1 00:00:09,840 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:30,280 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg with 5 00:00:30,480 --> 00:00:33,279 Speaker 1: us this morning this half hour, Richard Greenfield joins us 6 00:00:33,280 --> 00:00:36,080 Speaker 1: a B T I G on the state of Media, 7 00:00:36,200 --> 00:00:39,760 Speaker 1: the State of Content. Paul Sweeney will join us later 8 00:00:39,840 --> 00:00:43,600 Speaker 1: in this hour as we celebrate the oddest book of 9 00:00:43,640 --> 00:00:45,879 Speaker 1: the year I've ever done, John Farrell. Last year I 10 00:00:45,880 --> 00:00:49,320 Speaker 1: did Ken Rogoff's The Curse of Cash. Was that pression 11 00:00:49,360 --> 00:00:52,880 Speaker 1: as India tried to do away with cash book? Ken 12 00:00:52,960 --> 00:00:56,720 Speaker 1: Rogoff with a brave book. He got death threats often literally. 13 00:00:57,000 --> 00:00:59,440 Speaker 1: I'm not sure if Scott Galloway has death threats. The 14 00:00:59,560 --> 00:01:04,680 Speaker 1: four They hidden d NA of Amazon, Apple, Facebook, and Google. 15 00:01:04,800 --> 00:01:08,800 Speaker 1: This is a controversial book. A lot of hatreds for 16 00:01:08,840 --> 00:01:11,440 Speaker 1: this book, a lot of celebration of it as well. 17 00:01:11,480 --> 00:01:14,440 Speaker 1: And the professor from n YU with rich Greenfield joined 18 00:01:14,520 --> 00:01:18,000 Speaker 1: us right now. Scott Galloway, congratulations, Have you had any 19 00:01:18,120 --> 00:01:22,760 Speaker 1: death threats off the four? Uh? First off? Thanks Tom, 20 00:01:22,760 --> 00:01:25,880 Speaker 1: that means a lot coming from you, but no death threats. 21 00:01:25,880 --> 00:01:28,080 Speaker 1: Some death threats from my family and wife when I 22 00:01:28,120 --> 00:01:30,800 Speaker 1: was writing this down. So far since it came out, 23 00:01:31,120 --> 00:01:35,440 Speaker 1: it is a different book. It is not MBA one 24 00:01:35,480 --> 00:01:37,800 Speaker 1: oh one or Business Light one oh one. I'm going 25 00:01:37,880 --> 00:01:40,800 Speaker 1: to suggest it's a book Rich Greenfield can read to 26 00:01:40,959 --> 00:01:46,920 Speaker 1: look at these guys tangential to his media world. Is Amazon, Apple, Facebook, 27 00:01:46,959 --> 00:01:49,480 Speaker 1: in Google in the next ten years? Are they going 28 00:01:49,520 --> 00:01:53,960 Speaker 1: to be media companies at Rich Greenfield has to study? 29 00:01:55,080 --> 00:01:57,280 Speaker 1: You know, Look, I think the question is is this 30 00:01:57,320 --> 00:02:00,320 Speaker 1: whole idea of what's the media company has been pretty 31 00:02:00,440 --> 00:02:03,920 Speaker 1: dramatically shifted. You know, it was pretty easy to define 32 00:02:04,640 --> 00:02:07,200 Speaker 1: what's the media company, if you know, call it seven 33 00:02:07,280 --> 00:02:10,200 Speaker 1: ten years ago. I think now that the question is 34 00:02:10,200 --> 00:02:13,880 Speaker 1: is all of these sectors are are converging? Um, I 35 00:02:13,919 --> 00:02:16,000 Speaker 1: think you have to add communications into I mean, when 36 00:02:16,040 --> 00:02:19,239 Speaker 1: you look at Facebook and Snapchat and the way people 37 00:02:19,280 --> 00:02:22,520 Speaker 1: are communicating using these platforms, I think it's even broader, 38 00:02:23,080 --> 00:02:25,680 Speaker 1: uh than just media and technology. I think you really 39 00:02:25,680 --> 00:02:28,760 Speaker 1: have to lump in in communications into there. And look 40 00:02:28,800 --> 00:02:31,200 Speaker 1: when you've got companies like a T and T phone 41 00:02:31,240 --> 00:02:35,200 Speaker 1: companies trying to buy media companies Obviously all of this 42 00:02:35,320 --> 00:02:38,560 Speaker 1: is converging, and obviously regulation plays a big role, and 43 00:02:38,600 --> 00:02:40,520 Speaker 1: we can certainly get to that, but you know, I 44 00:02:40,520 --> 00:02:44,000 Speaker 1: think that the reality is what is so stunning is 45 00:02:44,040 --> 00:02:46,600 Speaker 1: when you think about the fact that Apple could buy 46 00:02:46,760 --> 00:02:51,600 Speaker 1: virtually every legacy media company for cash. So as these 47 00:02:52,000 --> 00:02:54,880 Speaker 1: new companies get into this sector, they don't seem to 48 00:02:54,880 --> 00:02:57,640 Speaker 1: really have too much interest in buying any of these companies. 49 00:02:57,880 --> 00:03:00,800 Speaker 1: They're using their balance sheets and they're basically trying to 50 00:03:01,280 --> 00:03:05,200 Speaker 1: disrupt and or replace these companies using the strength of 51 00:03:05,240 --> 00:03:08,400 Speaker 1: their cash balance sheets, cash rich balance sheets, to go 52 00:03:08,520 --> 00:03:12,720 Speaker 1: in and basically recreate or create their own content without 53 00:03:12,800 --> 00:03:15,680 Speaker 1: the need for these legacy companies to exist. And that's 54 00:03:15,720 --> 00:03:18,239 Speaker 1: what's so scary for all of these companies. Well, we've 55 00:03:18,240 --> 00:03:20,760 Speaker 1: got it's a fascinating hour here. Paul Sweeney will join 56 00:03:20,840 --> 00:03:23,560 Speaker 1: us later. Mr Greenfield with us through the hour, will 57 00:03:23,639 --> 00:03:26,919 Speaker 1: dive the end of the book after the thirty economic data. 58 00:03:26,960 --> 00:03:29,760 Speaker 1: But Scott Galloway, I've got to go to the inflammatory 59 00:03:29,800 --> 00:03:33,120 Speaker 1: comment you made last week, which is break these guys up, 60 00:03:33,360 --> 00:03:38,000 Speaker 1: break up Apple, breakup Facebook, Google, Amazon, discuss that why 61 00:03:38,040 --> 00:03:40,600 Speaker 1: do we need to break up these companies? Nobody agrees 62 00:03:40,640 --> 00:03:45,360 Speaker 1: with you because we're a capitalist and cut to capitalism 63 00:03:45,440 --> 00:03:48,000 Speaker 1: is full body contact competition on the field. And I 64 00:03:48,000 --> 00:03:52,040 Speaker 1: feel the markets are failing when consumer company stocks go 65 00:03:52,160 --> 00:03:54,720 Speaker 1: way up or way down. They're most likely and the 66 00:03:54,760 --> 00:03:58,240 Speaker 1: most likely indicator signal of that mover volatility, as the 67 00:03:58,280 --> 00:04:01,560 Speaker 1: underlying performance of the stock or the markets are at 68 00:04:01,560 --> 00:04:03,680 Speaker 1: the company and the market set day. The second most 69 00:04:03,680 --> 00:04:06,560 Speaker 1: likely signal is what Amazon is or isn't doing. We 70 00:04:06,600 --> 00:04:09,720 Speaker 1: now have a Amazon singularity in the markets where all 71 00:04:09,760 --> 00:04:13,320 Speaker 1: consumer stocks are moving corresponding to what Amazon is or 72 00:04:13,360 --> 00:04:14,960 Speaker 1: isn't doing. And I think one of the components of 73 00:04:15,120 --> 00:04:18,839 Speaker 1: robust markets is that no one company has too much control. 74 00:04:18,920 --> 00:04:21,400 Speaker 1: And the question I put forward to skeptics is are 75 00:04:21,440 --> 00:04:24,120 Speaker 1: we better in an ecosystem with Apple, Apazon, Facebook, and 76 00:04:24,120 --> 00:04:30,560 Speaker 1: Google or an ecosystem with Amazon, Aws, Facebook, Instagram, What's App? Apple, iTunes, 77 00:04:30,680 --> 00:04:34,120 Speaker 1: Google and YouTube. I know what my answer is. Conceptually, 78 00:04:34,160 --> 00:04:37,200 Speaker 1: that's that's an answer that makes sense. But for the regulator, 79 00:04:37,279 --> 00:04:40,120 Speaker 1: what's the argument they actually have at this point to 80 00:04:40,320 --> 00:04:43,600 Speaker 1: really push on the buttons of the likes of Amazon, etcetera. 81 00:04:44,200 --> 00:04:50,240 Speaker 1: To stop grumming so fast monopoly concentration power people People 82 00:04:50,279 --> 00:04:53,280 Speaker 1: tend to the primary line of defenses that if it's 83 00:04:53,279 --> 00:04:55,680 Speaker 1: good to the consumer, we leave it alone. And people 84 00:04:55,760 --> 00:04:57,480 Speaker 1: point in Amazon and so how can you say it's 85 00:04:57,480 --> 00:04:59,640 Speaker 1: not good for the consumer given the low prices? But 86 00:05:00,200 --> 00:05:02,160 Speaker 1: what are the markets telling us when a company is 87 00:05:02,200 --> 00:05:04,479 Speaker 1: trading at sixty times even of regarding a ut your 88 00:05:04,520 --> 00:05:08,560 Speaker 1: monopoly or pricing power. So when there's monopoly power or 89 00:05:08,560 --> 00:05:10,880 Speaker 1: the formation of appearance of what seems to be monopoly 90 00:05:10,920 --> 00:05:14,680 Speaker 1: power into restraint of trade, try and be an app 91 00:05:14,760 --> 00:05:17,240 Speaker 1: that gets any it gets out of the crib. When 92 00:05:17,240 --> 00:05:19,360 Speaker 1: you have Facebook with six of the top ten apps, 93 00:05:19,400 --> 00:05:22,400 Speaker 1: and programs that go out and identify features of apps 94 00:05:22,400 --> 00:05:24,880 Speaker 1: that are getting traction and immediately kills them, try to 95 00:05:24,920 --> 00:05:27,200 Speaker 1: get out of get out of the crib. When you're 96 00:05:27,400 --> 00:05:30,960 Speaker 1: Spotify and after puts Apple music and inferior product on 97 00:05:30,960 --> 00:05:33,320 Speaker 1: the front screen and then charges you a thirty tax 98 00:05:33,360 --> 00:05:36,719 Speaker 1: for the access to the billion Apple devices. So I 99 00:05:36,720 --> 00:05:39,640 Speaker 1: think we have incredible restraint of trade and monopoly. So 100 00:05:39,720 --> 00:05:41,839 Speaker 1: I think there's a lot of the only thing I 101 00:05:41,839 --> 00:05:45,640 Speaker 1: would say, the only thing. The only thing I would 102 00:05:45,640 --> 00:05:48,680 Speaker 1: say is, you know, from the standpoint of you know, look, 103 00:05:48,839 --> 00:05:53,200 Speaker 1: the government just approved Amazon's purchase of whole foods without 104 00:05:53,240 --> 00:05:56,279 Speaker 1: even really blinking an eye, and so it doesn't seem 105 00:05:56,320 --> 00:05:59,919 Speaker 1: like they have any interest in pursuing breakups of these companies. 106 00:06:00,279 --> 00:06:02,720 Speaker 1: I also kind of wonder what would a break up 107 00:06:02,880 --> 00:06:04,839 Speaker 1: look like? You know, when you think about a company 108 00:06:04,960 --> 00:06:07,920 Speaker 1: like Facebook, what would you actually break up? It's not 109 00:06:08,080 --> 00:06:11,120 Speaker 1: clear kind of what parts of some of these companies 110 00:06:11,360 --> 00:06:13,920 Speaker 1: even if you wanted to pursue that, which I don't 111 00:06:13,920 --> 00:06:16,400 Speaker 1: think this current government appears too. But if you did, 112 00:06:16,720 --> 00:06:18,520 Speaker 1: if not clear exactly what you would do, like, what 113 00:06:18,560 --> 00:06:22,640 Speaker 1: would you remove that would break their market power? Um? 114 00:06:22,680 --> 00:06:26,240 Speaker 1: You know the problem is, you know, I don't know 115 00:06:26,279 --> 00:06:28,960 Speaker 1: what applicant, what what part of Facebook could you remove? 116 00:06:29,480 --> 00:06:32,240 Speaker 1: You know? I guess with with with Amazon, what would 117 00:06:32,240 --> 00:06:34,040 Speaker 1: you do? You would you separate a w S? I mean, 118 00:06:34,040 --> 00:06:38,520 Speaker 1: it's not clear how you weaken these companies, um, given 119 00:06:38,560 --> 00:06:42,320 Speaker 1: their size right now? So Scott, what would you do? Well? 120 00:06:42,360 --> 00:06:44,360 Speaker 1: I think I think it's a really good point. First off, 121 00:06:44,400 --> 00:06:46,400 Speaker 1: I don't think it's gonna happen. It's going to come 122 00:06:46,400 --> 00:06:48,800 Speaker 1: from Washington. I don't think the current administration has the 123 00:06:48,839 --> 00:06:51,880 Speaker 1: will or the domain expertise, quite frankly, to take on 124 00:06:51,960 --> 00:06:54,479 Speaker 1: big tech. I think they're I think they're outgunned. I 125 00:06:54,480 --> 00:06:56,400 Speaker 1: think it will start with a kind of a red 126 00:06:56,440 --> 00:06:59,000 Speaker 1: state attorney general and most likely it'll come out of 127 00:06:59,480 --> 00:07:01,280 Speaker 1: come out of Russeles. As to what you would do, 128 00:07:01,400 --> 00:07:03,400 Speaker 1: I think Facebook is one of the easier ones. I 129 00:07:03,440 --> 00:07:05,120 Speaker 1: think Apple is the one that's tough to figure out 130 00:07:05,120 --> 00:07:06,520 Speaker 1: because who we get the main up with the brand 131 00:07:06,520 --> 00:07:10,520 Speaker 1: with Facebook? And again I'm not an economist, but Facebook, 132 00:07:10,560 --> 00:07:13,400 Speaker 1: what's the app? Instagram feels like pretty clean break up? 133 00:07:13,480 --> 00:07:16,280 Speaker 1: To me? Would you? Snapchat is going away? It's the 134 00:07:16,480 --> 00:07:19,120 Speaker 1: rocking dead and it was a viable third competitor with 135 00:07:19,880 --> 00:07:23,440 Speaker 1: the reason they're going away is because Zuckerberg has several 136 00:07:23,440 --> 00:07:27,000 Speaker 1: different weapons against them. I think Facebook, Instagram and a messenger, 137 00:07:27,040 --> 00:07:30,520 Speaker 1: a separate companies would be a more healthier ecosystem. I 138 00:07:30,560 --> 00:07:32,280 Speaker 1: want to get to the next block. Rich green Field 139 00:07:32,280 --> 00:07:34,960 Speaker 1: Teesus Ford on that Coco is the film of the moment, 140 00:07:35,040 --> 00:07:37,520 Speaker 1: film of the weekend. I believe it's in a hundred 141 00:07:37,560 --> 00:07:41,960 Speaker 1: million large It's it's released by Walt Disney Pictures for Pixar. 142 00:07:42,640 --> 00:07:46,239 Speaker 1: Can can create? Can the creation stuff that you follow? 143 00:07:46,880 --> 00:07:52,360 Speaker 1: Can Amazon do that? Can Can Facebook or Google create content? 144 00:07:52,840 --> 00:07:56,560 Speaker 1: Like in the Greenfield world? Well, I mean, look, I 145 00:07:56,560 --> 00:08:01,160 Speaker 1: think there's certainly proof that just because you're a new 146 00:08:01,280 --> 00:08:03,680 Speaker 1: entrant doesn't mean you can't have success. I mean, I 147 00:08:03,720 --> 00:08:06,640 Speaker 1: think you know, remember a little four and a half 148 00:08:06,720 --> 00:08:11,240 Speaker 1: years ago, there was no original programming on Netflix. Now 149 00:08:11,480 --> 00:08:15,160 Speaker 1: there is more original programming than anyone on any of us, 150 00:08:15,680 --> 00:08:19,360 Speaker 1: you know, talking right now, um could possibly watch. And 151 00:08:19,440 --> 00:08:22,960 Speaker 1: so you know, Netflix is just beginning to get into 152 00:08:23,080 --> 00:08:25,960 Speaker 1: their own animation. You know, they they're building out they 153 00:08:25,960 --> 00:08:29,600 Speaker 1: actually hired someone's senior from DreamWorks Animation and they're building 154 00:08:29,600 --> 00:08:33,760 Speaker 1: out a true US or true global animation studio. They've 155 00:08:33,760 --> 00:08:38,800 Speaker 1: got thirty Japanese anime projects in production, so that they're 156 00:08:38,800 --> 00:08:42,720 Speaker 1: doing all forms of animation for their global footprint there 157 00:08:42,760 --> 00:08:45,720 Speaker 1: by far the furthest along and kind of building a 158 00:08:45,760 --> 00:08:48,760 Speaker 1: new animation unit. But we've certainly seen that. I mean, 159 00:08:48,800 --> 00:08:52,359 Speaker 1: look what Chris Melindandre has done in building up illumination. 160 00:08:52,520 --> 00:08:55,199 Speaker 1: Before that, he built up Blue Sky for a Fox. 161 00:08:55,240 --> 00:08:59,080 Speaker 1: Now he's doing illuminations for Universal. I don't think animation 162 00:08:59,120 --> 00:09:03,040 Speaker 1: is solely in Disney's domain. I think the reality is 163 00:09:03,040 --> 00:09:05,800 Speaker 1: is when you look at the global footprints of companies 164 00:09:05,840 --> 00:09:08,400 Speaker 1: like Netflix and obviously you're talking about Apple and Amazon, 165 00:09:09,040 --> 00:09:11,880 Speaker 1: the ability to leverage those platforms and go out and 166 00:09:12,000 --> 00:09:17,560 Speaker 1: hire and spend the money. That's where it gets really 167 00:09:17,559 --> 00:09:19,920 Speaker 1: scary for companies like Disney is that you've got new 168 00:09:20,080 --> 00:09:23,760 Speaker 1: entrants with global platforms that are going out trying to 169 00:09:23,800 --> 00:09:26,679 Speaker 1: disrupt their business model. So right now that that kind 170 00:09:26,679 --> 00:09:29,480 Speaker 1: of animation prowess is safe, but I think you take 171 00:09:29,559 --> 00:09:32,200 Speaker 1: that over the next three to five years, I think 172 00:09:32,240 --> 00:09:34,440 Speaker 1: that's where you really end up at risk. Let's do 173 00:09:34,640 --> 00:09:36,720 Speaker 1: let's do this, Let's come back with Rich Greenfield and 174 00:09:36,760 --> 00:09:39,800 Speaker 1: Scott Galloway, and yes, we're gonna look at Amazon is 175 00:09:39,840 --> 00:09:43,040 Speaker 1: it goes into the medical business as well. Book of 176 00:09:43,080 --> 00:10:06,640 Speaker 1: the Year, The four by Scott Galloway. The only reason 177 00:10:06,679 --> 00:10:08,560 Speaker 1: we could get Rich Greenfield on is is if you 178 00:10:08,559 --> 00:10:12,480 Speaker 1: would brief Scott Galloway, Mr Galloway, where this Professor Galloway, 179 00:10:12,559 --> 00:10:15,120 Speaker 1: his book be four is my book of the year. 180 00:10:15,280 --> 00:10:21,000 Speaker 1: It is absolutely phenomenal on this technological thing that we're 181 00:10:21,000 --> 00:10:25,080 Speaker 1: dealing with around Apple, Amazon, Facebook and Google. Rich Greenfield 182 00:10:25,559 --> 00:10:27,640 Speaker 1: within your world and I guess it goes over to 183 00:10:27,720 --> 00:10:32,480 Speaker 1: CVS AT as well. Defined for Professor Galloway, what a 184 00:10:32,880 --> 00:10:39,120 Speaker 1: vertical merger is, a vertical transaction, a vertical horizon, What 185 00:10:39,120 --> 00:10:43,560 Speaker 1: what is vertical in the entertainment world like Disney, Fox 186 00:10:43,679 --> 00:10:48,760 Speaker 1: or this Fox that Fox. Well, look, the government is 187 00:10:49,400 --> 00:10:53,640 Speaker 1: at least appears to be focused on UM. You know, 188 00:10:53,640 --> 00:10:57,080 Speaker 1: if you're looking about the media world, you've got producers 189 00:10:57,120 --> 00:11:00,840 Speaker 1: of content or creators of content to take that Disney, 190 00:11:01,480 --> 00:11:07,280 Speaker 1: You've got um platforms that distribute content uh in channel 191 00:11:07,360 --> 00:11:10,960 Speaker 1: ways to think of a comcast, think of a direct 192 00:11:11,000 --> 00:11:15,800 Speaker 1: TV uh and then you you know have um, you know, 193 00:11:15,880 --> 00:11:20,600 Speaker 1: kind of national distribution platforms. Think of things like a 194 00:11:20,720 --> 00:11:25,439 Speaker 1: T and T wireless or Verizon wireless. But you know, Tom, 195 00:11:25,480 --> 00:11:29,120 Speaker 1: the problem here is is this whole kind of definition 196 00:11:29,559 --> 00:11:34,720 Speaker 1: of distribution is getting really fuzzy. Netflix has a hundred 197 00:11:34,800 --> 00:11:38,760 Speaker 1: million subscribers all over the world and they use the Internet. 198 00:11:39,360 --> 00:11:44,880 Speaker 1: Um is that distribution? Amazon has probably sixty plus million 199 00:11:44,960 --> 00:11:48,880 Speaker 1: prime subscribers domestically, probably a hundred around the world. Is 200 00:11:48,920 --> 00:11:53,400 Speaker 1: that distribution? Google has an Apple have the phones that 201 00:11:53,520 --> 00:11:58,120 Speaker 1: everybody uses all over the world. Is that distribution? And 202 00:11:58,160 --> 00:12:01,319 Speaker 1: so you know, the question is, you know, a T 203 00:12:01,440 --> 00:12:04,480 Speaker 1: and T is being sued because it not only owns 204 00:12:04,520 --> 00:12:06,640 Speaker 1: Direct TV and a T and T wireless, but it 205 00:12:06,720 --> 00:12:09,959 Speaker 1: wants to buy Time Warner, which owns Warner Brothers and HBO. 206 00:12:10,960 --> 00:12:15,040 Speaker 1: Yet at the same time, companies like Netflix are making 207 00:12:15,080 --> 00:12:18,280 Speaker 1: their own content, Apple starting to make its own content. 208 00:12:18,720 --> 00:12:22,920 Speaker 1: Google youtubeer making their own content. It's getting really hard 209 00:12:22,960 --> 00:12:28,040 Speaker 1: to understand what is and isn't allowed, and so um 210 00:12:28,080 --> 00:12:30,000 Speaker 1: I think that's one of the real fears we have, 211 00:12:30,240 --> 00:12:32,160 Speaker 1: is that if you don't like a T and T 212 00:12:32,400 --> 00:12:36,640 Speaker 1: Time Warner, should Amazon be allowed to make content? Should 213 00:12:36,679 --> 00:12:39,600 Speaker 1: Apple be stopped for making content? You know, how do 214 00:12:39,640 --> 00:12:41,960 Speaker 1: you draw the lines? Is it okay to make content 215 00:12:42,040 --> 00:12:45,640 Speaker 1: but not by content if you're a large distribution platform. 216 00:12:46,520 --> 00:12:49,360 Speaker 1: It is this whole A T and T Time Warner 217 00:12:49,440 --> 00:12:53,280 Speaker 1: lawsuit raises far bigger questions. Forget about that deal itself. 218 00:12:53,720 --> 00:12:56,720 Speaker 1: What it means to the overall ecosystem is what really 219 00:12:56,760 --> 00:13:00,200 Speaker 1: concerns us and more than anything confuses us. Well, do 220 00:13:00,200 --> 00:13:01,840 Speaker 1: you think, Scott gall Away, that needs to be an 221 00:13:01,840 --> 00:13:05,760 Speaker 1: appreciation on the regulated side that the likes of Walt Disney, 222 00:13:05,800 --> 00:13:08,720 Speaker 1: the likes of Century Folks not just competing with each other, 223 00:13:08,760 --> 00:13:12,160 Speaker 1: that competing with the upcoming tech companies that are be 224 00:13:12,200 --> 00:13:16,679 Speaker 1: getting bigger and bigger and bigger. Ritz is absolutely right. 225 00:13:16,720 --> 00:13:18,439 Speaker 1: I mean, let me understand this, A T and T 226 00:13:18,600 --> 00:13:22,040 Speaker 1: with a hundred and twenty million subscribers and thirty direct million, 227 00:13:22,080 --> 00:13:25,959 Speaker 1: Direct TV and Turner and HBO has to break up. 228 00:13:26,640 --> 00:13:30,280 Speaker 1: But Amazon, with six households with prime and the second 229 00:13:30,320 --> 00:13:33,000 Speaker 1: largest spender and original content of four and a half billion, 230 00:13:33,080 --> 00:13:36,920 Speaker 1: second only to Netflix, shouldn't be broken up. We have 231 00:13:37,520 --> 00:13:40,880 Speaker 1: Apple and Google, each with a billion and two billion 232 00:13:41,080 --> 00:13:44,480 Speaker 1: devices in terms of distribution, and then tens of millions 233 00:13:44,480 --> 00:13:47,960 Speaker 1: of songs, the original content billions of dollars in distribution, 234 00:13:48,040 --> 00:13:50,880 Speaker 1: but A T and T needs to sell adult swim. 235 00:13:50,960 --> 00:13:54,360 Speaker 1: One of two things is happening here. This proposed merger 236 00:13:54,480 --> 00:13:56,440 Speaker 1: or the blocking of A T and T and Time 237 00:13:56,480 --> 00:13:59,680 Speaker 1: Warner is either insane or we have woken up to 238 00:13:59,760 --> 00:14:03,040 Speaker 1: the reality that we should have broken up Amazon, Apple, 239 00:14:03,120 --> 00:14:06,040 Speaker 1: Facebook and Google five years ago. So Scott, why is 240 00:14:06,080 --> 00:14:08,319 Speaker 1: this coming under the right in d C? Why is 241 00:14:08,360 --> 00:14:14,199 Speaker 1: this not being picked up? I genuinely think big tech, well, okay, Amazon, 242 00:14:14,320 --> 00:14:18,199 Speaker 1: seventy seven full time lobbyists and the ultimate prophylactic against 243 00:14:18,240 --> 00:14:21,000 Speaker 1: any movement to break them up, called the Washington Post. 244 00:14:21,160 --> 00:14:24,200 Speaker 1: I think these guys are smarter than everybody else and 245 00:14:24,280 --> 00:14:27,280 Speaker 1: have wrapped themselves in a sheep's clothing, and guys like 246 00:14:27,360 --> 00:14:29,200 Speaker 1: me are afraid to come out of the closet and 247 00:14:29,200 --> 00:14:31,160 Speaker 1: feel as if we're going to be called socialists or 248 00:14:31,160 --> 00:14:34,320 Speaker 1: worse European by suggesting that we should hold them to 249 00:14:34,360 --> 00:14:36,600 Speaker 1: the same level of scrutiny we hold the rest of business. 250 00:14:36,760 --> 00:14:39,600 Speaker 1: This has been hugely valuable. Scott Gallery will stay with us. 251 00:14:39,600 --> 00:14:41,480 Speaker 1: We really want to continue with this book The Four. 252 00:14:41,800 --> 00:14:44,920 Speaker 1: Rich Greenfield, thank you so much for changing your schedule 253 00:14:44,960 --> 00:14:46,720 Speaker 1: to be with us today. Really honored that you could 254 00:14:46,760 --> 00:14:49,920 Speaker 1: be with us with maybe where these four companies are 255 00:14:49,920 --> 00:14:52,640 Speaker 1: going on Disney. We'll get Mr Greenfield on again for 256 00:14:52,720 --> 00:14:56,320 Speaker 1: some careful talk about Disney Fox in the media world. 257 00:14:56,440 --> 00:15:00,560 Speaker 1: Mr Greenfield is with bt I G. Marcus the Move up, 258 00:15:00,600 --> 00:15:04,360 Speaker 1: thirteen down, Future is Up. It's a really risk on 259 00:15:04,520 --> 00:15:07,280 Speaker 1: field off of the legislation of Friday. Who knows what 260 00:15:07,320 --> 00:15:10,600 Speaker 1: the news flow will bring uh. Today we're here in 261 00:15:10,680 --> 00:15:13,920 Speaker 1: celebration of Scott Galloway, my book of the year, The Four, 262 00:15:14,520 --> 00:15:18,920 Speaker 1: The Hidden DNA of Amazon, Apple, Facebook and Google. Whatever 263 00:15:19,000 --> 00:15:21,640 Speaker 1: your work, walk of life is, whatever you're doing Global 264 00:15:21,680 --> 00:15:25,840 Speaker 1: Wall Street, you're just somebody listening to the show who 265 00:15:26,400 --> 00:15:28,840 Speaker 1: is curious about what we do every day. I really 266 00:15:28,880 --> 00:15:32,760 Speaker 1: can't say of any book I've ever mentioned Summer Reading 267 00:15:33,120 --> 00:15:36,920 Speaker 1: Winter reading book of the year, The four is the 268 00:15:36,960 --> 00:15:40,640 Speaker 1: most accessible, important book I've seen in ages. We will 269 00:15:40,680 --> 00:15:58,360 Speaker 1: continue was Scott Galloway of n y U and with 270 00:15:58,520 --> 00:16:01,840 Speaker 1: us quickly here Scott Galloway, Professor n y and right 271 00:16:01,840 --> 00:16:05,400 Speaker 1: now we're just going to dive into his book Amazon. Scott, 272 00:16:05,520 --> 00:16:08,960 Speaker 1: I guess we're seeing the biggest healthcare mergers since ever 273 00:16:09,400 --> 00:16:12,080 Speaker 1: because after the Cloud, Jeff Bezos is going to go 274 00:16:12,080 --> 00:16:15,080 Speaker 1: into pharmaceuticals with CVS and that and then all that. 275 00:16:15,200 --> 00:16:17,640 Speaker 1: Do you buy the idea that Amazon can just do 276 00:16:17,680 --> 00:16:19,680 Speaker 1: it in anything they want to do? Can they become 277 00:16:19,760 --> 00:16:24,800 Speaker 1: the nation's pharmacist? Well, Amazon can not only do whatever 278 00:16:24,840 --> 00:16:27,280 Speaker 1: they want to do, they can begin or they can 279 00:16:27,280 --> 00:16:29,200 Speaker 1: do what I would refer to as Jedi mind tricks, 280 00:16:29,200 --> 00:16:31,160 Speaker 1: and that is they can just whisper. Hence they might 281 00:16:31,240 --> 00:16:34,480 Speaker 1: do something and stocks begin to move. So they just 282 00:16:34,560 --> 00:16:37,600 Speaker 1: hint that they might be in prescription business CVS and 283 00:16:37,640 --> 00:16:42,160 Speaker 1: will bring up down, open up down four and five 284 00:16:42,200 --> 00:16:45,520 Speaker 1: percent by the afternoon that same day, Manufacturer's drug stocks 285 00:16:45,520 --> 00:16:47,720 Speaker 1: are down. When they announced the acquisition of Whole Foods. 286 00:16:47,720 --> 00:16:49,280 Speaker 1: In between the time they announced it and Win to 287 00:16:49,360 --> 00:16:52,720 Speaker 1: close the largest pure play grocer Crowger lost a third 288 00:16:52,720 --> 00:16:55,240 Speaker 1: of its values. The question isn't what business will they 289 00:16:55,360 --> 00:16:58,440 Speaker 1: be in the question is what consumer businesses won't they be? 290 00:16:58,520 --> 00:17:01,920 Speaker 1: In the point reading your book, one of the many 291 00:17:01,960 --> 00:17:04,720 Speaker 1: reasons I love it is just the immediate impact you 292 00:17:04,760 --> 00:17:07,520 Speaker 1: give the reader around the scale of these companies. And 293 00:17:07,560 --> 00:17:10,639 Speaker 1: I turned to the chapter on Amazon on page fourteen, 294 00:17:10,840 --> 00:17:17,879 Speaker 1: fifty of households in America have Amazon Prime on a landline. 295 00:17:18,320 --> 00:17:22,359 Speaker 1: We're talking absolutely massive now. And my question to you, 296 00:17:22,400 --> 00:17:24,639 Speaker 1: Scott is where is Amazon biting off more than it 297 00:17:24,680 --> 00:17:31,159 Speaker 1: can chew? Well? It appears to get just getting starting eating. 298 00:17:32,080 --> 00:17:37,600 Speaker 1: Amazon has blown out the traditional notion from cprala core competence. 299 00:17:37,640 --> 00:17:39,920 Speaker 1: I mean, what is Amazon's core competence? I would argue 300 00:17:39,920 --> 00:17:42,840 Speaker 1: with storytelling, But we haven't seen a company going to 301 00:17:42,920 --> 00:17:45,960 Speaker 1: so many different sectors and basically win. Even if you 302 00:17:46,000 --> 00:17:49,480 Speaker 1: look at where they compete against the other three Google, Facebook, 303 00:17:49,520 --> 00:17:52,160 Speaker 1: and Apple. Wherever they bump up against the other three, 304 00:17:52,600 --> 00:17:54,879 Speaker 1: they're winning. So this notion that they're soon going to 305 00:17:54,960 --> 00:17:57,719 Speaker 1: find a bridge too far. So far, it hasn't happened. 306 00:17:57,760 --> 00:18:01,200 Speaker 1: They make mistakes, but they retreat, they dust off their pants, 307 00:18:01,240 --> 00:18:04,959 Speaker 1: and they come back harder. And how how are they 308 00:18:04,960 --> 00:18:06,440 Speaker 1: going to come back? If you look at the situation 309 00:18:06,480 --> 00:18:08,840 Speaker 1: with Retao at the moment, what I thought was interested 310 00:18:08,880 --> 00:18:11,760 Speaker 1: in the previous conversation is how easily the Whole Food's 311 00:18:11,800 --> 00:18:14,240 Speaker 1: merger went through. How the other is going to react 312 00:18:14,240 --> 00:18:16,359 Speaker 1: to this, Scott, and can they challenge what Amazon is 313 00:18:16,359 --> 00:18:20,760 Speaker 1: trying to do. I think in many ways it's don't 314 00:18:20,800 --> 00:18:23,960 Speaker 1: always be retailers that will break through. There's there's a 315 00:18:24,000 --> 00:18:26,480 Speaker 1: lot of innovation out there. But in terms of what 316 00:18:26,680 --> 00:18:29,439 Speaker 1: is between Amazon and being the first trillion dollar market 317 00:18:29,480 --> 00:18:32,679 Speaker 1: cap company, I don't see anything but regulation. You have 318 00:18:32,720 --> 00:18:36,800 Speaker 1: a company that's partnered with half a billion consumers and 319 00:18:36,880 --> 00:18:40,480 Speaker 1: fanatical investors to provide it with infinitely cheap capital, armed 320 00:18:40,480 --> 00:18:44,359 Speaker 1: with distribution and now with a of households, and they 321 00:18:44,359 --> 00:18:48,120 Speaker 1: own seventy of voice and of the fastest growing channel 322 00:18:48,160 --> 00:18:51,880 Speaker 1: in the largest consumer market in the world, and e commerce, Scott. 323 00:18:51,880 --> 00:18:54,440 Speaker 1: One of the important things here which permeates the book 324 00:18:54,480 --> 00:18:57,159 Speaker 1: The four Again folks, my book of the year is 325 00:18:57,200 --> 00:19:01,400 Speaker 1: this idea of when they get all they'll become like 326 00:19:01,480 --> 00:19:04,560 Speaker 1: we are when we're older. What is your research what 327 00:19:04,720 --> 00:19:11,280 Speaker 1: is your study of younger people in their Amazon, Apple, Facebook, Google, consumption, 328 00:19:11,840 --> 00:19:14,520 Speaker 1: and will the shift when they hit fifty? Will they 329 00:19:14,600 --> 00:19:20,720 Speaker 1: shift when they hit sixty? So only the hundred companies 330 00:19:20,720 --> 00:19:23,680 Speaker 1: in the Dow a hundred a hundred hundred years ago, 331 00:19:23,760 --> 00:19:27,120 Speaker 1: only eleven are still alive. So the mortality rate gets 332 00:19:27,200 --> 00:19:30,320 Speaker 1: higher and higher in my companies. But with respect to aging, 333 00:19:30,480 --> 00:19:33,200 Speaker 1: of the fourteen companies that have outperformed the SMP through 334 00:19:33,240 --> 00:19:36,120 Speaker 1: two thousand eleven through sixteen, five years in a row, 335 00:19:36,160 --> 00:19:38,879 Speaker 1: and there's only thirteen or fourteen of them, nine of 336 00:19:38,920 --> 00:19:40,840 Speaker 1: them have one thing in common, and that is they 337 00:19:40,880 --> 00:19:45,480 Speaker 1: age in reverse. They use they use agile technologies, technologies 338 00:19:45,480 --> 00:19:48,200 Speaker 1: and networking business models to get younger. So every time 339 00:19:48,240 --> 00:19:51,000 Speaker 1: you use Gap, every time you use Google, every time 340 00:19:51,040 --> 00:19:54,360 Speaker 1: you do Amazon reviews, every time you download a song 341 00:19:54,440 --> 00:19:57,679 Speaker 1: and rate it on Apple, the product gets better. Whereas 342 00:19:57,680 --> 00:20:00,520 Speaker 1: the economic titans of yesterday when a are rolled off 343 00:20:00,520 --> 00:20:03,040 Speaker 1: the assembly line, when we twisted the cap off a 344 00:20:03,080 --> 00:20:05,960 Speaker 1: tub toothpaste, they begin to age. The companies of our 345 00:20:06,000 --> 00:20:09,359 Speaker 1: era adding billions of dollars and shareholder value. Are Benjamin 346 00:20:09,480 --> 00:20:14,040 Speaker 1: Button companies aging in reverse? Interesting? Scott Galloway, thank you 347 00:20:14,080 --> 00:20:17,560 Speaker 1: so much, congratulations on a controversial book. This is so 348 00:20:17,680 --> 00:20:22,160 Speaker 1: different than the usual professorial NBA like book. It has 349 00:20:22,200 --> 00:20:24,600 Speaker 1: got some huge substance to it, whether you agree or 350 00:20:24,640 --> 00:20:27,920 Speaker 1: disagree with it. The lead sentence, John Farrell, Chapter six, 351 00:20:28,000 --> 00:20:32,040 Speaker 1: Lie to me stealing is a core competence of high 352 00:20:32,040 --> 00:20:36,000 Speaker 1: growth tech firms. That is just a window into the 353 00:20:36,040 --> 00:20:40,600 Speaker 1: controversy Scott Galloway and Genders with the four John, what 354 00:20:40,720 --> 00:20:42,160 Speaker 1: you took a look at this book? What do you think? 355 00:20:42,400 --> 00:20:44,280 Speaker 1: I think it's a tretty fantastic book. I think he's 356 00:20:45,160 --> 00:20:46,760 Speaker 1: I think he did great. I think he's ahead of 357 00:20:46,760 --> 00:20:49,000 Speaker 1: the curve. And I think he's ahead of the curve 358 00:20:49,080 --> 00:20:52,359 Speaker 1: because of the following reason. This isn't on the horizon 359 00:20:52,760 --> 00:20:55,880 Speaker 1: of investors an analysts yet, they're not feeding in any 360 00:20:55,960 --> 00:20:58,440 Speaker 1: kind of risk around these companies being broken up, getting 361 00:20:58,440 --> 00:21:01,360 Speaker 1: too big, into any kind of stimate or into any 362 00:21:01,400 --> 00:21:04,640 Speaker 1: kind of analysis of these companies. These companies have got 363 00:21:04,680 --> 00:21:08,480 Speaker 1: bigger and the evaluations have got much much bigger ahead 364 00:21:08,480 --> 00:21:10,840 Speaker 1: of next year. I just wonder when it turns, Tom, 365 00:21:10,880 --> 00:21:12,640 Speaker 1: I wonder when it turns and it starts to matter 366 00:21:12,680 --> 00:21:14,600 Speaker 1: in terms of the bottom line, because right now it 367 00:21:14,640 --> 00:21:16,960 Speaker 1: hasn't there. It is. We had fun with us. Thanks 368 00:21:16,960 --> 00:21:19,560 Speaker 1: to our team for putting together again Paul Sweeney will 369 00:21:19,560 --> 00:21:22,920 Speaker 1: be joining us. Scott Galloway will continue with us with 370 00:21:23,119 --> 00:21:43,400 Speaker 1: Mrs when you thrilled to have Professor Galloway with us today, 371 00:21:47,520 --> 00:21:50,639 Speaker 1: we're the Scott Galloway of New York University n y U. 372 00:21:51,280 --> 00:21:54,760 Speaker 1: His book The Four The Hidden DNA of Amazon, Apple, Facebook, 373 00:21:54,760 --> 00:21:58,400 Speaker 1: and Google required read for Global Wall Street, Required read 374 00:21:58,480 --> 00:22:01,320 Speaker 1: for all of us, as we are hugely influenced by 375 00:22:01,359 --> 00:22:04,199 Speaker 1: these four juggernauts. Paul Sweeney joins us running all of 376 00:22:04,200 --> 00:22:08,359 Speaker 1: Bloomberg Intelligence. Paul, give us a clinic here for Professor Galloway. 377 00:22:08,680 --> 00:22:13,040 Speaker 1: Gross profit forget about revenue, gross profit it. Amazon is 378 00:22:13,119 --> 00:22:17,840 Speaker 1: twice as large as Disney, but they're ebut down the 379 00:22:17,880 --> 00:22:22,960 Speaker 1: income statement is almost the same. Why is Mr Igor 380 00:22:23,520 --> 00:22:27,520 Speaker 1: so much a feared of Mr Bezos if they're minting 381 00:22:27,560 --> 00:22:30,920 Speaker 1: the same money. Well, I think it's because Jeff Bezos 382 00:22:30,920 --> 00:22:33,879 Speaker 1: and Amazon, you know, has just a tremendous amount of 383 00:22:33,920 --> 00:22:38,000 Speaker 1: top line revenue growth, which allows the company to continually 384 00:22:38,040 --> 00:22:41,520 Speaker 1: reinvest in the business, most notably in you know, their distribution, 385 00:22:41,560 --> 00:22:44,800 Speaker 1: their shipping, their logistics, uh to you know, try to 386 00:22:44,840 --> 00:22:47,399 Speaker 1: get closer to their customers, and so they have been 387 00:22:47,680 --> 00:22:50,199 Speaker 1: they being Amazon has been able to really condition the 388 00:22:50,240 --> 00:22:54,680 Speaker 1: marketplace into accepting these very high levels of either expenses 389 00:22:54,760 --> 00:22:56,840 Speaker 1: or investment in the company, depending upon how you want 390 00:22:56,840 --> 00:22:58,800 Speaker 1: to look at it, but certainly from the company's perspective, 391 00:22:58,800 --> 00:23:00,879 Speaker 1: they are investing in the company, investing in their service, 392 00:23:01,000 --> 00:23:04,160 Speaker 1: investing in their platform, all at the expense of near 393 00:23:04,280 --> 00:23:08,520 Speaker 1: term profit um and it has clearly been the case 394 00:23:08,560 --> 00:23:10,880 Speaker 1: where Jeff Bezos been able to condition the marketplace that 395 00:23:10,880 --> 00:23:14,800 Speaker 1: that is the path best chosen. Scott Galloway, Where is 396 00:23:14,920 --> 00:23:18,320 Speaker 1: Amazon in five years? I read every word of your 397 00:23:18,440 --> 00:23:23,200 Speaker 1: chapter on Amazon, and the growth is frightening. How big 398 00:23:23,200 --> 00:23:27,399 Speaker 1: are they in five years? Well, I think they'll be 399 00:23:27,480 --> 00:23:30,440 Speaker 1: smaller because I think what's going to happen is Amazon 400 00:23:30,520 --> 00:23:32,840 Speaker 1: is going to announce the equivalent of Prime squared, where 401 00:23:32,840 --> 00:23:37,280 Speaker 1: they get into zero click artificial intelligence driven retail or 402 00:23:37,320 --> 00:23:41,040 Speaker 1: for the your purchases that are low consideration and recurring, 403 00:23:41,119 --> 00:23:43,640 Speaker 1: they will just ship them without your permission and you'll 404 00:23:43,680 --> 00:23:46,239 Speaker 1: like it. They're working on technology can get into your 405 00:23:46,240 --> 00:23:49,320 Speaker 1: house and into your refrigerator. I believe when they announced 406 00:23:49,359 --> 00:23:52,320 Speaker 1: this program that you'll manage here using this butler that 407 00:23:52,400 --> 00:23:55,520 Speaker 1: follows you around your house called Alexa. You'll say, Alexa 408 00:23:55,640 --> 00:23:59,000 Speaker 1: dinner party for seven Alexa send me four quotes or 409 00:23:59,040 --> 00:24:02,200 Speaker 1: auto insurance you an email, They'll run a task, they'll 410 00:24:02,240 --> 00:24:05,280 Speaker 1: take prime households from an average dollars a year to 411 00:24:05,400 --> 00:24:09,800 Speaker 1: seven thousand. The stock will become anti gravity, it'll burst 412 00:24:09,800 --> 00:24:12,680 Speaker 1: through a trillion dollars in market chap our society is 413 00:24:12,680 --> 00:24:14,399 Speaker 1: going to freak out and we're going to break them 414 00:24:14,480 --> 00:24:16,600 Speaker 1: up and the company will be smaller in five years. 415 00:24:16,640 --> 00:24:18,399 Speaker 1: How do you respond to that pulse? I mean, that 416 00:24:18,520 --> 00:24:21,560 Speaker 1: is that is one of the Galloway thesis that makes headlines. 417 00:24:22,119 --> 00:24:25,920 Speaker 1: But is it valid to a financial guy like you? Uh? 418 00:24:25,960 --> 00:24:28,800 Speaker 1: It is. I think in the technology world, Um, you know, 419 00:24:28,880 --> 00:24:32,040 Speaker 1: we've seen regulatory risk as a material risk for a 420 00:24:32,080 --> 00:24:33,760 Speaker 1: lot of these tech companies, going all the way back, 421 00:24:33,840 --> 00:24:36,919 Speaker 1: you know to Microsoft five years ago, starting in the 422 00:24:36,920 --> 00:24:40,359 Speaker 1: European Union. So as companies, I think as investors take 423 00:24:40,400 --> 00:24:42,200 Speaker 1: a look at some of these business models and uh, 424 00:24:42,440 --> 00:24:44,920 Speaker 1: you know, as Professor Galloway suggested, the Big Four here, 425 00:24:45,359 --> 00:24:47,360 Speaker 1: you know, the the run rates just if you take 426 00:24:47,400 --> 00:24:50,000 Speaker 1: a look at the businesses are just so long. Uh. 427 00:24:50,040 --> 00:24:52,760 Speaker 1: The only risk that really investors kind of keeping the 428 00:24:52,760 --> 00:24:54,240 Speaker 1: back of their mind, and it's in the way back 429 00:24:54,240 --> 00:24:56,520 Speaker 1: of their mind is regulatory risk. We might see it 430 00:24:56,600 --> 00:24:58,720 Speaker 1: first in Europe, though that's kind of where we typically 431 00:24:58,800 --> 00:25:01,720 Speaker 1: see a lot of the push back initially. Dr Galloway, 432 00:25:01,800 --> 00:25:04,280 Speaker 1: you mentioned that earlier that Europe is maybe at the 433 00:25:04,320 --> 00:25:09,960 Speaker 1: margin the regulation leader. To me, they're very separate. How 434 00:25:10,040 --> 00:25:16,600 Speaker 1: linked is US Washington regulation with Brussels. It's a fair question, Tom. 435 00:25:16,680 --> 00:25:18,800 Speaker 1: I'm not sure I have a good answer. But what's 436 00:25:18,840 --> 00:25:21,360 Speaker 1: clear is where I believe in the US that we're 437 00:25:21,440 --> 00:25:25,560 Speaker 1: net gainers on the whole, despite all the downside. Job destruction, 438 00:25:25,640 --> 00:25:29,200 Speaker 1: privacy concerns, tax avoidance, were net gainers in the US, 439 00:25:29,320 --> 00:25:32,119 Speaker 1: But in Europe there are very few university buildings or 440 00:25:32,200 --> 00:25:36,000 Speaker 1: hospital wings named after Facebook are Google billionaires, yet they 441 00:25:36,040 --> 00:25:38,560 Speaker 1: register all of the downside, So a fraction of the 442 00:25:38,640 --> 00:25:40,919 Speaker 1: upside of all of the downside that's stiff in the 443 00:25:40,960 --> 00:25:44,720 Speaker 1: backbones of the regulators. You're about to see Marjory Messenger 444 00:25:44,800 --> 00:25:48,600 Speaker 1: go gangster on these four It's the war against big 445 00:25:48,600 --> 00:25:50,320 Speaker 1: tech is going to break out where all the major 446 00:25:50,359 --> 00:25:52,959 Speaker 1: conflicts of the twentieth century have broken out. It's going 447 00:25:53,000 --> 00:25:56,360 Speaker 1: to break out in continental Europe. Very interesting to see, 448 00:25:56,400 --> 00:25:58,399 Speaker 1: and I must have made I've amended my thoughts on 449 00:25:58,440 --> 00:26:00,680 Speaker 1: that through the year as well, and now we rip 450 00:26:00,760 --> 00:26:02,520 Speaker 1: up the script as we are wont to do at 451 00:26:02,520 --> 00:26:05,960 Speaker 1: Bloomberg Surveillance Scott Galloway. I looked at the index of 452 00:26:06,000 --> 00:26:09,679 Speaker 1: the four not an area a word of bitcoin. Have 453 00:26:09,800 --> 00:26:14,800 Speaker 1: you studied bitcoin? Have you lectured to the cherubs on bitcoin? Um? 454 00:26:14,880 --> 00:26:18,080 Speaker 1: I guess is there's a rather big divide between the 455 00:26:18,080 --> 00:26:23,240 Speaker 1: professor and the student. I you know, it's the reality 456 00:26:23,240 --> 00:26:25,760 Speaker 1: of Thomas. I don't fully understand it. The only thing 457 00:26:25,760 --> 00:26:27,920 Speaker 1: I can discern from it is that it's an adversely 458 00:26:27,960 --> 00:26:33,680 Speaker 1: correlated trust meter on our government. When we start having 459 00:26:33,720 --> 00:26:36,639 Speaker 1: senators who've been banned from malls, bitcoin goes up. I 460 00:26:36,680 --> 00:26:40,320 Speaker 1: think it's a belief that we no longer have confidence 461 00:26:40,359 --> 00:26:42,760 Speaker 1: in our governments and the Fiat currency as they back 462 00:26:42,840 --> 00:26:45,480 Speaker 1: and so we find a currency that is not backed 463 00:26:45,480 --> 00:26:48,800 Speaker 1: by government. I think it's a mistrust index. Paul Sweeney, 464 00:26:48,840 --> 00:26:52,480 Speaker 1: is Bloomberg Intelligence going to devote assets to the study 465 00:26:52,720 --> 00:26:57,400 Speaker 1: of separately? Bitcoin is currency value? With your great Currency 466 00:26:57,440 --> 00:27:03,800 Speaker 1: Teams or chryp do currency in the processes of digital space, 467 00:27:04,280 --> 00:27:06,159 Speaker 1: we are, and I think we would step back and 468 00:27:06,200 --> 00:27:08,439 Speaker 1: look at it just as a whole context of you know, 469 00:27:08,520 --> 00:27:11,920 Speaker 1: blockchain and kind of what that means across various industries. 470 00:27:11,920 --> 00:27:15,600 Speaker 1: We're looking at that, starting with obviously the financial services industry. UM, 471 00:27:15,640 --> 00:27:17,000 Speaker 1: and the question is do you know do you are 472 00:27:17,040 --> 00:27:19,560 Speaker 1: you in the Jamie Diamond camp, which obviously he is 473 00:27:19,560 --> 00:27:22,879 Speaker 1: not a believer at all in bitcoins specifically, but I 474 00:27:22,880 --> 00:27:25,760 Speaker 1: think blockchain is something that is clearly something in the marketplace, 475 00:27:25,800 --> 00:27:28,640 Speaker 1: and um, I think from a technology to a consumer 476 00:27:28,960 --> 00:27:32,480 Speaker 1: services to uh, you know, financial services, I think it's 477 00:27:32,480 --> 00:27:34,760 Speaker 1: going to be very impactful. And that's what our analys 478 00:27:34,760 --> 00:27:38,160 Speaker 1: are looking at the moment. Scott Galloway, what do Amazon, Apple, Facebook, 479 00:27:38,200 --> 00:27:41,000 Speaker 1: and Google do about blockchain? Do they take it in 480 00:27:41,160 --> 00:27:44,000 Speaker 1: this Google take it in and use it worldwide? You 481 00:27:44,080 --> 00:27:48,800 Speaker 1: how do they handle that? It's an interesting question. Tom. 482 00:27:48,800 --> 00:27:51,120 Speaker 1: I would argue that the companies that are most at 483 00:27:51,240 --> 00:27:54,359 Speaker 1: risk based on my understanding of blockchain, and I agree 484 00:27:54,440 --> 00:27:56,840 Speaker 1: with Paul that that's where the real innovation here is 485 00:27:56,920 --> 00:28:00,760 Speaker 1: with the blockchain our ledger based businesses such a large 486 00:28:00,760 --> 00:28:04,600 Speaker 1: accounting firms or financial services. I mean, Jamie Diamond has 487 00:28:04,640 --> 00:28:08,760 Speaker 1: good reason to hate anything crypto or blockchain because if 488 00:28:08,800 --> 00:28:11,960 Speaker 1: you look at where the destruction could potentially really take 489 00:28:12,000 --> 00:28:15,600 Speaker 1: an industry, it's financial services. Scott Galloway really leave to 490 00:28:15,640 --> 00:28:17,760 Speaker 1: continue with Paul here for a bit more, but thank you, 491 00:28:17,840 --> 00:28:20,760 Speaker 1: thank you so much. And Scott Galloway, folks surprised me. 492 00:28:20,800 --> 00:28:22,159 Speaker 1: I knew he had a book coming out, but he 493 00:28:22,240 --> 00:28:25,720 Speaker 1: had no idea the the effect it would have on 494 00:28:25,800 --> 00:28:28,600 Speaker 1: about these four companies that are part of each of 495 00:28:28,600 --> 00:28:32,720 Speaker 1: our everyday lies, Amazon, Apple, Facebook, and Google, the four. 496 00:28:33,240 --> 00:28:36,359 Speaker 1: It is a lovely brief read of some two hundred 497 00:28:36,440 --> 00:28:39,120 Speaker 1: fifty pages Scott Galloway in my book of the Year 498 00:28:39,480 --> 00:28:41,680 Speaker 1: at the four and a major shout out to Kenneth 499 00:28:41,760 --> 00:28:44,720 Speaker 1: Rogoff of Harvard with my book of the Year last year, 500 00:28:44,760 --> 00:28:48,240 Speaker 1: The Curse of Cash, which was a hugely brave book 501 00:28:48,360 --> 00:28:53,120 Speaker 1: done at some truly physical peril to Professor Rogoff as well. 502 00:28:53,120 --> 00:28:56,000 Speaker 1: Paul Sweeney in the News sort of kind of like today, 503 00:28:56,600 --> 00:29:00,640 Speaker 1: another another round of Disney and Fox. I mean, when 504 00:29:00,640 --> 00:29:03,480 Speaker 1: you're at the meeting with these players, is this gonna happen? 505 00:29:04,120 --> 00:29:06,200 Speaker 1: It's interesting, It's uh. This is one of the bigger 506 00:29:06,240 --> 00:29:08,280 Speaker 1: weeks of the year for the media industry. This is 507 00:29:08,320 --> 00:29:10,360 Speaker 1: the week of the UBS Media Conference. It's in its 508 00:29:10,360 --> 00:29:13,080 Speaker 1: forty year. I'll be heading down to the those meetings 509 00:29:13,080 --> 00:29:15,280 Speaker 1: today and that's gonna be very interesting to see how 510 00:29:15,280 --> 00:29:17,480 Speaker 1: people are kind of stewing all this around. But I 511 00:29:17,480 --> 00:29:20,080 Speaker 1: think the biggest news that's come out of the media sector, 512 00:29:20,120 --> 00:29:22,600 Speaker 1: which has been rife with a disruption over the last 513 00:29:22,600 --> 00:29:25,080 Speaker 1: several years, is the fact that Rupert Murdoch is actually 514 00:29:25,080 --> 00:29:27,200 Speaker 1: considering breaking up this company. We never I don't think 515 00:29:27,240 --> 00:29:29,800 Speaker 1: anybody who has followed this sector for the last thirty 516 00:29:29,840 --> 00:29:32,040 Speaker 1: years it would think that they would ever see that day. 517 00:29:32,040 --> 00:29:34,840 Speaker 1: So I think that day maybe here. If it is here, 518 00:29:35,000 --> 00:29:38,600 Speaker 1: then there are plenty of viable buyers that would be 519 00:29:38,760 --> 00:29:41,240 Speaker 1: looking at these assets. And obviously the most notable ones 520 00:29:41,280 --> 00:29:44,560 Speaker 1: are Disney, Comcast, and Verizon, but I suspect there might 521 00:29:44,560 --> 00:29:46,360 Speaker 1: be others as well. What have you learned from your 522 00:29:46,400 --> 00:29:51,560 Speaker 1: experts on CVS? Now? What is the heart the research 523 00:29:51,680 --> 00:29:55,920 Speaker 1: theme of Bloomberg Intelligence on this two hundred and forties 524 00:29:56,000 --> 00:29:59,120 Speaker 1: some million billion dollar Yeah, I think this, you know, 525 00:29:59,120 --> 00:30:01,200 Speaker 1: as we see it across number of industries, but this 526 00:30:01,240 --> 00:30:03,560 Speaker 1: is one's being driven by, you know, all the change 527 00:30:03,600 --> 00:30:06,680 Speaker 1: that's taking place in healthcare industry. And when there's change 528 00:30:06,720 --> 00:30:09,320 Speaker 1: taking place, a lot of times, one of the trends 529 00:30:09,320 --> 00:30:12,160 Speaker 1: you see is consolidations, scale the need for scale, the 530 00:30:12,240 --> 00:30:14,600 Speaker 1: need for vertical integration, and that's kind of what I 531 00:30:14,600 --> 00:30:17,840 Speaker 1: think we're seeing here. So it's it's a new model, um, 532 00:30:17,840 --> 00:30:20,000 Speaker 1: but it's one where the balance sheets seemed to support 533 00:30:20,040 --> 00:30:21,920 Speaker 1: it here so well, and the stocks seemed to as well. 534 00:30:22,200 --> 00:30:26,080 Speaker 1: Your Drew Armstrong was very good this morning as as well. 535 00:30:26,120 --> 00:30:28,760 Speaker 1: Paul Sweeney, thank you so much with Bloomberg Intelligence, not 536 00:30:28,800 --> 00:30:31,719 Speaker 1: only his expertise of media but running all of our 537 00:30:31,760 --> 00:30:35,080 Speaker 1: different affairs. The huge group and grows each and every year. 538 00:30:35,160 --> 00:30:38,600 Speaker 1: The commitment of Bloomberg to trying to throw non by 539 00:30:38,680 --> 00:30:42,680 Speaker 1: nonhold non sill securities research. Mr Sweeney, thank you, and 540 00:30:43,120 --> 00:30:46,120 Speaker 1: again a great thanks to Rich Greenfield of bt I 541 00:30:46,200 --> 00:30:49,520 Speaker 1: G who um on it with a really tight schedule, 542 00:30:49,960 --> 00:30:52,760 Speaker 1: joined us with Mr Galloway this morning as we celebrate 543 00:30:53,200 --> 00:30:56,959 Speaker 1: before the hidden DNA of Amazon, Apple, Facebook, and Google. 544 00:30:57,600 --> 00:31:01,000 Speaker 1: It's my enthusiastic book of the year. Uh. There were 545 00:31:01,040 --> 00:31:03,440 Speaker 1: many others that we looked at, but the four is 546 00:31:03,520 --> 00:31:09,240 Speaker 1: just absolutely original and I might point out controversial. Thanks 547 00:31:09,320 --> 00:31:13,560 Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen 548 00:31:13,800 --> 00:31:19,120 Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform 549 00:31:19,240 --> 00:31:23,520 Speaker 1: you prefer. I'm on Twitter at Tom Keane. Before the podcast, 550 00:31:23,600 --> 00:31:27,080 Speaker 1: you can always catch us worldwide. I'm Bloomberg Radio.