Speaker 1: From the heart of where Innovation, money and power Collie
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Changes San Francisco and this is
Speaker 1: Bloomberg Technology. Coming up in the next hour, a glimpse
Speaker 1: into the future of entertainment. Netflix versus Disney, House of
Speaker 1: Dragons versus Lord of the Rings and all of It
Speaker 1: versus TikTok, Who wins and loses. I'll speak with former
Speaker 1: TikTok CEO and top former Disney executive Kevin Meyer. Plus
Speaker 1: Learning in the Metaverse Are at Tech series continues with
Speaker 1: a candid conversation about the future of virtual learning and
Speaker 1: whether it could tip the balance in favor of screen
Speaker 1: time and lawyers for Tharanos founder Elizabeth Holmes failed in
Speaker 1: along on attempt to get her fraud conviction thrown out.
Speaker 1: We're gonna hear from our own General roles in Black,
Speaker 1: who was in the courtroom for this decision. We will
Speaker 1: get to all of that in a moment. Stocks ending
Speaker 1: another week down on the back of a job's report
Speaker 1: that showed people are going back to work, but that
Speaker 1: means the FED will likely stay on a talkish course.
Speaker 1: Bloom Brig Shanali Bossik here to break it all down.
Speaker 1: Pay Shanali happy Friday. Happy Friday, Emily. If we take
Speaker 1: a look not so happy of a Friday for the
Speaker 1: stock market. You have the SMP down more than one percent,
Speaker 1: as you say, on the back of that expectation of
Speaker 1: a hawkish fed. But remember did try to scrape higher
Speaker 1: into the day, ending the day lower than you do.
Speaker 1: Have the NAZAC one hundred ending more than one point
Speaker 1: four percent lower on the day, so the steeper decline
Speaker 1: than you're seeing in the SMP five hundred. Both of
Speaker 1: these indicries are down on the week pretty significantly. And
Speaker 1: then you have the two year yield. Interestingly, you had
Speaker 1: that really rise very significantly into the week, getting well
Speaker 1: above that three fifty level, really pairing some of those
Speaker 1: rises that you saw on the two year yield. And
Speaker 1: remember those yields have a big impact on what you're
Speaker 1: going to expect on how you value a lot of
Speaker 1: these high growth companies moving forward. And bitcoin Bitcoin is
Speaker 1: back below twenty thousand your now at nine nine fifty nine.
Speaker 1: We are watching that very closely. It hasn't broken too
Speaker 1: far below these levels here, But again bitcoin trades into
Speaker 1: the weekend. If we flip up the board here, let's
Speaker 1: look at another asset lately, very correlated to bitcoin. That
Speaker 1: is that NAZAC one hundred. As I've been talking to
Speaker 1: you about the five day move here when I said significant,
Speaker 1: what I meant was a four percent drop this week.
Speaker 1: That's not the biggest drop that we've seen. But again,
Speaker 1: moving into September, which is a traditionally hard month for stocks,
Speaker 1: it'll be interesting to see how this trades into next week.
Speaker 1: We did see traders try to get back some of
Speaker 1: those gains, but again ending the day and the week
Speaker 1: much lower. But a couple of individual movers for you
Speaker 1: quickly here, Emily, I want to take a look here
Speaker 1: at Starbucks because remember they had that new CEO announcement.
Speaker 1: On the back of that, the stock has declined two
Speaker 1: point eight percent on the day to point nine percent.
Speaker 1: That is, of course deeper than we saw in the SMP.
Speaker 1: Lulu Lemon was your biggest s gainer here and that
Speaker 1: now as that one d that was down on the
Speaker 1: day six point seven percent higher on the back of
Speaker 1: encouraging earnings. People are buying leggings Broadcom. We have also
Speaker 1: one point seven percent higher on the day, shaking off
Speaker 1: a lot of those fears for those chip companies. Emily,
Speaker 1: all right, we're gonna dig into chips a little later
Speaker 1: in the show, Shinali Bostek, thank you for that update. Meantime,
Speaker 1: turning to streaming, Netflix is set to launch its AD
Speaker 1: supported service later this year, a significant premium add a
Speaker 1: significant premium compared to other streaming platforms. As far as
Speaker 1: we know, the streaming giant intending to roll out this
Speaker 1: plan ahead of its rival, Disney Plus, which will launch
Speaker 1: its own AD supported plan on December eight. Netflix hasn't
Speaker 1: announced the rate for its AD supported plan. Yeah, we're
Speaker 1: gonna break all of this down with Kevin Meyer, founder
Speaker 1: and co CEO of Candle Media, a former top longtime
Speaker 1: Disney executive of course as well. Kevin, it's so great
Speaker 1: to have you back here on the show. So curious
Speaker 1: what you think of this raft of streaming news we've
Speaker 1: gotten over the last several weeks, and especially this these
Speaker 1: ADS supported tiers. How much do you think these will
Speaker 1: really drive new subscribers to Netflix and Disney Plus. We're
Speaker 1: great to be here, Emily, Always enjoy being on your show. Um, Look,
Speaker 1: I think there's a lot of promise in these as
Speaker 1: supported tiers. I do think that there are very substantial
Speaker 1: tail ones in the marketplace, and marketers are looking to
Speaker 1: place their brand marketing dollars and high quality video environments. Uh,
Speaker 1: linear television has been the traditional place where they spend
Speaker 1: that money, and of course that has becoming that's becoming
Speaker 1: challenged from just an audience perspective as audiences moved from
Speaker 1: linear television and pay TV over to streaming. That's what
Speaker 1: streaming is where the audiences are. When I launched Disney Plus,
Speaker 1: you know, several years ago, we had marketers trying to
Speaker 1: bang down our doors to have advertising on Disney Plus.
Speaker 1: So I know there'll be an explosion of demand. I
Speaker 1: also know, having been involved with running Hulu for many years,
Speaker 1: that the ad supported version of Hulu was five dollars
Speaker 1: less expensive for consumers but brought in and roughly eight
Speaker 1: and a half dollars worth of monthly revenue just from
Speaker 1: the ad loads and the ad sales that they add.
Speaker 1: So I'm feeling pretty bullish about it. I do think
Speaker 1: that consumers do tend to like to pay less, even
Speaker 1: if to put up with a small ad load. I
Speaker 1: think that both Netflix and Disney will be quite successful.
Speaker 1: If you don't know how Netflix will yet price their
Speaker 1: their their service with ads. Disney surprised me a little
Speaker 1: bit with keeping the same price as it is today
Speaker 1: add free for ads and moving the ad free price
Speaker 1: up three dollars or thirty eight percent. I think that's
Speaker 1: a pretty aggressive price move. It will be very interesting
Speaker 1: to see how much price sensitivity is in the Disney
Speaker 1: plus subscriber ranks and see how that how that evolves.
Speaker 1: And look, you've always said Netflix and Disney can both
Speaker 1: and will both coexist. But over the longer term, given
Speaker 1: the challenges that we we've known them to face, especially
Speaker 1: over the last six months, does Netflix or Disney have
Speaker 1: the edge? They're very different services. Um Disney is configured
Speaker 1: with the core brands of the Wall Disney Company, including Inport, Disney,
Speaker 1: It's Help and Pixar, Marvels, Star Wars, National Geographic, and
Speaker 1: it's meant is designed to superserve those fans, the fans
Speaker 1: of those brands. Now they have expanded under Bob Shapeck,
Speaker 1: They've expanded the programming somewhat to have a little bit
Speaker 1: more general entertainment adult programming, but still the essence of
Speaker 1: Disney Plus is for fans of those brands, not only families,
Speaker 1: because of course, if you have kids, you're more likely
Speaker 1: to be a fan of one of those brands, but
Speaker 1: also for adults and single people and couples, many of
Speaker 1: whom were fans of those brands as well. So that's
Speaker 1: the focus of Disney Plus. And if you are a
Speaker 1: fan of one of those brands, you kind of have
Speaker 1: to have Disney Plus to satisfy, uh, spatisfy that affinity
Speaker 1: that you have. You can't get that programming elsewhere. So
Speaker 1: I think if you're you know, and the Netflix, of
Speaker 1: course is much broader based too, serves uh the entire population.
Speaker 1: It's very much a general entertainment brand and service, so
Speaker 1: I think that has the broader footprint, and I think
Speaker 1: that Disney Plus is typically going to be an add
Speaker 1: on to Netflix. I think both are doing great. I
Speaker 1: think both will be you know, quote unquote winners in
Speaker 1: the global battle for um for having a successful rollout,
Speaker 1: and they already they already are, So I think both
Speaker 1: are going to go exist. And I don't know that
Speaker 1: either open care one is bigger than the other. They
Speaker 1: just want to service their consumers as best they can.
Speaker 1: Streaming of course, has surpassed cable for the first time.
Speaker 1: You know, with HBO's House of Dragons has been a
Speaker 1: huge hit so far. Who else wins and who else
Speaker 1: loses in this new future, Well, it's hard to say.
Speaker 1: I mean, those are the best programming. I guess it's
Speaker 1: an obvious thing to say that people subscribe to these
Speaker 1: services to watch the programs that they love. I think,
Speaker 1: you know, Netflix has already been established itself as a
Speaker 1: big winner. I know there's turbulence in the stock price,
Speaker 1: and they've hit some They've stalled out a little bit
Speaker 1: on growth of subscribers, but I think the add three
Speaker 1: tier at a lower price will actually help them there.
Speaker 1: I think they should see some additional growth restarting with
Speaker 1: with that offering. Um. Look, I think Disney Plus and
Speaker 1: Netflix are in arguably winners. I think that HBO Max
Speaker 1: with the programming that it has in its vault, and
Speaker 1: the and the ongoing production of HDO and discovery programming
Speaker 1: and even seeing enders, I expect to probably be in
Speaker 1: that in that service. I think that's going to be
Speaker 1: a global winner. I think I've been a little bit
Speaker 1: positively surprised by Paramount Plus. To tell you, the truth,
Speaker 1: I didn't have a lot of pok for it to
Speaker 1: be as successful as it has been. So I think
Speaker 1: that's that's they're they're they're making a big play. Then
Speaker 1: get the Apple and you have Amazon. They have a
Speaker 1: lot of money, a lot of cash, and they have
Speaker 1: other strategic reasons to be in the streaming space other
Speaker 1: than the direct economics of those streaming uh, the streaming
Speaker 1: services themselves. So I think they're pretty well committed. So
Speaker 1: I think you have a handfull, you know, four or
Speaker 1: five global winners, And of course the niches will continue
Speaker 1: to to to exist and then be profitable but smaller
Speaker 1: and those will be um, those will you know, won't
Speaker 1: be competing with the big guys, but the big guys
Speaker 1: I think there will be several of them. Ultimately. I'm
Speaker 1: seeing ads for Amazon's Lord of the Rings everywhere I go,
Speaker 1: everywhere I click. Um. The reviews on Rotten Tomatoes, at
Speaker 1: least if you look at the audience reviews not so positive.
Speaker 1: So are kind of rotten on Rotten Tomatoes critics have
Speaker 1: been more positive. What are you making this look? I
Speaker 1: haven't had a chance yet to watch it. I have
Speaker 1: seen the same same reviews that you've seen I would
Speaker 1: pay a lot more attention to the customer reviews than
Speaker 1: to the critic reviews. That's where the rubber reviews the
Speaker 1: road actually. But look, there's a lot of pent up
Speaker 1: excitement for this, for this title, I expected to do well. Um,
Speaker 1: it doesn't have to be critically reviewed to be successful
Speaker 1: or and rotten tomatoes only go so far by the way.
Speaker 1: I just I expected to be to work. I expected
Speaker 1: to to you know, to help Amazon continue to gather
Speaker 1: and keep Prime subscribers. And remember, people subscribe to Prime
Speaker 1: not just for video, but primarily for delivery of their
Speaker 1: of their goods and to and to conclude e commerce
Speaker 1: transactions on on on that platform. So I do think
Speaker 1: that it's not a must win. It doesn't have to
Speaker 1: be one of the top shows of the year for
Speaker 1: it to be to prove successful and to leverage more
Speaker 1: e commerce activity on Amazon, this is the old purpose
Speaker 1: of it, I think. So, look, you know, you've also
Speaker 1: talked about consolidation, but uh, you know, it seems like
Speaker 1: you're pretty optimistic about a lot of these services. If
Speaker 1: consolidation happens, who who gets consolidated? It's always hard to
Speaker 1: call that, Emily. Um, you know, if I knew that,
Speaker 1: I don't have a crystal ball there. But these are
Speaker 1: big brands, I guess the ones that are, you know,
Speaker 1: somewhat smaller could be consolidated. No one's consolidating Apple. No
Speaker 1: one's consolidating Amazon. That's obvious. And then you look at
Speaker 1: the media companies and which one of those might be consolidated.
Speaker 1: There's always rumors about you know, UM Peacock and HBO
Speaker 1: Max coming to the other possibly, or the parent companies
Speaker 1: merging Paramount and Paramount Global. The parent company is often
Speaker 1: discussed as being in play, and Stars is out there too,
Speaker 1: by the way, which is being separated from lions Gate.
Speaker 1: That that will be brought with someone ultimately, I think
Speaker 1: so hard to say. Obviously, the bigger guys, if there
Speaker 1: is consolidation, the bigger guys swallow the smaller guys. That's
Speaker 1: the way the physics of it, and that that will
Speaker 1: take place here too. So you might look at you
Speaker 1: might look at some of the digital giants to to
Speaker 1: buy some of the smaller media companies, or you might
Speaker 1: look for a merger between media companies. But I don't
Speaker 1: I think that that will happen ultimately, and not not
Speaker 1: in the two distant future. Now, Dan Lobe a few
Speaker 1: weeks ago urging Disney to spin off ESPN was otherwise
Speaker 1: positive of Bob Chpeck. Of course, you worked at Disney
Speaker 1: for so many years and oversaw ESPN. Was this ever
Speaker 1: discussed and in your view is this ever going to happen? Well,
Speaker 1: it's it's a very interesting question. From time to time
Speaker 1: we discussed, you know, what what should be the deployment
Speaker 1: of all of the assets of the Walt Disney Company.
Speaker 1: We had are very very um, a very high quality boarder,
Speaker 1: and of course one of the one of the things
Speaker 1: that board always asks of management is to review the
Speaker 1: asset portfolio that you have and understand whether or not
Speaker 1: there should be some additions to the assets or some
Speaker 1: subtractions should you sell something. So it is discussed, you know,
Speaker 1: at various times over the years that I was there,
Speaker 1: was there for a very long time, so I had
Speaker 1: to discussed several times. Bob is a very smart guy.
Speaker 1: I respect him all. I think he's a great uh.
Speaker 1: He's doing a very well good job as CEO. He'll
Speaker 1: make the right call. My own observation would be that
Speaker 1: ESPN was a very strategic asset for the Walt Disney
Speaker 1: Company when they are when PayTV was growing, and when
Speaker 1: ESPN was such an important part of the bundle of
Speaker 1: channels that Disney had, including ABC and the Disney Channel
Speaker 1: and X and all the different all the different channels
Speaker 1: and Nation National, Geographic, all the channels that they have.
Speaker 1: As the pay TV universe continues, it's precipitous decline. I
Speaker 1: think that the channel business and also the audiences for
Speaker 1: among the you know, for the programming on linear channels,
Speaker 1: is decreasing quite substantially. The channel business, not only for
Speaker 1: Disney but for all these media companies, is declining in
Speaker 1: strategic importance. So therefore the importance of ESPN to be
Speaker 1: a bulwark in that channel distribution modality is becoming less also,
Speaker 1: So I think that the the reason the strategic comparative
Speaker 1: of having a sports service like ESPN is less than
Speaker 1: it used to be. So I think there's more degrees
Speaker 1: of freedom, operating flexibility, if you will, for the for
Speaker 1: Bob and the management team there to make the right decision.
Speaker 1: So I wouldn't be shocked to see it um spun
Speaker 1: off from Disney, but I wouldn't be shocked to see
Speaker 1: a state or two. Yeah, okay, okay, Well, next week
Speaker 1: kicks off NFL season, and you know, there's been a
Speaker 1: lot of talk about whether these streaming services need sports
Speaker 1: to take them to the next level. Is that going
Speaker 1: to drive the next chapter, the next era of subscriber growth.
Speaker 1: Maybe it's not just sports, maybe it's also news. What
Speaker 1: do you think on the tournament of a big sports
Speaker 1: streaming service outside the US called the Zone D A
Speaker 1: c N and we stream the big most important soccer
Speaker 1: leagues in Italy and Spain and in Germany, and we
Speaker 1: have and across the tontinent of Europe, and in Japan
Speaker 1: we also have a big, big presence, and in the
Speaker 1: US with boxing. I think that the ultimate, the ultimate
Speaker 1: way that sports will be delivered to consumers will be
Speaker 1: over the top. It will be delivered via the internet,
Speaker 1: on apps, on televisions, and on mobile devices, just like
Speaker 1: entertainment programming is. I don't think that entertainment services need
Speaker 1: to have sports, nor do I think that sport needs
Speaker 1: of entertainment. I think consumers are tired of paying a
Speaker 1: lot for sports when they're just interested in entertainment. That's
Speaker 1: what's bringing the pay TV bundle down. And I think
Speaker 1: that people just just want to watch for I want
Speaker 1: to pay for entertainment necessarily, so I think the disaggregation
Speaker 1: of different programming types into and making leving consumers make
Speaker 1: a choice of what they want to pay for. I
Speaker 1: think that is the promise of the Internet. That's why
Speaker 1: streaming services have have done so well. And I think
Speaker 1: you'll see that here sports services will be paid for
Speaker 1: separately and package separately entertainment in the future. I think
Speaker 1: would love an update on what you're doing at Candle Media.
Speaker 1: Of course you bought Hello Sunshine. I want to know
Speaker 1: how that's going and where your priorities are in this
Speaker 1: new kind of constantly evolving world. Well, Candle Meet is
Speaker 1: going great. They have a fantastic partner in Blackstone Private
Speaker 1: Equity Group. They've been unbelievable supporters of the Candle We
Speaker 1: have bought about nine or ten companies already. The biggest
Speaker 1: ones were Hello Sunshine and the company called Moonbug. Pella
Speaker 1: Sunshine is doing great, Reese is Restura, this spoon is
Speaker 1: still highly involved with a great management team. There. We're
Speaker 1: doing We're doing very well uh at Hello Sunshine, but
Speaker 1: also a Moonbug where if you're a parent with small kids,
Speaker 1: you would under you would know of our great intellectual
Speaker 1: property and characters and Mukoka Millon the most popular streaming
Speaker 1: the second most popular show on Netflix last year in
Speaker 1: the second biggest YouTube channel in the world. Slippy Little
Speaker 1: Baby Bomb a whole bunch of different ip that we
Speaker 1: haven't move like. That's doing very well. We have bought
Speaker 1: a company called Exile, which does programming in Latin America
Speaker 1: under the stewardship of Isaac Lee, who was the former
Speaker 1: head of content for both Televisa and Univision. He's a
Speaker 1: great Latin American programmer. And that's a multi platform business
Speaker 1: that we acquired. Also Required Attention, which does social media
Speaker 1: storytelling on TikTok and Instagram and elsewhere. That will help
Speaker 1: all of our companies do. All of our brands do
Speaker 1: much better in the marketplace when they need to have
Speaker 1: a social media footprint. So we love the fly wheel
Speaker 1: that we've created in traditional television content, social media storytelling
Speaker 1: and then related commerce opportunities. And we we're doing We're
Speaker 1: We're very polish on our future. I've got a three
Speaker 1: year old Kevin Coco melon is huge in our house.
Speaker 1: I don't know whether to say thank you or no
Speaker 1: thank you for that, but you watch Kevin Meyer, candle
Speaker 1: founder and co CEO. Always good to have you, Kevin,
Speaker 1: have a great weekend. Thank you for stopping by. Twitter
Speaker 1: is asking a judge to order Elon Musk to turn
Speaker 1: over all of his text messages from the first six months.
Speaker 1: The company is saying the billionaire isn't cooperating and exchanging
Speaker 1: evidence ahead of the trial in this fight over that
Speaker 1: forty four billion dollar deal bloom Brooks. Jeff Phely joins
Speaker 1: us from Delaware More Late Friday News. Jeff, is it
Speaker 1: usual to be asking for six months of test text messages?
Speaker 1: I mean, should we have expected this given Elon Musk
Speaker 1: is witness number one? Yeah, I don't think it's an
Speaker 1: unusual request. I've seen it in other cases, and I
Speaker 1: suspect Mr Musk has a lot of business by text,
Speaker 1: so you know, so it's easily actually going to hand
Speaker 1: them over. What's the likelihood Twitter is going to get these?
Speaker 1: I think the judge will ask him to hand over,
Speaker 1: you know, maybe not all of them, but some of them,
Speaker 1: if you know, have to go through and have somebody
Speaker 1: look at them to see if they're relevant to the case. Maybe,
Speaker 1: but he's not going to be able to keep texts
Speaker 1: completely out. How does one do this? I mean, I
Speaker 1: mean there are hundreds thousands of texts, and there could
Speaker 1: be a lot of different kinds of information in those times,
Speaker 1: those things that might be interesting. True, But he also
Speaker 1: has he liked many folks. He also has multiple phones
Speaker 1: and wipes his phone periodically, so you know, it gets
Speaker 1: kind of touchy, you know, trying to figure it out.
Speaker 1: I suspect that since he filed the notice that he
Speaker 1: was gonna walk away from the deal though, that he's
Speaker 1: been saving his texts because judges don't like here, and
Speaker 1: that that that kind of material has been deleted. Okay, okay. Now,
Speaker 1: Twitter says he hasn't been cooperating in the discovery process.
Speaker 1: What does that mean? Well, and the discovery is the
Speaker 1: pre trial information exchange that folks do so you can
Speaker 1: you know, get the material to put your case together.
Speaker 1: Twitter claims that he has not been cooperating in good faith,
Speaker 1: acting in good faith, dragging his feet. In other words,
Speaker 1: that the most people say, oh no, it's not us,
Speaker 1: has been dragging our feet. Twitter has been dragging their
Speaker 1: feet and trying to hide witnesses about this whole box
Speaker 1: issue again. These kind of fights are very common in
Speaker 1: the run up to these you know merger cases, all right,
Speaker 1: and we are still, of course waiting to see if
Speaker 1: this indeed will stay in October or if it gets
Speaker 1: pushed back to November December, as Muski is asking for
Speaker 1: Jeff Feey in Delaware, thank you chip Stocks and focus.
Speaker 1: After the US government imposed new license requirements on semiconductor
Speaker 1: exports to China. Bloomberg's Ian King, of course, covers all
Speaker 1: things chips Ian. What does this mean? Yeah, I mean
Speaker 1: this is a big deal first of all, for in
Speaker 1: video obviously, for hundred million dollars in a quarter for
Speaker 1: in video that's and the ads up over a year.
Speaker 1: On the flip side of that, for China, this is
Speaker 1: a key piece of technology. These are key AI accelerators
Speaker 1: that really helped train these systems. So if you're in
Speaker 1: a hyper scale you really need this if you want
Speaker 1: to stay up with what Google, what a ws are doing.
Speaker 1: And that's really you know, could be a major blow
Speaker 1: to some of these Chinese customers, you know, chip companies
Speaker 1: reporting it's been a lot of doom and gloom, but
Speaker 1: Broadcom seems to be more positive. Why is that? Yeah, No,
Speaker 1: I mean, they spent an hour on the phone ys
Speaker 1: today with analyst saying are you shut you know, answering
Speaker 1: the same question, which was are you sure? Are you sure?
Speaker 1: And you know, it's really a division between the PC
Speaker 1: related companies where we've seen, you know, laptop demand has
Speaker 1: just gone away after the pandemic, and you know, lots
Speaker 1: of companies like Intel like you know, a lot weaker
Speaker 1: outlook on the flip side. Don't comment saying, look, infrastructure,
Speaker 1: these giant data centers people are still building. Companies are
Speaker 1: still investing in their infrastructure and that's why our numbers
Speaker 1: are good. Broadcom is, of course a big Apple supplier.
Speaker 1: What is what they had to say indicate about iPhone
Speaker 1: de man, especially with the big Apple event coming up
Speaker 1: next week. Yeah, no, you're you're absolutely right. That got
Speaker 1: kind of lost in the in the general mix yesterday.
Speaker 1: And what world Com said was like, you know, the
Speaker 1: shipments for our large North American customer that everybody knows
Speaker 1: who it is, It's, it's it's Apple are going to
Speaker 1: be kind of what they were last at this point
Speaker 1: last time, and demand this solid. So the indications at
Speaker 1: least from that on a unit basis is that Apple
Speaker 1: is expecting the next version of the iPhone to be
Speaker 1: sort of as good as the previous one was, which
Speaker 1: I think, given you know the environment and consumer spending,
Speaker 1: will be seen as a positive side all right, And
Speaker 1: of course Bloomberg Technology will be coming to you live
Speaker 1: from the Apple event Wednesday of next week, will be
Speaker 1: across all of those new iPhones were expecting them to unveil.
Speaker 1: Bloomberg's and King Ian thank you so much for that update.
Speaker 1: Welcome back to Bloomberg Technology. I'm Emily Chang in San
Speaker 1: Francisco for the last installment of our a Tech series.
Speaker 1: This week, we want to take a look at education
Speaker 1: in the metaverse. With today's technology already prompting so many
Speaker 1: safety concerns, how do we make sure the metaverse can
Speaker 1: be a safe place for all students. Let's bring in
Speaker 1: Kathy hirsh Passek for more on this. She's a professor
Speaker 1: of psychology at Temple University and a senior fellow at
Speaker 1: the Brookie Institution. Dr harsh Passing, thank you so much
Speaker 1: for joining us. What does the metaverurs look like in
Speaker 1: the classroom, or should I say what does the classroom
Speaker 1: look like in the metamurs? Well, we're not really sure yet,
Speaker 1: is the curi answer to that. We're on the cusp
Speaker 1: of so much that's so exciting that it feels kind
Speaker 1: of like the dot com revolution, and I think many
Speaker 1: of us are trying to figure it out. But I
Speaker 1: want to take you on a journey right now what
Speaker 1: it would be like. It's instead of reading paragraphs about
Speaker 1: ancient Greece, you actually got to visit it, and you
Speaker 1: actually got to figure out how we know so much
Speaker 1: about ancient Greece given that we're living thousands of years later.
Speaker 1: So what if students could be active and engaged as
Speaker 1: they were learning, as opposed to pass it when they're
Speaker 1: reading or listening. You know, it's I feel like technology
Speaker 1: is just coming into classrooms. Were us getting kids to
Speaker 1: start learning how to code? How are we going to
Speaker 1: get educators and schools on board and equipped with this
Speaker 1: new technology even when it is available. Well, I think
Speaker 1: it's going to take a little while, to be quite
Speaker 1: honest with you. The affordability is a big piece, as
Speaker 1: you mentioned, um the second big pieces right now. The
Speaker 1: glasses are kind of clunky, but researchers are working on
Speaker 1: that technology. Folks are working on it, so quite soon.
Speaker 1: I think it's gonna be like wearing a pair of
Speaker 1: glasses like this, and we're going to be able to
Speaker 1: enter into new spaces and alternate realities. One key piece
Speaker 1: I want to add here, though, is that this is
Speaker 1: not meant to be a substitute for the kind of
Speaker 1: reality that we live in or for the social interactions
Speaker 1: we have in that reality. It's not a solo game.
Speaker 1: This is meant to be a space in which we
Speaker 1: can work with others and have teachers who guide us
Speaker 1: into these worlds and back again. A lot of parents,
Speaker 1: including myself, concerned about screen time, concerned about tech addiction.
Speaker 1: Why wouldn't this make all of that worse. Well, look,
Speaker 1: tech has its good sides and its bad sides. It
Speaker 1: takes us to places that we could never go otherwise.
Speaker 1: On the other hand, if we sit around by ourselves
Speaker 1: just investigating tech, we kind of that the solo doesn't
Speaker 1: work so well for human beings because we have a
Speaker 1: socially integrated brain and that's how we learn. So I
Speaker 1: think what we need to move to a more collective
Speaker 1: kinds of environments that prompt prompt social interaction rather than
Speaker 1: taking over for it. They can't be substitutes, and that's
Speaker 1: going to be true as we go along the same
Speaker 1: as nutrition, How are we going to stop our kids
Speaker 1: from meeting dessert? Well, we have to set limits and say,
Speaker 1: you know, you've got to eat the roccoli. Now, what
Speaker 1: about concerns about privacy and protecting our our children in
Speaker 1: these new worlds? Given that much of this technology is
Speaker 1: going to be deployed by big tech company, some of
Speaker 1: which don't have the best records on privacy. Boy, isn't
Speaker 1: that isn't that true? I think at the beginning, um,
Speaker 1: you know, will be wonderful for a lot of this
Speaker 1: were through the gating of the education systems so that
Speaker 1: teachers would work together to prin pick wonderful experiences that
Speaker 1: our kids could learn from and enjoy and that they
Speaker 1: could be guides in. Um. What I don't think we
Speaker 1: want to create is something that's a total free for all,
Speaker 1: because I worry, like you do, that many of these
Speaker 1: new technologies can get out of hand. So let's move
Speaker 1: slowly this time, and let's try to think it out
Speaker 1: before we just thrust it in the marketplace. I spoke
Speaker 1: with the Attorney General of New Mexico yesterday. Hector Balderis
Speaker 1: who's sounded the alarm about kids privacy when it comes
Speaker 1: to technology in the current world. He's actually sued Google
Speaker 1: about how they used student data even even before the
Speaker 1: pandemic ever happened. Because you know, a lot of the
Speaker 1: technology that schools are using it's free software, free technology,
Speaker 1: because a lot of these schools are under research sourced.
Speaker 1: He's very concerned about regulation and whether or not lawmakers
Speaker 1: can figure out how to regulate current technologies. Take a
Speaker 1: listen to what he had to say. Technology is a
Speaker 1: great equalizer in terms of education outcomes, but we are
Speaker 1: not regulating these companies, and we are not regulating safety
Speaker 1: and these safeguards within these technology products. What do you
Speaker 1: think about Dr Hirst that Doctor Hirst passet given that
Speaker 1: you know, obviously we want everyone to have the benefit
Speaker 1: of these technologies, but they also need to be fairly
Speaker 1: and appropriately regulated. But regulation is up to lawmakers who
Speaker 1: don't necessarily understand the technology that they're trying to regulate. Well,
Speaker 1: I think we're going to have to help train them,
Speaker 1: and I think it's really important. I couldn't agree more
Speaker 1: with what I just heard. I think it has to
Speaker 1: be some regulation to make this safe for parents and
Speaker 1: for children, and I think we have to deal with
Speaker 1: that upfront. In the same way we have to make
Speaker 1: sure that there's quality, quality experiences in the metaverse. Again,
Speaker 1: as is suggested to, we have to have some gate
Speaker 1: keeping and a free for all that just says anything
Speaker 1: goes is dangerous for children, and as a parent, I
Speaker 1: would be scared too, ill with you. Then there's the
Speaker 1: equity piece, and you know, so much of technic classrooms,
Speaker 1: right like, so much of technic classrooms is not equitable.
Speaker 1: Some students have access to these things, some students don't.
Speaker 1: If you don't have access, there can be these huge
Speaker 1: learning gaps. I mean when it comes to something like
Speaker 1: the metaverse and technology that's you know, so advanced. Are
Speaker 1: you concerned this could could lead to even more, even
Speaker 1: bigger sort of class divides and education. Well, as you
Speaker 1: suggested in our paper, this is something we definitely have
Speaker 1: to have to look at. But we're on the cusp
Speaker 1: of something and the classrooms aren't really ready nor the
Speaker 1: schools yet for taking on the metaverse. So I think
Speaker 1: we had some league time here to really think about
Speaker 1: how we want to introduce it. What should the school
Speaker 1: classroom look like? How should we retrain in teaching, teaching
Speaker 1: professional development, How do the teachers get on board so
Speaker 1: they help us in the training, how do we grow scientists?
Speaker 1: And so what we're presenting on the metaverse really is
Speaker 1: of high quality for children. Now in the interim, it
Speaker 1: may be something like an imax, and it may be
Speaker 1: the communities will adopt a certain place where schools can
Speaker 1: take their kids on field trips and visit areas they
Speaker 1: could have never visited otherwise. So I think there's tremendous potential.
Speaker 1: And well, I appreciate that, Um, your concentration today is
Speaker 1: more on the risks and the safety and the oh nose.
Speaker 1: I think we have to put together the oh nos
Speaker 1: and the oh my gosh is and see if we
Speaker 1: can create an optimal product that will be safe for
Speaker 1: children and will bring everyone in at a cost that
Speaker 1: will be reasonable. So let's leave then on the oh
Speaker 1: my gosh as. What are you most excited about and
Speaker 1: where do you think we will realistically be Let's say
Speaker 1: five years from now. I think five years from now
Speaker 1: we will have more affordable products that allow us to
Speaker 1: visit the maniverse. I don't think classrooms will be quite
Speaker 1: ready yet, but I do think we could set up
Speaker 1: community centers that people could take field trips in, and
Speaker 1: I think the oh my gosh for me instead, a
Speaker 1: lot of things that were otherwise kind of boring to
Speaker 1: learn for kids might then be excited. And if we
Speaker 1: can bring more joy and more experience and more energy
Speaker 1: into classrooms and into learning experiences, children will not only
Speaker 1: learn what we're teaching them, but they will learn how
Speaker 1: to learn. And since the world is changing so so
Speaker 1: very quickly, that's the skill that everyone needs. Well, that
Speaker 1: is something certainly worth continuing to innovate for. Kathy Hurts Passek,
Speaker 1: Professor of psychology at Temple University and uh Senior Fellow
Speaker 1: at the Brookings Institution. Thank you, what a fascinating conversation.
Speaker 1: Appreciate you stopping by A hedge fund that told most
Speaker 1: of its crypto holdings last month, says today's jobs report
Speaker 1: could have been dire for the price of bitcoin. Alpha
Speaker 1: Trey CEO Max Goackam, saying bitcoin could have dropped below
Speaker 1: fifteen thousand dollars or to fifteen thousand dollars if the
Speaker 1: report was a major eat. You know it's Bitcoin has
Speaker 1: been increasingly tied to macro sentiment joining us to discuss
Speaker 1: Juthaa Choe, head of OTC trading for crack in. UH,
Speaker 1: what's your take on this? I mean, I think there's
Speaker 1: no question that bitcoin has been tied to the macro
Speaker 1: markets um, and I think that's for a few reasons. So,
Speaker 1: you know, in one area, bitcoin is kind of like
Speaker 1: a growth text stock, you know, a three hundred four
Speaker 1: hundred billion dollar market cap. It's not really a macro asset.
Speaker 1: It does trade like a growth stock. You can think
Speaker 1: about it kind of like an equity investment UM, but
Speaker 1: that's a small component. I think another piece is that
Speaker 1: it becomes a self fulfilling prophecy um, similar to signals
Speaker 1: like technical nowlysis. Sometimes if everybody's looking at them and
Speaker 1: kind of trading on them and believing them, you can
Speaker 1: start to see that price action UM. And then I
Speaker 1: think the last pieces that uh, in a lot of ways,
Speaker 1: I think investors in the crypto space are latching onto
Speaker 1: the macro narrative a little bit because without that, there
Speaker 1: wouldn't really be many catalysts or many events for bitcoin.
Speaker 1: You know, we're in a bear market. Volatility has come down.
Speaker 1: We've been sitting around twenty thousand for a while. And
Speaker 1: so if not for some of these macro events like
Speaker 1: Jackson Hole and some of the jobs numbers, UM, August
Speaker 1: would look a lot quieter, and so crypto investors are
Speaker 1: following them. Um, I think for a number of those reasons. Well,
Speaker 1: speaking of events, we've got the merge coming up in
Speaker 1: mid September. You know, what are you expecting uh to
Speaker 1: happen around the merge? What kind of volume will there be?
Speaker 1: Will there be a sort of sell the news event? Well,
Speaker 1: we're definitely seeing a wide range of speculative bets and
Speaker 1: positioning and hedging that are being put on, particularly in
Speaker 1: the derivativist market and the options market ethereum. Open interests
Speaker 1: is reaching high as we're seeing a lot of volume
Speaker 1: through our OTC death on ethereum, and so I think
Speaker 1: investors are gearing up for something to happen. UM. I
Speaker 1: think if you look at the volatility surface of the
Speaker 1: term structure, UH, the September sixteenth term, which is the
Speaker 1: one that's kind of pricing in at least a couple
Speaker 1: of the merge events, UH, it's about ten points of
Speaker 1: the September ninth term, And so I think investors are
Speaker 1: gearing up for some sort of price action in some
Speaker 1: sort of move for sure. What about cracking house cracking
Speaker 1: handling the merge. Are you gonna halt trading of ether
Speaker 1: for example, we won't halt trading. Nope, So customers can
Speaker 1: still trade ether. It will be available. They can trade
Speaker 1: at otc um. All the trading services will be available.
Speaker 1: There might be temporary suspension on withdrawals and deposits, so
Speaker 1: just at the plock chain level, but trading will still
Speaker 1: be available. Congress has been questioning Cracking about your handling
Speaker 1: of fraud. What is it important that regulators know about
Speaker 1: your security standards? Well, you know, Cracking abides by all
Speaker 1: the necessary KYC and transaction monitoring, and this obviously in
Speaker 1: my area of expertise, but we've been doing this for
Speaker 1: many years. Cracking itself has been around for more than
Speaker 1: a decade, and you can't be around for more than
Speaker 1: a decade in the crypto space unless you're abiding by
Speaker 1: all the local regulations and so UM I think some
Speaker 1: of the inquiries might be related to just some of
Speaker 1: the fallout on related to cracking really from three a
Speaker 1: C And Tornado and things of that nature. UM, But
Speaker 1: from our point of view. This is just kind of
Speaker 1: standard KYC transaction monitoring that we normally do meantime Crypto
Speaker 1: dot com. The story getting a lot of attention is
Speaker 1: suing a woman after accidentally sending her seven million dollars
Speaker 1: she was supposed to get a hundred and and and
Speaker 1: reportedly she went on a little bit of a spending spree.
Speaker 1: I'm so curious what your reaction is to this story
Speaker 1: and how crack can handles these kinds of scenarios and
Speaker 1: awards these kinds of errors. Well, you know, I think
Speaker 1: this is one of those things with that when you
Speaker 1: look at bitcoin and what makes it so powerful is
Speaker 1: that this transaction settlement finality that you know, without any
Speaker 1: intermediary you can send money seven and three, six five,
Speaker 1: and it's a gross settlement network that clears instantly, like
Speaker 1: better than wire transfers. But obviously there's this downside that
Speaker 1: you have to be really careful. I'm cracking. You can
Speaker 1: again imagine being a for many many years, has a
Speaker 1: lot of protections, policies, procedures, safeguards UM. Anytime funds are
Speaker 1: are sent out, we have hosts of customer service representatives
Speaker 1: that US is send it to UM and we do
Speaker 1: a proof of reserves audit so that customers can also
Speaker 1: feel comfortable that all of the funds that they have
Speaker 1: on deposit are are not being sent out, either for
Speaker 1: affarious reasons or for errors. So all of these things
Speaker 1: have really been built over time because all of the
Speaker 1: powerful elements you get from being able to send money,
Speaker 1: you know, bitcoin as a method of payment on a blockchain,
Speaker 1: come with some downsides too, and so we have to
Speaker 1: protect against those for sure. So speaking out of downsides,
Speaker 1: where do you think the bottom is, Well, you know,
Speaker 1: I do think it depends on the macro environment. I
Speaker 1: mean within crypto. I think with volatility coming down, you
Speaker 1: can kind of see that investors have gotten a little
Speaker 1: bit comfortable around this level, which can be both a
Speaker 1: good and a bad thing. A lot of the panic
Speaker 1: and the leverage has been wiped out of the system,
Speaker 1: so they're not as much of that um inherent kind
Speaker 1: of riskiness that's still in a lot of the positions
Speaker 1: that are out there. But I think everybody is waiting
Speaker 1: to see what happens with the macro markets, and once
Speaker 1: there's a little bit of resilience shown in the NAZAC
Speaker 1: and the SMP, then I think we'll see that altern
Speaker 1: into crypto markets as well. All right, thanks for that
Speaker 1: crack and head of OTC Trading Juicoo, appreciate you stopping by.
Speaker 1: All right, let's get back to the Sara Noes trial.
Speaker 1: A lot has happened since Elizabeth Holmes guilty verdict. For one,
Speaker 1: she just tried to get her own fraud conviction thrown out,
Speaker 1: but the judge upheld that verdict. Let's break it all
Speaker 1: down with our court reporter Joel Rosenblatt, who was in
Speaker 1: the courtroom every day and was there for this latest decision.
Speaker 1: So what happened? So yesterday's hearing was a rather routine
Speaker 1: hearing in which Elizabeth Holmes her lawyers argued that the
Speaker 1: verdict should be set aside or thrown out for insufficient evidence,
Speaker 1: so that the government really just didn't a mass or
Speaker 1: martial the evidence required to convict her on on the
Speaker 1: various counts that she was convicted of. Um. That was
Speaker 1: quickly dismissed. H and kind of surprisingly for this judge
Speaker 1: who likes to weigh and consider everything, he wasn't having it. Really,
Speaker 1: So what's next? I mean, does she have any other options?
Speaker 1: She does, and so well there's a So we're entering
Speaker 1: the endgame of her legal odyssey. But there's gonna be
Speaker 1: a flurry of activity now. So we have left her
Speaker 1: sentencing next month. Uh and assuming that goes well for
Speaker 1: the prosecution, um, she will show up for prison six
Speaker 1: days after that. However, yesterday at this hearing, she in
Speaker 1: true kind of Holmes fashion, through something of a curveball,
Speaker 1: hinted at a curveball. And this is a different kind
Speaker 1: of motion in which she's arguing for a new trial.
Speaker 1: So her attorneys have found something since since the conviction
Speaker 1: that they've decided that they've they're going to argue warrants
Speaker 1: a whole new trial. So not not an acquittal as
Speaker 1: they argued for yesterday and looks like they failed, but
Speaker 1: for a whole new trial. Just three more months for trial,
Speaker 1: Rosen Black in the courtroom is what that means? Really though?
Speaker 1: How likely is it that she's going to get a
Speaker 1: new trial? All of this is unlikely. Yesterday's the chances
Speaker 1: of yesterday's acquittal. The acquittal she asked for very low probability,
Speaker 1: I mean extremely low. All white color criminal defendants or
Speaker 1: convicts usually ask for this, but don't get it. This
Speaker 1: new this new question of of of a new trial
Speaker 1: based on this new evidence. Again low probability, but it's
Speaker 1: just kind of so fitting with how this thing is unfolded,
Speaker 1: and it's just gonna be interesting to see what it
Speaker 1: is that she's comes up with. So, in all likely
Speaker 1: she's going to jail, In all likely that she's going
Speaker 1: to prison, I'm just like, it's just kind of unbelievable
Speaker 1: after all this time. So I'm being careful. How much
Speaker 1: time is she likely to serve when all is said
Speaker 1: and done? So this is the question I always get
Speaker 1: because people always want to know. And look, there has
Speaker 1: been a case made that her entire defense was built
Speaker 1: around not winning and acquittal, but minimizing her her time served.
Speaker 1: If she gets seven years, seven years, that would be
Speaker 1: a win for her. At this point, that would be
Speaker 1: a win. She's facing uh, well, legally twenty years, she's
Speaker 1: likely to get eight to ten years, Okay, and at
Speaker 1: what point? How much longer is this drag on? For
Speaker 1: her sentencing is scheduled for October, if you know, barring
Speaker 1: these barring a kind of twist that we've discussed, um,
Speaker 1: she would be asked to show up for prison six
Speaker 1: nine day after that sentencing. Uh, and she will appeal,
Speaker 1: but it's unlikely that she would have to be she
Speaker 1: would have to go to prison while she appeals her conviction.
Speaker 1: And what's happening with Sonny Balwani? So Sonny meanwhile, yeah,
Speaker 1: everybody kind of has furgotten about Sonny um. But he
Speaker 1: was convicted in May on twelve counts and so in
Speaker 1: other words, all the counts, including the the accounts of
Speaker 1: patient fraud. M His sentencing is scheduled for November. Will
Speaker 1: he serve as much time as her? Will he serve
Speaker 1: four time than her? What decides? That? Very interesting? That's
Speaker 1: this kind of this endgame, this phase of sentencing, right,
Speaker 1: both sides will make the case that these are in
Speaker 1: fact good people who maybe win austray all these kinds
Speaker 1: of arguments from family members and friends, and the judge
Speaker 1: will decide, and he will compare their respective roles in
Speaker 1: this fraud and decide who should get what. They were
Speaker 1: both convicted of conspiracy. It was a conspiracy, uh, the
Speaker 1: crime of co conspirators. So I I'm thinking they're going
Speaker 1: to get the same sentence. I think they're both going
Speaker 1: to be serving eight to ten years, all right, Joel
Speaker 1: Rolls and Black who, of course, has lived and breathed
Speaker 1: both of these cases. Thank you Joel for that update.
Speaker 1: Appreciate it all right. This weekend, NASA we'll try again
Speaker 1: Saturday to launch it's Artemis one moon rocket. The Space
Speaker 1: Agency tried earlier this week, but the launch was scrowed
Speaker 1: because of a problem with one of the rocket's engines
Speaker 1: and other technical issues. It is the first major flight
Speaker 1: in NASA's ambitious plan to go back to the Moon.
Speaker 1: This mission is carrying test dummies instead of astronauts. You
Speaker 1: can watch the launch Saturday on Bloomberg Television. Coverage starts
Speaker 1: two pm Eastern. And that does it for this edition
Speaker 1: of Bloomberg Technology. I'm Emily changing in San Francisco. Tuesday,
Speaker 1: we're going to start a series on sports technology. That'll
Speaker 1: be a fun one. Drafting CEO Jason Robbins will help
Speaker 1: us kick that off. Have a great weekend everyone. This
Speaker 1: is Bloomberg the Big Who Day. Were up Everything