Speaker 1: From the heart of where innovation, money and power Collie
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Changing in San Francisco, and this
Speaker 1: is Bloomberg Technology coming up in the next hour. Netflix
Speaker 1: hits a wall. The streaming giant loses subscribers for the
Speaker 1: first time in a decade, two hundred thousand of them,
Speaker 1: and says two million more will go. We've got the
Speaker 1: latest earnings from port covered from all angles plus after
Speaker 1: airlines now Ober and Lift are also dropping masks in
Speaker 1: the United States after a judge overturned a federal mandate
Speaker 1: for passengers to cover their faces. We'll talk about how
Speaker 1: that might impact ride hailings bottom line. And Bitcoin can't
Speaker 1: seem to break out of that two thousand dollar range,
Speaker 1: so can it really be a hedge against inflation. We'll
Speaker 1: speak with Michael Sailor of micro Strategy, the world's biggest
Speaker 1: corporate holder of bitcoin, about all this and much more.
Speaker 1: We'll get to that in a moment, but first, it
Speaker 1: is a blood bath for Netflix, with a drop and
Speaker 1: subscribers and a plunge in shares. Bloom Brooks and Ludlow
Speaker 1: has been pouring through the numbers here and this was
Speaker 1: kind of unexpected, yeah, I mean hugely unexpected. Two hundred
Speaker 1: thousand customers lost in that first quarter of the estimate
Speaker 1: by Netflix itself was to add more than two million,
Speaker 1: the Street looking for that as well. The worrying part
Speaker 1: is the outlook for the second quarter, another loss of customers,
Speaker 1: two million lost. The outlook was a gain of two
Speaker 1: point four million, that's the Wall Street can Sense estimate.
Speaker 1: And in three out of the four regions where Netflix
Speaker 1: operates they lost customers. The only exceptions that rule Asian specific.
Speaker 1: You see what the market thinks about it. We're down
Speaker 1: and after hours. This is actually the fifth quarter in
Speaker 1: a row though where there's been a negative reaction to
Speaker 1: Netflix earning. So you know, none of this we saw coming.
Speaker 1: But this is pretty profound impact, especially when you consider
Speaker 1: the market throughout the day on Tuesday, we saw an
Speaker 1: rally across equities, outperformance in the technology sector relative to
Speaker 1: the broader market. And that's the despite yields continues to
Speaker 1: be elevating. You look at US tenure yield up two
Speaker 1: point nine four percentage points. Also a risk on mode
Speaker 1: with bitcoin getting caught up in it. The other big story,
Speaker 1: of course, and that I've been tracking Twitter and elon
Speaker 1: Musk's bid to buy the company Twitter lower On Tuesday,
Speaker 1: really the big news was Apollo getting in on the act,
Speaker 1: saying it would partner with musks bid, or according to sources,
Speaker 1: they were partner with Musk bigs or another private equity
Speaker 1: firm in the form of a credit backing or preferential equity,
Speaker 1: something of that form. And then The New York Post
Speaker 1: reporting earlier Tuesday that Musk is struggling to get backers,
Speaker 1: but he could put ten to fifteen billion dollars of
Speaker 1: his own money in and even do some kind of
Speaker 1: leverage by out borrowing against the holdings of this Twitter steak.
Speaker 1: One story, though, We've got to focus on Netflix because
Speaker 1: it's not just Netflix that's moving in after hours, you
Speaker 1: look across the streaming space and some of Netflix's peers
Speaker 1: we're seeing serious declines. Disney down five per and Paramount
Speaker 1: now a little changing after ours, but Roku also suffering.
Speaker 1: Question is is this isolated and just Netflix or is
Speaker 1: the big growth we saw in streaming throughout the pandemic
Speaker 1: is that over all right? And we're going to see
Speaker 1: that in earnings reports to come over the next few weeks,
Speaker 1: i'd Ludlow, thank you. I want to stick with Netflix
Speaker 1: and bring in Andre Swanston, longtime entrepreneur and executive in
Speaker 1: the streaming business now and s VP at TransUnion. Andre,
Speaker 1: great to have you back with us. Look, first subscriber
Speaker 1: loss in a decade? What went wrong? Look? I I
Speaker 1: don't think it was unexpected uh to a lot of
Speaker 1: executives across the media entertainment industry that Netflix was gonna
Speaker 1: have challenges. I've been saying so for the last eighteen months. Um.
Speaker 1: To have such a large miss, I think is is
Speaker 1: a bit surprising. But there's a there's a few core
Speaker 1: challenges that that I think it's astonishing to me that
Speaker 1: that Netflix hasn't adjusted, and even in the report that
Speaker 1: don't seem like they're really looking to I think the
Speaker 1: first one is there's a lot of talk about the
Speaker 1: competition from Disney and HBO, Max and Amazon and others. Uh,
Speaker 1: and I do think that that has some impact, right, um.
Speaker 1: But but what people really aren't talking about is is
Speaker 1: that most of the growth over the last two years
Speaker 1: and streaming has really been free ad supported solutions UM
Speaker 1: the Pluto TVs. The two bees, the zoom os, and
Speaker 1: what the major media companies have done a really good
Speaker 1: job is that they went and acquired all of those companies.
Speaker 1: And so why they while they made acquisitions that versify
Speaker 1: their business model and streaming, Netflix is still yet to lead, uh,
Speaker 1: you know, launch any sort of cheaper ad supported or
Speaker 1: free ad supported tiers. So I think that was one
Speaker 1: of the main things. Um So inflation hurt them more.
Speaker 1: Competition hurt them more that I think it will hurt
Speaker 1: a lot of their competitors. Part of this overall number
Speaker 1: we're seeing is Russia, and of course we saw Netflix
Speaker 1: cutting off service there. I believe it's only about three
Speaker 1: thousand accounts total, but there's clearly a longer term problem
Speaker 1: here with two million paid subscribers potentially going in the
Speaker 1: coming quarter. I mean, why are we not just losses
Speaker 1: but such deep losses. Well, so, you know, partly because
Speaker 1: there's nothing that they've done or or mentioned that they're
Speaker 1: doing to solve these challenges. So the two things they
Speaker 1: talked to is about the the they're increasing the money
Speaker 1: that the investment that they're making into content. You can't
Speaker 1: really spend your way out of this because there's there's
Speaker 1: other huge companies that are going and spending billions and
Speaker 1: billions of dollars as well, So that's not really the challenge.
Speaker 1: The other thing that Netflix was really good at historically
Speaker 1: is they probably had a six or seven year head
Speaker 1: start on when it came to data in terms of
Speaker 1: streaming media consumption for television and movie shows. And so
Speaker 1: what that allowed them to do is in this in essence,
Speaker 1: play moneyball with content licensing. Now they can't do that
Speaker 1: because the owners of those content can monetize it themselves. Um.
Speaker 1: And they mentioned, you know, launching the two thumbs up
Speaker 1: button to give them more insight. Um. There's nothing that
Speaker 1: Netflix can do to claim more data and insight off
Speaker 1: of their platform that can help them compete with the
Speaker 1: the the diversity of the data that a company like
Speaker 1: Amazon has they know what you buy, or Google knows
Speaker 1: what you search, um uh. And and you know, Apple
Speaker 1: knows what music you listen to as well, And so
Speaker 1: I think that's gonna be a real real challenge for them.
Speaker 1: And and also the investments that they've made into gaming.
Speaker 1: You know, they've spent tens of millions of dollars here
Speaker 1: and hundreds of millions of dollars. The people that they're
Speaker 1: trying to catch are spending billions of dollars on gaming
Speaker 1: and going into the metaverse, and so, you know, I
Speaker 1: think just doubling down and tripling down on what they
Speaker 1: have been doing over really well over the last decade
Speaker 1: and thinking that it's going to carry them through the twenties,
Speaker 1: um is gonna be. It's gonna be difficult. Our look
Speaker 1: at show who covers the entertainment business and Netflix for
Speaker 1: us said there's a hard solution to Netflix's problem. He's
Speaker 1: not talking about ads. He simply says, make better shows.
Speaker 1: What about that? No, I I think that that's that's
Speaker 1: actually the mentality that they pretty much already doubled down on.
Speaker 1: If we can poach the biggest producers in the industry,
Speaker 1: if we can have the greatest TV shows and and
Speaker 1: and great movies, we can fend off companies like like
Speaker 1: Disney that have a hundred years of content that they
Speaker 1: can just keep updating. Um. I think that strategy has
Speaker 1: are already proven that it doesn't work, or else they
Speaker 1: wouldn't have had the mist that they did this past
Speaker 1: quarter so quickly. Then how contagious do they think this
Speaker 1: is going to be how much are we gonna see
Speaker 1: This also reflected in Disney results given you know, yes,
Speaker 1: a different library, but still they're also relying on new content. Yeah,
Speaker 1: so I don't think the results will be the same
Speaker 1: in terms of other companies for a couple of reasons. Um. One,
Speaker 1: the other streaming solutions are still new. They're still launching
Speaker 1: a new market for the first time, so there's still
Speaker 1: uh potential subscribers that never had the ability to access
Speaker 1: their content, whereas Netflix has had pretty widespread distributions for
Speaker 1: quite some time. So that's one thing. Um. The second
Speaker 1: thing is everybody else has it diversified, just about has
Speaker 1: a diversified subscriber model where they're cheaper tears like Hulu
Speaker 1: or other things where subscribers can get in and pay
Speaker 1: less to see ads or in fact just completely free
Speaker 1: tears and the in the ad supported streaming ecosystem, we're
Speaker 1: seeing massive growth year over year, um, even despite the
Speaker 1: weighing of lockdowns in the pandemic. So it doesn't hold
Speaker 1: true that people just aren't streaming anymore, because the data
Speaker 1: shows is that that's absolutely not the case. All Right, Well,
Speaker 1: we're going to continue to cover the story throughout the hour.
Speaker 1: Andre Swanston of TransUnion, always appreciate your insights on Netflix
Speaker 1: and the streaming business beyond. No more masks on rides.
Speaker 1: Uber and Lyft now joining a growing number of major
Speaker 1: transport providers and shifting their mask policies. This after a
Speaker 1: US judge overturned a federal mandate for passengers to cover
Speaker 1: their faces on Monday. Let's bring in Blue Works Jackie Davalos,
Speaker 1: who covers both Uber and left for US. So, Jackie,
Speaker 1: I guess the big question is is this going to
Speaker 1: mean drivers and riders are more or less inclined to travel?
Speaker 1: You know, if you are one of those that have
Speaker 1: following mask mandates for as long as they've been around
Speaker 1: the past two years, this may seem like an inconsequential
Speaker 1: update and policy. But if you're also like me who
Speaker 1: forgets their mask in a different coat pocket or purse, uh,
Speaker 1: it might come as a relief and even you know,
Speaker 1: making more likely to take another ride. For many riders,
Speaker 1: you know, this has just been something that we've learned
Speaker 1: to live with. However, for others, you know, it might
Speaker 1: bring them off the sidelines after um, you know, perhaps
Speaker 1: feeling strongly about not wearing masks, on the driver's side.
Speaker 1: I think that's where we're going to see more of
Speaker 1: a diverging reaction. It may not be such a slam
Speaker 1: dunk policy for for driver's supply, because many were already
Speaker 1: skittish to come back to the platform. As we've spoken
Speaker 1: about emily in the past, the driver's shortage, A major
Speaker 1: reason that has really persisted is because of the heightened
Speaker 1: concern around the risk of infection by having someone in
Speaker 1: your car. Uber and Left also now saying riders can
Speaker 1: ride in the front seat if they want want though
Speaker 1: of course saying that folks need to be respectful if
Speaker 1: they still want to wear masks. How much do you
Speaker 1: think this is actually going to impact Uber and Lifts
Speaker 1: bottom lines? You know, when we think about where the
Speaker 1: companies are today, Uber obviously has more of a buffer
Speaker 1: with their Uber Eats business, but they've been trying to
Speaker 1: really bolster that mobility segment. Again, this is only going
Speaker 1: to help that that rideshare business was already profitable and
Speaker 1: it could only help their bottom lighting you further if
Speaker 1: they can boost those levels back to where they were
Speaker 1: pre pandemic. Now for Lift, this uh, the stakes are
Speaker 1: much higher for them given bright hailing is their primary business. UM.
Speaker 1: When we think about where, um, some of their business
Speaker 1: comes from, as it relates to airport travel, major airlines
Speaker 1: loosening their mask mandates and potentially seeing an uptick in
Speaker 1: flights is only going to help rideshare companies even more.
Speaker 1: But definitely, you know, ridership has not totally recovered and
Speaker 1: this could potentially put them a little bit star to
Speaker 1: the finish line. And what about Uberpool On their website,
Speaker 1: Uber is hinting that it's back, but it doesn't show
Speaker 1: up on the app in the US or Europe. We
Speaker 1: actually check this. It's a mystery. They've been testing pool
Speaker 1: strategies here and there. But I spoke with them this
Speaker 1: morning and the company said, this is not They have
Speaker 1: nothing to share. This is not something that's being tested broadly. UM.
Speaker 1: But I think we will hear from Lift in particular
Speaker 1: UM in the coming months, especially now that you see
Speaker 1: cities starting to revise maybe even loosen some of their
Speaker 1: own mask updates, which goes to show that perhaps pandemic
Speaker 1: conditions are improving more broadly and rideshare companies are poised
Speaker 1: to benefit from that. Okay, Bloomberg, Jacki Dagulas We'll see
Speaker 1: how this evolves. As always, thank you. Coming up, we're
Speaker 1: gonna hear from ft X ee O Sam Bankman Freed
Speaker 1: on all things crypto, from regulation to stable coins to
Speaker 1: Elon Musk, and is hinted at Twitter takeover that's next.
Speaker 1: This is Bloomberg f t X founder and CEO Sam
Speaker 1: Bankman Freed, who was recently profiled in a Bloomberg Big
Speaker 1: Take on how he plans to give away his fortune,
Speaker 1: has been vocal about the Musk Twitter controversy and how
Speaker 1: blockchain could revolutionize social media. He's spoke earlier with my
Speaker 1: colleagues Matt Miller and Kaylee Lines and started by talking
Speaker 1: about crypto regulation and how it could change not only
Speaker 1: businesses like f t X, but the way traditional Wall
Speaker 1: Street operates. One of the big things is I think
Speaker 1: that that may provide a pathway for them to get
Speaker 1: involved in digital assets. Um. That that's frankly something I'm
Speaker 1: excited about here. Um. You know, I think a lot
Speaker 1: of them have been waiting for uh, you know, clear
Speaker 1: federal oversight of the space to get involved. Um. I
Speaker 1: think that there are really interesting applications of other asset classes.
Speaker 1: Now you have to be careful when you do that,
Speaker 1: because you have to look at what do existing element
Speaker 1: cycles look like in you know, traditional agricultural commodities. How
Speaker 1: would that interface with the system like this. I think
Speaker 1: it's an interesting question. I think it's one that you
Speaker 1: know needs more thought and certainly, you know, we would
Speaker 1: be looking to start just with doing this for digital assets. Um,
Speaker 1: but but I do think that that, you know, it
Speaker 1: would be really interesting to do a deep dive, um,
Speaker 1: you know, with the CFTC and crucially with the core
Speaker 1: market participants in those areas about how this could you know,
Speaker 1: interface with that. I think when you look at things
Speaker 1: like treasuries, right, I think tokenized treasuries could be really interesting.
Speaker 1: I think you could provide transparency and real time settlement
Speaker 1: of them, getting rid of this sort of like keyser
Speaker 1: q on T two system that we have for various
Speaker 1: asset classes, right with securities, where it takes two days
Speaker 1: to settle a trade, and there's sort of like this
Speaker 1: amount of uncertainty and risk and and exposure during those
Speaker 1: two days. I think it would be really cool to
Speaker 1: see you real time margining, real time risk, and real
Speaker 1: time settlement you know, based on tokens of those. So
Speaker 1: I think there are really interesting applications. Okay, Sam, I
Speaker 1: want to pivot to another story. We even carefully following
Speaker 1: Bloomberg for the last couple of weeks, and I know
Speaker 1: you've been following it. To Elon Musk's bid for Twitter.
Speaker 1: We just had a headline crossing from the New York
Speaker 1: Post that he's willing to invest tend to fifteen billion
Speaker 1: dollars of his own cash for Twitter, whether or not
Speaker 1: he eventually succeeds. You have proposed a decentralized model for Twitter.
Speaker 1: Can you just walk us through that and how you
Speaker 1: think it will be beneficial to the company. Absolutely, and
Speaker 1: I think this would be a really really interesting and
Speaker 1: important innovation in in uh social networks. Obviously, we'd have
Speaker 1: to see how it actually played out, but here's the
Speaker 1: core of it, um right now. One of the big
Speaker 1: problems with social media is there's lots of platforms, and
Speaker 1: all the platforms are completely independent of each other. There's
Speaker 1: no ability to see a tweet on Facebook if you
Speaker 1: message him on Facebook, you know, even what'sapp can't rate it,
Speaker 1: and that that's even the same company, um, And so
Speaker 1: it's just you know, really messy system where there are uh,
Speaker 1: you know, there's no interoperability between different platforms. UM. And
Speaker 1: there's a second problem that you have here is around
Speaker 1: basically moderation, right, Like what is the moderation policy for
Speaker 1: basically all of social media right now? It's like three guys, right,
Speaker 1: it's a people who run three companies who choose what
Speaker 1: doesn't doesn't get censored. Um and and we've seen that
Speaker 1: that is a broken model. Right. We saw a social
Speaker 1: media choose not to censor um misinformation in and get
Speaker 1: absolutely roasted for that decision. And then we saw them
Speaker 1: choose to censor in and get roasted for that decision.
Speaker 1: UM and uh. And so here's the core of what
Speaker 1: I think would be really really exciting, UM would be
Speaker 1: that you take a blockchain, you put the actual underlying
Speaker 1: messages directly on the blockchain. UM. And what that means
Speaker 1: is that any platform in theory could access those same
Speaker 1: sets of messages. UM. And so whether you're using you know, Facebook,
Speaker 1: Twitter or whatever, this sort of like you know platform
Speaker 1: is they're all drawing on all of the messages. They
Speaker 1: can all write to this blockchain, they can all read
Speaker 1: from it, but they are as different interfaces effect of
Speaker 1: living in the same universe. And one of the cool
Speaker 1: things that falls out of that is, first of all,
Speaker 1: you have interoperability between platforms, which solves a lot of
Speaker 1: these network problems and allow us for more competition because
Speaker 1: it means new people can enter this space without being
Speaker 1: miles behind in terms of you know, user based growth. UM.
Speaker 1: But the other thing that it means, UM is that
Speaker 1: when it comes to moderation, you could have different platforms
Speaker 1: making different decisions, right, and so you could have you know,
Speaker 1: two people have two different platforms, but each with the
Speaker 1: same underlying set of message is accessible and so UM,
Speaker 1: you know, they don't have to deal with this this
Speaker 1: network effect problem, but which makes slightly different decisions about
Speaker 1: what to sensor what not to sensor, UM and uh,
Speaker 1: you know, and and that can at least give some
Speaker 1: consumer choice here. It can at least give people, you know, options, Sam,
Speaker 1: I think it's a fascinating idea. And I also had
Speaker 1: seen c Z tweet about it UM on the Elon
Speaker 1: Musk Twitter announcement day. I'm just wondering, have you talked
Speaker 1: to Ellen about this? But I have not talked directly
Speaker 1: to to Ellen about this, UM, but I would be
Speaker 1: excited to UM, I you know, have had some conversations
Speaker 1: with you know, people who are investigating this. I think
Speaker 1: they're they're really cool ideas UM and I would be
Speaker 1: really excited to be, you know, potentially involved in something here,
Speaker 1: whether you're looking at UM you know, I thinking, I
Speaker 1: think the biggest thing would be thinking about how blockchain
Speaker 1: could be applied here UM, you know, maybe as a
Speaker 1: test case first. I'd be excited to help on the
Speaker 1: designing and building of it UM and I, you know,
Speaker 1: on I you know, potentially helping to manage a network
Speaker 1: that that was looking to do this. That was FDx
Speaker 1: founder and CEO Sam Bankman Fried earlier with Matt Miller
Speaker 1: and Kaylee Lines on bloom Brooks Cryptos Show, and speaking
Speaker 1: of Elon Musk and Twitter, the story has been developing
Speaker 1: day by day. Bloom Brook's Ed Ludlow here with more
Speaker 1: on the latest at Apollo now weighing a bid for
Speaker 1: Twitter as well. Yeah, so Bloomberg sources saying Apollo is
Speaker 1: weighing a lot of options right, Either they back Musqus bid,
Speaker 1: or they back a bid from others. We know tomer Rather,
Speaker 1: for example, is eyeing its own bid for Twitter. One
Speaker 1: other media reports suggested that Apollo could even go to
Speaker 1: Twitter and help their defense and say, Yo, let's do
Speaker 1: something together directly. And as with all deals, you get
Speaker 1: these usual caveats that the deal may not happen depending
Speaker 1: on certain circumstances. And I think he heard Kayley allude
Speaker 1: to in that piece of tape. The New York Post
Speaker 1: was kind of the story of the day reporting the
Speaker 1: Elon Musk is struggling to find backers for his own bid,
Speaker 1: but ultimately he's considering putting ten to fifteen billion dollars
Speaker 1: of his own money up front. But he'd still need
Speaker 1: to find the rest of the financing, of course, because
Speaker 1: the figure that is currently on the table is a
Speaker 1: forty three billion dollar valuation of Twitter. Now, one of
Speaker 1: the big takeaways here at is that investors may need
Speaker 1: to buckle up. This could be a long ride. I mean,
Speaker 1: you know, flight could go on for months, right. Yeah,
Speaker 1: But we've discussed on this show. All the experts we
Speaker 1: speak to in the world of M and A say
Speaker 1: that this is playing out as a textbook scenario for
Speaker 1: a hostile takeover. There are lots of options, we think,
Speaker 1: and the New York Post did report this that a
Speaker 1: tender offer directly to shareholders from Musk could come at
Speaker 1: some point in the next ten days. That's great fun
Speaker 1: for me because I like to get up at four
Speaker 1: a m e. Sometime in the morning and wait for
Speaker 1: regulatory filings to come through. And that's how it would
Speaker 1: be communicated. This is the thing. We have to wait
Speaker 1: and see how it plays out. But ultimately the kind
Speaker 1: of hypothesis out there from the street is that Musk
Speaker 1: is going to have to do this in coordination with
Speaker 1: a number of parties, and that does give him options.
Speaker 1: And tomorrow is for twenty, which is, as we know,
Speaker 1: one of Elon Musk's favorite days. I mean, are you're
Speaker 1: going to be staying up all night and waiting for
Speaker 1: that regulatory filing. I will stay up all day, all
Speaker 1: night and four twenties also Tesla earnings and when better
Speaker 1: to announce your intentions for a hostile take over Twitter
Speaker 1: than the earnings core of your other company. Sure, all right,
Speaker 1: ed Ludlow, thank you, We'll be watching well. Florida Governor
Speaker 1: Rond De Santis has escalated a dispute with Disney, asking
Speaker 1: the state's legislator to consider terminating special districts where Disney
Speaker 1: currently has special privileges for example, access to cheaper tax
Speaker 1: exempt financing. This is the first indication that the standoff
Speaker 1: between the state and the entertainment giant over school instruction
Speaker 1: about gender identity and sexual orientation could have consequences for Disney.
Speaker 1: This as plunging shares of Netflix has impacted other companies
Speaker 1: tied to streaming, like Disney, also dropping about five percent
Speaker 1: after hours. Meantime, Airbnb is not only planning to issue
Speaker 1: a lifetime band to the guests behind a mass shooting
Speaker 1: at one of its rentals in Pittsburgh, the company is
Speaker 1: also reportedly looking to take legal action against them. This
Speaker 1: according to the Pittsburgh Post Gazette. Two teenagers were killed
Speaker 1: nine others injured at an underage party early Sunday morning.
Speaker 1: Back Abnb announced a global ban on all parties and
Speaker 1: events after a number of violent incidents. It also blocked
Speaker 1: thousands of rentals at the height of the pandemic due
Speaker 1: to hosts breaking party rules. Welcome back to Bloomer Technology.
Speaker 1: I'm emily changing in San Francisco. Well after a decade
Speaker 1: of meteoric growth that shook Hollywood to its core, and
Speaker 1: Netflix has run into a wall. The streaming service losing
Speaker 1: two hundred thousand subscribers in the first quarter, the first
Speaker 1: time it has said subscribers since shares plumbing and Late
Speaker 1: Trading joining us Now Rich Greenfield of Light shed partners.
Speaker 1: No relation to the shedding of subscribers, Rich, what do
Speaker 1: you think happens here? Look, I think what happens here
Speaker 1: is the content is not resonating the way it should.
Speaker 1: I mean, while they're making a lot of other excuses,
Speaker 1: it's hard to look past the fact that when Netflix
Speaker 1: has had great content, their subscribers have explode it. So
Speaker 1: it certainly seems like there's a connection between some of
Speaker 1: their content, especially their film content. They've put probably five
Speaker 1: billion dollars into the film business and it does not
Speaker 1: appear to be having the type of impact on subscriber
Speaker 1: growth that they expected. So they're making a lot of excuses.
Speaker 1: There's clearly is the supply chain for TVs impacted? Is
Speaker 1: there a big problem in connected TV sales? Shore We've
Speaker 1: seen that with Roku Stock, We've seen that with video Like,
Speaker 1: We've seen this with other companies. But there is no
Speaker 1: doubt that a big chunk of this is Netflix content
Speaker 1: is simply not breaking through the way it has in
Speaker 1: prior years. Netflix says it's gonna zero in on password
Speaker 1: sharing and Shonda rhymes to turn things around. Obviously, Bridgerton
Speaker 1: has been a hit. I'm sure you would agree, But
Speaker 1: what what what? What are not? What are they not
Speaker 1: getting right in content? Remember, there's a lot of competition.
Speaker 1: I mean, they clearly called out competition, but it's not
Speaker 1: like even if you look across Disney Plus and Peacock,
Speaker 1: it's not like there were massive competitive hits this quarter.
Speaker 1: It's not like, you know, Kulu had to drop up,
Speaker 1: but there are not I would not say that there
Speaker 1: were breakout hits that were really competitively pressuring Netflix. You know,
Speaker 1: I think the big question investors are grappling with the
Speaker 1: reason why you see the stock down so much, is
Speaker 1: the question now becomes was was Read Hastings and team
Speaker 1: just too optimistic about how big the streaming market was.
Speaker 1: I mean, we used to talk about six hundred seven,
Speaker 1: eight hundred million ultimate subscribers. Jason Kyler, who just left
Speaker 1: Warner Media, was talking about a billion dollar or billion
Speaker 1: subscriber opportunity. If two hundred million subscribers is sort of,
Speaker 1: you know, starting to near the top, that changes everything
Speaker 1: for how every media company legacy media company, new media company.
Speaker 1: It changes everything if that's the size of the market.
Speaker 1: And I think that's the panic you're seeing in the
Speaker 1: stock is, oh my god, is this is this business
Speaker 1: model far far smaller than people expected. People were looking
Speaker 1: at a multiples of where they are now for the upside,
Speaker 1: not this being increasingly a ceiling. And Emily, I think
Speaker 1: one of the big questions out there is is this
Speaker 1: anyone's fault at Netflix? Like if someone getting fired for this,
Speaker 1: is there going to be executive shake up because of this?
Speaker 1: Or is this really just unavoidable and no one's at fault.
Speaker 1: I think investors are gonna want to know, is someone
Speaker 1: at fault for this? Do you think someone's at fault?
Speaker 1: I mean, look, the content clearly hasn't resonated. I think
Speaker 1: they're gonna have to explain why they feel confident. And
Speaker 1: I mean it sounds like from the press release, it
Speaker 1: definitely sounds like they're ramping investment, they're not pulling back.
Speaker 1: You don't usually ramp investment and quote unquote double down
Speaker 1: on content if you don't believe there's a substantial long
Speaker 1: term market opportunity. So do they believe that they're gonna
Speaker 1: get to six seven hundred million subscribers still and it's
Speaker 1: just not linear the what what Wall Street wants because
Speaker 1: it's odd and I think it's gonna be scary to
Speaker 1: Wall Street if they're ramping spend and they're hitting US ceiling,
Speaker 1: investors are going to panic. That's what they're doing right now.
Speaker 1: So how much do you think the price hikes for
Speaker 1: subscribers have had to do with this? And and what
Speaker 1: about an AD supported model? Our guest of Andre s
Speaker 1: Wanston of TransUnion was suggesting that earlier to offset some
Speaker 1: of these costs. Yeah, look, I um, I know there's
Speaker 1: a lot of investors that would like them to follow
Speaker 1: suit on an AD model. UM continue to not be
Speaker 1: convinced because where an AD model is most successful is
Speaker 1: the US and developed parts of Europe, which is where
Speaker 1: Netflix actually is increasingly mature. So the real benefit to
Speaker 1: doing an AD model UM wouldn't be in places where
Speaker 1: there is an ad market. You know, you could say,
Speaker 1: oh my god, hey in India, would an advertising model help?
Speaker 1: I mean not really? Right, The r proof of the
Speaker 1: subscription services pretty low, and there isn't a robust AD
Speaker 1: market for the streaming services, as companies like Disney no
Speaker 1: well with hot stars. So I'm a little skeptical. While
Speaker 1: I think advertising could you know, create a short term
Speaker 1: spike and subscribers, I don't think it's the answer, and
Speaker 1: I think it brings with it a lot of risks
Speaker 1: and what sort of what makes Netflix unique, especially when
Speaker 1: you've got companies like Amazon and Apple ad free. So
Speaker 1: I don't think this is about advertising being the panacea.
Speaker 1: I think the question is is their content. Can you
Speaker 1: make enough great content to drive subscribers to five six, seven,
Speaker 1: eight hundred million? Is it possible? Or has read Hastings
Speaker 1: changed his mind that the market opportunity is simply not
Speaker 1: that big. And if it isn't that big, why in
Speaker 1: the world are they not cutting back on content expense?
Speaker 1: Those are gonna be the big questions for the call
Speaker 1: in you know, half an hour. Could gaming be the
Speaker 1: panacea or will that just be another money pick? You know, Emily,
Speaker 1: what's crazy is there's really no mention of gaming at
Speaker 1: all in the press release. You know, they actually spent
Speaker 1: considerable time in the press release last quarter and even
Speaker 1: on their conference call last time. There's no mention really
Speaker 1: of gaming. And so the question is, I mean, gaming
Speaker 1: is obviously the nacy stage. It's very early for them.
Speaker 1: It's just started nine months ago, so it's it's not
Speaker 1: as if we can say, you know, why is gaming
Speaker 1: not working yet? Could gaming be this long term solution.
Speaker 1: It's possible, but I don't think in the next two years.
Speaker 1: I doubt gaming is the catalyst for this. I think
Speaker 1: the real question is, is you know they lowered price
Speaker 1: in India. They have very little in terms of subscribers
Speaker 1: in India. Why is it not growing faster given the
Speaker 1: amount of spending they've had in India? Is it? Is
Speaker 1: it just they can't seem to break through. Do they
Speaker 1: have the wrong content mix or strategy? But subscribers in
Speaker 1: the eight pack region actually had slower growth year over
Speaker 1: year in Q one this year than last year despite
Speaker 1: lower pricing in one of their biggest markets, India. Sort
Speaker 1: of hard to understand that. Well, it's certainly a new
Speaker 1: chapter beginning for Netflix. Le Chad's Rich Greenfeld as always
Speaker 1: appreciate your quick analysis. Thank you. The question is going
Speaker 1: to be is it time for the hashtag good luck streaming? Emily?
Speaker 1: All right, it's see if we can get that trending
Speaker 1: on Twitter. Risk Thank you? Coming up can bitcoin truly
Speaker 1: be a hedge against inflation? We'll be joined by micro
Speaker 1: Strategy founder and bitcoin bull Michael Sailor to talk about inflation,
Speaker 1: Elon Musk, Jack Dorsey and much more. He's next. This
Speaker 1: is Bloomberg time now for our crypto report, and the
Speaker 1: markets still looking risk averse, with bitcoin sticking in a
Speaker 1: tight range, providing more fodder for critics who don't think
Speaker 1: it's a hedge against inflation. Micro Strategy co founder and
Speaker 1: CEO Michael Sailor might put push back on that idea,
Speaker 1: as I would expect him to. Let's bring him in now. Michael,
Speaker 1: good to have you back with us. You've been saying
Speaker 1: for a long time now you think bitcoin is the
Speaker 1: hedge against the dangers of inflation. But what do you
Speaker 1: make of the fact that it's staying in such a
Speaker 1: tight range and not not really moving on from that mark. Well,
Speaker 1: it's all time frame. If you go back two years
Speaker 1: when micro Strategy bought in uh, it's up by fo
Speaker 1: and it's dramatically outperformed the NASDAC or gold or any
Speaker 1: other asset you could have bought. If you're looking at
Speaker 1: it in a matter of days or weeks or months,
Speaker 1: the traders control it. And right now, there's three types
Speaker 1: of investors in bitcoin. There's the there's the traders, there's
Speaker 1: the technocrats, and there's the maximalist. Uh. The maximalists are
Speaker 1: all in myself, Jack Dorsey, we think that bitcoin is
Speaker 1: an instrument of economic empowerment. So we're just busy educating
Speaker 1: and we sweep free cash flows into it, but we're
Speaker 1: kind of out of the market. Day to day. The
Speaker 1: market price is set by a tug a war between
Speaker 1: the technocrats, people that are pro technology and they think
Speaker 1: it's like the next big tech network like Google or
Speaker 1: Amazon for money well, and the traders who are just
Speaker 1: looking at an uncorrelated asset or correlated asset. So right now,
Speaker 1: both the traders and the technocrats are kind of, you know,
Speaker 1: scared of risk, and so they've both been in a
Speaker 1: bad mood. They had been selling. Uh. What you'll see
Speaker 1: over time is the technocrats will turn into a good
Speaker 1: mood and I'll realize that this is the next great
Speaker 1: big tech network. The maximalist will keep sweeping cash flows.
Speaker 1: So when does that happen? When does bitcoin break this
Speaker 1: correlation with risk assets? If ever? Well, uh, I would
Speaker 1: think that over a four year time frame, you're better
Speaker 1: off to be a maximalist or a tech investor. But
Speaker 1: as long as there's a massively choppy market right uncertainty
Speaker 1: about FED policy and fear uh in the near term,
Speaker 1: I think that the traders will probably dominate the price.
Speaker 1: So you're saying we're gonna have to wait four years
Speaker 1: for this to happen. No, I think sometime on a
Speaker 1: day that is very unexpected, the correlation go will go
Speaker 1: from correlated to risk assets to zero percent. And when
Speaker 1: that happens, then the traders will reverse the polarity of
Speaker 1: their trades, the technologists will start to double down. The
Speaker 1: maximualis will just enjoy the ride. Okay, I have to
Speaker 1: ask you about Twitter with you know, as you say,
Speaker 1: you and Jack Dorsey among the mask maxis. What in
Speaker 1: a huge crypto community on Twitter, you are one of
Speaker 1: the most prolific users. What do you make of Elon
Speaker 1: Musk's hint at an attempt to take over a hostile takeover? Well,
Speaker 1: I mean, I think there's obviously there's a lot of
Speaker 1: frustration everywhere in the world right now that's circulating about
Speaker 1: and you see that reflected on Twitter, and this is
Speaker 1: indicative of that, Um, it's a bit above my pay
Speaker 1: grade to determine how the entire the entire uh chapter ends.
Speaker 1: It definitely makes for interesting watching. But you're a power user.
Speaker 1: Do you want Elon Musk to own Twitter? I think that,
Speaker 1: uh that Twitter is going to be uh fine, regardless
Speaker 1: of what happens. I don't think I mind if if
Speaker 1: he if a Twitter user ended up owning Twitter. I
Speaker 1: think that'd probably be a fine thing. Have you talked
Speaker 1: to Jack about this at all? I mean, I know
Speaker 1: you've been spending a lot of time together. No, No,
Speaker 1: I'm not really involved in this. It's just this is
Speaker 1: not really my, uh my area of expertise. I think
Speaker 1: I'll let people that are focused upon tech stock investing
Speaker 1: decide the fate of Twitter. I'm focused on bitcoin, but
Speaker 1: of course there's a huge crypto community on Twitter, and
Speaker 1: I'm curious what you think the impact could be on
Speaker 1: the crypto community, whether or not you think, for example,
Speaker 1: Twitter should be decentralized. I don't think the Twitter is
Speaker 1: going to be decentralized regardless of the outcome of all
Speaker 1: these discussions. Right now, I think Twitter is a centralized service.
Speaker 1: I think that the only thing we're sure, we can
Speaker 1: decentralizes is bitcoin, which has been very successful, but it's
Speaker 1: a much simpler idea. I think they're trying to decentralize
Speaker 1: highly functional, high speed applications. That's very challenging and no
Speaker 1: one's very successfully done that. Well, yeah, you seem really
Speaker 1: optimistic about Treasury Secretary Janet Yellen's understanding of bitcoin, and
Speaker 1: I'm curious, even though we might be looking at a
Speaker 1: longer timeframe for you know, the divorce of of of
Speaker 1: of bitcoin and UM risk assets, do you think we're
Speaker 1: at an inflection point when it comes to regulation and
Speaker 1: mainstream adoption. Yeah? Absolutely, Um. I think April seventh at
Speaker 1: American University was a really critical speech. I think it's
Speaker 1: probably one of the most important speeches of the century
Speaker 1: because you had a set of deniers, people that said
Speaker 1: that bitcoin is is a mirage or a Ponzi scheme,
Speaker 1: and then you had a set of skeptics that said, well,
Speaker 1: it isn't that, but it's too good to be true,
Speaker 1: and so some government's going to take it away from you.
Speaker 1: And when you have the Sectuary of the Treasury giving
Speaker 1: a speech explaining what decentralized UH networks are and what
Speaker 1: digital property is and what's the totiy Knockamoto means to
Speaker 1: the world. I think it clicks in a lot of
Speaker 1: people's mind that bitcoin is actually technology that's revolutionary, and
Speaker 1: it also clicks that no, it's not getting banned. And
Speaker 1: once you decide it's real technology to improve the world
Speaker 1: and it's not being banned, you're no longer a denier,
Speaker 1: and you can't be a skeptic. So you have to
Speaker 1: move into the trader camp or the technocrat camp, and
Speaker 1: eventually everybody ends up as a maximalist if you understand
Speaker 1: it well enough. So there's a long answer to my
Speaker 1: next question. But give me the nutshell answer. With the
Speaker 1: ethereum merge coming up, what changes? What are you predicting
Speaker 1: or expecting? Yeah, well, they keep pushing it back. But
Speaker 1: I mean, I think this huge questions about what ethereum
Speaker 1: is following that merge, and whether it's a security or
Speaker 1: whether it's property. And I think a lot of people
Speaker 1: have implied that staking networks are digital security is not property.
Speaker 1: So so I just think they're moving into a very uncertain,
Speaker 1: uncertain chapter of their existence. All right, Michael Sailor of
Speaker 1: micro Strategy. Always great to have it here, on the show,
Speaker 1: thanks so much for stopping by. The debut of Crazy
Speaker 1: Rich Asians Back In was a huge cultural moment. It
Speaker 1: helped to usher in more films featuring largely Asian casts,
Speaker 1: including Parasite, which won the Oscar for Best Picture, and
Speaker 1: the critically acclaimed Everything Everywhere, All At Once Out Now.
Speaker 1: Gold House, a nonprofit that was founded to capitalize on
Speaker 1: the momentum of Crazy Rich Asians, is focused on reshaping
Speaker 1: public opinion about the Asian and Pacific islander community. Now
Speaker 1: they're launching a new accelerator class along with a thirty
Speaker 1: million dollar fund called gold House Ventures, to take this
Speaker 1: momentum to Silicon Valley. Joining me now, Eric Fang, generalner
Speaker 1: at gold House Ventures. Eric, great to have you with us,
Speaker 1: So tell us a short origin story of gold House
Speaker 1: and how that evolved to gold House Ventures. Well, Asians
Speaker 1: have long lack of voice in America and a unifying
Speaker 1: organization that bring our why the asked for together and
Speaker 1: the team here at gold House thought that that was
Speaker 1: a huge opportunity, so in we launched what has turned
Speaker 1: out to be the premier collective for Asian thought leaders, creators,
Speaker 1: influencers and business leaders to band together and promote really
Speaker 1: three things, unity, success, and representation for our culture in
Speaker 1: Silicon Valley in particular, what kind of challenges and stereotypes
Speaker 1: do you think Asian founders face when they're pitching, when
Speaker 1: they're trying to raise money. Yeah, that's a great question. Well, um,
Speaker 1: you know in the technology field, and and that's that's
Speaker 1: my background. I'm an engineer by trade. Our representation is
Speaker 1: incredibly strong. Uh, we're about thirty of the overall tech workforce,
Speaker 1: but if you look at C suites, we are in
Speaker 1: the single agents. So I think Asians have been given
Speaker 1: a lot of opportunity to participate in tech, but not
Speaker 1: participate at the highest levels. And then when you factor
Speaker 1: in not Asians, not all Asians are are are the same.
Speaker 1: You know, we're very very wide diverse culture. Um. So
Speaker 1: you have East Asians like myself that I think have
Speaker 1: been afforded lots of fantastic opportunities. But there are women
Speaker 1: that have been marginalized, Southeast Asians that suffer a lot
Speaker 1: of systemic racism and bias against them. And for us
Speaker 1: as a community, we really need to do better to
Speaker 1: lift each other up. And that's why gold House is
Speaker 1: so important as a way to bring everyone together, not
Speaker 1: just these Asians, not just men, but women, Southeast Asians,
Speaker 1: people from Indonesia, Cambodi, Vietnam, across the entire community. Uh.
Speaker 1: That is really our focus. You've brought in some big
Speaker 1: name backers and mentors like Tony Schu of door Dash
Speaker 1: Finance CEO Chong Pung jaws Chen who helped found YouTube.
Speaker 1: What are they bringing to the table and how are
Speaker 1: they helping your current class of founder. Well, Um, the
Speaker 1: number one thing that they do for us as they
Speaker 1: serve as a example of great representation that can inspire
Speaker 1: the next generation of leaders. Uh. Uh, Steve and Tony
Speaker 1: and c Z incredibly brilliant, successful entrepreneurs, but also reserved.
Speaker 1: Um also very quiet, humble and Uh. We want to
Speaker 1: be the megaphone that they may not want to be
Speaker 1: because it's so important for us to showcase that our people,
Speaker 1: our community can achieve those levels of success, shadow those
Speaker 1: bamboo ceilings, breakout and um and really inspire others. So
Speaker 1: that's what they bring. They they their success is what
Speaker 1: we can hopefully build the next generation of great Asian leaders.
Speaker 1: On top of you're competing with traditional venture capital funds.
Speaker 1: How will you measure success. Well, that's a really interesting
Speaker 1: model that we've decided to set up your gold House Ventures.
Speaker 1: So um, first and foremost, we are a for profit initiative.
Speaker 1: We have great LPs like Tony I see, like CZ
Speaker 1: that we want to help deliver a great, great to
Speaker 1: return on their capital. We consider it an honor of
Speaker 1: privilege that they've chosen to give us their capital and
Speaker 1: it is our responsibility to show great returns of that capital.
Speaker 1: So for them it is very much a poor profit initiative.
Speaker 1: But for the gold House Collective, for the general partners
Speaker 1: like myself and my partner's Megan and being Chen. For us,
Speaker 1: it is a nonprofit initiative, So all of our fees
Speaker 1: and carry actually go back to the nonprofit. So uh,
Speaker 1: this dual goal, this dual strategy, I think it is
Speaker 1: very unique to them value and as I like to
Speaker 1: tell our LPs, we want to make them a lot
Speaker 1: of money, but we want them to feel good about
Speaker 1: at the same time. And what that's really opened up
Speaker 1: the doors for is tremendous support from the community. We
Speaker 1: have a great not only network of LPs, but we've
Speaker 1: got investors from top firms like ny A and Upfront
Speaker 1: Ventures and Excel and general catalysts that want to help
Speaker 1: us out their mission oriented in line with us. So
Speaker 1: I think the really unique thing too that we're doing
Speaker 1: here is that we're very much making venture a team sport. Um.
Speaker 1: You know, historically it's been this kind of individual sport,
Speaker 1: highly competitive, but with gold House Ventures, it is a
Speaker 1: team sport. We're all working together to really try to
Speaker 1: improve the future for our community. Quickly, Eric, before you go,
Speaker 1: I got to ask you about Netflix. You spend a
Speaker 1: long time as an executive at Hulu. You know, the
Speaker 1: streaming business. How bad is this? The fact that we're
Speaker 1: seeing the first loss of subscribers in a decade, has
Speaker 1: the streaming business plateau? You know? I think what this
Speaker 1: is a reminder is how humbling, uh it is that
Speaker 1: in the hundred year history of entertainment UM, it is
Speaker 1: still a hits driven business and no one can manufacture hits.
Speaker 1: We've seen a lot of books and a lot of
Speaker 1: different companies try, like Zinga and the gaming space and
Speaker 1: Netflix in the video space, and no matter how much
Speaker 1: technology and science and engineering and data that you apply
Speaker 1: to it, it's still up to the gods, the gods
Speaker 1: of entertainment to shine good fortune on you. And I
Speaker 1: think that's what what's reflecting in here. It's not so
Speaker 1: much the competition and you know, the account sharing. I
Speaker 1: think it's mostly that where's the next where's the next weigame,
Speaker 1: Where's an next bridge, Where's the next big hit? And
Speaker 1: that's what all entertainment companies are still at the at
Speaker 1: the whim zone, in the hands of the gods, apparently,
Speaker 1: Eric Fang Gold House Ventures. Eric. Great to have you
Speaker 1: back on the show. Thank you. I want to get
Speaker 1: back to that story of the day Netflix at Ludlow back.
Speaker 1: We're waiting for that earnings call to begin at water
Speaker 1: investors gonna be digging into Yeah, a hundred million people
Speaker 1: and households have Netflix but don't pay for it. Where
Speaker 1: are they how do they get around that? As we
Speaker 1: just had from Mereric content is king, what does the
Speaker 1: pipeline look like? Two hundred thousand customers lost in the
Speaker 1: first quarter, four coasts of two million lost in the
Speaker 1: second quarter. Where are they being lost? Which markets are
Speaker 1: having pain? Those are the big questions, all right, Uh
Speaker 1: at Ludlow, waiting for that Netflix earnings call to begin again.
Speaker 1: Losing two hundred thousand subscribers, the first time Netflix has
Speaker 1: lost subscribers in a decade, the company saying two million
Speaker 1: more to come in the coming quarter. We'll be listening
Speaker 1: into that call that does it for this addition to
Speaker 1: Bloomberg Technology. Join us tomorrow we'll be breaking down Tesla results.
Speaker 1: Steve Wesley, one of the original Tesla board members, will
Speaker 1: be joining us. And make sure to tune in for
Speaker 1: my exclusive conversation with a ws CEO, Adam Salipsky. That
Speaker 1: conversation happening tomorrow three thirty Eastern twelve thirty Pacific right
Speaker 1: here on Bluebrick Television. And check out the podcast as
Speaker 1: always anywhere you get your podcast. I'm Emily Changing in
Speaker 1: San Francisco. This is bloom