WEBVTT - Snap Earnings and CNN+ Shutting Down 0:00:02.320 --> 0:00:05.680 From the heart of where innovation, money and power collive 0:00:06.440 --> 0:00:10.960 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:11.000 --> 0:00:26.720 Emily Jay. I'm Emily Jenking, San Francisco, and this is 0:00:26.720 --> 0:00:29.640 Bloomberg Technology. Coming up in the next hour. Snap share 0:00:29.760 --> 0:00:33.760 snap back after a shortfall in late trading following its 0:00:33.760 --> 0:00:37.280 first quarterly results. Why the company is saying advertisers are 0:00:37.280 --> 0:00:41.000 pulling back. Plus Delon Musk just got a little closer 0:00:41.000 --> 0:00:43.839 to making his Twitter dream a reality, all thanks to 0:00:43.880 --> 0:00:46.720 some pretty big backers on Wall Street. Will tell you 0:00:46.760 --> 0:00:51.479 who they are. And Netflix shares keep plunging. Now CNN 0:00:51.520 --> 0:00:55.160 plus announcing it's shutting down. Is it a sign that 0:00:55.280 --> 0:00:58.520 streaming has peaked? We'll talk about that. I want to 0:00:58.560 --> 0:01:01.000 stick with snap now, the company reporting sales following short 0:01:01.160 --> 0:01:04.720 of estimate, saying advertisers pulled back on spending in the 0:01:04.840 --> 0:01:08.480 days following Russia's invasion of Ukraine. Rohan called Carni of 0:01:08.560 --> 0:01:13.560 MTM partners with us now to discuss here is that it? 0:01:16.120 --> 0:01:18.240 I think they are giving us a lot of numbers. 0:01:18.240 --> 0:01:21.560 They're saying what happened before three, what happened through March 0:01:21.640 --> 0:01:25.360 thirty one, what's happening through April, and I think what 0:01:25.400 --> 0:01:28.080 they're trying to tell us is things got a little 0:01:28.080 --> 0:01:31.520 bit worse during March, but that they are not getting 0:01:31.520 --> 0:01:35.240 more worse. They're definitely a leg down from what they 0:01:35.280 --> 0:01:39.000 expected them themselves to be. But I think you're quarter 0:01:39.120 --> 0:01:41.120 to date data seems to indicate that they are not 0:01:41.120 --> 0:01:44.760 getting more words, and the guidance for two Q they 0:01:45.000 --> 0:01:46.680 at least this is the story that they want us 0:01:46.680 --> 0:01:50.600 to hear is we are expecting more worse strength and 0:01:50.640 --> 0:01:53.840 hence we are a little bit more conservative. So that's 0:01:53.880 --> 0:01:57.760 where the stock went down twenty up five because of 0:01:58.040 --> 0:02:01.680 the this narrative that seems to be sticking with investors. 0:02:02.280 --> 0:02:04.360 So is this a story that's going to repeat itself 0:02:04.400 --> 0:02:09.160 with Twitter earnings? With Meta? Again, every company has their 0:02:09.200 --> 0:02:12.440 own flavor of advertisers that they work with. What is 0:02:12.639 --> 0:02:17.200 incrementally slightly more negative for companies that work with brand advertisers. 0:02:17.680 --> 0:02:21.239 Snap is calling that out here that brand advertisers were 0:02:21.360 --> 0:02:24.840 much slower during March and they pulled back very quickly. 0:02:25.160 --> 0:02:29.000 And if you look at um Facebook versus Twitter versus Pinterest, 0:02:29.080 --> 0:02:32.839 I think Twitter is the one that overskews towards brand advertisers. 0:02:32.840 --> 0:02:35.840 So if what Snap is telling is really applicable to 0:02:35.880 --> 0:02:39.200 everybody else, then Twitter is probably the one that is 0:02:39.240 --> 0:02:42.280 going to see more negative brands, and Facebook and p 0:02:42.320 --> 0:02:47.160 Interest may not as much. Meantime, Twitter has a lot 0:02:47.160 --> 0:02:49.360 of other drama to deal with, and I know you 0:02:49.400 --> 0:02:52.040 also cover Twitter. What do you think about Elon Musk 0:02:52.200 --> 0:02:55.760 as a buyer? Do you like this? I think there 0:02:55.800 --> 0:03:00.960 are just a lot of hurdles, logistical, financial diligions, and 0:03:01.080 --> 0:03:04.920 just the overall uh kind of how he gets the 0:03:04.960 --> 0:03:08.080 board to approve this current offer. I think I think 0:03:08.680 --> 0:03:10.160 this is going to be a drama. It's going to 0:03:10.200 --> 0:03:12.480 be a ping pong match over the next collar three, six, 0:03:12.639 --> 0:03:15.799 nine months. I don't see a very clear and very 0:03:16.520 --> 0:03:19.360 immediate resolution in my opinion. I think that there is 0:03:19.400 --> 0:03:23.200 just there are too many variables. Macro environment is weakening, 0:03:23.560 --> 0:03:26.400 so probably Elon Musk may have second thoughts as we 0:03:26.440 --> 0:03:30.120 see the earnings kind of unfold. So does that make 0:03:30.120 --> 0:03:32.519 Twitter a dangerous or risky stack to own right now? 0:03:33.960 --> 0:03:36.600 Given what we're hearing from Snap right now, if brand 0:03:36.720 --> 0:03:39.840 advertisers are pulling back because of not just Ukraine, but 0:03:39.920 --> 0:03:42.920 just the confluence of all the macro headwinds we are seeing, 0:03:43.240 --> 0:03:48.120 interest rate hikes, inflation, supply chain uncertainty. Europe may have 0:03:48.200 --> 0:03:51.840 some issues. European consumer brand advertisers may have some issues. 0:03:51.880 --> 0:03:53.720 So I think, yeah, Twitter is the one that is 0:03:53.720 --> 0:03:56.560 going to probably face more issues, and we'll learn that 0:03:56.600 --> 0:03:58.880 over the next week or so. In this STAB story, 0:03:58.920 --> 0:04:01.440 do you also see some of the problems Netflix is 0:04:01.480 --> 0:04:04.840 facing people leaving their homes, not sitting on the couch 0:04:05.280 --> 0:04:08.760 all day, getting out and not you know, sitting there 0:04:08.800 --> 0:04:13.080 on their phone watching Netflix or hanging out on Snapchat. 0:04:14.240 --> 0:04:16.680 I think so, isn't that there is obviously a consumer 0:04:16.760 --> 0:04:20.040 behavior shift. We we did, the pendulum of consumer behavior 0:04:20.120 --> 0:04:23.480 did shift extremely to all these internet stocks and all 0:04:23.520 --> 0:04:26.880 these Internet companies, and now we're seeing the pendulum swing 0:04:27.040 --> 0:04:30.880 way far away. People are sitting on flights, sitting on cruises, 0:04:30.920 --> 0:04:33.880 and just sitting away from their iPads and iPhones. So 0:04:33.920 --> 0:04:36.359 I feel at some point, once we get back to 0:04:36.400 --> 0:04:39.600 the new normal, we should see resumption of consumer behavior. 0:04:40.040 --> 0:04:42.880 But until then, I think all these UH companies that 0:04:42.960 --> 0:04:46.279 rely on engagement in front of your iPad, engagement in 0:04:46.279 --> 0:04:49.680 front of your iPhone are going to see pockets of weakness. 0:04:49.839 --> 0:04:53.320 UH in Netflix again is also probably at the mercy 0:04:53.320 --> 0:04:57.280 of this vertical video shift that we are seeing across Internet. TikTok, 0:04:57.600 --> 0:05:01.360 Snapped has its spotlight, Instagram has its reels, YouTube has 0:05:01.360 --> 0:05:03.640 its short So there is this shift towards short form 0:05:03.760 --> 0:05:07.320 video ad supported video, and plus there's the pendulum shifting 0:05:07.320 --> 0:05:11.160 away from out of home kind of consumption. So they 0:05:11.160 --> 0:05:14.479 are in a slight air pocket. Hopefully they recover. I 0:05:14.520 --> 0:05:17.680 wonder how much competition you think snapas seeing from TikTok 0:05:18.240 --> 0:05:21.640 in particular, given you know similar audiences and that we 0:05:21.680 --> 0:05:26.440 don't have as much visibility into TikTok's results. Um, like, 0:05:26.520 --> 0:05:28.960 how much is it? Is it really TikTok alone that's 0:05:28.960 --> 0:05:33.120 taking a bite here? Um, TikTok is definitely taking a 0:05:33.160 --> 0:05:37.159 bite from across the overall advertising ecosystem. It's not it's 0:05:37.200 --> 0:05:39.839 not too small to be ignored right now. It is 0:05:40.080 --> 0:05:42.400 it is a much bigger force to reckon with both 0:05:42.440 --> 0:05:45.560 from engagement and time spent on TikTok, as well as 0:05:45.600 --> 0:05:50.440 advertiser kind of share of wallet perspective. I feel when 0:05:50.480 --> 0:05:53.760 we talk to a lot of ad agencies, TikTok is 0:05:53.920 --> 0:05:58.960 probably positioning itself as a linear TV sort of brand 0:05:58.960 --> 0:06:04.400 advertiser friend lee um advertising engagement platform, so it is 0:06:04.400 --> 0:06:07.080 more closer to you, Pube and a little bit further 0:06:07.160 --> 0:06:11.000 away from Snap is what they're currently positioning. But again 0:06:11.040 --> 0:06:13.880 I think TikTok is definitely something that is going to 0:06:13.880 --> 0:06:16.240 start to mount it as they scale up. Still very 0:06:16.240 --> 0:06:20.120 early days, all right, Rod called Carney MK M partners, 0:06:20.120 --> 0:06:23.800 Thank you so much. Lots to digest. Another story we 0:06:23.839 --> 0:06:28.400 continue to watch meantime, Florida's Republican controlled legislator later has 0:06:28.440 --> 0:06:32.159 passed a measure to strip Disney of special privileges in 0:06:32.200 --> 0:06:35.680 the state. This escalates a feud between Governor Ronda Santis 0:06:35.760 --> 0:06:38.680 and the entertainment giant. The legislation could lead to the 0:06:38.760 --> 0:06:42.600 dissolution of the Really Creek Improvement District, where Disney has 0:06:42.640 --> 0:06:45.760 been allowed to carry out its own municipal functions on 0:06:45.800 --> 0:06:48.640 its own. It was already approved by the Senate, now 0:06:48.680 --> 0:07:01.480 goes to the Santis for his signature. Elon Musk appears 0:07:01.520 --> 0:07:04.040 to be getting closer to making his attempt to own 0:07:04.080 --> 0:07:07.040 Twitter a reality. Bloomberg has learned Musk is now vetting 0:07:07.120 --> 0:07:10.200 potential investors. For more on it all, I'm joined by 0:07:10.240 --> 0:07:12.520 bloombergs Michelle Davis, who reports on M and A for 0:07:12.600 --> 0:07:16.440 US and David Kirpatrick, founder of Teconomy. So, Michelle, what's 0:07:16.440 --> 0:07:19.520 the latest on how much funding Musk has actually pulled 0:07:19.520 --> 0:07:22.280 together at this point. Yeah, so, I mean you said it, 0:07:22.280 --> 0:07:24.720 it seems like he is serious about this. Today he 0:07:25.080 --> 0:07:27.360 issued a filing that said he has raised forty six 0:07:27.400 --> 0:07:31.040 point five billion dollars of financing. Five billion dollars of 0:07:31.080 --> 0:07:33.680 that is debt um some of its lb O debt, 0:07:33.680 --> 0:07:35.000 you know, from banks that's going to be in the 0:07:35.000 --> 0:07:38.520 form of junk bonds and loans, and then uh, part 0:07:38.520 --> 0:07:41.360 of that is also a margin loan that basically is 0:07:41.640 --> 0:07:44.960 you know alone secured by his own Tesla shares. And 0:07:44.960 --> 0:07:48.320 then the other half was twenty one billion of equity financing. 0:07:48.360 --> 0:07:52.040 That's just him basically promising that he's going to contribute 0:07:52.040 --> 0:07:55.480 equity to the to the offer um. And so right 0:07:55.520 --> 0:07:58.400 now he's can be canvassing investors. You know, he doesn't 0:07:58.400 --> 0:08:00.960 have one billion dollars, but he at the ready he 0:08:00.960 --> 0:08:03.440 has about three billion. And so over the coming days 0:08:03.440 --> 0:08:05.840 what he's gonna be doing is talking to equity investors 0:08:05.840 --> 0:08:08.080 and kind of you know, vetting them to figure out 0:08:08.080 --> 0:08:11.360 who he wants to participate in the bid with him. 0:08:11.440 --> 0:08:13.640 David The fact that we're even talking about whether or 0:08:13.680 --> 0:08:16.520 not Elon Musk is serious about a forty three billion 0:08:16.520 --> 0:08:19.080 dollar bid he already said he planned to make is 0:08:19.160 --> 0:08:22.720 so ironic. I mean, the numbers here are just huge. 0:08:22.840 --> 0:08:26.600 How do you expect this all to continue to unfold? Well? 0:08:26.960 --> 0:08:30.120 If I knew how it was going to continue to unfold, uh, 0:08:30.160 --> 0:08:33.520 I would be unusual, because I don't think anybody, even 0:08:33.520 --> 0:08:37.560 Elon Musk, really knows how it's likely to unfold. In fact, 0:08:37.640 --> 0:08:41.679 I was talking today to a very very veteran investor 0:08:42.120 --> 0:08:44.760 and I asked him what he thought, and he said, well, 0:08:45.080 --> 0:08:48.240 it depends on how Musk feels that day. If he 0:08:48.280 --> 0:08:50.600 feels good, he'll do it. If he doesn't feel good, 0:08:50.600 --> 0:08:52.440 he probably won't do it. I mean, that's pretty the 0:08:52.559 --> 0:08:55.760 much of the world we're in, where the world's richest 0:08:55.800 --> 0:09:01.120 man is incredibly whimsical and unpredictable and and silly, and 0:09:01.559 --> 0:09:03.959 I sort of revel in that, but it's not easy 0:09:04.000 --> 0:09:06.880 to protect what comes next. So, Michelle, who are these 0:09:06.920 --> 0:09:10.120 investors who are willing to get into bed with somebody 0:09:10.120 --> 0:09:14.480 who is unpredictable on any given day. So there's still 0:09:14.480 --> 0:09:16.160 a lot that we don't know. But what we do 0:09:16.200 --> 0:09:18.679 know is that there are twelve banks that have agreed 0:09:18.720 --> 0:09:21.360 to contribute the debt financing. We're in Stanley, you know, 0:09:21.440 --> 0:09:23.560 has the biggest share of that. I think they're agreeing 0:09:23.559 --> 0:09:25.960 to put up four five point five billion dollars of debt. 0:09:26.000 --> 0:09:28.320 And then you know it's the City Groups, Well, Bank 0:09:28.320 --> 0:09:33.200 of America, Barclay's, those kinds of big international banks. On 0:09:33.240 --> 0:09:37.040 the equity side, we know that Apollo is thinking about 0:09:37.040 --> 0:09:40.360 helping him. It's unclear what form that would take, but 0:09:40.760 --> 0:09:43.040 up until you know, right now, we still don't know 0:09:43.080 --> 0:09:45.319 who else it's. It's gonna it's gonna materialize over the 0:09:45.360 --> 0:09:47.920 coming days, is what we're told. So, David, what do 0:09:48.000 --> 0:09:51.160 you imagine Jack Dorsey is thinking here? He's been rather 0:09:51.200 --> 0:09:56.000 crick picked, like initially supportive than he himself, um tweeting 0:09:56.000 --> 0:09:59.760 about the dysfunction of Twitter's own board where you know 0:09:59.760 --> 0:10:02.800 who side is Jack on? Well, he voted for the 0:10:02.840 --> 0:10:06.719 poison pill. The company confirmed that. So we know that 0:10:06.800 --> 0:10:11.000 he's cautious about this deal. As a manager and as 0:10:11.040 --> 0:10:13.640 a steward of his own shares and the company that 0:10:13.679 --> 0:10:19.240 he co founded. My guess is that he's generally sympathetic 0:10:19.320 --> 0:10:21.800 to Musk and a lot of the things that Musk 0:10:21.920 --> 0:10:25.560 says he would love to see happen if they were 0:10:25.600 --> 0:10:30.120 really possible, although not to completely abandon moderation, which is 0:10:30.480 --> 0:10:33.520 one of the things that Musk seems to be implying 0:10:33.640 --> 0:10:35.599 or saying that he might do. He doesn't say that 0:10:35.679 --> 0:10:40.080 straight out, but it sounds like he's interested in reducing moderation. 0:10:40.160 --> 0:10:42.840 But one thing that Jack did last week was he 0:10:42.920 --> 0:10:47.960 tweeted cryptically everybody stop and hug Now what does that mean? 0:10:48.240 --> 0:10:50.800 Does that mean the people the board of Twitter should 0:10:50.880 --> 0:10:54.440 hug Elon Musk or or vice versa, or you know, 0:10:55.360 --> 0:10:59.960 that does suggest that probably he thinks a negotiated resolution 0:11:00.040 --> 0:11:03.480 as possible. But again we are reading tea leaves here 0:11:04.800 --> 0:11:08.200 is Michelle, is there a potential for some sort of 0:11:08.240 --> 0:11:12.120 negotiated resolution? What might that look like? Yeah? Definitely. You know, 0:11:12.200 --> 0:11:14.959 when I've been talking to lawyers and bankers who are 0:11:15.160 --> 0:11:17.840 experts in this matter, they have been saying that every 0:11:17.880 --> 0:11:20.559 hostile bid always ends up as a friendly bid if 0:11:20.559 --> 0:11:23.240 it does turn into an actual deal. And so, you know, 0:11:23.400 --> 0:11:26.000 for this to work for Elon Musk, he needs the 0:11:26.000 --> 0:11:28.599 board to remove the poison pill, because even if he 0:11:28.600 --> 0:11:31.160 gets a tunder offer done like it's a deal would 0:11:31.160 --> 0:11:33.280 be contingent on them removing that. So I do think 0:11:33.480 --> 0:11:35.480 for this to work, And and now he's shown that, 0:11:35.520 --> 0:11:37.920 you know, he is serious about this, this offer, it 0:11:38.080 --> 0:11:40.520 is going to have to turn into something friendly. One 0:11:40.559 --> 0:11:43.560 other thing that I thought was interesting about today's amended 0:11:43.600 --> 0:11:46.160 filing was that he said his offer is no longer 0:11:46.200 --> 0:11:49.920 contingent on a due diligence. So that means basically, we 0:11:49.920 --> 0:11:51.200 don't need to look you know, we don't need to 0:11:51.200 --> 0:11:53.520 look into your books. Um, we could do a deal tomorrow. 0:11:53.600 --> 0:11:56.760 We have the financing here, let's let's just do it. Um. 0:11:56.800 --> 0:12:01.240 So yeah, David, you know, having covered social networking for 0:12:01.360 --> 0:12:04.560 so long, including the earliest days of Facebook, do you 0:12:04.600 --> 0:12:07.599 think that I mean that Twitter could could change in 0:12:07.640 --> 0:12:11.960 a good way under Elon Musk's leadership, you know, like, 0:12:12.000 --> 0:12:14.760 do you like the idea of open sourcing the algorithm 0:12:15.000 --> 0:12:18.480 for example? That I do think is a good idea, 0:12:18.840 --> 0:12:21.560 probably depending on how it was implemented. I think the 0:12:21.600 --> 0:12:25.040 idea of giving users more control over how they experience 0:12:25.559 --> 0:12:29.960 these social networks is a good idea. Um. But even 0:12:30.040 --> 0:12:33.320 you know your either boss or a longtime colleague, Matt 0:12:33.320 --> 0:12:36.240 Winkler today or just week, wrote a piece about how 0:12:36.280 --> 0:12:39.600 what a brilliant manager Elon Musk is. He was talking 0:12:39.920 --> 0:12:44.320 primarily about Tesla, but look, you can't really bet against 0:12:44.320 --> 0:12:47.280 Elon Musk as a business decision maker. That would be 0:12:47.360 --> 0:12:50.760 very risky. Uh. It could be that he's willing with 0:12:50.840 --> 0:12:55.240 his own money to invest even more in algorithms, AI 0:12:55.320 --> 0:12:59.559 other technology that might make managing Twitter better or easier. 0:12:59.640 --> 0:13:02.320 I like his tweet today that he could get rid 0:13:02.360 --> 0:13:06.520 of the bots and um and authenticate all users. I 0:13:06.520 --> 0:13:08.760 think that's a very good idea that would actually make 0:13:08.760 --> 0:13:12.320 Twitter more like Facebook, because Facebook was always intended to 0:13:12.320 --> 0:13:15.319 be an authenticated social network. You use your real name. 0:13:15.360 --> 0:13:18.440 Now we know that isn't in fact what has happened entirely, 0:13:18.480 --> 0:13:20.760 but it's still the general design. I would like to 0:13:20.800 --> 0:13:25.880 see Twitter go in that direction. Uh, Michelle, he's personally 0:13:25.960 --> 0:13:29.040 pledged twenty one billion of his own equity. How much 0:13:29.040 --> 0:13:31.080 of that do you think if a deal happens he'd 0:13:31.120 --> 0:13:34.840 actually spend it? All probably comes down to who he 0:13:34.920 --> 0:13:37.440 is able to convince to, you know, sign on to 0:13:37.480 --> 0:13:40.079 provide equity. So at this point, if he needed to 0:13:40.120 --> 0:13:42.120 do it tomorrow, he could do three billion, unless he 0:13:42.200 --> 0:13:44.600 sold a bunch of his his Tesla stock Um and 0:13:44.640 --> 0:13:47.160 so yeah, it really depends on you know, who decides 0:13:47.200 --> 0:13:49.200 to come on and what their conditions are for for 0:13:49.280 --> 0:13:52.240 joining him. I think another thing that's notable about this 0:13:52.240 --> 0:13:54.920 whole situation is, up until today, you know, there are 0:13:54.920 --> 0:13:57.120 some people who I don't think took this very seriously 0:13:57.520 --> 0:14:00.079 because there was a question around, you know, how he 0:14:00.120 --> 0:14:03.160 didn't have the financing. Now that he does. I think 0:14:03.200 --> 0:14:05.240 one thing that we're definitely keeping an eye on is 0:14:05.600 --> 0:14:07.840 does a sudden in motion, you know, chain of events, 0:14:07.840 --> 0:14:10.680 where as we've talked about before, you know, a potential 0:14:10.679 --> 0:14:14.160 White Knight comes in to try to make an offer 0:14:14.200 --> 0:14:15.920 for Twitter, you know, to kind of save them from 0:14:15.960 --> 0:14:17.839 Elon Musk. Me there could have been you know, some 0:14:17.920 --> 0:14:20.360 on the sidelines who weren't taking it seriously. But now 0:14:20.360 --> 0:14:22.600 that they see that Musk has the money, we might 0:14:22.600 --> 0:14:28.120 see them emerge. Michelle Davis, Bloomberg, David Kirkpatrick of Teconomy. 0:14:29.080 --> 0:14:32.280 We will continue to watch how this all continues to unfold. 0:14:32.320 --> 0:14:43.120 Thank you. Let's get back to this week's top story, 0:14:43.160 --> 0:14:45.520 and that of course, is Netflix. Three days after losing 0:14:45.520 --> 0:14:48.440 subscribers for the first time in a decade, shares falling 0:14:48.560 --> 0:14:52.960 even further down almost four on the day, extending a 0:14:53.080 --> 0:14:55.240 massive sell off. I want to bring in Bloomberg Jerry 0:14:55.240 --> 0:14:57.800 Smith for more on this, and Jerry, the big question 0:14:57.880 --> 0:14:59.960 is is this just a blip, is this a netfli 0:15:00.120 --> 0:15:03.960 X thing, or is this the streaming business at its peak? Yeah? 0:15:03.960 --> 0:15:06.600 I think that's what all the investors and media companies 0:15:06.600 --> 0:15:08.840 want to know right now. Um. You know, not only 0:15:08.840 --> 0:15:11.840 did Netflix is stock the client after this, but um, 0:15:11.880 --> 0:15:14.360 you know, Warner Brothers, Discovery and other media companies that 0:15:14.400 --> 0:15:17.080 have made big, big bets on streaming also saw their 0:15:17.080 --> 0:15:20.520 shares fall. And I think investors are wondering if Netflix 0:15:20.600 --> 0:15:22.560 is now starting to hit its head on the ceiling 0:15:22.880 --> 0:15:25.640 of how many subscribers there are in the streaming business, 0:15:25.640 --> 0:15:27.520 So what does that mean for Disney? Plus what does 0:15:27.520 --> 0:15:30.360 that mean for HBO Max? Um, you know, these are 0:15:30.480 --> 0:15:33.440 the entire media industry really transformed its business and went 0:15:33.440 --> 0:15:36.360 all in on streaming because Netflix was so successful. If 0:15:36.440 --> 0:15:38.640 Netflix is starting to hit a wall, um, you know, 0:15:38.680 --> 0:15:42.560 that's bad news for everybody. Bill Ackman, one of the 0:15:42.600 --> 0:15:46.360 largest shareholders Pershing Square, dumped their entire stake three point 0:15:46.400 --> 0:15:50.040 one million shares. I mean, is there any relief in 0:15:50.080 --> 0:15:54.640 sight here. Well, Netflix says that the you know, COVID 0:15:54.720 --> 0:15:57.920 sort of obscured their business. Um, they did really well 0:15:58.000 --> 0:16:00.920 during COVID. Everyone was stuck at home and and now 0:16:00.960 --> 0:16:03.440 that COVID is starting to end, they're saying there's other 0:16:03.480 --> 0:16:06.640 factors that are causing the subscriber decline. They point to 0:16:06.720 --> 0:16:09.680 things like a hundred million people who are sharing other 0:16:09.720 --> 0:16:11.760 passwords and if they can get more of those people 0:16:11.760 --> 0:16:14.080 to start paying, Um, you know, there's a lot of 0:16:14.080 --> 0:16:16.560 things that Netflix says it could do. And they're also 0:16:16.600 --> 0:16:20.880 introducing a lower cost ad supported service, which is very interesting. 0:16:20.920 --> 0:16:23.880 Netflix had long said they would never have advertising, and 0:16:23.880 --> 0:16:27.200 now they're talking about a cheaper service interned with ads, 0:16:27.240 --> 0:16:29.560 and that's really an acknowledgement that they can't just keep 0:16:29.640 --> 0:16:32.400 raising prices, but if they want to keep growing, there's 0:16:32.400 --> 0:16:36.200 a part of the market that wants a cheaper service. Now, 0:16:36.520 --> 0:16:40.480 on the other side, they're CNN Plus abruptly getting shut 0:16:40.520 --> 0:16:43.400 down less than a month after launch. I actually had 0:16:43.400 --> 0:16:46.240 a chance to shoot down with Andrew Morris, who really 0:16:46.320 --> 0:16:49.720 launched this service s VP at CNN, and here's what 0:16:49.760 --> 0:16:52.320 he had to say to me. Just a few weeks ago. 0:16:53.760 --> 0:16:56.600 The beauty of a subscription service is if you create 0:16:56.760 --> 0:17:00.920 something of value, people will paying. We are so confident 0:17:01.360 --> 0:17:04.879 that we're building something of such value that that people 0:17:04.880 --> 0:17:06.720 are going to be willing to give a give up 0:17:06.760 --> 0:17:12.359 one cup of coffee a month to pay for this service. So, Jerry, 0:17:12.440 --> 0:17:17.080 what happened? Why didn't Discovery give it more of a chance? Well, 0:17:17.080 --> 0:17:20.080 I think this is largely a story about two media 0:17:20.119 --> 0:17:24.439 companies that had different strategies and streaming CNN's parents. Up 0:17:24.520 --> 0:17:28.040 until a couple weeks ago, Warner Media felt that CNN 0:17:28.119 --> 0:17:32.520 could exist as a standalone streaming service. David Zaslav, who's 0:17:32.520 --> 0:17:35.520 going to who is the CEO now of Warner Brothers Discovery, 0:17:35.560 --> 0:17:39.280 the combined company, has been saying for several weeks that 0:17:39.800 --> 0:17:41.920 the you know, their strategy is going to be one 0:17:42.000 --> 0:17:45.440 big streaming service that competes around the world with Netflix, 0:17:45.800 --> 0:17:49.880 And that really was a sign that CNN Plus did 0:17:49.880 --> 0:17:54.479 not fit into David Zaslov's vision. Now, streaming news is 0:17:54.520 --> 0:17:57.879 something that no one's really cracked. I've heard a couple 0:17:57.880 --> 0:17:59.760 of analysts say over the last couple of days that 0:18:00.040 --> 0:18:03.440 Flix needs streaming news and sports. Is that something that 0:18:03.840 --> 0:18:06.880 CNN and other streaming services are still going to need 0:18:07.080 --> 0:18:11.640 if they really want to rack up more subscribers. Well, 0:18:11.640 --> 0:18:13.760 I mean that was really what was so interesting about 0:18:13.800 --> 0:18:17.320 CNN Plus. Nobody had really tried to have a streaming 0:18:17.359 --> 0:18:20.600 service that people have to pay for, um, for news. 0:18:20.920 --> 0:18:24.399 And now you know the fact that uh, you know, 0:18:24.480 --> 0:18:27.240 Warner Brothers Discovery has pulled the plug on this so quickly. 0:18:28.000 --> 0:18:30.399 I think we still don't know what the market is, 0:18:30.480 --> 0:18:33.000 what the appetite is for streaming service that you have 0:18:33.040 --> 0:18:36.960 to pay for, a lot of TV networks have streaming services, 0:18:36.960 --> 0:18:39.720 but they're all free. Um. You know, there were some 0:18:39.800 --> 0:18:42.640 numbers that came out about CNN Plus as early subscribers, 0:18:43.000 --> 0:18:44.760 but it was still early. It was only a few 0:18:44.760 --> 0:18:47.480 weeks into the launch. And you know, for now we 0:18:47.560 --> 0:18:50.760 are left wondering just how popular kind of streaming service 0:18:50.800 --> 0:18:54.080 for news really be. All Right, A story will continue 0:18:54.080 --> 0:18:58.560 to follow Bloomberg's Jerry Smith thank you. Meantime, another news, 0:18:58.600 --> 0:19:02.760 Cheryl Sandberg, meta CEO, reportedly pressured a British newspaper and 0:19:02.800 --> 0:19:06.240 not to publish a story about her then boyfriend. According 0:19:06.240 --> 0:19:09.080 to The Wall Street Journal, on two occasions, Samberg contacted 0:19:09.119 --> 0:19:11.960 the digital edition of the daily mail regarding reporting on 0:19:12.440 --> 0:19:16.520 Activision CEO Bobby Kodek and a restraining order taken out 0:19:16.560 --> 0:19:20.639 by his former girlfriend. Samberg and Kdek reportedly worked with 0:19:20.680 --> 0:19:23.840 Facebook and Activision employees on this matter. Facebook is said 0:19:23.880 --> 0:19:36.960 to have begun a review of her actions. Octa has 0:19:37.000 --> 0:19:40.160 concluded its investigation of a security breach, saying the impact 0:19:40.240 --> 0:19:43.240 was far smaller than it could have been. The January 0:19:43.520 --> 0:19:46.040 hack lasted for just twenty five minutes, according to the 0:19:46.080 --> 0:19:49.400 company and the hackers, which Bloomberg learned included a sixteen 0:19:49.440 --> 0:19:52.560 year old in England, had control of a single workstation 0:19:52.600 --> 0:19:56.119 from a third party vendor. Just two customer systems were breached, 0:19:56.240 --> 0:19:59.480 far fewer than the three hundred sixty six they initially thought. 0:20:00.160 --> 0:20:02.160 I'm joined out by Frederick Karsti is the co founder 0:20:02.160 --> 0:20:04.520 and c o O of Octa, also out with a 0:20:04.520 --> 0:20:07.120 brand new book Zero to I p o over one 0:20:07.200 --> 0:20:12.440 trillion dollars of actionable advice from the world's most successful entrepreneurs. Frederick, 0:20:12.520 --> 0:20:14.800 thank you so much for joining us. Thanks. So, we're 0:20:14.800 --> 0:20:16.800 gonna get to the hack, but I'll talk about the 0:20:16.800 --> 0:20:19.280 book first. Um, there are a lot of books out 0:20:19.320 --> 0:20:22.320 there about entrepreneurship. You say, they don't give you what 0:20:22.359 --> 0:20:24.760 you need when you're really in the trenches. What do 0:20:24.880 --> 0:20:27.880 they not have that your book does well? I think 0:20:27.920 --> 0:20:30.359 one of the things for an entrepreneur is these books 0:20:30.400 --> 0:20:32.919 that are out there today, they just try and lionize 0:20:33.320 --> 0:20:35.760 what happened to other folks, and they walk through their 0:20:35.800 --> 0:20:38.160 lives and what happened and how they build their businesses 0:20:38.200 --> 0:20:41.560 and personally. What we're trying to do is demystify what 0:20:41.680 --> 0:20:44.960 happens in entrepreneurship. We're trying to get advice from the 0:20:45.119 --> 0:20:47.760 best entrepreneurs in the world, gathering all that advice in 0:20:47.840 --> 0:20:50.240 one place, and it's basically the field guide that I 0:20:50.280 --> 0:20:53.000 wish I had had when we started Actor thirteen years ago. 0:20:53.080 --> 0:20:56.720 You open with a story about Octor revenue flatlining. You're 0:20:56.720 --> 0:20:58.960 going into a board meeting, you think you're going to 0:20:59.040 --> 0:21:02.760 get fired and that the company is done. Instead, Ben Horowitz, 0:21:02.840 --> 0:21:05.600 one of your investors, calls you and instead of firing you, 0:21:05.680 --> 0:21:09.120 he gives you some advice. What did he tell you 0:21:09.160 --> 0:21:11.919 that enables you to turn the company around. That's a 0:21:11.960 --> 0:21:14.240 great example of some of the actionable advice that I 0:21:14.280 --> 0:21:17.880 think too often doesn't get shared with entrepreneurs. Entrepreneurs think 0:21:17.920 --> 0:21:19.720 that everything is a perfect journey, and when they look 0:21:19.760 --> 0:21:22.760 from the outside, all these companies are destined for glory. 0:21:22.800 --> 0:21:26.560 As you said in octr, revenue basically flatlined, and Ben 0:21:26.560 --> 0:21:28.280 called and said a couple of things. He said, first 0:21:28.320 --> 0:21:30.200 of all, you need to get help, and you need 0:21:30.240 --> 0:21:32.560 to hire leaders who have done this kind of thing before. 0:21:32.960 --> 0:21:34.760 And second of all, he said, you need to keep 0:21:34.800 --> 0:21:36.879 the main thing the main thing. In our case, it 0:21:36.960 --> 0:21:39.520 was focusing on the right go to market segment and 0:21:39.600 --> 0:21:43.160 pivoting too much large organizations that actually have serious identity 0:21:43.160 --> 0:21:47.480 management opportunities and problems. So it's Octus five year anniversary 0:21:47.560 --> 0:21:51.200 actually this month, I believe, and it's been an incredible ride. 0:21:51.280 --> 0:21:53.960 Sheriffs have gone way up more recently that they've come 0:21:54.080 --> 0:21:56.840 a bit down from their peak. What is the hardest 0:21:56.920 --> 0:21:59.960 lesson you've learned in the five years since going public? 0:22:00.440 --> 0:22:02.960 I think keeping a view on where you're going in 0:22:02.960 --> 0:22:05.800 the long term and reminding employees that we're building something 0:22:05.840 --> 0:22:08.960 that's important in a big market that matters too many people. 0:22:09.320 --> 0:22:11.080 So if you pay attention too much to this stock 0:22:11.119 --> 0:22:13.359 on a day to day basis, you might feel as 0:22:13.400 --> 0:22:15.320 though you're not sure you're focused on the right things. 0:22:15.400 --> 0:22:17.159 But if you take the long view, look, we're in 0:22:17.200 --> 0:22:20.000