1
00:00:02,720 --> 00:00:10,559
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

2
00:00:10,600 --> 00:00:14,560
Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

3
00:00:14,600 --> 00:00:17,880
Speaker 1: Eastern on Apple Coarclay, and Android Auto with the Bloomberg

4
00:00:17,920 --> 00:00:21,040
Speaker 1: Business App. Listen on demand wherever you get your podcasts,

5
00:00:21,360 --> 00:00:23,600
Speaker 1: or watch us live on YouTube.

6
00:00:24,239 --> 00:00:28,600
Speaker 2: Tessa reported some numbers last night. The profit tumbled despite

7
00:00:28,600 --> 00:00:31,360
Speaker 2: strong electric vehicle deliveries in the most recent quarter, and

8
00:00:31,360 --> 00:00:34,080
Speaker 2: that's putting pressure on Elon musk Plant to refocus the

9
00:00:34,120 --> 00:00:39,080
Speaker 2: company on artificial intelligence and robots. Kevin China joins us here,

10
00:00:39,120 --> 00:00:41,320
Speaker 2: director of research for the Presidio Group who's been found

11
00:00:41,320 --> 00:00:45,479
Speaker 2: in the auto industry for decades. Here, Kevin, I'm not

12
00:00:45,520 --> 00:00:49,040
Speaker 2: sure Tesla's even an auto company anymore. How are you

13
00:00:49,120 --> 00:00:51,640
Speaker 2: viewing what you heard last night from Elon and company.

14
00:00:52,840 --> 00:00:57,320
Speaker 3: Yeah, Look, there was a lot of automotive type results

15
00:00:57,640 --> 00:01:02,160
Speaker 3: in that release, right, and you talked about it. Volume

16
00:01:02,840 --> 00:01:06,679
Speaker 3: that you buy is not necessarily demand, right, Like, that's

17
00:01:06,760 --> 00:01:12,800
Speaker 3: spend and you saw mix deteriorate, right, and so margins compress.

18
00:01:13,360 --> 00:01:17,080
Speaker 3: So selling more things at lower margin is not necessarily

19
00:01:17,120 --> 00:01:19,840
Speaker 3: the way, although it is common in the auto industry

20
00:01:19,880 --> 00:01:24,039
Speaker 3: for manufacturers, you know, over the decades, and that's how

21
00:01:24,080 --> 00:01:28,000
Speaker 3: that happens. Best thing though about that is that you

22
00:01:28,400 --> 00:01:32,120
Speaker 3: did not see them compress margins and not get the volume.

23
00:01:32,120 --> 00:01:34,080
Speaker 3: At least they got the volume, but it winds up

24
00:01:34,080 --> 00:01:36,920
Speaker 3: doing more harm than good to your pricing and your

25
00:01:36,959 --> 00:01:38,880
Speaker 3: profit dynamics when that happens.

26
00:01:38,920 --> 00:01:43,640
Speaker 4: Though Kevin Tessa has been promising for years a cheap

27
00:01:43,800 --> 00:01:48,040
Speaker 4: or affordable EV, a lower cost EV. Does that even

28
00:01:48,120 --> 00:01:50,840
Speaker 4: matter to the companies that are priority at this point?

29
00:01:50,840 --> 00:01:53,440
Speaker 4: I mean, it feels like the company has so deemphasized

30
00:01:53,440 --> 00:01:57,000
Speaker 4: its traditional auto business that people don't care about it,

31
00:01:57,040 --> 00:01:59,080
Speaker 4: and I wonder if the company cares about it.

32
00:02:00,360 --> 00:02:03,520
Speaker 3: Well, two things Scarlett like one I would say is that, look,

33
00:02:03,520 --> 00:02:07,640
Speaker 3: if you're having problems with margins and mix, the answer

34
00:02:07,720 --> 00:02:12,720
Speaker 3: is not a more affordable vehicle, right because fair material costs,

35
00:02:12,720 --> 00:02:16,920
Speaker 3: input costs, production costs are all inflating. The answer is

36
00:02:16,960 --> 00:02:19,440
Speaker 3: not to get to twenty five thousand dollars. That actually

37
00:02:19,520 --> 00:02:24,359
Speaker 3: compounds the problem. But yeah, as a passenger car company,

38
00:02:25,080 --> 00:02:28,360
Speaker 3: you know, I obviously the narrative is not that and

39
00:02:28,400 --> 00:02:31,520
Speaker 3: it's probably not the way forward for this company going forward.

40
00:02:31,600 --> 00:02:37,760
Speaker 3: So you know the idea of maybe more models they're

41
00:02:37,760 --> 00:02:41,360
Speaker 3: going in the other direction, right models, Model X production

42
00:02:41,520 --> 00:02:44,960
Speaker 3: is ceased. Now you're talking about three name plates, Y

43
00:02:45,160 --> 00:02:49,120
Speaker 3: three and Cybertruck for what that's worth. So you know,

44
00:02:49,600 --> 00:02:52,799
Speaker 3: not acting like an automaker that's putting product in all

45
00:02:52,919 --> 00:02:57,600
Speaker 3: segments and able to grow volume that way healthy through

46
00:02:57,760 --> 00:03:03,520
Speaker 3: more demand. It's really about mix, price reductions, discounting and

47
00:03:03,560 --> 00:03:06,080
Speaker 3: exporting cheaper products to other parts of the world.

48
00:03:06,800 --> 00:03:07,040
Speaker 5: Kevin.

49
00:03:07,080 --> 00:03:09,679
Speaker 2: I read a really interesting article over the weekend, I

50
00:03:09,720 --> 00:03:11,560
Speaker 2: think was in the New York Times about the kind

51
00:03:11,560 --> 00:03:15,359
Speaker 2: of the US automakers, how they've pivoted back to what

52
00:03:15,480 --> 00:03:19,800
Speaker 2: actually makes money for them, which are trucks and SUVs

53
00:03:19,919 --> 00:03:23,600
Speaker 2: and de emphasizing their EV businesses. And while that's good

54
00:03:23,600 --> 00:03:28,440
Speaker 2: for near term intermediate term profitability, they fall they run

55
00:03:28,480 --> 00:03:30,359
Speaker 2: the risk of falling behind the rest of the world

56
00:03:30,440 --> 00:03:34,720
Speaker 2: in terms of EV technology. How do you think the

57
00:03:35,000 --> 00:03:38,800
Speaker 2: US auto companies are thinking about that EV strategy longer term?

58
00:03:39,720 --> 00:03:43,440
Speaker 3: Yeah, Look, and the products are there, the technology is there,

59
00:03:43,560 --> 00:03:47,240
Speaker 3: But to your point, the profitability is and look, and

60
00:03:48,440 --> 00:03:51,680
Speaker 3: as a global manufacturer of really anything, you want to

61
00:03:51,720 --> 00:03:56,560
Speaker 3: share as many platforms parts as you can. But the

62
00:03:56,640 --> 00:04:01,080
Speaker 3: demand profile in each country, if not region, and it's

63
00:04:01,120 --> 00:04:03,640
Speaker 3: not the same you know, where money is made here

64
00:04:04,080 --> 00:04:07,880
Speaker 3: are on big trucks and SUVs, pickups and SUVs. The

65
00:04:08,400 --> 00:04:12,280
Speaker 3: small products that work in maybe Europe or even in China, India,

66
00:04:12,320 --> 00:04:14,960
Speaker 3: they don't make sense here and they don't make money.

67
00:04:15,440 --> 00:04:21,320
Speaker 3: So the idea that falling behind on EV necessarily matters

68
00:04:21,400 --> 00:04:24,360
Speaker 3: if profit is the driver here. You know, I'm not

69
00:04:24,440 --> 00:04:27,560
Speaker 3: sure why we need to go toe to toe on

70
00:04:27,760 --> 00:04:33,039
Speaker 3: EV anymore than we already are or tried if the

71
00:04:33,080 --> 00:04:37,680
Speaker 3: profitability isn't there. I get maybe it's technology shaming, you know,

72
00:04:37,720 --> 00:04:39,440
Speaker 3: by the rest of the world that says you're not

73
00:04:39,600 --> 00:04:42,520
Speaker 3: keeping up, But it's not what our demand profile in

74
00:04:42,560 --> 00:04:46,680
Speaker 3: this country looks like. We're not going to out export China.

75
00:04:47,120 --> 00:04:50,440
Speaker 3: We're not a low cost manufacturer. So the idea that

76
00:04:50,480 --> 00:04:54,840
Speaker 3: we're going to overtake China in EV, in export or domestically,

77
00:04:55,160 --> 00:04:56,000
Speaker 3: it's just not going to happen.

78
00:04:56,040 --> 00:04:56,240
Speaker 6: To me.

79
00:04:56,279 --> 00:04:59,960
Speaker 3: That fight is already over. So I think manufacturers probably

80
00:05:00,160 --> 00:05:02,640
Speaker 3: for the time being, need to be doing what makes

81
00:05:02,680 --> 00:05:05,440
Speaker 3: money and enables them to innovate from there.

82
00:05:06,360 --> 00:05:08,880
Speaker 4: We already see it with people in California facing six

83
00:05:08,920 --> 00:05:11,159
Speaker 4: dollars gallon gas, and now you have the iron war

84
00:05:11,560 --> 00:05:14,200
Speaker 4: flaring up again. And oil prices are back up again.

85
00:05:15,279 --> 00:05:19,080
Speaker 4: At some point the consumer behavior is going to tip over,

86
00:05:19,160 --> 00:05:19,479
Speaker 4: isn't it.

87
00:05:20,839 --> 00:05:23,919
Speaker 3: Well, the consumer can only buy what the manufacturer is

88
00:05:23,920 --> 00:05:28,240
Speaker 3: building right and selling to the dealerships, and those products

89
00:05:28,279 --> 00:05:30,640
Speaker 3: tend to be what makes the manufacturer money. This is

90
00:05:30,760 --> 00:05:35,040
Speaker 3: really a push market on the supply side from the manufacturer,

91
00:05:35,400 --> 00:05:38,960
Speaker 3: and what you're talking about is the pull side. So ultimately,

92
00:05:39,160 --> 00:05:41,719
Speaker 3: and the difference between say the US and China in

93
00:05:41,800 --> 00:05:46,039
Speaker 3: terms of EV adoption is subsidizing your manufacturers, which we

94
00:05:46,160 --> 00:05:49,200
Speaker 3: don't and probably won't do here. So if you have

95
00:05:49,279 --> 00:05:54,440
Speaker 3: a manufacturer looking at an EV platform that loses i

96
00:05:54,480 --> 00:05:57,960
Speaker 3: don't know, five figures ten, fifteen thousand dollars per unit,

97
00:05:58,240 --> 00:06:00,920
Speaker 3: you just don't have the motivation to build it. Now

98
00:06:01,000 --> 00:06:04,000
Speaker 3: the government makes you whole by subsidizing your losses. It's

99
00:06:04,040 --> 00:06:08,080
Speaker 3: a different story, which is what happens with Chinese manufacturers.

100
00:06:08,120 --> 00:06:11,760
Speaker 3: But ultimately, the automakers are going to go where their

101
00:06:11,800 --> 00:06:15,760
Speaker 3: profit is, and evs, even for Tesla, have proven that

102
00:06:15,800 --> 00:06:18,599
Speaker 3: they're just not there. We don't own any of the

103
00:06:18,640 --> 00:06:21,560
Speaker 3: supply chain either, China does, so the idea that this

104
00:06:21,680 --> 00:06:25,320
Speaker 3: gets more cost effective going forward is also a difficult

105
00:06:25,360 --> 00:06:27,440
Speaker 3: case to make stay with us.

106
00:06:27,480 --> 00:06:29,720
Speaker 4: More from Bloomberg Intelligence coming up after this.

107
00:06:33,839 --> 00:06:37,559
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

108
00:06:37,640 --> 00:06:40,719
Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

109
00:06:40,720 --> 00:06:44,039
Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

110
00:06:44,120 --> 00:06:47,200
Speaker 1: you get your podcasts, or watch us live on YouTube.

111
00:06:47,960 --> 00:06:50,799
Speaker 2: All right, let's talk technology. Google reported numbers after the close.

112
00:06:50,880 --> 00:06:53,120
Speaker 2: The kids call it alphabet, but those of us who

113
00:06:53,120 --> 00:06:57,160
Speaker 2: were there at the beginning, we're sticking with Google and.

114
00:06:57,160 --> 00:06:58,080
Speaker 6: The Capex numbers.

115
00:06:58,400 --> 00:06:59,720
Speaker 2: First of all, the operating numbs looked good to me,

116
00:07:00,000 --> 00:07:03,120
Speaker 2: don't know, but the Capex raised maybe spookings some people.

117
00:07:03,160 --> 00:07:07,200
Speaker 2: And Indh Sing he's part of that whole technology cabal there.

118
00:07:07,200 --> 00:07:10,080
Speaker 2: He runs it for Bloomberg Intelligence. And you give us

119
00:07:10,160 --> 00:07:12,160
Speaker 2: your overview of kind of what you heard what you

120
00:07:12,200 --> 00:07:14,000
Speaker 2: saw from Google last night.

121
00:07:14,320 --> 00:07:18,240
Speaker 6: Yeah, I mean, the entire call was about Google Cloud

122
00:07:18,480 --> 00:07:22,480
Speaker 6: and TPUs. Not even one question on the Core ads

123
00:07:22,600 --> 00:07:26,520
Speaker 6: search business, which is surprising, you know, given how the

124
00:07:26,600 --> 00:07:30,480
Speaker 6: calls used to be. But look, they talked about how

125
00:07:30,760 --> 00:07:35,040
Speaker 6: supply constraints remain when it comes to AI data center capacity.

126
00:07:35,280 --> 00:07:40,720
Speaker 6: They're actually renting data center compute from third party providers

127
00:07:41,120 --> 00:07:45,160
Speaker 6: despite all this more compute than had Google for Yeah,

128
00:07:45,200 --> 00:07:50,520
Speaker 6: but they want more because right now anybody who was

129
00:07:50,720 --> 00:07:56,320
Speaker 6: early to invest in power and computing and data center

130
00:07:56,400 --> 00:07:58,440
Speaker 6: capacity is looking like a genius.

131
00:07:58,440 --> 00:07:59,240
Speaker 2: Who are those people?

132
00:08:00,120 --> 00:08:01,200
Speaker 6: These hyperscalers?

133
00:08:01,360 --> 00:08:02,920
Speaker 2: So Google's renting space from.

134
00:08:03,000 --> 00:08:08,080
Speaker 6: From SpaceX potentially Meta. Again they didn't specify.

135
00:08:07,720 --> 00:08:10,720
Speaker 4: But Meta has data centers to spare like, That's what

136
00:08:10,760 --> 00:08:11,600
Speaker 4: I don't understand.

137
00:08:11,880 --> 00:08:15,320
Speaker 6: They don't have a model which is comparable to an

138
00:08:15,320 --> 00:08:20,040
Speaker 6: anthropic or Gemini, And so right now they are following

139
00:08:20,080 --> 00:08:23,240
Speaker 6: the SpaceX playbook, which is if you rent your one

140
00:08:23,320 --> 00:08:26,280
Speaker 6: gigabot compute, you can generate up to a twenty billion

141
00:08:26,320 --> 00:08:29,320
Speaker 6: dollars in rental revenue just by renting the compute, nothing

142
00:08:29,480 --> 00:08:32,480
Speaker 6: by being a landlord, by being a landlord for your compute.

143
00:08:32,559 --> 00:08:36,320
Speaker 4: Yeah, at what point is investing in all this too much?

144
00:08:36,360 --> 00:08:39,920
Speaker 4: I mean, right now, investors have been following this guideline

145
00:08:39,960 --> 00:08:41,440
Speaker 4: of as long as I see a return on this,

146
00:08:41,480 --> 00:08:43,720
Speaker 4: as long as it's paying off. But at some point

147
00:08:43,800 --> 00:08:45,760
Speaker 4: is it just too much and investors will walk?

148
00:08:46,040 --> 00:08:48,800
Speaker 6: I think so we will hit that point. But Google

149
00:08:48,880 --> 00:08:53,560
Speaker 6: also said they will be significantly raising their compute for

150
00:08:53,640 --> 00:08:56,240
Speaker 6: twenty twenty seven, so there is a Foliar guide for

151
00:08:56,320 --> 00:08:59,760
Speaker 6: twenty six by about ten fifteen billion dollars at the

152
00:08:59,760 --> 00:09:02,880
Speaker 6: mid point, and then they said twenty twenty seven would

153
00:09:02,920 --> 00:09:06,400
Speaker 6: be a significant increase. Now, my interpretation of significant is

154
00:09:06,640 --> 00:09:08,920
Speaker 6: it's at least fifty percent, because this year was one

155
00:09:08,960 --> 00:09:13,480
Speaker 6: hundred percent. Wow, their capex doubled in twenty twenty six.

156
00:09:13,880 --> 00:09:16,920
Speaker 4: Fifty percent increase equals significant increase at least.

157
00:09:17,800 --> 00:09:22,200
Speaker 6: Yes, So it's it's not changing anytime soon to your question. Yeah,

158
00:09:22,200 --> 00:09:22,440
Speaker 6: all right.

159
00:09:22,480 --> 00:09:26,280
Speaker 2: So I'm looking at the FA function on the Bloomberg terminal, folks,

160
00:09:26,280 --> 00:09:28,440
Speaker 2: which gives you a financial analysis. That's what it stands

161
00:09:28,440 --> 00:09:32,360
Speaker 2: for capex for this company Google in twenty twenty two,

162
00:09:33,440 --> 00:09:38,920
Speaker 2: capex was thirty billion in twenty twenty six, expected to

163
00:09:38,920 --> 00:09:41,480
Speaker 2: be almost call one hundred ninety billion going to too

164
00:09:41,640 --> 00:09:44,920
Speaker 2: eighty next year. There ain't no free cash flow oft

165
00:09:44,920 --> 00:09:47,000
Speaker 2: for this company, which was a free cash flow juggernaut.

166
00:09:47,160 --> 00:09:50,240
Speaker 6: Yeah, they were negative free cash flow even for this quarter,

167
00:09:50,720 --> 00:09:53,839
Speaker 6: first time ever, right, first time ever. So and they

168
00:09:53,960 --> 00:09:56,839
Speaker 6: just did an equity raise eighty five billion dollars. So,

169
00:09:57,200 --> 00:10:02,760
Speaker 6: and the justification is, we we'll invest significantly in training

170
00:10:02,760 --> 00:10:07,200
Speaker 6: our own model Gemini for and you know, the cloud

171
00:10:07,240 --> 00:10:10,560
Speaker 6: business really is super strong. So eighty two percent growth

172
00:10:10,880 --> 00:10:13,960
Speaker 6: when you have one hundred billion dollar business, it's like,

173
00:10:14,080 --> 00:10:17,440
Speaker 6: show me any other company that's growing eighty percent at

174
00:10:17,440 --> 00:10:18,800
Speaker 6: one hundred billion dollar rundering.

175
00:10:19,440 --> 00:10:22,320
Speaker 4: Stay with us more from Bloomberg Intelligence coming up after this.

176
00:10:26,679 --> 00:10:30,360
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

177
00:10:30,440 --> 00:10:33,520
Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

178
00:10:33,559 --> 00:10:36,840
Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

179
00:10:36,920 --> 00:10:40,400
Speaker 1: you get your podcasts, or watch us live on YouTube.

180
00:10:41,000 --> 00:10:43,720
Speaker 2: Let's switch gears towards the media space. Lots of news

181
00:10:43,760 --> 00:10:45,760
Speaker 2: there as always. We could talk to Githa rang Andathan

182
00:10:45,880 --> 00:10:47,520
Speaker 2: every day if we wanted to, but she's got a

183
00:10:47,600 --> 00:10:50,960
Speaker 2: day job. She covers the media stocks for Bloomberg Intelligence. Hey, Keith,

184
00:10:51,080 --> 00:10:54,920
Speaker 2: let's just start with Comcast A they reported numbers here,

185
00:10:55,120 --> 00:10:57,800
Speaker 2: give us like a couple of notes on on their quarter.

186
00:10:57,920 --> 00:11:00,120
Speaker 2: But more importantly, what do you think the strategy is

187
00:11:00,160 --> 00:11:01,640
Speaker 2: of the Comcast company going forward?

188
00:11:02,559 --> 00:11:05,200
Speaker 5: Yeah? Thanks so much, Paul for Comcasts. Really, as you

189
00:11:05,200 --> 00:11:07,560
Speaker 5: pointed out, it's more about the strategy than the second

190
00:11:07,640 --> 00:11:10,840
Speaker 5: quarter results. But just a few you know, high points

191
00:11:10,880 --> 00:11:14,040
Speaker 5: from the results. So remember they are the largest broadband

192
00:11:14,080 --> 00:11:16,040
Speaker 5: provider in the United States, they have about a twenty

193
00:11:16,040 --> 00:11:18,720
Speaker 5: five percent share of the market, but that share has been,

194
00:11:19,000 --> 00:11:22,400
Speaker 5: you know, rapidly declining, and we continue to see that

195
00:11:22,440 --> 00:11:25,679
Speaker 5: in the numbers today. So they again lost broadband subscribers.

196
00:11:26,160 --> 00:11:28,559
Speaker 5: And really, I mean, I think what investors are focused on, Paul,

197
00:11:28,720 --> 00:11:31,800
Speaker 5: is that you know, this story is not getting any better.

198
00:11:32,040 --> 00:11:34,800
Speaker 5: So over the past four years, we've seen intense competition

199
00:11:34,840 --> 00:11:37,920
Speaker 5: from the telecoms, both on the fixed wireless side as

200
00:11:37,920 --> 00:11:40,760
Speaker 5: well as fiber, and then now this year you have

201
00:11:40,880 --> 00:11:45,080
Speaker 5: this new competition with Starlink, and you know, just with

202
00:11:45,280 --> 00:11:48,240
Speaker 5: kind of the expansion in V three satellites next year,

203
00:11:48,360 --> 00:11:52,160
Speaker 5: the expansion in broadband capacity, there is so much fear

204
00:11:52,360 --> 00:11:55,600
Speaker 5: on the street that Starlink is going to become another

205
00:11:55,760 --> 00:11:59,560
Speaker 5: big competitor for cable, and so just the story doesn't

206
00:11:59,559 --> 00:12:02,719
Speaker 5: get any better now. Comcast, what they've done is they

207
00:12:02,760 --> 00:12:06,240
Speaker 5: have altered their go to market strategy by becoming much

208
00:12:06,240 --> 00:12:09,680
Speaker 5: more competitive in terms of broadband pricing. But that obviously

209
00:12:09,800 --> 00:12:13,240
Speaker 5: has resulted in EBITDA getting crushed, and so we saw

210
00:12:13,280 --> 00:12:17,400
Speaker 5: it again fall about six percent this quarter. Again they're

211
00:12:17,440 --> 00:12:20,320
Speaker 5: pointing to the story getting slightly better in the second

212
00:12:20,400 --> 00:12:22,240
Speaker 5: half but again it's a little bit of a wait

213
00:12:22,280 --> 00:12:25,760
Speaker 5: and watch longer term. I just don't think investors are

214
00:12:26,240 --> 00:12:29,360
Speaker 5: optimistic about this cable broadband turnaround at all.

215
00:12:29,600 --> 00:12:32,480
Speaker 4: Okay, so it's kind of like managing the decline of

216
00:12:32,520 --> 00:12:36,800
Speaker 4: its business right now, it's main business. What's is the

217
00:12:36,920 --> 00:12:40,560
Speaker 4: company offering up any kind of growth story for investors

218
00:12:40,559 --> 00:12:41,520
Speaker 4: to get excited about.

219
00:12:42,320 --> 00:12:44,480
Speaker 5: Yeah, I'm glad you asked that. Actually they did that

220
00:12:44,600 --> 00:12:48,079
Speaker 5: just three weeks ago, Scarletts. So you know, they are

221
00:12:48,720 --> 00:12:52,120
Speaker 5: an interesting company because they're a vertically integrated media company.

222
00:12:52,160 --> 00:12:54,800
Speaker 5: So of course broadband makes up eighty five percent of

223
00:12:54,880 --> 00:12:57,800
Speaker 5: their ebit dah, but they do have a great media

224
00:12:57,880 --> 00:13:01,840
Speaker 5: business with NBC. They announced plans just a few weeks

225
00:13:01,880 --> 00:13:04,560
Speaker 5: ago to actually separate out that media business, which is,

226
00:13:04,800 --> 00:13:08,280
Speaker 5: you know, the NBC NBC Universal business along with Sky,

227
00:13:08,360 --> 00:13:11,000
Speaker 5: into a separate company, which is supposed to happen sometime

228
00:13:11,120 --> 00:13:13,959
Speaker 5: next year. Now, the whole story here has been that

229
00:13:14,120 --> 00:13:17,480
Speaker 5: with you know, the whole Warner Brothers bidding war. Media

230
00:13:17,520 --> 00:13:21,080
Speaker 5: assets have actually they're actually being really played up. And

231
00:13:21,120 --> 00:13:24,840
Speaker 5: if you look at comcasts NBC for instance, you know,

232
00:13:24,960 --> 00:13:27,320
Speaker 5: just the collection of assets, it's it's a stellar collection

233
00:13:27,360 --> 00:13:30,680
Speaker 5: of assets. And it almost resembles a Disney, if you will,

234
00:13:30,720 --> 00:13:32,520
Speaker 5: because they are one of the few media companies that

235
00:13:32,559 --> 00:13:35,280
Speaker 5: actually has theme parks very similar to Disney. Has Studio,

236
00:13:35,320 --> 00:13:38,200
Speaker 5: has a broadcast network, you know, had some cable networks,

237
00:13:38,240 --> 00:13:41,360
Speaker 5: and has Peacock the streaming platform. And so the big

238
00:13:41,440 --> 00:13:44,920
Speaker 5: argument here was, you know, cable multiples have actually declined.

239
00:13:44,960 --> 00:13:47,480
Speaker 5: They've they've had so they've gone from you know, ten

240
00:13:47,520 --> 00:13:50,760
Speaker 5: times EBITDA just about three four years ago to five times,

241
00:13:51,000 --> 00:13:54,680
Speaker 5: and NBC, because it's being clubbed with Comcast, is suffering here.

242
00:13:55,120 --> 00:13:57,240
Speaker 5: And so if you look at Disney, for instance, you know,

243
00:13:57,280 --> 00:13:59,360
Speaker 5: Disney trads it about nine ten times. And so the

244
00:13:59,440 --> 00:14:01,960
Speaker 5: question was, you know, why are we punishing NBC for

245
00:14:02,480 --> 00:14:05,559
Speaker 5: cable sport performance. So I think investors definitely are happy

246
00:14:05,600 --> 00:14:08,360
Speaker 5: about that because it now kind of shines NBC in

247
00:14:08,400 --> 00:14:10,400
Speaker 5: this new light and it definitely gives them some strategic

248
00:14:10,440 --> 00:14:11,400
Speaker 5: optionality as well.

249
00:14:12,200 --> 00:14:15,160
Speaker 4: Stay with us more from Bloomberg Intelligence coming up after this.

250
00:14:19,240 --> 00:14:22,920
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

251
00:14:23,040 --> 00:14:26,120
Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

252
00:14:26,120 --> 00:14:29,440
Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

253
00:14:29,480 --> 00:14:32,600
Speaker 1: you get your podcasts or watch US live on YouTube.

254
00:14:33,440 --> 00:14:37,440
Speaker 2: Looking at the healthcare space here, Eli Lilly, its next

255
00:14:37,480 --> 00:14:41,760
Speaker 2: generation weight loss shot, has cleared another hurdle that is

256
00:14:41,840 --> 00:14:44,840
Speaker 2: just a massive market that continues to show tremendous growth.

257
00:14:44,840 --> 00:14:47,080
Speaker 2: Madison Muller joins us here. She's a healthcare reporter for

258
00:14:47,120 --> 00:14:50,080
Speaker 2: Bloomberg News. What's going on in Eli Lilly medicine.

259
00:14:50,200 --> 00:14:52,840
Speaker 7: We had an important update from Lily today about when

260
00:14:52,920 --> 00:14:56,920
Speaker 7: it plans to file for regulatory approval for its next generation,

261
00:14:57,160 --> 00:14:59,760
Speaker 7: next generation weight loss shot read a true Tide, which

262
00:14:59,840 --> 00:15:03,120
Speaker 7: is going to be a pretty big product for Lily

263
00:15:03,160 --> 00:15:05,520
Speaker 7: if it ends up being approved. Already, there are a

264
00:15:05,520 --> 00:15:08,520
Speaker 7: lot of people seeking out black market versions of this

265
00:15:08,640 --> 00:15:11,800
Speaker 7: drug just because they've heard about all of the potentially

266
00:15:11,840 --> 00:15:16,080
Speaker 7: incredible effects, everything from thirty percent up to thirty percent

267
00:15:16,120 --> 00:15:19,640
Speaker 7: weight loss to liver impacts and all of these other

268
00:15:19,680 --> 00:15:23,560
Speaker 7: potential health benefits like anti inflammation and all of these things.

269
00:15:24,400 --> 00:15:26,560
Speaker 7: So Lily said that they are going to apply for

270
00:15:26,640 --> 00:15:29,720
Speaker 7: FDA approval sometime in the first quarter of twenty twenty seven,

271
00:15:29,920 --> 00:15:33,400
Speaker 7: which is a little bit later than some analysts had expected,

272
00:15:33,640 --> 00:15:36,320
Speaker 7: but that's just because the data package and the filing

273
00:15:36,320 --> 00:15:38,160
Speaker 7: that they have to put together is so big.

274
00:15:38,240 --> 00:15:42,200
Speaker 2: So how will this be materially different or better than

275
00:15:42,240 --> 00:15:44,360
Speaker 2: what's on the market right now? Because people are getting

276
00:15:45,080 --> 00:15:49,320
Speaker 2: really substantial weight loss and it seems to be working already.

277
00:15:49,320 --> 00:15:50,400
Speaker 2: What's this new and going to do?

278
00:15:50,480 --> 00:15:52,520
Speaker 7: Yeah, that's exactly right. I mean zep Bound, which is

279
00:15:52,560 --> 00:15:54,840
Speaker 7: Lily's other weight loss shot, in Wagovi, which is a

280
00:15:54,840 --> 00:15:57,480
Speaker 7: Nova Noordisk product, are really good and like you said,

281
00:15:57,520 --> 00:15:59,760
Speaker 7: people are getting a lot of success with those. Now

282
00:16:00,160 --> 00:16:02,600
Speaker 7: read a true Tide, which that's the sort of generic

283
00:16:02,640 --> 00:16:04,760
Speaker 7: chemical name. It doesn't have a brand name yet because

284
00:16:04,800 --> 00:16:08,520
Speaker 7: it's not approved. Combines three different gut hormones, so it's

285
00:16:08,640 --> 00:16:11,560
Speaker 7: GLP one, which we've all heard so much about, plus

286
00:16:11,640 --> 00:16:15,240
Speaker 7: another one called glucagon and another called GIP. Basically, it

287
00:16:15,400 --> 00:16:19,320
Speaker 7: just supercharges the drug a little bit. It targets some

288
00:16:19,480 --> 00:16:23,520
Speaker 7: different receptors and is maybe better for things like removing

289
00:16:23,560 --> 00:16:27,080
Speaker 7: fat from the liver and other health impacts. And there

290
00:16:27,120 --> 00:16:30,080
Speaker 7: are a certain percentage of people that don't see success

291
00:16:30,240 --> 00:16:33,040
Speaker 7: on the currently available GLP one, So for people that

292
00:16:33,400 --> 00:16:36,200
Speaker 7: need that higher degree of weight loss, this is something

293
00:16:36,240 --> 00:16:37,840
Speaker 7: that could be a really good product for them.

294
00:16:38,040 --> 00:16:40,440
Speaker 2: Can you explain to me? I see the ads all

295
00:16:40,480 --> 00:16:45,080
Speaker 2: over the place, Serena Williams, How are these Are they generics?

296
00:16:45,120 --> 00:16:48,560
Speaker 2: Are they compounds? How are they different from the stuff

297
00:16:48,600 --> 00:16:49,760
Speaker 2: you have to get a prescription for.

298
00:16:49,960 --> 00:16:52,200
Speaker 7: Yeah, well, at one point, a lot of those ads

299
00:16:52,200 --> 00:16:55,120
Speaker 7: that you're seeing from companies like Row and Hymns and Hers,

300
00:16:55,880 --> 00:16:58,920
Speaker 7: those were for compounded products. So those are products that

301
00:16:58,920 --> 00:17:02,000
Speaker 7: are made by compounding pharmacies, and they're not exactly the

302
00:17:02,000 --> 00:17:05,960
Speaker 7: same as the drugs that the pharmaceutical companies sell. They're

303
00:17:05,960 --> 00:17:09,240
Speaker 7: not approved or reviewed by the FDA in sort of

304
00:17:09,320 --> 00:17:13,280
Speaker 7: the same way. But a lot of the telehealth companies

305
00:17:13,320 --> 00:17:16,159
Speaker 7: have recently moved into selling the brand name medications. They

306
00:17:16,160 --> 00:17:20,639
Speaker 7: were really pushing the compounded versions when there were supply shortages.

307
00:17:21,320 --> 00:17:23,800
Speaker 7: Now those supply shortages have ended, they've moved to selling

308
00:17:23,800 --> 00:17:26,680
Speaker 7: the brand name medications. However, there are still a lot

309
00:17:26,680 --> 00:17:29,640
Speaker 7: of compounding pharmacies and a lot of smaller telehealth companies

310
00:17:29,640 --> 00:17:33,280
Speaker 7: that have continued to sell these cheaper compounded ones, even

311
00:17:33,320 --> 00:17:35,520
Speaker 7: though the FDA has said that that's not allowed anymore.

312
00:17:35,640 --> 00:17:40,960
Speaker 2: Interesting, what's the where are we with the oral dosage

313
00:17:41,840 --> 00:17:43,400
Speaker 2: that's in the market now right?

314
00:17:43,480 --> 00:17:46,520
Speaker 7: Yeah, it is, which was a big development this year, Wogov.

315
00:17:47,080 --> 00:17:50,040
Speaker 7: There's a Wogov pill. There's also another pill from Lily

316
00:17:50,080 --> 00:17:54,480
Speaker 7: called Fondeo. Both of those are selling really really well.

317
00:17:54,600 --> 00:17:57,320
Speaker 7: People are I mean, especially the Wogov pill has been

318
00:17:57,359 --> 00:18:00,639
Speaker 7: a huge product for Novo, which is something that really needed.

319
00:18:00,720 --> 00:18:03,320
Speaker 7: Novo has fallen behind Lily sort of in the weight

320
00:18:03,320 --> 00:18:05,239
Speaker 7: loss drug race, even though they were the ones that

321
00:18:05,560 --> 00:18:08,359
Speaker 7: really created this modern weight loss market with their products

322
00:18:08,359 --> 00:18:11,720
Speaker 7: so Zepic and WGOV. Lily leapfrogged them with some more

323
00:18:11,720 --> 00:18:15,840
Speaker 7: effective options and also just understanding how to sell products

324
00:18:15,840 --> 00:18:19,200
Speaker 7: directly to patients and build these sort of telehealth or

325
00:18:19,240 --> 00:18:22,640
Speaker 7: online infrastructures that were really appealing to patients. So they

326
00:18:22,720 --> 00:18:25,520
Speaker 7: saw that opportunity and moved into it quickly, helped them

327
00:18:25,560 --> 00:18:28,560
Speaker 7: sort of surpass Novo. But now Novo's come back with

328
00:18:28,680 --> 00:18:31,960
Speaker 7: this oral version of Agov that's extremely popular, and so

329
00:18:32,040 --> 00:18:34,520
Speaker 7: that's been helping them as of late. But it sort

330
00:18:34,520 --> 00:18:36,600
Speaker 7: of remains to be seen in the long run how

331
00:18:36,680 --> 00:18:38,760
Speaker 7: the pills will end up stacking up to the orals

332
00:18:38,760 --> 00:18:41,600
Speaker 7: because we are seeing or sorry to the shots, because

333
00:18:41,640 --> 00:18:43,920
Speaker 7: we are still seeing a lot of demand for the shots.

334
00:18:44,240 --> 00:18:49,480
Speaker 2: So it's almost I mean, who doesn't take a weight

335
00:18:49,520 --> 00:18:53,080
Speaker 2: loss drug that could in fact benefit from a weight

336
00:18:53,119 --> 00:18:55,280
Speaker 2: loss drug. What are the hurdles still?

337
00:18:55,359 --> 00:18:59,320
Speaker 7: Is it still cost or still is cost in the

338
00:18:59,320 --> 00:19:02,640
Speaker 7: sense that insurance companies are still not widely covering these

339
00:19:02,680 --> 00:19:06,040
Speaker 7: which is pretty different than other chronic conditions. So the

340
00:19:06,119 --> 00:19:09,520
Speaker 7: insurance landscape is still pretty tough for people, and that

341
00:19:09,520 --> 00:19:11,800
Speaker 7: can be a barrier if they I mean, the price

342
00:19:11,840 --> 00:19:13,320
Speaker 7: when you're paying out of pocket is still a couple

343
00:19:13,440 --> 00:19:15,600
Speaker 7: hundred dollars a month, So that's still unaffordable for a

344
00:19:15,600 --> 00:19:19,280
Speaker 7: lot of Americans, especially right now. And we've not seen

345
00:19:19,359 --> 00:19:21,960
Speaker 7: sort of the same insurance pickup that we would see

346
00:19:21,960 --> 00:19:24,160
Speaker 7: with other chronic health conditions and that we would sort

347
00:19:24,160 --> 00:19:26,760
Speaker 7: of expect in this market. So that's been a barrier

348
00:19:26,760 --> 00:19:29,959
Speaker 7: to entry. And one positive thing with that is that

349
00:19:30,080 --> 00:19:33,960
Speaker 7: Medicare recently started covering these drugs for people sixty five

350
00:19:34,000 --> 00:19:36,399
Speaker 7: and older with certain health conditions, so that's sort of

351
00:19:36,440 --> 00:19:40,280
Speaker 7: expected to open access to potentially millions more people. But

352
00:19:40,680 --> 00:19:43,479
Speaker 7: it's still like, you know, the number or the percent

353
00:19:43,520 --> 00:19:45,879
Speaker 7: of people that actually take these drugs that could benefit

354
00:19:45,920 --> 00:19:47,000
Speaker 7: from them is still pretty low.

355
00:19:47,280 --> 00:19:49,080
Speaker 2: Yeah, because I mean, you see somebody out on the

356
00:19:49,080 --> 00:19:51,720
Speaker 2: street that you would think could benefit and you wonder

357
00:19:51,960 --> 00:19:55,360
Speaker 2: why haven't they yeah, and I guess it's cost primarily.

358
00:19:55,440 --> 00:19:58,239
Speaker 2: Right now is the issue? Do the compounded Are they

359
00:19:58,359 --> 00:20:00,479
Speaker 2: maturely cheaper the compounds.

360
00:20:00,240 --> 00:20:03,520
Speaker 7: At this point? Not really. I mean at one point yes,

361
00:20:03,640 --> 00:20:05,840
Speaker 7: because people were paying out a pocket for the list

362
00:20:05,880 --> 00:20:07,959
Speaker 7: price of the drug, which drugs, which was over one

363
00:20:07,960 --> 00:20:12,240
Speaker 7: thousand dollars a month. The drug makers have substantially reduced

364
00:20:12,359 --> 00:20:15,480
Speaker 7: the cash pay costs, so now it's like two hundred

365
00:20:15,520 --> 00:20:17,520
Speaker 7: dollars a month and up, sort of depending on the

366
00:20:17,520 --> 00:20:20,560
Speaker 7: dose that you're on, which is much much cheaper. And

367
00:20:20,600 --> 00:20:23,400
Speaker 7: that's sort of around the same price as these compounded medications,

368
00:20:23,400 --> 00:20:26,440
Speaker 7: because usually for compounded medications, you're getting them from a

369
00:20:26,480 --> 00:20:29,399
Speaker 7: telehealth company, so you're paying a subscription fee plus the

370
00:20:29,440 --> 00:20:31,600
Speaker 7: cost of the drug ends up being sort of the same.

371
00:20:32,359 --> 00:20:37,040
Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify,

372
00:20:37,240 --> 00:20:40,720
Speaker 1: and anywhere else you get your podcasts. Listen live each

373
00:20:40,720 --> 00:20:44,480
Speaker 1: weekday ten am to noon Eastern on Bloomberg dot Com,

374
00:20:44,600 --> 00:20:48,200
Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app.

375
00:20:48,560 --> 00:20:51,520
Speaker 1: You can also watch us live every weekday on YouTube

376
00:20:51,880 --> 00:20:54,120
Speaker 1: and always on the Bloomberg terminal