WEBVTT - P&L: Why Fake News Is A Global Problem 0:00:04.760 --> 0:00:08.080 Welcome to the Bloomberg P and L Podcast. I'm pim Fox. 0:00:08.119 --> 0:00:11.200 Along with my co host Lisa Abramowitz. Each day we 0:00:11.280 --> 0:00:14.480 bring you the most important, noteworthy, and useful interviews for 0:00:14.520 --> 0:00:16.880 you and your money, whether at the grocery store or 0:00:16.920 --> 0:00:20.680 the trading floor. Find the Bloomberg P L Podcast on iTunes, 0:00:20.840 --> 0:00:30.440 SoundCloud and at Bloomberg dot com. Well, talking about fake 0:00:30.560 --> 0:00:34.360 news is David Guarantee, CEO of g v A Research. 0:00:34.400 --> 0:00:36.400 Thank you David so much for being here and sort 0:00:36.400 --> 0:00:40.519 of helping us understand how big of a problem the 0:00:40.520 --> 0:00:42.920 proliferation of some of this fake news is on a 0:00:42.960 --> 0:00:46.839 global level. Certainly, Lisa, my pleasure and thank you pim um. 0:00:46.880 --> 0:00:48.640 You know, in terms of looking at the current election cycle, 0:00:48.680 --> 0:00:51.440 two thousand and sixteen, we didn't see the rise of 0:00:51.479 --> 0:00:55.600 this sort of unverified content being put out onto the 0:00:55.640 --> 0:00:58.040 social media, and if we went back to two thousand twelve, 0:00:58.080 --> 0:00:59.920 we were in a situation here where social media was 0:01:00.200 --> 0:01:03.040 really at a point where the size of their audience 0:01:03.240 --> 0:01:07.280 was outstripping that of traditional news organizations. However, four years 0:01:07.319 --> 0:01:10.560 further down the road, things obviously have massively changed, and 0:01:10.600 --> 0:01:13.280 we're now in a situation where organizations such as the 0:01:13.319 --> 0:01:16.679 Pew Center have said that of their survey respondents recently, 0:01:16.920 --> 0:01:19.880 about forty percent of them are roving relying upon social 0:01:19.920 --> 0:01:24.400 media as being their primary information source. However, social media 0:01:24.480 --> 0:01:28.320 organizations bend over backwards to say we're not news organizations, 0:01:28.319 --> 0:01:30.920 were technology companies. Well, the fact of the matter is 0:01:31.040 --> 0:01:34.240 the size of their audience is now larger than traditional 0:01:34.319 --> 0:01:37.959 news organizations. They are in effect news organization because their 0:01:38.000 --> 0:01:41.560 audience treats them as such. However, given the fact that 0:01:41.560 --> 0:01:43.640 they're now adults, they don't wish to take on the 0:01:43.680 --> 0:01:47.720 responsibilities that would fall traditionally to a news organization, which 0:01:47.760 --> 0:01:51.279 means they don't they would want not enjoy the protections 0:01:51.320 --> 0:01:56.960 of the US Constitution as a news media outlet. And 0:01:57.000 --> 0:01:58.720 they will also say that they would be subject to 0:01:58.760 --> 0:02:01.040 libel laws. Well, was where I was going to go 0:02:01.120 --> 0:02:05.080 with this, because we all recall the libel uh suit 0:02:05.200 --> 0:02:11.280 that was filed against Vice. Was this That's what I 0:02:11.280 --> 0:02:15.600 beg Gawker was a director of Facebook. Peter Teal, yes, 0:02:15.680 --> 0:02:18.840 who funded that lawsuit, and its not the only lawsuit 0:02:18.919 --> 0:02:23.440 that Pete that Teal and other billionaires have funded. So clearly, 0:02:23.720 --> 0:02:26.880 if people are concerned about a free press, people are 0:02:26.880 --> 0:02:30.760 concerned about having proper information, and if proper information is 0:02:30.800 --> 0:02:34.280 what is necessary to have an informed electorate that can 0:02:34.320 --> 0:02:38.720 make proper and appropriate choices in elections. Liberal democracy needs 0:02:38.720 --> 0:02:42.280 an informed electorate. Misinformation cuts right at that route. I 0:02:42.280 --> 0:02:44.600 want to play the devil's advocate because in your comments 0:02:44.600 --> 0:02:47.519 you're basically saying that the facebooks and the twitters of 0:02:47.560 --> 0:02:49.919 the world really ought to So the implication is that 0:02:49.960 --> 0:02:54.040 they really ought to police what's getting distributed and understood 0:02:54.080 --> 0:02:56.720 as truth. At the same time, isn't the onus on 0:02:58.000 --> 0:03:00.200 the consumers of this, I mean, isn't it to sort 0:03:00.200 --> 0:03:03.720 of seek out the verified information? And I mean, by 0:03:03.800 --> 0:03:06.080 how do you how do you make sure that the 0:03:06.080 --> 0:03:09.600 twitters and facebooks of the world aren't de facto censors 0:03:09.600 --> 0:03:12.960 and becoming you know, uh and viewed frankly as as 0:03:13.000 --> 0:03:15.440 the man or sort of be viewed as in bed 0:03:15.480 --> 0:03:18.400 with a particular political party in going after you know, 0:03:18.400 --> 0:03:21.160 another side. I mean, this sort of edges into a 0:03:21.200 --> 0:03:23.640 pretty scary territory. Yes, we we are relying upon an 0:03:23.680 --> 0:03:26.480 informed electorate to basically exercise their judgment, but at the 0:03:26.480 --> 0:03:28.679 same time, we look at how social media sites have 0:03:28.800 --> 0:03:32.359 developed their algorithms they're programming is developed in such a 0:03:32.360 --> 0:03:34.239 way as to show people what it is that they 0:03:34.280 --> 0:03:37.080 already like. The idea being if the dogs reading the 0:03:37.120 --> 0:03:40.000 dog food, give them more dog food. And from that standpoint, 0:03:40.000 --> 0:03:43.320 we've seen the creation of basically filter bubbles in terms 0:03:43.320 --> 0:03:46.080 of people basically sharing information with their friends and they're 0:03:46.080 --> 0:03:49.000 basically just given more of the same. They're not given 0:03:49.040 --> 0:03:52.080 a contrasting point of view. There is nothing that as 0:03:52.200 --> 0:03:55.120 individuals requires them to be fair and balanced in terms 0:03:55.120 --> 0:03:58.360 of what media they consume. There is a concern here 0:03:58.600 --> 0:04:00.720 which I think we have to look were the corporate 0:04:00.720 --> 0:04:03.800 advertisers who have been looking at using social media as 0:04:03.840 --> 0:04:07.880 a channel increasingly because that's where the audiences migrated. Were 0:04:08.160 --> 0:04:11.240 the advertisers from the standpoint of concerns over their own 0:04:11.240 --> 0:04:14.800 brand reputations, not wishing to have an ad served next 0:04:14.800 --> 0:04:17.240 to a piece of news that is fake or false 0:04:17.360 --> 0:04:19.479 or hateful or misleading. You know, there could be a 0:04:19.520 --> 0:04:22.760 move here by advertisers essentially, Sarah say, yes, social media 0:04:22.839 --> 0:04:25.280 maybe a lot of noise, but it's not something we 0:04:25.360 --> 0:04:28.039 used to identify with. Why because we've spent you know, 0:04:28.160 --> 0:04:30.640 billions of dollars building our reputations and We're not going 0:04:30.680 --> 0:04:33.320 to see it sold away for something that basically gives 0:04:33.360 --> 0:04:35.839 the way the truth or debases it. Didn't that already 0:04:35.839 --> 0:04:38.359 happen with pripe Bart. Wasn't there an a distributor that 0:04:38.400 --> 0:04:41.840 removed it's uh its services from bright part calling it 0:04:42.279 --> 0:04:44.080 hate speech? It was last week there was there was 0:04:44.080 --> 0:04:46.440 something like this. I mean it is there are There 0:04:46.560 --> 0:04:49.600 is starting to be some pushback, but it'll be curious 0:04:49.600 --> 0:04:51.440 to see whether it will be. I was actually in 0:04:51.440 --> 0:04:54.200 a meeting recently with a fellow who was in charge 0:04:54.200 --> 0:04:58.360 of WPP Group, very large global advertising agency amongst the largest, 0:04:58.400 --> 0:05:00.719 and he was the one who is simply indicating that 0:05:00.800 --> 0:05:03.840 this was a likely response to fake news coming off 0:05:03.839 --> 0:05:05.760 of the selection, that he would basically go out and 0:05:05.839 --> 0:05:09.040 council the global advertisers that they work with to say, look, 0:05:09.480 --> 0:05:14.560 focus on reliable sources of media and information. You know, 0:05:15.400 --> 0:05:18.440 from that standpoint, social media, like any other organization, has 0:05:18.480 --> 0:05:20.320 to pay bills, and if they don't get any money 0:05:20.320 --> 0:05:23.000 from advertisers, I think their tune will change. Well, let 0:05:23.000 --> 0:05:26.320 me just give you the detail here. The bright Bart 0:05:26.960 --> 0:05:29.760 example that you just offered a Lisa it was app 0:05:30.080 --> 0:05:34.000 nexus and they deactivated bright Bart News after an audit 0:05:34.040 --> 0:05:37.600 of the site's content determined that it violated the Advertising 0:05:37.640 --> 0:05:43.960 Networks Code of Conduct banning hate speech and great hate speech. 0:05:44.000 --> 0:05:47.760 But I didn't say fake speech. And one David, how 0:05:47.800 --> 0:05:51.200 long have you been covering the technology industry more technology 0:05:51.200 --> 0:05:54.280 sector of going back before the change the millennium? Okay, 0:05:54.360 --> 0:05:59.360 so consequences responsibilities? Do technology companies have a great track 0:05:59.400 --> 0:06:02.600 record when it comes to the social consequences and responsibilities? 0:06:02.640 --> 0:06:08.120 Because if they want those press uh freedoms, then maybe 0:06:08.200 --> 0:06:10.440 they're going to have to change the way that they charge. 0:06:10.880 --> 0:06:12.640 This is very true. And if we go back and 0:06:12.680 --> 0:06:15.280 look historically a technology companies, they tend to have a 0:06:15.640 --> 0:06:19.039 shorter lifespan, if you will, than than other companies. But 0:06:19.120 --> 0:06:21.720 one thing that people have noted more broadly is that 0:06:21.760 --> 0:06:25.640 the lifespan of corporations has been contracting. But arguably one 0:06:25.680 --> 0:06:28.719 would say technology companies lead in this regard. Typically there 0:06:28.760 --> 0:06:31.200 has been a disposition on the part of managements whre 0:06:31.480 --> 0:06:34.800 in early stage investors and technology companies essentially to build 0:06:34.839 --> 0:06:38.640 them for sale, basically passed the buck on to somebody else, 0:06:38.680 --> 0:06:42.279 the acquirer, to have the acquirer solve the problem. Some 0:06:42.400 --> 0:06:44.080 of the concerns that they have been in the case 0:06:44.120 --> 0:06:47.440 of social media companies, is being concerned about how fickle 0:06:47.720 --> 0:06:51.800 the demographics of their audience was. Certainly we've seen early 0:06:51.920 --> 0:06:56.279 age demographics going from say fifteen to twenty four have 0:06:56.360 --> 0:06:59.520 been migrating away from Facebook, have been migrating more towards 0:06:59.560 --> 0:07:02.040 things like Napchat. Obviously, we'll see how well that does 0:07:02.400 --> 0:07:05.560 with its I p O. But nonetheless, the audience is fickle, 0:07:05.760 --> 0:07:08.919 and from that standpoint, one would argue that there is 0:07:09.440 --> 0:07:12.720 a hands off attitude in order to maintain an audience. 0:07:12.760 --> 0:07:17.360 And so as a result, you know, this kind of disregard, 0:07:17.400 --> 0:07:20.560 if you will, for the niceties that news organizations need 0:07:20.600 --> 0:07:25.200 to follow have certainly led social media organizations Facebook at 0:07:25.240 --> 0:07:39.400 al to wander far afield Um. Now I want to 0:07:39.440 --> 0:07:42.880 turn our attention to the fate of Italian banks. We 0:07:42.920 --> 0:07:46.200 have Jonathan Tyson is our senior banks analyst for Bloomberg Intelligence, 0:07:46.280 --> 0:07:52.280 joining us from London. Jonathan, there is a referendum scheduled 0:07:52.280 --> 0:07:56.080 for December the fourth. What does the referendum in Italy 0:07:56.400 --> 0:07:59.680 mean not only for the government but for the future 0:08:00.080 --> 0:08:03.840 of Italian banking. That's good, good morning. I think the 0:08:03.920 --> 0:08:08.640 referendum per se was clearly Mario Renzi um the prime minister, 0:08:08.920 --> 0:08:11.920 the prime minister looking to consolidate his position or have 0:08:11.960 --> 0:08:15.320 an exit strategy. And in terms of what it means 0:08:15.480 --> 0:08:18.880 for the sort of wider economy and the banks, um, 0:08:18.920 --> 0:08:22.320 if it's a no vote and Renzy does walk, then 0:08:22.440 --> 0:08:25.560 quite clearly all of the things the Italian banks, mostly 0:08:25.640 --> 0:08:28.240 via UNI Credit and Monty Pachy, where most of the 0:08:28.800 --> 0:08:30.240 people are looking at the moment they're trying to do, 0:08:30.840 --> 0:08:34.520 they get set back. Confidence dwindles. We've already seen, for example, 0:08:35.240 --> 0:08:38.839 a five billion euro fifty year bond that was issued 0:08:38.920 --> 0:08:41.280 very recently by itaally that's now trading at eighty five 0:08:41.440 --> 0:08:45.240 cents in the euro. So it's fallen in a very 0:08:45.280 --> 0:08:47.160 few weeks. When they issued it, I think it was 0:08:47.200 --> 0:08:50.240 like two point eight three percent or something around there. 0:08:50.240 --> 0:08:51.840 And you wonder, who would you know lend their money 0:08:51.880 --> 0:08:54.800 for fifty years. Well, so, I mean we we've seen 0:08:54.920 --> 0:08:58.000 hundred year bonds in Europe. Certainly, sometimes you do look 0:08:58.000 --> 0:09:01.720 at it and think, two people believe that the Eurozone 0:09:01.720 --> 0:09:04.880 crisis has gone away, and if anything, as very little 0:09:04.920 --> 0:09:09.120 is achieved, we're getting further right um politically across Europe 0:09:09.440 --> 0:09:11.960 and there are so many questions unresolved, with so little 0:09:11.960 --> 0:09:15.640 action and resolution in the banks. Um, it's very hard 0:09:15.679 --> 0:09:18.360 to see this not dragging into two thousands and seventeen 0:09:18.400 --> 0:09:21.040 and beyond. Well, okay, so the Italian banks have been 0:09:21.040 --> 0:09:22.959 in trouble for a while that there is are a 0:09:23.040 --> 0:09:25.240 number of them that are looking for some kind of 0:09:25.280 --> 0:09:30.360 solution that may, if possible, include some kind of government bailout. Again, 0:09:30.360 --> 0:09:34.800 that's not necessarily possible under some of the recent rules 0:09:34.800 --> 0:09:37.480 that have been implemented. But can you walk us through 0:09:38.120 --> 0:09:41.679 the direct mechanism by which the banks will suffer in 0:09:41.679 --> 0:09:43.760 a no vote for the referendum? In other words, walk 0:09:43.800 --> 0:09:46.600 us through kind of Is this a matter of yields 0:09:46.760 --> 0:09:51.559 on an Italian government bonds, blowing out any of their holdings, 0:09:51.559 --> 0:09:55.600 losing a lot of value, borrowing costs for them, you know, ballooning. 0:09:55.720 --> 0:09:58.520 Is that sort of the mechanism by which this will 0:09:58.600 --> 0:10:01.000 lead to trouble for them? No? Not really, I mean 0:10:01.040 --> 0:10:05.240 that is that's amcillary, that's part of it. Because the 0:10:05.280 --> 0:10:09.120 Italian banks owned several hundred billion of government bonds, So 0:10:09.160 --> 0:10:12.400 clearly yields blowing out means that the unrealized gains in 0:10:12.440 --> 0:10:16.120 those bonds are disappearing, and Italian banks include that in 0:10:16.160 --> 0:10:19.480 regulatary solvency, so it's unhelpful. But that's not the problem. 0:10:19.559 --> 0:10:22.400 The problem is that the banks have got several hundred 0:10:22.440 --> 0:10:25.160 billions of non performing loans. They've got two hundred plus 0:10:25.200 --> 0:10:29.000 billion of the very worst sort of loans, and Monty Pasky, 0:10:29.040 --> 0:10:31.760 which is the poster child for everything that's bad and 0:10:32.240 --> 0:10:35.720 needs addressing in Italy, they are trying to raise up 0:10:35.720 --> 0:10:38.680 to five billion and are flowed tens of billions of 0:10:38.679 --> 0:10:41.880 non performing loans. And we need proof that there is 0:10:41.920 --> 0:10:46.000 actually a secondary market for the sale of non performing loans, 0:10:46.040 --> 0:10:49.000 because it's not just Monti Paski. Uni Credit is the 0:10:49.080 --> 0:10:52.720 largest bank in Italy by assets. They've got tens of billions, 0:10:52.880 --> 0:10:57.119 multiples of what Monty Pasky has. So if we lose confidence, 0:10:57.160 --> 0:10:59.680 if the market takes a step back and doesn't understand 0:10:59.679 --> 0:11:04.600 the direction politically and regulatorily of Italy into two thousands 0:11:04.600 --> 0:11:08.400 and seventeen, it's very hard to see how Monty Patsky 0:11:08.520 --> 0:11:11.280 and then Newny Credit, which has, by the way, a 0:11:11.320 --> 0:11:14.440 strategy day one December where they're going to try and 0:11:14.520 --> 0:11:16.920 articulate how many billions of new capital they need and 0:11:16.920 --> 0:11:19.080 how they're going to get it if we get the 0:11:19.120 --> 0:11:22.080 no vote, and there is significant fallout even from here 0:11:22.200 --> 0:11:25.920 because things have already moved. The problem remains, how on 0:11:26.000 --> 0:11:31.800 earth does Italy address it's bad loans, Jonathan the the 0:11:31.880 --> 0:11:35.680 introduction of a sort of a bad loan bank. Hasn't 0:11:35.720 --> 0:11:40.000 that been considered? And have US institutions such as Goldman 0:11:40.080 --> 0:11:44.920 Sachs and JP Morgan. They have indicated that something might 0:11:45.040 --> 0:11:47.760 change if indeed that referendum gets the no vote. As 0:11:47.800 --> 0:11:51.679 you describe, well, the problem is that you can't have 0:11:51.720 --> 0:11:55.280 state aid, and because Italy has been very very slow 0:11:55.600 --> 0:11:59.000 in applying bailin enforcing its banks to take its medicine 0:11:59.480 --> 0:12:03.559 um the the bailing rule effectively kicked in for Italy 0:12:03.600 --> 0:12:05.880 at the beginning of two thousand and sixteen. One of 0:12:05.880 --> 0:12:08.480 the problems they face is that, unlike many other markets, 0:12:08.520 --> 0:12:10.560 a lot of the bond or the debt funding that 0:12:10.600 --> 0:12:14.360 the banks have is actually held by retail bond holders. 0:12:14.800 --> 0:12:17.160 So the last thing really that you want for the 0:12:17.160 --> 0:12:19.960 Italian bank system is to have a bail in from here, 0:12:20.040 --> 0:12:23.360 because suddenly you've got a lot of retail investors and 0:12:23.679 --> 0:12:26.920 retail deposit holders who will lose significance amount of money. 0:12:27.200 --> 0:12:29.720 At that point you've got a proper liquidity crisis for 0:12:29.760 --> 0:12:33.040 the bank system as well. So unfortunately that the bail 0:12:33.160 --> 0:12:37.040 in should Montypasky struggle to raise its five billion and 0:12:37.080 --> 0:12:41.160 if it doesn't manage to use the securitization guarantee from 0:12:41.160 --> 0:12:43.920 the government to offload its nonforming leans, I think bailing 0:12:44.040 --> 0:12:46.839 is what people begin to think. At that point, you're 0:12:46.840 --> 0:12:48.880 a retail bond holder and some of the other small 0:12:49.000 --> 0:12:51.760 Italian banks, what do you do with your money and 0:12:51.800 --> 0:12:53.920 what happens to liquidity? And as we all know from 0:12:53.920 --> 0:12:57.280 two thousand and eight, when you get a significant liquidity problem, 0:12:57.280 --> 0:13:00.680 it becomes a capital problem very quickly. When we're already 0:13:00.679 --> 0:13:03.840 concerned about the solvancy of the Italian banks, Jonathan real 0:13:03.960 --> 0:13:06.760 quick Is any of this price into the market currently 0:13:06.800 --> 0:13:10.600 that a no vote will be the presiding one? Oh? Absolutely? 0:13:10.640 --> 0:13:12.800 I think the mark is well aware, um that this 0:13:12.840 --> 0:13:15.040 will be the case. And the fact is that you've 0:13:15.040 --> 0:13:17.760 got France at the moment, you've got what happens with Brexit. 0:13:18.160 --> 0:13:20.760 So is it priced inadequately? I don't know, But as 0:13:20.800 --> 0:13:23.679 we just said, um, you've got a five billion, fifty 0:13:23.720 --> 0:13:25.800 year bond away and it's four and fift cent and 0:13:25.840 --> 0:13:27.679 two to three weeks. The market is clearly very aware 0:13:27.720 --> 0:13:30.600 of this, It just doesn't understand what the real number 0:13:30.640 --> 0:13:45.000 needs to be. Lisa A. Bronwitz. Something else happening today 0:13:45.200 --> 0:13:48.800 taking place in Dallas, A T and T is said 0:13:48.840 --> 0:13:52.480 to reveal its new online video service. Of course, A 0:13:52.679 --> 0:13:55.760 T and T the owner of the video streaming service 0:13:56.000 --> 0:14:01.839 direct Tv. Now it's the country's time pay TV producer, 0:14:02.320 --> 0:14:03.880 and we know that they also want to get into 0:14:03.960 --> 0:14:09.199 the content business. We don't know exactly whether A T. 0:14:09.360 --> 0:14:13.679 T will receive a regulatory approval for their pending Uh 0:14:13.720 --> 0:14:18.000 they're pending acquisition, um is it? Uh? This is a 0:14:18.000 --> 0:14:21.360 good introduction though, for our next guest, because A T. 0:14:21.520 --> 0:14:24.800 T has been behind this this venture. Couldn't go as 0:14:24.840 --> 0:14:27.880 the co founder and the general manager of Crunchy Roll. 0:14:28.400 --> 0:14:31.240 And by the way, it makes me hungry, though, well okay, 0:14:31.280 --> 0:14:34.360 couldn't you. You've got one, You've got one follower there 0:14:34.400 --> 0:14:37.320 already already because of the name. Tell us what is 0:14:37.440 --> 0:14:40.960 what is crunchy role and then maybe just explain the 0:14:41.000 --> 0:14:43.320 relationship between you and A T and T because they're 0:14:43.360 --> 0:14:47.720 they're part owner. Sure, thank you for having me. Crunchy 0:14:47.840 --> 0:14:52.080 Role is a anime streaming service. We bring the latest 0:14:52.080 --> 0:14:55.400 shows out of Japan and we stream it to eight 0:14:55.440 --> 0:15:01.080 different languages, including English, Spanish, French, Portuguese, Italian, German, Arabic 0:15:01.360 --> 0:15:05.040 into a hundred sixty different countries. We have millions of 0:15:05.080 --> 0:15:09.440 viewers and a lot of paid subscribers. Our relationship with 0:15:09.520 --> 0:15:12.280 A T and T. They are an investor along with 0:15:12.560 --> 0:15:16.760 the Trending Group into Outer Media, which is a digital 0:15:17.000 --> 0:15:21.560 media venture UH company, and that is a majority investor 0:15:21.640 --> 0:15:24.120 into crunchy roll. Um. I want to talk a little 0:15:24.160 --> 0:15:27.880 bit about the demand for viewing anime or sort of 0:15:27.880 --> 0:15:31.480 a Japanese form of hand drawn or computer animation. How 0:15:31.600 --> 0:15:34.680 much has it sort of gained in popularity away from Japan. 0:15:34.960 --> 0:15:36.560 I mean, I know that it has been popular for 0:15:36.640 --> 0:15:40.000 years in certain um, in certain circles, but you know, 0:15:40.120 --> 0:15:45.120 is it proliferating more? Absolutely? We think this is just 0:15:45.200 --> 0:15:48.400 the early innings and there's a lot more demand and 0:15:48.440 --> 0:15:52.120 a lot more popularity to be had. What we've seen 0:15:52.280 --> 0:15:55.120 is that there's a lot of misconception about what is 0:15:55.160 --> 0:15:59.760 anime and generally animation. Anime is a medium for a 0:16:00.080 --> 0:16:03.560 using storytelling, just like live action is a medium and 0:16:03.760 --> 0:16:06.760 within that medium there's a lot of diversity. There's a 0:16:06.760 --> 0:16:11.880 lot of different genres within that medium, including romance, horror, 0:16:11.920 --> 0:16:15.400 sci fi, comedy, action, drama, you name it, and there's 0:16:15.480 --> 0:16:19.320 just so much rich storytelling, amazing characters. I think that's 0:16:19.320 --> 0:16:23.200 what draws audience into it as has been very much 0:16:23.400 --> 0:16:26.160 under the radar for a lot of years, but I 0:16:26.160 --> 0:16:29.440 think that's because it's mostly the fans who are into 0:16:29.480 --> 0:16:31.640 it were really in the know, And what we're really 0:16:31.680 --> 0:16:34.640 seeing now is that the fan base has grown and 0:16:34.920 --> 0:16:38.360 there are the millennials today and they're uh figuring out 0:16:38.400 --> 0:16:40.880 new ways to access this content, to engage with its content, 0:16:40.920 --> 0:16:44.280 and making it even more popular. Can you explain the 0:16:44.400 --> 0:16:51.000 financial background for Crunchy Role in the context of advertisements, 0:16:51.040 --> 0:16:53.920 but also in the context of you can have your 0:16:53.920 --> 0:16:56.920 own YouTube television channel now and I believe that you 0:16:56.960 --> 0:16:59.840 can watch a lot of these types of programs in 0:17:00.480 --> 0:17:02.840 another format. How does crunch your role figure into this? 0:17:02.880 --> 0:17:06.960 How do you make money? Absolutely? So, we're still really 0:17:07.040 --> 0:17:11.800 early innings into digital media and we're still learning a lot. 0:17:11.960 --> 0:17:14.480 But I think one thing that we've learned and that's 0:17:14.480 --> 0:17:17.439 been valuated across other different businesses in this space is 0:17:17.480 --> 0:17:21.520 that it takes a lot of capital to be able 0:17:21.560 --> 0:17:25.600 to make investments to create premium truly premium content, and 0:17:25.680 --> 0:17:29.679 premium content is what gets people to really engage and 0:17:29.760 --> 0:17:32.600 to get ultimately people to pay and subscribe to your 0:17:32.640 --> 0:17:36.080 content because you've got general discussion boards and forms about 0:17:36.119 --> 0:17:41.720 each individual character and episode. That's right. So the difference 0:17:42.000 --> 0:17:45.879 here is that comparing UH for example, us to other services, 0:17:46.119 --> 0:17:47.560 there are a lot of services that are in the 0:17:47.560 --> 0:17:52.360 digital space that are basically something for everyone. What we're 0:17:52.400 --> 0:17:55.000 trying to be is we're trying to be everything for 0:17:55.080 --> 0:17:58.000 some people, the most passionate fans. And what we've seen 0:17:58.160 --> 0:18:00.800 is that with really passionate fans, for them, it's not 0:18:00.920 --> 0:18:04.000 just let's watch a video and and let's watch a 0:18:04.040 --> 0:18:07.159 show and let's come back later. Once they engage with 0:18:07.200 --> 0:18:10.840 the show, they're absolutely engaging with everything else. They're going 0:18:10.920 --> 0:18:13.800 going to the community, they're they're engaging in forums, they're 0:18:13.840 --> 0:18:17.560 transacting by buying merchandise and figures around the shows they're watching. 0:18:17.840 --> 0:18:20.560 They're going to physical conventions. They're just doing a lot 0:18:20.600 --> 0:18:23.479 more things and and creating a lot more engagement and 0:18:23.520 --> 0:18:26.960 hopefully a lot more opportunities for monetization. How big is 0:18:27.000 --> 0:18:32.080 the online market for viewing anime right now? We have 0:18:32.359 --> 0:18:35.680 many millions of viewers over the US as well as 0:18:35.680 --> 0:18:38.119 the rest of the world. We think that there's still 0:18:38.160 --> 0:18:41.560 a lot more potential. Ultimately, we think that anime is 0:18:41.840 --> 0:18:45.800 one of the ways that millennial audiences really want to 0:18:45.840 --> 0:18:48.760 engage with digital content, and they really embrace it, and 0:18:49.000 --> 0:18:51.560 and they really can relate to a lot of characters, 0:18:51.600 --> 0:18:54.080 a lot of the stories are being told, and they 0:18:54.119 --> 0:18:56.000 think it's a lot of fun. You know. I want 0:18:56.040 --> 0:18:58.560 to bring up something we talked about earlier in the program. 0:18:58.640 --> 0:19:01.320 We were talking about social media of sites um and 0:19:01.760 --> 0:19:04.879 whether they ought to be getting involved in some of 0:19:04.920 --> 0:19:08.600 the conversations and preventing speech that might be their hate speech, 0:19:08.720 --> 0:19:10.960 or you know, if there's something that veers into some 0:19:11.040 --> 0:19:14.440 kind of inappropriate territory. I mean, do you guys have 0:19:14.480 --> 0:19:18.760 some kind of approach to that. I think that's an 0:19:18.680 --> 0:19:23.359 amazing and very relevant topic. So with animation, what we 0:19:23.440 --> 0:19:26.280 do is we we take everything that's on air on 0:19:26.359 --> 0:19:29.760 TV and we rebroadcasted and we self title it into 0:19:29.840 --> 0:19:33.680 multiple languages. But what we have seen is that animation 0:19:33.920 --> 0:19:38.720 is amazingly diverse, and there's a lot of storytelling around empowerment, 0:19:39.160 --> 0:19:41.960 around growing up, around a lot of these themes that 0:19:42.000 --> 0:19:45.679 are anti boling around Uh, really, how do you develop 0:19:45.720 --> 0:19:48.960 yourself and find your own perspective as a as an individual? 0:19:49.119 --> 0:19:52.080 And how do you do that with friends? So we 0:19:52.160 --> 0:19:55.760 think that the content is amazingly empowering and not just 0:19:55.880 --> 0:19:59.720 towards one demographic or one audience. It captures an entire 0:19:59.760 --> 0:20:03.960 sp a froum of perspective in in terms of not 0:20:04.080 --> 0:20:09.359 just male, but female, various other gender or sexual orientations, 0:20:10.080 --> 0:20:12.680 all of those things. So it's it's an amazing diverse 0:20:12.760 --> 0:20:17.199 medium for storytelling and empowerment. Couldn't you graduated from UC 0:20:17.400 --> 0:20:19.600 Berkeley with honors? You've got a Bachelor of Science and 0:20:19.680 --> 0:20:25.400 Electrical engineering computer science, also be an applied mathematics. Does 0:20:25.400 --> 0:20:30.280 anyone question like, you're working with cartoons? Does that? How 0:20:30.320 --> 0:20:36.080 does that go down? So I had this, Uh, I 0:20:36.160 --> 0:20:39.960 had this debatement with myself many many years ago. I think, 0:20:40.840 --> 0:20:44.320 you know, the path was either academia or go into 0:20:44.560 --> 0:20:47.640 working with animation. And I think the great thing about 0:20:47.680 --> 0:20:51.720 animation is we're able to bring through crunch real amazing 0:20:51.760 --> 0:20:56.119 story telling that touches people touches many millions of people 0:20:56.600 --> 0:20:59.800 in meaningful ways, and I think that's ultimately very impacting 0:20:59.840 --> 0:21:02.560 and very very rewarding for me personally as well as 0:21:02.720 --> 0:21:05.600 to be able to reach so many people and and 0:21:05.760 --> 0:21:08.959 we would impact so many lives. Kuno, co founder and 0:21:09.000 --> 0:21:12.680 general manager of Crunchy Role, coming to us from San 0:21:12.720 --> 0:21:16.600 Francisco talking about UH, the movement of anime to the 0:21:16.680 --> 0:21:31.399 United States. This is Bloomberg. Wait, Wait is that a 0:21:31.440 --> 0:21:34.280 black sweater? No? Do I want to get that microwave? 0:21:34.800 --> 0:21:36.520 Wait we have to be on the radio. Oh, yes, 0:21:36.520 --> 0:21:39.760 that's right. I'll stop shopic. But one person who may 0:21:39.760 --> 0:21:42.160 go back to shop in. Christian mcgoon, CEO of Amplify 0:21:42.280 --> 0:21:45.520 Investments and manager of the Amplify Online Retail et F, 0:21:45.800 --> 0:21:47.679 is here in the studio to talk about what we 0:21:47.840 --> 0:21:51.880 know so far about how well UH stores did on 0:21:52.160 --> 0:21:55.280 Black Friday. Of course, as we just heard from Greg 0:21:55.359 --> 0:21:58.119 Jared in the Bloomberg news room, it's unclear whether we 0:21:58.160 --> 0:22:00.119 have a better sense from maybe Cyber Monday than we 0:22:00.160 --> 0:22:03.360 do from Black Friday. But Christian, thank you so much 0:22:03.400 --> 0:22:05.680 for being with us. I want to start out with 0:22:06.119 --> 0:22:10.080 how much do we really know already about Black Friday, 0:22:10.080 --> 0:22:14.840 there was that UH National Federation of National Retail Federation 0:22:14.880 --> 0:22:17.879 that came out saying the average spending per person was 0:22:18.080 --> 0:22:24.200 down slightly dollars per person from more than two last year. 0:22:24.840 --> 0:22:27.800 How accurate is this? Yeah, I think it's fairly accurate. 0:22:27.840 --> 0:22:30.320 Big data is now emerging in the retail scene. It's 0:22:30.520 --> 0:22:33.400 less about opinions and it's more about gathering all these 0:22:33.440 --> 0:22:37.119 streams of data into quick analytics, and I think that's correct. 0:22:37.160 --> 0:22:41.000 I think consumers haven't spent as much so far this year. 0:22:41.280 --> 0:22:43.399 I think it's probably due to the fact that these 0:22:43.760 --> 0:22:47.160 UH deals have been extended before Black Friday and even 0:22:47.200 --> 0:22:50.040 after Cyber Monday, so I think there's less urgency to 0:22:50.080 --> 0:22:52.600 go out and make your purchase on that single day 0:22:52.680 --> 0:22:55.320 or wait for for for Cyber Monday today, and that's 0:22:55.359 --> 0:22:58.160 impacting I think some of the swiftness of the sales, 0:22:58.359 --> 0:23:00.040 but I think they're still going to be there, and 0:23:00.080 --> 0:23:03.639 it's clear the big winner here is online retail versus 0:23:03.680 --> 0:23:06.000 brick and mortar. Christian, I wonder if you could just 0:23:06.040 --> 0:23:08.040 tell us a little bit of your background, going back 0:23:08.080 --> 0:23:11.840 to claim More and the exchange traded fund industry, and 0:23:11.880 --> 0:23:15.359 then the creation and the manager of this new amplify 0:23:15.600 --> 0:23:19.080 online Retail et F symbol I buy. Yeah. So I've 0:23:19.119 --> 0:23:21.639