WEBVTT - Sonos CEO: Stay Tuned For Audio Category Expansion 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.400 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.440 --> 0:00:13.600 along with essential market moving news. Find the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple Podcasts or wherever you listen to podcasts, 0:00:17.000 --> 0:00:20.560 and on Bloomberg dot com. Well So nost they reported 0:00:20.680 --> 0:00:24.720 better than expected numbers last night after the closed raised 0:00:24.720 --> 0:00:28.000 their forward guidance. The stock market like it's likes it. 0:00:28.000 --> 0:00:30.760 It's up seventeen percent today, s O n O on 0:00:30.840 --> 0:00:34.200 your Bloomberg terminal stocks up seventeen percent today, fifty seven 0:00:34.240 --> 0:00:36.920 percent year to date, and about a hundred sixty seven 0:00:36.960 --> 0:00:39.479 percent on a trailing twelve month basis. So this story 0:00:39.560 --> 0:00:42.960 is absolutely working for shareholders. To give us the latest. 0:00:43.159 --> 0:00:45.960 We welcome so to CEO of Patrick Spence. Patrick talked 0:00:46.000 --> 0:00:49.240 to us first about your earnings last night. Big numbers, 0:00:49.280 --> 0:00:54.080 the street like some what are the key takeaways? Yeah, thanks, Paul. Uh, 0:00:54.120 --> 0:00:57.520 you know, we have really capitalized on the system that 0:00:57.560 --> 0:01:00.120 we've built over the last nineteen years. And know I 0:01:00.160 --> 0:01:02.440 mentioned last quarter we'd hit an inflection point. I feel 0:01:02.480 --> 0:01:04.600 like we're just you know, continuing to go from strength 0:01:04.640 --> 0:01:07.039 to strength on the back of that, and certainly you're 0:01:07.040 --> 0:01:09.760 one of the big trends here is just the explosion 0:01:09.920 --> 0:01:13.640 in audio, right, so you see it with podcasts, the 0:01:13.640 --> 0:01:16.479 streaming music, take up audio, books, and now social audio. 0:01:16.560 --> 0:01:20.080 So audio is booming and we are a huge beneficiary 0:01:20.080 --> 0:01:22.000 of that. Patrick, I'm going to ask them one question 0:01:22.080 --> 0:01:25.040 that's been on everyone's minds for a long time. You 0:01:25.040 --> 0:01:30.760 know what that is? Are we getting headphones? You know? 0:01:30.920 --> 0:01:33.120 And you know we don't talk about a product roadmap, 0:01:33.200 --> 0:01:37.800 but look, but you said we would. We are a 0:01:37.800 --> 0:01:41.080 small player in the whole audio category. Today, we see 0:01:41.120 --> 0:01:43.720 a lot of opportunity in a number of categories that 0:01:43.760 --> 0:01:46.240 we're not in today. So, uh, stay tuned because I 0:01:46.240 --> 0:01:48.680 think over time, uh, you know, you can expect to 0:01:48.680 --> 0:01:52.240 see us play in every category of audio. All right, Patrick, 0:01:52.240 --> 0:01:55.120 give us a sense of how your business. That's kind 0:01:55.120 --> 0:01:58.600 of rewind back to early March of last year, kind 0:01:58.600 --> 0:02:00.120 of just give us a sense of how you our 0:02:00.240 --> 0:02:05.360 business changed in March of Yeah, it was you know, 0:02:05.400 --> 0:02:08.280 it was a shock. Obviously, our first focus was on 0:02:08.320 --> 0:02:11.520 the health and safety of our people. So March thirteenth, 0:02:11.560 --> 0:02:13.760 we all headed home and we've been working from home 0:02:13.840 --> 0:02:17.760 ever since, UH, and I just have been astounded by 0:02:17.760 --> 0:02:19.679 you know, I knew we had the best team in 0:02:19.720 --> 0:02:21.400 the world. I might be a little bit biased, but 0:02:21.639 --> 0:02:24.120 at the same time, you know, to see the way 0:02:24.160 --> 0:02:27.359 that everybody has adapted, UH, and how resilient they've been 0:02:27.400 --> 0:02:29.520 in the face of all the challenges that we've had 0:02:29.560 --> 0:02:32.560 this year. And you you guys know, supply chain has 0:02:32.560 --> 0:02:34.800 been a massive issue this year, right with all these shortages, 0:02:34.800 --> 0:02:37.519 everything that's been happening, and our team has just done 0:02:37.639 --> 0:02:40.480 a phenomenal job, like you know, end to end in 0:02:40.600 --> 0:02:44.200 terms of being able to manage our business, create new products, 0:02:44.280 --> 0:02:47.160 launched new products, sell our products. I mean, our DTC 0:02:47.400 --> 0:02:49.959 sales have been off the charts, UH, in the midst 0:02:49.960 --> 0:02:52.760 of a pandemic and working from home, and so I 0:02:52.800 --> 0:02:55.400 am just so proud of the team and grateful. But 0:02:55.760 --> 0:02:58.920 it's really been a team effort, UH, and the adaptability 0:02:58.919 --> 0:03:03.480 and resilience has been incredible. Patrick, how do you sell sons? 0:03:03.520 --> 0:03:05.800 So the sense of you know, high end audio is 0:03:06.200 --> 0:03:10.240 such a specialized field and it's so particular, and at 0:03:10.240 --> 0:03:11.880 the same time, if you walk into a store and 0:03:11.919 --> 0:03:14.760 you don't know enowful lot about the back brands, backgrounds 0:03:14.800 --> 0:03:17.280 or what have you. What's to stop somebody buying a 0:03:17.360 --> 0:03:21.080 Bows over a Sun Nos. Yeah, well, I think the 0:03:21.720 --> 0:03:24.280 you know, you can get started with sas for So 0:03:24.320 --> 0:03:27.679 we've really democratized that and democratized and brought kind of 0:03:27.720 --> 0:03:30.280 high end audio um to the masses, if you will. 0:03:30.520 --> 0:03:33.520 And the best place I would want you to experience 0:03:33.560 --> 0:03:36.920 so Nos is someone else's home and that's where that's 0:03:37.000 --> 0:03:40.840 the number one driver of our new customers is actually 0:03:41.120 --> 0:03:43.960 hearing about Sons from a friend or family member, and 0:03:44.000 --> 0:03:46.920 that's how they come into the Sons ecosystem. And that 0:03:47.200 --> 0:03:49.480 is huge, right, It's a huge testament to the power 0:03:49.520 --> 0:03:52.080 of the brand, a huge testament to the customer experience 0:03:52.080 --> 0:03:54.520 that we deliver today. And the nice thing about Sons 0:03:54.560 --> 0:03:57.600 and what's different than all the traditional audio brands is 0:03:57.640 --> 0:03:59.840 that you can start with one, you can start with many, 0:04:00.000 --> 0:04:01.800 and then you add more over time. So one of 0:04:01.800 --> 0:04:03.920 the greatest things that we we talked about in this 0:04:04.000 --> 0:04:06.640 last quarter is that we had a record percentage of 0:04:06.680 --> 0:04:09.560 our existing customers coming back in the quarter and adding 0:04:09.600 --> 0:04:12.480 another product to their Sonos system, not replacing, but rather 0:04:12.640 --> 0:04:16.440 adding another Sonos product into their home which um is 0:04:16.520 --> 0:04:19.120 just a testament to the kind of products we build 0:04:19.120 --> 0:04:20.960 in the brand We've built your where again in Santa 0:04:21.000 --> 0:04:22.880 Barbara because me and Paul will come right over and 0:04:22.880 --> 0:04:25.880 and tast that out. I tried. You know, I grew 0:04:25.960 --> 0:04:28.040 up in Toronto, so I I think I've paid my 0:04:28.120 --> 0:04:30.000 dues when it comes to snow and the cold and 0:04:30.080 --> 0:04:33.440 all of those things. But you're welcome any time. Yeah, 0:04:33.480 --> 0:04:36.880 So it's interesting. So, um, Patrick, I'm a former investment banker. 0:04:37.120 --> 0:04:39.320 When I see a stock up as much as yours is, 0:04:39.400 --> 0:04:41.760 I know you don't necessarily need the cash. Any thoughts 0:04:41.760 --> 0:04:43.720 of raising equity here and take advantage of your strong 0:04:43.720 --> 0:04:48.839 stock price. Uh No. We we reported record cash levels 0:04:48.839 --> 0:04:50.520 and we paid off a little bit of debt that 0:04:50.560 --> 0:04:53.520 we had, so debt free we bout six hundred fifty 0:04:53.720 --> 0:04:57.360 million on the balance sheet. We are fully focused on 0:04:57.400 --> 0:04:59.720 how do we invest that to drive more growth and 0:04:59.760 --> 0:05:01.760 build on this momentum through you know, a lot of 0:05:02.120 --> 0:05:05.520 acquisitions or organic efforts. But um, we are just uh, 0:05:05.720 --> 0:05:08.320 we feel like we have great momentum. There's a massive 0:05:08.320 --> 0:05:11.520 opportunity in front of us. It's all about investing. Patrick. 0:05:11.600 --> 0:05:14.239 It's an absolute pleasure to speak with you when should 0:05:14.240 --> 0:05:18.159 we expect maybe another product updates? Briefly, Well, you know, 0:05:18.200 --> 0:05:20.720 we actually I mentioned last night that we have a product, 0:05:20.720 --> 0:05:22.640 new product coming next month, so we're excited about that. 0:05:22.720 --> 0:05:26.320 And we also have our first investor event on March nine, 0:05:26.480 --> 0:05:29.440 so uh, stay tuned for that one. Well, that is exciting. 0:05:29.520 --> 0:05:32.800 sUAS of course US based and just a wonderful audio 0:05:32.880 --> 0:05:37.520 product maker, charging cradles, adapters, controller as well as speakers, 0:05:37.560 --> 0:05:40.680 you know, loudspeakers, amps, anything that you could possibly think of, 0:05:40.880 --> 0:05:43.840 and they are based in Santa Barbara, California with about 0:05:43.880 --> 0:05:50.960 fifteen hundred employees. Patrick Spence is CEO of Well, it's 0:05:50.960 --> 0:05:53.480 our pleasure now to bring in Dr lucas A Jumpa, 0:05:53.560 --> 0:05:58.479 who's chief environmental officer for Microsoft. No less, it's the 0:05:58.600 --> 0:06:02.360 first time that there husband the chief environmental officers. So basically, 0:06:02.440 --> 0:06:05.320 Dr Joppa is leading the development and execution of any 0:06:05.320 --> 0:06:09.359 sustainability strategy that Microsoft comes up with across its worldwide business. 0:06:09.800 --> 0:06:12.520 So Dr Joppa, thanks for joining. What have you decided 0:06:12.560 --> 0:06:17.640 Microsoft needs to do in terms of sustainability, Well, thanks 0:06:17.640 --> 0:06:19.880 for having me on the show. Really a pleasure to 0:06:19.920 --> 0:06:24.600 talk about sustainability, particularly now in UM in today's climate 0:06:24.600 --> 0:06:28.920 in today's administration here in the United States. I think 0:06:29.040 --> 0:06:31.400 a little bit ago, about a year ago, Microsoft stepped 0:06:31.400 --> 0:06:33.800 back and asked itself if we thought we were doing 0:06:34.000 --> 0:06:37.000 enough on sustainability. I think the clear answer was no, 0:06:38.160 --> 0:06:41.640 everybody needs to do more. We put in place an 0:06:41.680 --> 0:06:47.279 acceleration of our ambition really to see a set industry 0:06:47.360 --> 0:06:52.640 leading commitments across four key areas, carbon, water, waste, and ecosystems. 0:06:52.960 --> 0:06:56.799 And we spent the last year setting those commitments, which 0:06:56.839 --> 0:07:01.080 were designed to address what's the best available science says 0:07:01.120 --> 0:07:05.120 every individual organization and ultimately our global economy needs to do. 0:07:05.440 --> 0:07:08.680 And we culminated the year with a set of commitments 0:07:08.680 --> 0:07:12.800 to see us by committing to be a carbon negative, 0:07:13.320 --> 0:07:17.320 water positive, zero waste company that's also protecting more land 0:07:17.320 --> 0:07:21.120 than we use and building out the computational infrastructure of 0:07:21.160 --> 0:07:24.360 what we call a planetary computer to help society better 0:07:24.480 --> 0:07:28.320 manage natural resources. So I think those that set of 0:07:28.400 --> 0:07:33.280 commitments really does concisely represent what we think needs to 0:07:33.360 --> 0:07:36.720 be done. And about two weeks ago we issued our 0:07:36.720 --> 0:07:39.920 first annual report that was kind of a a progress 0:07:39.960 --> 0:07:43.120 report on how we've done in the first year of 0:07:43.200 --> 0:07:46.640 not just commitment setting, but also working towards achieving our 0:07:47.280 --> 0:07:52.120 commitments in saw some great progress. We reduced our emissions 0:07:52.120 --> 0:07:55.200 by six percent, a little over six percent. We managed 0:07:55.280 --> 0:07:59.440 to complete a pretty historic removal of carbon purchase of 0:07:59.480 --> 0:08:02.720 carbon move all of about one point three million metric tons. 0:08:02.720 --> 0:08:04.800 Both of those things put us well on our way 0:08:04.880 --> 0:08:09.000 to being a carbon negative company by so, Dr Choppa, 0:08:09.160 --> 0:08:11.760 how do we uh, you know e s G investing 0:08:11.920 --> 0:08:15.360 environmental sustainability, social governance. I mean it's becoming a big, 0:08:15.400 --> 0:08:19.200 big part of the investment community investment process. How do 0:08:19.240 --> 0:08:24.520 we hold senior managers, board members accountable for these goals? 0:08:24.520 --> 0:08:26.960 Tell us how Microsoft does that? Because a lot of 0:08:26.960 --> 0:08:29.760 folks are just concerned that this is rhetoric from corporate 0:08:29.760 --> 0:08:32.600 America and not net's say, something that's measured, uh and 0:08:32.920 --> 0:08:37.319 maybe reflecting compensation for for example, Well, one of the 0:08:37.400 --> 0:08:40.320 things that we thought was important was to represent it 0:08:40.440 --> 0:08:44.080 in compensation for our senior leaders. So after a lot 0:08:44.120 --> 0:08:47.160 of thinking about this, this is exact question that you pose, 0:08:47.240 --> 0:08:51.200 how do you hold senior leaders accountable? We um We 0:08:51.240 --> 0:08:53.319 announced as as part of our one year and the 0:08:53.400 --> 0:08:57.520 Anniversary announcement, that we would be tying executive compensation of 0:08:57.559 --> 0:09:00.960 our CEO, our president, our CFO, and the senior leadership 0:09:01.000 --> 0:09:05.080 team more broadly to meeting our sustainability goals. And I 0:09:05.120 --> 0:09:08.560 think that is just absolutely critical in the corporate context 0:09:08.880 --> 0:09:13.120 to really tie it directly to the core compensation incentivization 0:09:13.200 --> 0:09:17.000 measures that any company holds. So what does that specifically 0:09:17.040 --> 0:09:22.400 mean for our products? Will we notice any difference? Uh? Well, 0:09:22.720 --> 0:09:26.520 I hope so, um, But in many respects, we don't 0:09:26.600 --> 0:09:29.440 really want you to notice a lot of difference. We 0:09:29.480 --> 0:09:33.880 want your products that UM that you consume from Microsoft 0:09:34.000 --> 0:09:38.719 to you know, be as as as helpful as as 0:09:38.760 --> 0:09:41.600 they possibly can be, but we want them to do 0:09:41.679 --> 0:09:45.960 that in a way that's increasingly environmentally sustainable. So should 0:09:45.960 --> 0:09:49.800 you notice that your products are being powered by renewable 0:09:49.920 --> 0:09:55.320 energy um, like they will be by for all of 0:09:55.320 --> 0:09:59.120 our cloud customers. I wouldn't expect you to notice that, 0:09:59.160 --> 0:10:02.800 but I would expect you to just by default receive 0:10:02.920 --> 0:10:07.160 those benefits by just being a customer of Microsoft. Would 0:10:07.160 --> 0:10:10.360 I expect you to notice that, you know, all of 0:10:10.440 --> 0:10:14.520 the hardware and componentry of our data centers, for instance, 0:10:14.559 --> 0:10:18.120 are part of a new circular cloud initiatives that where 0:10:18.280 --> 0:10:21.760 we have behind our secure private perimeter of our data centers, 0:10:21.920 --> 0:10:25.439 increasing our reusability and recycling of all of our componentry 0:10:25.440 --> 0:10:28.680 by up You probably won't notice that either, but all 0:10:28.720 --> 0:10:32.600 of our customers are going to receive those sustainability benefits 0:10:32.600 --> 0:10:34.880 by default. It's been up to us to be able 0:10:34.920 --> 0:10:38.600 to provide those reporting platforms so that those who care 0:10:38.960 --> 0:10:42.000 do have access to that information, so that they can 0:10:42.040 --> 0:10:45.720 included in their external third party reporting into their stakeholders 0:10:45.760 --> 0:10:49.640 and shareholders. Dr Choppic spent twenty seconds here just give 0:10:49.679 --> 0:10:51.640 us a sense of the governments that you work with 0:10:51.679 --> 0:10:56.520 around the world. How cooperative have they been? Well? You 0:10:56.600 --> 0:10:59.680 just I think everybody is seeing the tide shift here 0:11:00.040 --> 0:11:01.760 and governments all around the world. We have a new 0:11:01.760 --> 0:11:05.520 administration here in the United States, we saw some extremely 0:11:05.559 --> 0:11:09.600 interesting executive orders putting the full weight of government into 0:11:09.960 --> 0:11:14.960 um clean climate procurement decisions, putting science at the at 0:11:15.000 --> 0:11:17.960 the center of decision making. UH. In the EU we 0:11:18.080 --> 0:11:20.880 see just you know, rapid progress on this. I think 0:11:21.200 --> 0:11:23.680 this is the We're starting to see the dominoes fall 0:11:23.720 --> 0:11:27.520 all across the world on progressive policy. UM right, progressive 0:11:27.559 --> 0:11:30.880 climate policy very good. We will certainly be paying attention 0:11:31.000 --> 0:11:34.840 going for Dr Lucas job a Chief Environmental Officer for Microsoft, 0:11:34.880 --> 0:11:38.439 based of course in Redmond, Washington, as a company accelerates 0:11:38.480 --> 0:11:43.720 its plans for to go green, to become even more green. Well, 0:11:43.800 --> 0:11:47.560 New York City restaurants they will be open their indoor 0:11:47.600 --> 0:11:51.959 dining too about capacity beginning tomorrow, just in time for 0:11:52.080 --> 0:11:56.640 the Valentine's Day rush. This is good news for restaurants. 0:11:56.679 --> 0:11:59.760 A question is how good? Uh is this news? Let's 0:11:59.800 --> 0:12:03.120 check with Kate Creator. She's a food editor for Bloomberg Pursuits, 0:12:03.160 --> 0:12:05.840 joining us on the phone from New York City. So, Kate, 0:12:06.360 --> 0:12:08.559 it's good news for the restaurants, I think, but I'm 0:12:08.600 --> 0:12:11.560 just not sure how good? What do you think? That's 0:12:11.600 --> 0:12:13.880 exactly right. It's good news and the optics of it 0:12:13.960 --> 0:12:16.920 are good, and it gets restaurants names out there. You 0:12:16.920 --> 0:12:19.280 get to think about it, you know, get the gears going. 0:12:19.720 --> 0:12:23.319 But in terms of financial like windfall, it's nowhere near that. 0:12:23.360 --> 0:12:25.160 In fact, it's a lost for a lot of them 0:12:25.160 --> 0:12:28.559 to open. Will they be able to access more p 0:12:28.800 --> 0:12:31.000 P P if we get I mean at the moment 0:12:31.000 --> 0:12:35.959 it's eight million dollars in the proposal by the administration 0:12:36.040 --> 0:12:38.720 and may not end up at eight hundred plus billion dollars, 0:12:38.720 --> 0:12:41.400 but that's where it is at now. Would these restaurants 0:12:41.480 --> 0:12:43.840 that have managed to stay open or to close and 0:12:43.880 --> 0:12:47.360 reopen be able to access more of that? Yeah, they 0:12:47.400 --> 0:12:51.360 should on the new loans are definitely geared more left 0:12:51.360 --> 0:12:55.439 prochained and more towards independent restaurants. And there's a news 0:12:55.440 --> 0:12:59.000 there's a cent five billion dollar federally built for restaurants 0:12:59.040 --> 0:13:02.760 that is getting some attention and everyone is very hopeful 0:13:02.800 --> 0:13:05.000 about that. That that's the kind of thing that makes 0:13:05.000 --> 0:13:08.840 it different. You know, not not opening for tables on 0:13:09.760 --> 0:13:12.440 you know, right before Valentine's Day, that's not that's not 0:13:12.520 --> 0:13:16.840 sustaining restaurant. So it kind of just you know, reading 0:13:17.360 --> 0:13:20.720 your story on the Bloomberg terminal with you and your team, 0:13:21.040 --> 0:13:24.600 lots of great reporting in there. So I guess one 0:13:24.640 --> 0:13:27.600 of the issues is I got a lot of restaurants 0:13:27.679 --> 0:13:30.400 laid off staff when they were forced to close. Can 0:13:30.400 --> 0:13:33.320 they even get that staff back and be ready to go? 0:13:33.360 --> 0:13:36.200 It seems like kind of a rush here. It's a 0:13:36.240 --> 0:13:39.320 great question. And yeah, I think even geting up towards 0:13:39.400 --> 0:13:43.440 Valentine's Day, um that that in itself was its talents. 0:13:43.520 --> 0:13:46.920 But when Cuomo made a relatively last minute call to 0:13:47.000 --> 0:13:51.079 open on Friday the twelfth instead of Sunday the fourteenth. 0:13:51.720 --> 0:13:54.320 It gives it gives restaurants a couple more days to 0:13:54.360 --> 0:13:58.440 celebrate Valentine's Day, but it's really short notice because a 0:13:58.520 --> 0:14:01.440 lot of restaurant workers can afford a New York City 0:14:01.480 --> 0:14:04.199 rent and have moved away. So it's been a scramble 0:14:04.240 --> 0:14:07.160 for a lot of them to staff their dining rooms. Okay, 0:14:07.280 --> 0:14:12.319 in your story, there's this sentence, and it's just so sad. Already, 0:14:12.360 --> 0:14:15.600 more than one hundreds and thousand restaurants have closed permanently 0:14:15.840 --> 0:14:18.040 or for the long term across the country, with New 0:14:18.080 --> 0:14:21.800 York City seeing more than four thousand closures according to 0:14:21.840 --> 0:14:25.600 the New York State Restaurant Association. These closures. Any hope 0:14:25.640 --> 0:14:28.160 that these these chefs and these managers and so on, 0:14:28.240 --> 0:14:34.120 that they'll reopen maybe once rent goes down in certain areas. Yeah, Bunny, 0:14:34.160 --> 0:14:36.240 you know what, I really want to be hopeful about that. 0:14:36.480 --> 0:14:38.920 And I mean, there's so much talent, and you can 0:14:38.960 --> 0:14:42.560 see from the way so many restaurants activity there, you know, 0:14:42.600 --> 0:14:45.640 their models to do take out and Neil kids. I 0:14:45.680 --> 0:14:48.720 think there's a lot of opportunity for them. But there's 0:14:48.760 --> 0:14:52.680 also a fear. This is another story we're working on that. UM. 0:14:52.800 --> 0:14:54.920 For all the real estate opportunities out there, it's going 0:14:54.960 --> 0:14:56.800 to be the changes that are going to sweep in 0:14:56.960 --> 0:14:59.520 and take advantage of it. UM. So, to go back 0:14:59.520 --> 0:15:02.480 to what Paul was saying, hopefully, when the loans come through, 0:15:02.760 --> 0:15:06.360 UM some good enterprising steps and UM restaurant people will 0:15:06.360 --> 0:15:09.640 be able to take advantage of that. Okay, My understanding 0:15:09.680 --> 0:15:12.080 of the economics of the restaurant business is it's very 0:15:12.360 --> 0:15:16.160 very thin margins and you have to be at or near, 0:15:16.480 --> 0:15:19.120 you know, full capacity and turn over the tables and 0:15:19.160 --> 0:15:23.520 all that kind of stuff, and it just seems like 0:15:23.520 --> 0:15:26.440 an unsustainable level. What are some of these restaurant owners 0:15:27.040 --> 0:15:29.960 hoping for the hoping to get back to full capacity 0:15:30.000 --> 0:15:33.160 by the spring, by the summer. What are they saying? Yeah, No, 0:15:33.280 --> 0:15:35.400 there's a big UM, there's a big place some New 0:15:35.480 --> 0:15:39.720 York City. UM restaurateurs are lobbying hard UM. The blog 0:15:39.840 --> 0:15:44.040 you and Cuomo too quickly open at I'm not sure 0:15:44.040 --> 0:15:47.160 a hundred percent is I wouldn't even guess when that's 0:15:47.160 --> 0:15:50.040 going to happen. But when outdoor dining can come back 0:15:50.080 --> 0:15:53.760 strong or been fantastic innovations on that front. I think 0:15:53.920 --> 0:15:58.720 with indoor dining and outdoor dining like nice Weather and 0:15:58.760 --> 0:16:01.640 all those accommodations of the NATE, that's starting to be 0:16:01.720 --> 0:16:05.400 a much more sustainable model for restaurants. But like Daniel 0:16:05.440 --> 0:16:09.120 Ballut is the great TEP. Daniel Blues said, another another 0:16:09.800 --> 0:16:12.760 hard factor for them is that there's a mandated closure 0:16:12.920 --> 0:16:15.160 at ten PM, and that means a lot of these 0:16:15.200 --> 0:16:18.760 restaurants at only twenty percent, can only do one service 0:16:18.800 --> 0:16:21.440 at night. If it was extended to eleven, they might 0:16:21.440 --> 0:16:23.840 be able to do two services. And that is you 0:16:23.880 --> 0:16:26.400 can imagine double the amount of people you can bring in. 0:16:26.520 --> 0:16:28.640 And it's funny places where there are more people, like 0:16:28.640 --> 0:16:32.800 New Jersey have higher capacity. So right now it's it's 0:16:32.840 --> 0:16:36.520 a thirty five present capacity and Westchester is operating at 0:16:36.520 --> 0:16:39.160 half capacity. And apparently that's where everybody went. You would 0:16:39.200 --> 0:16:41.280 have thought that New York City, which is empti or 0:16:41.280 --> 0:16:43.960 would be able to you know, here in New Jersey 0:16:43.960 --> 0:16:46.840 at the restaurants, they are at capacity. I mean, if 0:16:46.840 --> 0:16:50.400 you cool, the demand is there, yeah, absolutely, Kate. Finally, 0:16:50.680 --> 0:16:54.160 our landlords giving any concessions and totally I have heard 0:16:54.200 --> 0:16:57.080 that they are absolutely not giving any concessions, which really 0:16:57.080 --> 0:17:00.240 surprises me. Yeah, and ectotally I've heard to say saying, 0:17:00.280 --> 0:17:05.040 although actually I've heard that they're starting to there's you know, 0:17:05.200 --> 0:17:08.520 it's there's so much empty store front now, so many 0:17:08.520 --> 0:17:12.560 of them. Um, I think they are starting to realize 0:17:12.640 --> 0:17:15.520 or make or instead of doing like long term leases, 0:17:15.560 --> 0:17:19.919 doing short leases, which um I think convenitate of combetit 0:17:20.000 --> 0:17:22.359 at restaurants who might want to try and experiment and 0:17:22.440 --> 0:17:25.680 do something, but now it's not happening. It's fast. Yeah, 0:17:25.760 --> 0:17:29.359 I mean literally Midtown Manhattan. You're talking about, you know, 0:17:29.440 --> 0:17:32.880 ninety dollars per square foot. You know, it's it's an 0:17:32.920 --> 0:17:36.480 insane amount of rent. But that's because there are normally 0:17:36.560 --> 0:17:39.440 tourists all over the place and every place is always full, 0:17:39.880 --> 0:17:42.240 and you know it can withstand that. But I can 0:17:42.240 --> 0:17:46.119 tell you Midtown Manhattan is absolutely empty. Kate Craters, thank you. 0:17:46.160 --> 0:17:51.640 It's a great story. On the Bloomberg Wall Street. Time 0:17:51.680 --> 0:17:55.440 for Bloomberg Opinion today we are joined by Ferdinando Giuliano, 0:17:55.480 --> 0:17:59.000 Bloomberg Opinion editor. His column is entitled Who's booking their 0:17:59.000 --> 0:18:01.800 beach holiday? Are Ready? And it really goes to the 0:18:01.920 --> 0:18:05.120 issue of as more and more people get shots how 0:18:05.160 --> 0:18:07.560 much freedom should they have for the NANDO Thanks much 0:18:07.560 --> 0:18:10.000 for joining us here. Give us a key takeaways here. 0:18:10.000 --> 0:18:11.320 How do you think this is going to play out 0:18:11.359 --> 0:18:16.480 as more and more people begin to get jobs. Well, 0:18:16.520 --> 0:18:19.240 I think it's going to become a very important issue 0:18:19.280 --> 0:18:22.159 at the moment um. You know, the data collected shows 0:18:22.200 --> 0:18:25.560 that we've got around nine at least nineteen million people 0:18:26.160 --> 0:18:30.000 in the ward who have been fully vaccinated. That means 0:18:30.080 --> 0:18:34.720 two jobs because the existing vaccines required to thoses as 0:18:34.720 --> 0:18:37.080 we know, uh and half of them are in the 0:18:37.160 --> 0:18:41.240 United States. But as the rollout continues, this number is 0:18:41.240 --> 0:18:45.320 going to grow, so governments will face demands to give 0:18:45.400 --> 0:18:51.720 more freedom to people who have been fully fully immunized. UM. 0:18:51.760 --> 0:18:56.400 But I think there are both medical and ethical issues 0:18:56.480 --> 0:19:00.879 with giving these people, uh the sports back. You know, 0:19:01.080 --> 0:19:04.640 we can call them passports if you want to detail 0:19:04.840 --> 0:19:07.320 some of those medical issues if you will. I think 0:19:07.480 --> 0:19:10.160 the artical issues we can probably imagine a little easier, 0:19:11.680 --> 0:19:14.160 but the medical the main medical issues that we are 0:19:14.200 --> 0:19:18.600 still not quite sure whether people who have been immunized 0:19:18.880 --> 0:19:23.200 are infectious or not. In other words, we know that 0:19:23.760 --> 0:19:28.880 vaccines are very effective in preventing, especially the world forms 0:19:28.960 --> 0:19:33.119 of COVID nineteen. But we don't know yet with certainty 0:19:33.240 --> 0:19:37.679 whether you can still spread the virus to other individuals. 0:19:37.720 --> 0:19:40.240 And these issue is key. If you think, for example, 0:19:40.320 --> 0:19:47.320 about doctors. I mean, doctors have been vaccinated first partly 0:19:47.359 --> 0:19:50.920 to protect them, but mainly to um, you know, make 0:19:51.000 --> 0:19:55.439 sure that they don't spread the virus to the people 0:19:55.440 --> 0:19:59.000 who are in hospital are very fragile. Now imagine we 0:19:59.080 --> 0:20:02.000 give we tell officers that we can they can just 0:20:02.160 --> 0:20:06.280 roll around freely because you know, we want to give 0:20:06.320 --> 0:20:09.480 them this passport, but they could become dangerous. Now there 0:20:09.560 --> 0:20:14.240 is mounting evidence that perhaps these facts do protect from infection. 0:20:15.119 --> 0:20:19.120 Once we have certainty that you know, their protection from 0:20:19.160 --> 0:20:23.399 infection is very high, then we can set these medical 0:20:23.440 --> 0:20:27.720 issues aside. But for now we just can't. Well, it 0:20:27.760 --> 0:20:30.439 seems like there's also an economic argument here that we 0:20:30.480 --> 0:20:33.000 all know on a global scale, um that you know, 0:20:33.040 --> 0:20:37.760 the economic disruption and impact from closing down is just 0:20:37.960 --> 0:20:42.040 too great. And it seems to me that you know, 0:20:42.280 --> 0:20:43.800 I guess the argument could be made that hey, if 0:20:43.800 --> 0:20:48.240 you're fully inoculated, go out and start living your life, 0:20:48.280 --> 0:20:51.119 go to restaurants, go to Disney World. What are the 0:20:51.160 --> 0:20:55.280 ethical issues associated with that that seems kind of straightforward 0:20:55.280 --> 0:20:58.480 to a lot of people. But the issues that at 0:20:58.480 --> 0:21:02.320 the moment, the distribution of back the supply of vaccines 0:21:02.320 --> 0:21:08.840 is constrained, and the distribution of vaccine is tightly enforced 0:21:08.840 --> 0:21:12.679 by politicians and the public health authorities. In other words, 0:21:12.800 --> 0:21:16.040 if you're not vaccinated, it's not your choice, is because 0:21:16.080 --> 0:21:20.480 the state has decided that you're not a priority group, 0:21:20.680 --> 0:21:22.600 and for good reasons. I mean, I'm not I'm not 0:21:22.680 --> 0:21:25.239 debating that. I think it's absolutely right that we are 0:21:25.560 --> 0:21:28.760 take care first of all of the people who are 0:21:28.800 --> 0:21:32.399 most at risk. But should then you know the fact 0:21:32.480 --> 0:21:36.359 that the government is taking care of you by giving you, uh, 0:21:36.520 --> 0:21:40.800 you know this um priority treatment allow you to go 0:21:40.880 --> 0:21:44.400 and live your life, you know, better than those who 0:21:44.640 --> 0:21:49.680 are further down the queue just because they're younger or um, 0:21:49.720 --> 0:21:52.959 you know, they they don't have an underlying condition. I 0:21:53.000 --> 0:21:55.560 think this is a real question and it could put 0:21:55.680 --> 0:21:59.440 a lot more pressure on government to make different forms 0:21:59.440 --> 0:22:02.000 of choice is from the ones they are making, again 0:22:02.119 --> 0:22:04.760 for very good reasons. And one final point I think 0:22:04.880 --> 0:22:08.120 is a generational issue. Let's remember a lot of young 0:22:08.280 --> 0:22:11.760 people have been foured to stay at home. Maybe I've 0:22:11.760 --> 0:22:16.360 lost their jobs, maybe couldn't attend schools because we were here. 0:22:16.480 --> 0:22:19.200 You know, they were really trying to protect the elderly. 0:22:19.480 --> 0:22:23.320 Now imagine a society where youngsters have been you know, 0:22:23.520 --> 0:22:27.320 really been at home to protect the elderly and are 0:22:27.359 --> 0:22:30.520 now fourced at home again, while the elderly can roam 0:22:30.560 --> 0:22:35.840 around freely. I think they would feel very agreed. Do 0:22:35.920 --> 0:22:39.800 we need all or most countries to get on the 0:22:39.840 --> 0:22:42.760 same board or is it possible for each country to 0:22:42.840 --> 0:22:45.199 sort of treat their citizens a different way and for 0:22:45.280 --> 0:22:49.040 the world to go back to normal somehow well, I 0:22:49.080 --> 0:22:51.720 think you know on many issues, like you know what 0:22:51.880 --> 0:22:55.680 happens to your social life, your habits, whether you can 0:22:55.840 --> 0:22:57.880