering your costs ke to lower uld li and the artists would like to see go in the other direction. We think the artist deserves to profit and it wont unless it artists. Self with as our cofounder mentioned we still pay out approaching 70 of review to the rights holders which includes the artists. We are proud of that. We think everyone deserves to make a dollar. The radio stations are paying single digits, right . One of the cool things we announced last welcome is a new evel of transparency in terms of how this model works. We launched a website that we call spotify for artists and provides a detailed window on how this works. So check it out. Theres been a lot of speculation that you have spent over 500 million this year paying for million. Correct. And 500 million about of that. Would not have this conversation if this model were not working so well to take monetized or not poorly, radio is one you d converting them to a much higher valued way of consuming music. At the end of the day we have to continue to do that and again to we made to a point earlier, we are trying to get more people into this. It is a very efficient way to move people from no pay or r ttle pay to a much highe payback to the industry and that ing more people on that efficient conveyor belt. Spotifys chief content officer. Opponents of president obamas brotherse law the koch would like obama care it disappear. They have turned to the disappe disappearing photo appear snapchat. Ing through that next. Blog s blagojevich west. Se talked about the white hou p. R. Push but one Group Opposed to obama care is trying to get its message out using snapchat. Megan hughes has more. Ch brothers will stop at nothing but is nothing sacred . Eative and chief. They call themselves Generation Opportunity a conservative leaning organization and has funding from the Koch Brothers. You probably have seen some of their ads, the creepy uncle sam demonizing Big Government and encouraging young people without insurance most coveted by the Insurance Industry to refuse to sign up healthcare of the exchanges. They are moving into the snapchat. The first disappeared after those opted in received it but tured and posted on twitter. They also released a video on youtube promoting the fact that they were moving to snapchat. Get this. Mo group is planning pro events at colleges like the recent university of miami tail et party they will be hitting 20 College Towns and the entire 750,000 so not a ton of money when you consider that the Koch Brothers are involved but they are certainly being aggressive. T the Koch Brothers partying a the u. His interested in what t means for people using snapchat for something almost reselling commerce. What does it mean for snapchat . Not a lot of money. Kevin touconservative group es less than 1,000 but they are trigger to get the message out using the app. It is just getting off the ground. They have a new chief operating officer emily white. Igure out rying to f how po monetize disappearing photos. Ge. T is the challen there are new numbers out that crossed this morning on Affordable Care act in signups in november. E have talked about the technological problems. Now that they are supposedly fixed what are we seeing . There were good signs that some of the fixes are in place and we got the obama Care Exchange numbers for november and there was a major uptick. Ore than a quarter million last month and that is twice as many as october. Attributed to the technical fixes with the website. Cathol kathle sebelius is planning an investigation. I have asked the i. G. To become involved because i think it is very appropriate to look only the ects of not Management Practices but the penditures, specs in the contract, payment issues. Sed on his ba recommendation. Dont get the idea that fixed. Ing has been the website continues to face challenges namely backend issues including data transfer. Till have improved but s problems. We will watch that. Youtube viewers watched more of video illion hours each month but one has climb the or what did the waoepblgen nner norwegian duo. Stuff youtubeilly brings some serious numbers. Back to talk n is about the business end. That is solid stuff. No wrecking ball but solid. Yes. They put out enormous numbers on youtube one being cally has be basi discriminated this year in the 5. 5 billion. Away with close to 2 billion in advertising related revenue. It that is an increase of 225 . That speaks to the internet gold mine that is video ads. O roll out and t generally they bring in more ads. H than banner another number that amazed me was that according to emarket the share of the u. S. Video d market that youtube has is more than 20 . It is a dominant player. He give me some examples of t programming that is on youtube that is bringing in advertisers. Chicken and egg situation, right . Yes. One company we recently checked out in los angeles we will have upcoming them on an show but they saw the market as unity so they created a Youtube Channel about teens and reached out to kids all around the world to say if you want to partner with us and create your own channel you can be part of our network and here is a way to get a lot of people going to one destination. The guy who started it was because his kids were not watching tv. They were on phones and tablets and watching youtube. I thought we already had awesomeness tv. John ehrlichman there. Hackathons are common but how do they come together . Facebook labs to see. Boughs of n the facebook. It builds and designs its own systems and storage networking equipment and the goal is to save money for facebook by making more Efficient Data Centers and making more efficient equipment from hewlettld buy packard or dell. Ng this is where we are doi the Circuit Board level very detailed work. E are running american 20,000 servers per technician. How do you get to the point to do Common Service with my 10 fingers. An example is getting rid of screws where it counts. Ou see a guy down there with a screwdriver and you use more like a popoff. You got it. Google, facebook, amazon. Such a high s at level nobody faced the problems you had faced so you have to build stuff that works for you and suited your needs. It turns out that you have e standards de thes that other companies are building on. What might seem trivial designing 1 out of the server it has an impact. This is a server sitting in a vat of oil. Why . This is how like the facebook hack hacker culture applies the hardware. Said am got together and we have been hearing about Oil Immersion and it is interesting. It s see if we can make t work. Eral oil from minute rely store. Rinarian supply this is the noisiest room. N room. Is our ove we have people simulate might go. E our servers the ovens allow us to create a wide range of environmental conditions including what we call thermal events. Actual serveike an are and put it inside these ovens . We do. We need to have our own testing not because we are better at testing but we understand our pretty Good Environment better than our suppliers. Everybody has ovens. Most dont test it. Oisiest must have the n work spaces in facebook. It is noisier than the software developing floor. Ashley vance. Kets. Time for on the mar what is up . I can almost reach out and touch you. N have a pullback going on i stocks. A couple of things are raising that tapering es is closer to becoming a reality. One is budget talks in washington making progress and Economic Data we have seen as of late. In terms of individual stocks, s stercard is upping it Quarterly Dividend to 1. 10 a osting the buyback program. With returning cash to oved a 10 rs it appr for one stock split. Minutes. Ave more in 30 this is the Early Edition of bloomberg west. 3 00 pacific us at and 6 00 here on the east coast. Headlines the ntsb is olding the hearing on the crashlanding of flight 214 in San Francisco in all. Pilots s show the inadvertently enabled the speed control system and he said he was stressed about landing landing. An instrument the sign Language Interpreter of Nelson Mandela is accused of being a fake. Aid that the gestures were meaningless as he allegedly signed for president obama and other world leaders. The government is investigating how that happened. Uruguay is the first nation to egalize the growth, sale and use of marijuana. Weed is legal there. With prices set by the government. Pharmacies can sell it. 1. 4 ounces can be sold each month. Supporters say it will suppress illegal drug trafficking. Unding the zz surro bitcoin we decided to celebrate be a traditional holiday. Matt miller is here for day three. You bought three french hens. Some video games with a bitcoin. Five. Ht four to call duty ghosts. Battlefield 4. I bought a number of things. Ped at whole foods, gotten a pizza. The pizza was the first bitcoin effort. Take us back to the early days of bitcoin. Ks. Lain how it wor people are starting to pop up on twitter. You have to Exchange Dollars rien or euro or whatever currency to bitcoin. The way you do it is get a wallet a Matrix Digital wallet on the right. You use your wallet if you are a consumer the same way you would second animation showing this to receive money money. Spend a merchant uses the wallet more kinda Cash Register or any of Vendor Service provider, someone who is making goods. Third, you have to make the transaction. What bitcoin people call keys. You have a private key and public key. Everyone has both in his or her wallet but merchants will show which has ablic key q. R. Code. You take a picture of that and your wallet creates a random ey ber that is the private k and they meet and create a transaction. So you need both to make it happen . If you want to get money you need the public key or give private key. D the does the private key stay with that user . You. T is with it is like a passward. Ction ou create the transa it goes into a box with a whole bunch of other transactions locks and miners people who are mining try to some the problem which wraps up these transactions or you can think of age they put into a giant ledge ar book and they ge rewarded. They make it fool proof and ir irreversible. Each bitcoin is essentially a ique to code that is un itself but is verified that it is bitcoin how . It is all written in the original coat by the person who developed it . Not only do i not want to get deep in the weeds but i couldnt. It is very complicated and i recommend spending a few days reading about it on read it or caan academy has a tutorial. But it is in the very early stages so even though im living dont see of people it as a currency. I will forgive all of this difficulty with it because it is new and new things can be difficult. It is interesting to have an understanding of how it works. Ised who is involved in the speculation like minors or ing yellow lotuses with the license plate bitcoin but this morning i talked to lating thato is specu it is a purely speculative instrument. He thinks of it more as a commodity than currency. E pay past president say the same thing. A lot of people would say he might have kind of a little bit of skin in the game because he has his own electronic Payment System on the internet. But not his own currency. Hinks of it as a commodity, not a currency, yet. Hes long bitcoin and thinks it will get there. But he is long bitcoin. S holds it at least that i what he said. If you look at the price graph ery volatile. This is the kind of thing people say you can expect in the early days. It is not the kind of thing in it think ed about on a daytoday basis. You have to look at it on on a decadetodecade basis. Not o you think people are watching this . I think they are watching the people it but involved in the inner circle of the community i dont think they think about it like we think about it just dollar signs. Hey are thinking about it as a revolution. It will change the which the internet created a way to transfer knowledge from one place to another anywhere in the world instantly and almost for free and this does the same thing but with value. When i think of you i think dollar signs because you are money. Thank you so much. Still ahead, the best tech for . Any to work glass door says it is twitter. The largest city in north america has suffered another major cell phone outage. Thousands of customers lost Voice Service 81 minutes after the largest carrier had a network failure. Atest problem and at least two other widespread outages hit the company the past two years. Twitter has grabbed the top spot est places to work in tech. This puts it ahead of linkedin and facebook. It is a career website where mployees share information secretly about the company they work for. H hrlich machine ehrlichman has more. Twitter views from employees range from admiration nagement ulture and ma style. The c. E. O. Of glass door gives findings. The 22 Tech Companies on this list. Very briefly give us the back story on how you make the determinations. These are the best companies that are chosen by employees reviews theysed on leave on glass door and they are mployees