WEBVTT - Smart Ring Maker Oura Becomes Latest Company to Delay US IPO 0:00:02.730 --> 0:00:04.410 Bloomberg Audio Studios. 0:00:04.890 --> 0:00:05.569 Podcasts. 0:00:05.890 --> 0:00:06.410 Radio. 0:00:06.850 --> 0:00:07.250 News. 0:00:09.760 --> 0:00:13.460 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:00:13.540 --> 0:00:16.580 weekdays at 10 a.m. Eastern on Apple CarPlay and Android 0:00:16.640 --> 0:00:19.939 Auto with the Bloomberg Business App. Listen on demand wherever 0:00:19.980 --> 0:00:23.070 you get your podcasts or watch us live on YouTube. 0:00:24.270 --> 0:00:28.190 Well, I know the Charlie Pellett, John Tucker, the hipsters, 0:00:28.250 --> 0:00:30.430 they're all into the aura rings. They want to know 0:00:30.990 --> 0:00:33.940 how they're sleeping. Are they getting enough steps and all 0:00:33.979 --> 0:00:35.720 this kind of stuff? I'm not into it, but. 0:00:36.580 --> 0:00:37.200 It's a company. 0:00:37.300 --> 0:00:39.700 It's a big and it had planned to go public here. 0:00:39.900 --> 0:00:43.020 But I just saw some news today or delayed a U.S. 0:00:43.060 --> 0:00:47.380 initial public offering, setting uncertainty in the market. Anthony Hughes 0:00:47.400 --> 0:00:50.790 joins us here. Equity Capital Markets reporter for Bloomberg News. Anthony, 0:00:50.850 --> 0:00:54.190 I'm not buying it. We're near all time highs here 0:00:54.210 --> 0:00:57.110 in the market. I got a VIX, you know, down 0:00:57.190 --> 0:01:00.370 like 15 as an IPO banker. This is what you 0:01:00.410 --> 0:01:02.670 dream of. What's going on here with or do you think? 0:01:03.520 --> 0:01:06.980 Well, I think the excuse that there is market uncertainty 0:01:07.380 --> 0:01:11.509 in this case does hold. The company itself is obviously 0:01:11.569 --> 0:01:13.850 doing very well at the moment, but people didn't like 0:01:14.110 --> 0:01:16.670 the deal, some aspects of the deal, particularly the valuation, 0:01:16.709 --> 0:01:19.360 but also the structure of things like the lockup. And 0:01:20.380 --> 0:01:22.140 there is a track record of these sorts of consumer 0:01:22.160 --> 0:01:26.699 hardware companies being sometimes do well initially, or they have 0:01:26.720 --> 0:01:28.820 strong financials for a few years, and then then they 0:01:28.860 --> 0:01:31.140 fade away. So, I mean, I think the company tried 0:01:31.170 --> 0:01:33.470 to address some of these issues around the fattishness of 0:01:33.810 --> 0:01:36.690 some of these consumer hardware products, but ultimately it was 0:01:36.709 --> 0:01:40.490 pretty bad timing and, you know, they were probably looking 0:01:40.510 --> 0:01:42.520 at pricing below range if they really wanted to get 0:01:42.560 --> 0:01:44.120 this done. And, you know, I mean, I guess you 0:01:44.140 --> 0:01:47.420 could say to the company's credit, they held firm. They 0:01:47.440 --> 0:01:49.940 decided not to cut the price in the range. They 0:01:50.060 --> 0:01:53.980 have enough conviction now to, you know, take the deal 0:01:54.000 --> 0:01:56.309 off the market and look to go public maybe another day. 0:01:56.390 --> 0:02:00.030 But obviously the market, the investors are lacking conviction in 0:02:00.070 --> 0:02:04.410 these sorts of, you know, and actually most IPOs at 0:02:04.430 --> 0:02:06.310 the moment, there's a bit of a lack of conviction. 0:02:06.330 --> 0:02:07.440 I mean, I think a lot of people are focused 0:02:07.470 --> 0:02:09.299 on Anthropic later in the year and a lot of 0:02:09.320 --> 0:02:13.030 the other stuff doesn't really measure up. So when was 0:02:13.070 --> 0:02:15.290 it supposed, when was it scheduled to price? It was 0:02:15.310 --> 0:02:17.710 scheduled to price tonight. So this is really a postponement 0:02:17.750 --> 0:02:19.510 on the eve of, you know, the 11th hour. And 0:02:19.530 --> 0:02:22.860 that's usually what happens when there is a postponement. It 0:02:22.900 --> 0:02:24.460 tends to happen right at the last moment, basically. 0:02:24.800 --> 0:02:26.739 And so when you see something at the last moment 0:02:26.760 --> 0:02:29.240 like this, it suggests that they weren't getting, I guess, 0:02:29.280 --> 0:02:31.030 the order flow that they were really looking for at 0:02:31.060 --> 0:02:32.359 the price level they were looking at. 0:02:32.370 --> 0:02:32.830 Yeah, yeah. 0:02:32.889 --> 0:02:36.639 So, you know, there was a marketing problem. marketing process 0:02:36.680 --> 0:02:38.220 a roadshow that went on in the last week or 0:02:38.260 --> 0:02:39.840 so and you know i think it was pretty slow 0:02:39.900 --> 0:02:42.080 going i think because of these market conditions a lot 0:02:42.100 --> 0:02:44.460 of the long only investors who you really want to 0:02:44.520 --> 0:02:46.500 support these sorts of deals unless you know less so 0:02:46.560 --> 0:02:49.560 the hedge funds they they were they were hesitating and 0:02:49.620 --> 0:02:51.960 i think they some some of them we know passed 0:02:51.980 --> 0:02:54.200 and many of them passed really and uh they if 0:02:54.240 --> 0:02:56.580 they i think they were holding holding off to see 0:02:56.639 --> 0:02:58.960 whether the market conditions would improve as well so you 0:02:59.000 --> 0:03:00.620 know i think the fact that the quality the you 0:03:00.639 --> 0:03:02.100 know the quality of the demand that they were getting 0:03:02.120 --> 0:03:03.970 was not was not adequate was one of the one 0:03:03.990 --> 0:03:05.730 of the factors in the decision not to go ahead. 0:03:06.310 --> 0:03:07.950 Is this deal or the pulling of this deal, is 0:03:07.970 --> 0:03:11.070 that indicative of the IPO market today? Is the IPO 0:03:11.090 --> 0:03:12.910 market like a little softer than maybe people would like 0:03:12.950 --> 0:03:13.210 to see? 0:03:13.490 --> 0:03:14.130 Oh, absolutely. 0:03:14.190 --> 0:03:16.970 I think that, you know, we've seen three postponements now 0:03:17.010 --> 0:03:20.780 in three weeks. We saw an insurance company go postpone 0:03:20.800 --> 0:03:22.720 last week. And the week before that, we saw another 0:03:22.760 --> 0:03:27.579 company postponed. So it's becoming a trend. And basically, investors 0:03:27.800 --> 0:03:32.040 are lacking conviction on these companies, particularly paying up big valuations, 0:03:32.060 --> 0:03:35.640 you know, and And, you know, really IPOs are like 0:03:35.660 --> 0:03:38.040 a lot of business transactions, getting people to agree on 0:03:38.080 --> 0:03:40.430 a price. And, you know, I think the sellers of 0:03:40.490 --> 0:03:43.810 these assets are wanting more for them than the buyers 0:03:43.830 --> 0:03:47.230 are prepared to pay. And that's basically that disconnect is widened. 0:03:47.630 --> 0:03:49.510 You know, we've seen a bit more of a focus 0:03:49.570 --> 0:03:51.730 on macro issues, rising rates, stuff like that, which has 0:03:51.770 --> 0:03:54.850 made it tougher for growth-oriented companies to get these really 0:03:55.000 --> 0:03:58.580 high valuations. And, you know, people have been more picky 0:03:58.600 --> 0:04:00.540 and discerning about the quality of the companies that they've 0:04:00.560 --> 0:04:01.440 been prepared to invest in. 0:04:01.700 --> 0:04:05.560 Interesting. What is the latest on Anthropic? That's probably maybe 0:04:05.660 --> 0:04:07.620 one of the reasons that some of these IPO buyers 0:04:07.690 --> 0:04:09.550 are waiting because they think they may have the opportunity 0:04:10.150 --> 0:04:13.230 to put serious capital to work. Yeah, so I think the. 0:04:13.130 --> 0:04:16.310 Interesting thing about Anthropic is that the, you know, we 0:04:16.330 --> 0:04:18.470 were assuming maybe it'd almost be public by now, but 0:04:18.490 --> 0:04:20.830 I think there's been a lot more uncertainty around the 0:04:20.870 --> 0:04:24.120 company that's been, you know, that's been evident in all 0:04:24.140 --> 0:04:27.620 the public discussion around safety and regulation and, you know, 0:04:27.660 --> 0:04:28.200 the future of. 0:04:30.570 --> 0:04:34.750 AI and also what's happening in terms of the releases 0:04:34.830 --> 0:04:36.969 of these competitive models. These are all factors that are 0:04:37.350 --> 0:04:39.550 added to some level of uncertainty. I think it's been 0:04:39.589 --> 0:04:42.440 quite prudent for them to delay. And the word is 0:04:42.450 --> 0:04:44.210 they're waiting till after the election now. And I don't 0:04:44.240 --> 0:04:47.080 know whether they're expecting a different political environment to have 0:04:47.300 --> 0:04:50.740 an impact. Sometimes those factors are a little overstated, but 0:04:51.160 --> 0:04:54.460 that could be a factor here. But I think the 0:04:54.500 --> 0:04:57.150 buy side is still pretty keen for this company the 0:04:57.230 --> 0:04:59.690 the numbers that you've seen floating around show very strong 0:04:59.730 --> 0:05:02.969 growth uh growth that we've you know it's mind-boggling growth 0:05:03.010 --> 0:05:05.710 that we don't see at scale that we don't see 0:05:05.770 --> 0:05:09.050 with um companies you know almost ever but ever and 0:05:09.070 --> 0:05:12.169 uh you know, this is a new era for AI. 0:05:12.210 --> 0:05:15.719 But I think the buy side is pretty eager for Anthropic, 0:05:15.760 --> 0:05:17.659 just not very eager for most other IPOs that are 0:05:17.680 --> 0:05:18.320 out there. Interesting. 0:05:18.339 --> 0:05:21.780 Yeah, it was reported earlier today by Axios initially that 0:05:21.839 --> 0:05:26.180 OpenAI's annual recurring revenue near $ 70 billion. So the numbers 0:05:26.760 --> 0:05:28.190 continue to grow pretty dramatically. 0:05:28.580 --> 0:05:31.220 Yeah, so I think that's another factor is the competitive environment. And, 0:05:31.500 --> 0:05:34.680 you know, I think while Anthropic is sort of hoping 0:05:34.700 --> 0:05:36.789 to push ahead here this year and OpenAI has pushed 0:05:36.820 --> 0:05:41.370 into next year, but I think there's quite a serious 0:05:41.410 --> 0:05:44.770 competitive process going on here where these two companies are 0:05:45.110 --> 0:05:47.830 trying to assert who has the superior model, who's going 0:05:47.850 --> 0:05:50.680 to dominate this market going forward. But I think investors 0:05:50.740 --> 0:05:52.960 are probably looking at the situation now and thinking there 0:05:52.980 --> 0:05:54.740 are going to be multiple players in this industry. And 0:05:54.760 --> 0:05:55.539 if you look at some of the. 0:05:57.040 --> 0:05:59.560 Tech themes over the past few decades. I mean, I 0:05:59.610 --> 0:06:02.530 think maybe some of the Mag7 companies who dominate our 0:06:02.550 --> 0:06:05.750 market today really had a dominant position in certain areas 0:06:05.810 --> 0:06:11.650 of technology and maybe with large language models and AI, 0:06:11.670 --> 0:06:13.030 it's less certain that that's the case. 0:06:14.150 --> 0:06:14.710 Stay with us. 0:06:14.850 --> 0:06:21.710 More from Bloomberg Intelligence coming up after this. You're listening 0:06:21.750 --> 0:06:25.460 to the Bloomberg Intelligence Podcast. Catch us live weekdays at 0:06:25.460 --> 0:06:28.500 10 a.m. Eastern on Apple CarPlay and Android Auto with 0:06:28.520 --> 0:06:31.620 the Bloomberg Business App. Listen on demand wherever you get 0:06:31.640 --> 0:06:34.380 your podcasts or watch us live on YouTube. 0:06:35.700 --> 0:06:39.479 OpenAI, of course, this is the privately held AI lab company. 0:06:39.680 --> 0:06:44.260 According to Axios' Madison Mills, OpenAI's annual recurring revenue is 0:06:44.350 --> 0:06:49.070 nearing $ 70 billion. Enterprise sales more than doubling since July. 0:06:49.790 --> 0:06:53.210 So perhaps this is a sign that OpenAI is catching 0:06:53.270 --> 0:06:56.890 up to Anthropic, which we know had kind of overtaken OpenAI. OpenAI. 0:06:57.300 --> 0:07:00.480 Speaking of OpenAI, the company is actually holding back a 0:07:00.500 --> 0:07:03.900 version of its Astra model while it establishes stronger safeguards 0:07:03.960 --> 0:07:07.510 for AI development. And of course, this suggests heightened risks 0:07:07.589 --> 0:07:12.060 after all these spate of recent rogue AI hacking incidents, 0:07:12.120 --> 0:07:14.220 and people are kind of mindful of all of that. 0:07:14.720 --> 0:07:17.220 Let's put all of this together into context and bring 0:07:17.280 --> 0:07:19.700 in our Ed Ludlow. He is our BTEC anchor on 0:07:19.720 --> 0:07:23.520 Bloomberg Television, tech reporter for Bloomberg News joining us. And 0:07:23.560 --> 0:07:26.050 of course, Ed will be at the OpenAI Development Day 0:07:26.110 --> 0:07:29.070 later today as well. Ed, just put into context the 0:07:29.110 --> 0:07:32.990 headlines that we just gave you about OpenAI, this Astra 0:07:33.010 --> 0:07:37.920 model being held back, the annual recurring revenue approaching $ 70 billion. 0:07:38.000 --> 0:07:38.940 What does this all suggest? 0:07:39.880 --> 0:07:44.870 Well, on the ARR, Anthropic, its great rival, was tracking 0:07:44.910 --> 0:07:49.230 at sort of $ 74 billion ARR as of the third quarter. 0:07:49.250 --> 0:07:53.360 So that's kind of fun. What it tells us in aggregate, right, 0:07:53.420 --> 0:07:55.680 is how difficult it's going to be for these frontier 0:07:55.700 --> 0:07:59.580 labs to balance the growth their investors want to see, 0:07:59.700 --> 0:08:02.460 with both of them destined for the public markets, with 0:08:02.560 --> 0:08:07.310 making decisions like hitting pause, Which can have commercial impacts. 0:08:07.390 --> 0:08:07.680 Right. 0:08:07.860 --> 0:08:13.619 So the news headline is that GPT 6.1 Astra was 0:08:13.740 --> 0:08:18.380 being evaluated internally. It was a model, a new model. 0:08:18.520 --> 0:08:22.570 And they basically said that this model is not behaving 0:08:22.770 --> 0:08:26.130 reliably in the way that we thought it would. So 0:08:26.250 --> 0:08:28.739 out of safety concern, we're just not going to release it. 0:08:30.100 --> 0:08:33.780 And that is open AI, to be fair, making good 0:08:33.820 --> 0:08:35.599 on what it has said over the last 10 days, 0:08:35.640 --> 0:08:37.540 that it has some kind of more structure in place 0:08:37.880 --> 0:08:39.380 on how it makes those kinds of decisions. 0:08:40.500 --> 0:08:42.630 Ed, how are folks out in the Valley thinking about, 0:08:42.890 --> 0:08:46.730 the AI folks there, thinking about their policy for guardrail 0:08:47.250 --> 0:08:51.060 development of AI versus what we're hearing from President Trump, 0:08:51.420 --> 0:08:54.140 Vice President Vance, and maybe some others here. It feels 0:08:54.160 --> 0:08:56.040 like it's getting kind of political here. 0:08:56.950 --> 0:09:00.510 So there are certainly camps emerging, right? Different schools of thought. 0:09:01.150 --> 0:09:05.110 It's very rare that Sam Altman, the CEO of OpenAI, 0:09:05.210 --> 0:09:08.270 Dario Amodei, the CEO of Anthropic, and Elon Musk agree 0:09:08.330 --> 0:09:12.330 on anything. They agree it would appear that it is 0:09:12.390 --> 0:09:16.229 sensible to pace the development of what the capability of 0:09:16.250 --> 0:09:19.610 the model is so that your work on safety can 0:09:19.630 --> 0:09:24.170 catch up. The camps are distinguished by who they think 0:09:24.200 --> 0:09:28.380 should oversee that. Someone like the president or David Sachs 0:09:28.440 --> 0:09:31.459 or even Jensen Wong are like, you guys, the AI labs, 0:09:32.000 --> 0:09:34.460 you're the ones that see this. You're the ones working 0:09:34.520 --> 0:09:37.980 on it. If it's not safe, don't release it. And 0:09:38.020 --> 0:09:40.970 so today with OpenAI, it's a pretty concrete example of that. 0:09:42.860 --> 0:09:46.520 the Frontier Labs themselves are also saying, we want some 0:09:46.600 --> 0:09:50.900 third party here to kind of check our work. And 0:09:51.640 --> 0:09:54.310 those in DC are saying, that's fine. But at the 0:09:54.330 --> 0:09:56.390 end of the day, you're still responsible. You can't sort 0:09:56.410 --> 0:09:58.130 of pass this off onto someone else. 0:09:58.770 --> 0:10:00.860 Well, I guess we will discuss morning to some reporting 0:10:00.900 --> 0:10:04.120 out of Reuters, which Tom Keene just was calling out 0:10:04.179 --> 0:10:09.140 repeatedly for good purposes. Anthropic warned that its technology poses 0:10:09.240 --> 0:10:14.319 catastrophic or existential risk to humanity. That's a risk factor 0:10:14.559 --> 0:10:19.520 in their IPO filing. What does that language mean? I mean, 0:10:19.559 --> 0:10:20.100 what's going on? 0:10:21.240 --> 0:10:25.790 Yeah, I mean, there was reporting that this would get 0:10:25.830 --> 0:10:28.950 included in the prospectus. The S1 has not flipped public. 0:10:29.050 --> 0:10:31.689 Someone somewhere has got their hands on it and we're 0:10:31.710 --> 0:10:34.150 trying our best. It's funny because I went back to 0:10:34.190 --> 0:10:38.170 the S1 from SpaceX and there were loads of risk 0:10:38.190 --> 0:10:41.439 factors in there, but not this idea of existential threat 0:10:41.480 --> 0:10:44.420 to human life. I guess that what people out here 0:10:44.960 --> 0:10:48.830 would say this points to Is Dario Amodei, the CEO 0:10:48.850 --> 0:10:52.350 of Anthropic, trying to be consistent? You know, when all 0:10:52.370 --> 0:10:55.510 of this emerged, the idea that in a series of 0:10:55.570 --> 0:10:58.410 interviews and also in that essay that he published last 0:10:58.510 --> 0:11:03.330 month on pacing the frontier, that his motivation for doing this, 0:11:03.950 --> 0:11:09.190 giving a warning signal, was marketing. That might seem paradoxical, right? 0:11:09.210 --> 0:11:11.740 But if you're going, oh, this is super dangerous potentially, 0:11:12.500 --> 0:11:16.750 It also kind of is empowering and gives momentum to 0:11:16.770 --> 0:11:20.309 an IPO because you're basically saying like so cutting edge 0:11:20.330 --> 0:11:23.090 is this technology that this is the degree of risk 0:11:23.130 --> 0:11:23.910 we're talking about. 0:11:25.110 --> 0:11:25.670 Stay with us. 0:11:25.790 --> 0:11:27.949 More from Bloomberg Intelligence coming up after this. 0:11:32.040 --> 0:11:35.740 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:11:35.820 --> 0:11:38.850 weekdays at 10 a.m. Eastern on Apple CarPlay and Android 0:11:38.900 --> 0:11:42.210 Auto with the Bloomberg Business App. Listen on demand wherever 0:11:42.250 --> 0:11:45.330 you get your podcasts or watch us live on YouTube. 0:11:46.870 --> 0:11:50.719 Joining us now is Geetha Ranganathan. Geetha is Bloomberg Intelligence's 0:11:50.820 --> 0:11:51.780 analyst on U.S. 0:11:51.840 --> 0:11:52.100 Media. 0:11:52.640 --> 0:11:56.140 Geetha, Bob Chapek's got a chip on his shoulder, I suppose, 0:11:56.179 --> 0:11:58.179 given the way that he left the company, that makes 0:11:58.230 --> 0:12:00.929 a lot of sense. Do you agree with him that 0:12:01.030 --> 0:12:03.850 Disney needs a growth engine, that it lacks a growth 0:12:03.929 --> 0:12:04.470 engine right now? 0:12:05.970 --> 0:12:08.310 I do agree with that, Scarlett. I mean, it is 0:12:08.450 --> 0:12:12.100 absolutely true that, yes, the parks are performing well, given 0:12:12.120 --> 0:12:15.100 the current situation, given all of the uncertainty that we've 0:12:15.120 --> 0:12:17.420 seen in the economy, given what we've seen with the 0:12:17.460 --> 0:12:21.770 Comcast Universal Parks and much softer attendance there. Disney still 0:12:21.830 --> 0:12:25.270 is somehow managing to hold its ground. But he's right. 0:12:25.330 --> 0:12:28.230 I mean, there's nothing there on the horizon that's super 0:12:28.330 --> 0:12:31.270 exciting in terms of, you know, a growth catalyst or 0:12:31.290 --> 0:12:34.000 a growth narrative. And it all depends on how they 0:12:34.040 --> 0:12:36.920 want to spin. I mean, investors are definitely looking at 0:12:36.960 --> 0:12:40.559 the streaming product. This was a business that was losing 0:12:41.660 --> 0:12:43.850 billions of dollars just a few years ago and now 0:12:43.880 --> 0:12:46.610 has become, you know, a source of profit today. but 0:12:46.690 --> 0:12:48.970 how profitable it gets to be. I mean, that's the 0:12:49.030 --> 0:12:52.770 ultimate question. And we really need some more concrete numbers 0:12:52.830 --> 0:12:55.580 around that to really kind of energize the narrative around Disney. 0:12:55.960 --> 0:12:57.960 And Geetha, I think for a while there, investors were 0:12:57.980 --> 0:13:01.040 saying maybe streaming will be that growth story. Just look 0:13:01.080 --> 0:13:04.599 at Netflix, but the Netflix stock is underperformed and primarily 0:13:04.620 --> 0:13:07.680 because they just haven't had any hit shows to kind 0:13:07.730 --> 0:13:09.050 of get you all jazzed up. It kind of goes 0:13:09.090 --> 0:13:11.430 back to the old, this is how media companies work. 0:13:11.490 --> 0:13:13.170 You have to have hit shows, hit movies, that kind 0:13:13.210 --> 0:13:13.390 of thing. 0:13:14.540 --> 0:13:18.210 Yeah, you're absolutely right, Paul. So the biggest problem for 0:13:18.250 --> 0:13:20.790 Netflix this year has kind of been this whole story 0:13:20.870 --> 0:13:24.770 around engagement and engagement that has been languishing. I mean, 0:13:24.790 --> 0:13:26.190 we look at some of the numbers that come out 0:13:26.230 --> 0:13:30.429 of Nielsen's monthly gauge report, and they point to share 0:13:30.490 --> 0:13:33.630 of TV viewing time that's constantly declining for Netflix. So 0:13:33.670 --> 0:13:36.570 right now it's at less than 8% of total TV 0:13:36.610 --> 0:13:39.990 viewing time. Meanwhile, you have YouTube that has climbed to 0:13:40.050 --> 0:13:42.410 record highs, and it's at 14%. So you really have 0:13:42.450 --> 0:13:45.550 all of these media companies that are contending with you know, 0:13:45.650 --> 0:13:48.290 a lot of viewing that is happening on YouTube, that's 0:13:48.320 --> 0:13:51.740 happening on social media platforms, on TikTok, on Instagram. So 0:13:51.760 --> 0:13:55.040 they really need to kind of tailor that strategy. And yes, 0:13:55.340 --> 0:13:57.700 you know, Disney, you're right, Disney does have that kind 0:13:57.760 --> 0:14:00.160 of benchmark from a net, you know, from the Netflix 0:14:00.240 --> 0:14:04.309 operating profit and margin perspective. But, you know, we need 0:14:04.350 --> 0:14:08.070 something more to really kind of get investors excited and 0:14:08.130 --> 0:14:10.490 for a re-rating of multiples, not just for Disney, but 0:14:10.530 --> 0:14:11.670 for the entire sector, I would think. 0:14:11.910 --> 0:14:12.670 Yeah, well said. 0:14:12.690 --> 0:14:15.699 Well, we know that Disney recently increased the price of 0:14:15.720 --> 0:14:19.060 its Disney Plus streaming service, at least the one without ads, 0:14:19.620 --> 0:14:23.280 to $ 21. 49 a month. And if you bundle it with Hulu, 0:14:23.360 --> 0:14:27.840 then it's slightly more expensive. But that idea of bundling 0:14:27.900 --> 0:14:30.330 things is back in fashion again. How much of a 0:14:30.350 --> 0:14:32.630 difference is that going to make to the bottom line 0:14:32.690 --> 0:14:33.370 in the coming quarters? 0:14:34.750 --> 0:14:36.720 It is definitely going to make a difference. I mean, 0:14:36.760 --> 0:14:38.480 this is what we've been seeing across all of these 0:14:39.280 --> 0:14:42.340 streaming platforms. And we've seen kind of quite a noticeable 0:14:42.440 --> 0:14:46.930 change in terms of the whole profitability picture and the economics. 0:14:47.030 --> 0:14:50.470 So majority of the services that were posting pretty huge 0:14:50.510 --> 0:14:54.180 losses are now posting profits. This is important for all 0:14:54.200 --> 0:14:56.700 of these streaming services because subscriber growth has kind of 0:14:56.740 --> 0:14:58.740 come to a screeching halt. So the only way that 0:14:58.780 --> 0:15:01.640 they get to actually pad that bottom line is by 0:15:01.760 --> 0:15:03.940 increasing prices. And you bring up a very good point 0:15:04.000 --> 0:15:07.280 with the bundle. Disney has this unique advantage of the bundle, 0:15:07.360 --> 0:15:10.020 not just with Hulu, but potentially with ESPN where you 0:15:10.040 --> 0:15:12.220 get a lot of sports content and where people absolutely 0:15:12.300 --> 0:15:14.330 want to subscribe and want to get to that bundle. 0:15:14.680 --> 0:15:18.070 So yeah, we do think it'll be really important to 0:15:18.110 --> 0:15:22.290 the profitability equation going forward. But ultimately, I think, Scarlett, 0:15:22.310 --> 0:15:24.950 what it's going to come down to is how exactly— and 0:15:24.390 --> 0:15:26.390 we've heard a lot of rumblings about this, but really 0:15:26.490 --> 0:15:30.210 no concrete picture just yet— in terms of what exactly or 0:15:30.270 --> 0:15:34.830 how exactly Josh DeMauro plans to position Disney +. Does 0:15:34.870 --> 0:15:37.930 he really make it the central hub for all things Disney? 0:15:37.950 --> 0:15:39.470 Do you go to Disney +, and not just get 0:15:39.510 --> 0:15:42.290 a streaming subscription, but also your park tickets, also your 0:15:42.350 --> 0:15:45.120 movie tickets? does it almost kind of become like an 0:15:45.340 --> 0:15:47.440 agent for you in terms of getting to, you know, 0:15:47.600 --> 0:15:50.040 anything and everything Disney. So that is what is going 0:15:50.060 --> 0:15:53.300 to be really interesting to see how, you know, how 0:15:53.340 --> 0:15:56.090 they kind of position Disney +, how they position the 0:15:56.110 --> 0:15:58.330 streaming business as kind of the door to the entire 0:15:58.370 --> 0:15:59.250 Disney ecosystem. 0:16:00.170 --> 0:16:02.990 Stay with us. More from Bloomberg Intelligence coming up after this. 0:16:07.130 --> 0:16:10.840 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:16:10.920 --> 0:16:13.940 weekdays at 10 a.m. Eastern on Apple CarPlay and Android 0:16:14.000 --> 0:16:17.300 Auto with the Bloomberg Business App. Listen on demand wherever 0:16:17.360 --> 0:16:20.380 you get your podcasts or watch us live on YouTube. 0:16:21.850 --> 0:16:24.830 It turns out Stanford University is not just an elite 0:16:25.290 --> 0:16:28.390 Ivy League level university. It's also an incubator of talent 0:16:28.730 --> 0:16:31.450 for tech startups, which makes a lot of sense given 0:16:31.490 --> 0:16:34.490 its location in the heart of Silicon Valley in Palo Alto, California. 0:16:34.710 --> 0:16:37.790 Theo Baker knows this well. He is the author of 0:16:37.840 --> 0:16:40.520 a new book, How to Rule the World. an education 0:16:40.560 --> 0:16:43.700 in power at Stanford University. It's basically on his four 0:16:44.340 --> 0:16:47.820 very adventurous years at the school. He and Janet Lorne, 0:16:47.900 --> 0:16:51.100 our higher education finance reporter, join us now in the 0:16:51.120 --> 0:16:55.100 Bloomberg Interactive Broker Studio. So Theo, just walk us through 0:16:55.180 --> 0:16:57.420 what surprised you the most when you showed up at 0:16:57.440 --> 0:17:00.660 the Stanford campus, ready to take on as, I think 0:17:00.700 --> 0:17:03.380 you came in knowing how to code and maybe looking 0:17:03.400 --> 0:17:06.380 to pursue computer science as your major, and you were 0:17:06.820 --> 0:17:10.699 just totally taken away by what this school does when 0:17:10.720 --> 0:17:13.890 it comes from his young talent and how they kind 0:17:13.910 --> 0:17:14.690 of usher you along. 0:17:14.890 --> 0:17:15.450 Yeah. Yeah. 0:17:15.710 --> 0:17:18.310 Well, it's great to be here with you. It is true. 0:17:18.430 --> 0:17:20.450 I showed up as a true tech geek, the kind 0:17:20.470 --> 0:17:22.770 of kid who would build a machine learning model into 0:17:22.810 --> 0:17:24.490 my room in high school and called it a fun 0:17:24.510 --> 0:17:27.359 Friday night. And I showed up and I realized that 0:17:27.410 --> 0:17:31.040 very quickly, you know, either you're in or you're out, right? 0:17:31.060 --> 0:17:34.160 There's this system that is designed to extract talent from 0:17:34.200 --> 0:17:36.859 these teenagers. They are viewed almost as a commodity to 0:17:36.880 --> 0:17:39.420 be monetized because if you get in on the ground 0:17:39.480 --> 0:17:41.939 floor of the next Google or Instagram, you've made your 0:17:42.040 --> 0:17:45.379 own career. These venture capitalists and assorted hangers-on who are 0:17:45.420 --> 0:17:49.100 constantly on campus trying to court the next up-and-coming teenagers, 0:17:49.440 --> 0:17:52.699 these hangers-on are really a huge part of the experience 0:17:52.720 --> 0:17:54.590 for those people who belong to what I call the 0:17:54.609 --> 0:17:58.750 Stanford inside Stanford. That is, those future trillion-dollar startup founders 0:17:58.770 --> 0:18:01.070 who've been tapped on the shoulder at age 17. 0:18:01.070 --> 0:18:01.250 All right. 0:18:01.270 --> 0:18:04.850 Your freshman year involved investigative journalism that prompted the Stanford 0:18:04.869 --> 0:18:07.990 president to step down. Part of this book, How to 0:18:08.050 --> 0:18:11.540 Rule the World, An Education in Power at Stanford University. 0:18:11.560 --> 0:18:12.179 Talk to us about that. 0:18:12.980 --> 0:18:13.760 What happened there? 0:18:13.880 --> 0:18:16.139 And what's the basis for this book? Talk to us 0:18:16.160 --> 0:18:16.419 about it. 0:18:16.440 --> 0:18:19.179 Yeah. Well, I describe this book as being about, you know, 0:18:19.220 --> 0:18:21.530 the kids who are being raised to rule the world 0:18:21.619 --> 0:18:24.170 and what they learn from those who already do. And, 0:18:24.530 --> 0:18:26.970 you know, in that respect, Mark Tessier-Levine, who was the 0:18:26.990 --> 0:18:28.730 president of Stanford, is a great example. 0:18:29.070 --> 0:18:29.210 Right. 0:18:29.250 --> 0:18:32.550 Mark Tessier-Levine was a world renowned neuroscientist, the first in 0:18:32.570 --> 0:18:34.580 his family to go to college. He ended up earning 0:18:34.600 --> 0:18:38.479 a Rhodes Scholarship, created an entirely new field of neuroscientific research, 0:18:38.740 --> 0:18:41.859 and eventually went on to become a fabulously wealthy entrepreneur 0:18:41.900 --> 0:18:45.600 and biotech executive. I discovered in my reporting for the 0:18:45.640 --> 0:18:49.600 school newspaper across an eight-month investigation a number of research 0:18:49.640 --> 0:18:53.280 papers that he had co-authored or otherwise overseen, which contained 0:18:53.359 --> 0:18:57.600 falsified images and other forms of data manipulation. Mark Tessier 0:18:57.640 --> 0:18:59.810 Levine eventually, as a result of this, had to retract 0:18:59.850 --> 0:19:02.470 several papers and was pushed out as president of Stanford. 0:19:03.010 --> 0:19:05.760 So you describe in the book wanting to talk to 0:19:05.820 --> 0:19:08.000 him and sort of staking him out, but you didn't 0:19:08.020 --> 0:19:10.280 want to appear like you were staking him out. But finally, 0:19:10.359 --> 0:19:14.620 you got to meet him and talk to him. And you're, what, 0:19:14.619 --> 0:19:17.200 17 years old at this point? Can you describe that? 0:19:17.240 --> 0:19:18.730 I mean, he was, at that point, sort of a 0:19:18.770 --> 0:19:20.450 larger-than-life guy. Yeah. 0:19:20.750 --> 0:19:22.830 So I've never sat with an interview with Mark Tessie Levine, 0:19:23.130 --> 0:19:25.670 despite over a dozen attempts and You know, I've sent over, 0:19:25.790 --> 0:19:28.389 I believe it's 126 questions in writing to him, the 0:19:28.410 --> 0:19:31.500 vast majority of which he has declined to answer. Instead, 0:19:31.800 --> 0:19:33.619 usually I hear from his lawyers who have tried to 0:19:33.660 --> 0:19:36.720 prevent the publication of my articles and subsequently the book 0:19:36.800 --> 0:19:39.419 that was published based on some of that reporting. You know, 0:19:39.460 --> 0:19:42.140 Marc-Tessie Levine, as you say, looms larger than life. I mean, 0:19:42.200 --> 0:19:45.770 he is this iconic figure. I've tried and basically failed 0:19:45.970 --> 0:19:48.149 to find a single negative word published about him before 2022. 0:19:48.130 --> 0:19:53.179 But of course, you excellence, these positions of higher and 0:19:53.200 --> 0:19:56.260 higher acclaim that he segued to over time amassed a 0:19:56.280 --> 0:20:00.450