WEBVTT - TikTok Security and ARK's Latest VC Fund 0:00:02.240 --> 0:00:05.600 From the heart of where innovation, money and power collive 0:00:06.360 --> 0:00:10.920 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.960 --> 0:00:26.840 Emily jay I met Ludlow in New York in for 0:00:26.880 --> 0:00:30.080 Emily Chang. This is Bloomberg Technology coming up in the 0:00:30.120 --> 0:00:33.400 next hour. A lack of trust from US lawmakers could 0:00:33.440 --> 0:00:38.000 completely alter TikTok's operations in its biggest market. The worry 0:00:38.360 --> 0:00:41.800 is parent company Bite Dances relationship to the Chinese government. 0:00:42.159 --> 0:00:44.960 Now we've learned the White Houses working with TikTok on 0:00:44.960 --> 0:00:49.680 a security deal, but negotiations have all but stalled. Plus, 0:00:49.840 --> 0:00:53.920 Kathy Wood's new venture fund targets liquid assets. It's arks 0:00:53.960 --> 0:00:57.560 first for eight into private investments and essentially gives retail 0:00:57.600 --> 0:01:02.120 traders venture capital market access. Will ask arcs chief futurist 0:01:02.480 --> 0:01:07.319 about the strategy, and Bitcoin maximalist Jack Mallars joins me 0:01:07.400 --> 0:01:10.760 to discuss Strike's latest funding round and his push to 0:01:10.760 --> 0:01:15.800 make bitcoin the currency for cross border transactions. The Biden 0:01:15.840 --> 0:01:18.600 administration and TikTok are working on an agreement that would 0:01:18.680 --> 0:01:21.520 let the video sharing site keep operating in the US, 0:01:22.000 --> 0:01:25.600 but Bloomberg's learned that talks have stalled over concerns the 0:01:25.600 --> 0:01:30.839 company's Chinese ownership poses a national security threat, according to sources. 0:01:31.200 --> 0:01:34.520 If an agreement is reached, it could impose more restrictions 0:01:34.560 --> 0:01:39.240 on how TikTok stores data from US users. Meanwhile, TikTok 0:01:39.240 --> 0:01:42.319 has stepped up it's lobbying efforts in d C, but 0:01:42.440 --> 0:01:47.319 has had little engagement with Republican naysays Bloomberg BusinessWeek reports. 0:01:47.400 --> 0:01:51.760 Joining me now, Bloomberg's Alex Brinker Adam Adam Kovakovitz, Chamber 0:01:51.760 --> 0:01:54.520 of Progress CEO, Alex, I'm going to start with you. 0:01:54.760 --> 0:01:58.440 What is your latest reporting about talks between the US 0:01:58.520 --> 0:02:02.280 government and TikTok. That's right. This is to allay concerns 0:02:02.320 --> 0:02:06.640 around US users data, particularly in regards to Chinese government, 0:02:06.800 --> 0:02:10.760 which owns which China is where TikTok's parent company is based. 0:02:11.000 --> 0:02:13.960 So far, in these negotiations, TikTok has said that they're 0:02:13.960 --> 0:02:17.320 going to partner with Oracle throughout all US users data 0:02:17.360 --> 0:02:19.600 through their servers. They're also going to allow Oracle to 0:02:19.880 --> 0:02:23.600 audit its algorithms and its content moderation policies. Now the 0:02:23.680 --> 0:02:27.280 hiccup ed has come in because the deal still needs 0:02:27.280 --> 0:02:29.640 to kind of get over the line. Scythians is the 0:02:29.680 --> 0:02:32.560 governmental body that's investigating it um it is an inter 0:02:32.760 --> 0:02:37.400 agency body, and the Justice Department in particular, the individual 0:02:37.440 --> 0:02:40.440 who is on that panel for the Justice Department is 0:02:40.480 --> 0:02:43.640 still concerned that this deal does not go far enough 0:02:43.919 --> 0:02:46.880 to keep data out of the hands of the Chinese 0:02:46.880 --> 0:02:49.320 government ed So that seems to be the sticking point 0:02:49.320 --> 0:02:52.960 according to our reporting, that is dragging this process on 0:02:53.080 --> 0:02:56.240 perhaps a little bit longer than TikTok would like. Adam, 0:02:56.320 --> 0:02:59.520 you're the CEO of the Chamber of Progress, and one 0:02:59.520 --> 0:03:02.359 of the goals of the Chamber of progresses to make 0:03:02.440 --> 0:03:07.440 the tech industry acts fairly and responsibly, particularly towards consumers. 0:03:07.440 --> 0:03:10.800 So when you hear Alex go through the latest reporting, 0:03:11.440 --> 0:03:13.960 is this good news or bad news. I'm not sure 0:03:14.000 --> 0:03:16.639 we've ever seen a service like TikTok before that it's 0:03:16.760 --> 0:03:21.000 become so popular with Americans and yet is owned by 0:03:21.040 --> 0:03:24.880 the Chinese, and that's a unique problem and challenge for 0:03:24.960 --> 0:03:29.320 government policymakers. Alex talked about the concessions that are on 0:03:29.360 --> 0:03:32.400 the table in terms of the company's negotiations with the 0:03:32.400 --> 0:03:36.600 Biden administration. I'm not sure any of those conditions really 0:03:36.720 --> 0:03:42.040 solve this question of Chinese government access problem. Of access. 0:03:42.080 --> 0:03:44.680 So long as TikTok is owned by a Chinese company, 0:03:44.960 --> 0:03:47.280 the Chinese are are almost certainly going to have access 0:03:47.320 --> 0:03:51.000 to American user data no matter where it's stored. They 0:03:51.000 --> 0:03:53.120 don't come in through the front door, they come in 0:03:53.120 --> 0:03:55.760 through the back door. That's just the reality of how 0:03:55.920 --> 0:03:59.640 China operates. And as far as the Oracle you know, 0:03:59.600 --> 0:04:02.320 suppose is an audit look Oracles on the verge of 0:04:02.400 --> 0:04:05.600 having a massive cloud hosting deal with TikTok, right, they're 0:04:05.600 --> 0:04:07.680 going to have a financial incentive to look the other 0:04:07.720 --> 0:04:10.280 way regarding China's control, and Oracle is not a branch 0:04:10.320 --> 0:04:12.960 of the US government. It's obligated to do what's best 0:04:13.000 --> 0:04:15.040 for its business. So I think there's a I think 0:04:15.040 --> 0:04:17.320 that one of the big questions surrounding this, As you said, 0:04:17.760 --> 0:04:21.240 some of the buy Administrations figure figures involved, I think 0:04:21.240 --> 0:04:23.800 are doubting whether this is tough enough. And frankly, I 0:04:23.880 --> 0:04:26.440 think there's a concern that if they do a partial 0:04:26.560 --> 0:04:30.440 compromise on certain aspects of their business that doesn't really 0:04:30.440 --> 0:04:34.479 get the fundamental national security and even propaganda concerns that 0:04:34.680 --> 0:04:37.400 that that could be seen as avoiding the deep, bigger, 0:04:37.480 --> 0:04:41.880 deeper issues that TikTok uh opposes Alex. The talks between 0:04:41.920 --> 0:04:44.280 TikTok and US government a kind of the hair and now. 0:04:44.360 --> 0:04:47.520 But you've got a fantastic piece in Bloomberg Business Week 0:04:47.560 --> 0:04:50.520 magazine about the kind of bigger picture efforts of TikTok 0:04:50.800 --> 0:04:52.360 and I gotta bring up a child on the screen 0:04:52.440 --> 0:04:54.960 now that kind of shows how TikTok is kind of 0:04:55.000 --> 0:04:58.360 stepping up and bites onto its parents company, its parent company, 0:04:58.520 --> 0:05:01.719 and it's low being efforts. But then we're near what Meta, 0:05:01.800 --> 0:05:04.800 the parent company of Facebook's doing tolkd us through what 0:05:04.839 --> 0:05:08.720 you've learned, Yeah, they are nowhere near. But TikTok did 0:05:08.880 --> 0:05:11.919 clock it's biggest quarter in terms of lobbying spend. And 0:05:12.040 --> 0:05:13.920 my colleague and I wanted to take you guys behind 0:05:13.960 --> 0:05:15.560 the scenes a little bit to see what's going on 0:05:15.640 --> 0:05:19.040 in d C with TikTok's efforts to charm the belt Way. 0:05:19.440 --> 0:05:21.880 What we learned from a mix of sources in DC 0:05:22.320 --> 0:05:25.640 around the company is that they've taken hundred and thirty 0:05:25.680 --> 0:05:29.680 meetings with congressional offices. Uh, it's TikTok ceo. We heard 0:05:29.760 --> 0:05:32.599 last week was even at a football game of lawmakers 0:05:32.720 --> 0:05:36.640 versus the Capitol Police, but there's a really important group 0:05:36.680 --> 0:05:39.680 of folks that they are not meeting with. We heard 0:05:39.800 --> 0:05:43.839 that Um McCarthy and thieves, the leads in the House, 0:05:43.920 --> 0:05:47.040 the key Republicans in the House, Josh Holly and Mark A. 0:05:47.120 --> 0:05:50.640 Rubio in the Senate, these senators that all Republicans who 0:05:50.680 --> 0:05:54.200 have been really large detractors and have approached the company 0:05:54.200 --> 0:05:57.480 with a lot of skepticism have been notably left off 0:05:57.839 --> 0:06:00.720 the formal meeting lists for the company. Now, the company 0:06:00.800 --> 0:06:04.359 told us that they are having productive conversations with lawmakers. 0:06:04.640 --> 0:06:07.480 They said they are not meeting with folks who seemed 0:06:07.520 --> 0:06:11.240 to be unswayed by facts. So ed read into that 0:06:11.279 --> 0:06:14.200 what you may, but it does seem that TikTok's charm 0:06:14.240 --> 0:06:16.800 offensive has missed some of the biggest detractors in the 0:06:16.839 --> 0:06:19.880 belt Way. And I'll tell you, if this Synthius deal 0:06:20.360 --> 0:06:23.479 doesn't go through, or if it drags on and these 0:06:23.560 --> 0:06:27.040 voices continue to get louder, it could cause some problems 0:06:27.080 --> 0:06:29.560 for them as they're trying to kind of resolve some 0:06:29.640 --> 0:06:32.479 of these really big concerns and get this deal over 0:06:32.520 --> 0:06:34.800 the line out of what's your reactions what you've just 0:06:34.839 --> 0:06:38.080 said about so s well, being efforts. Look, I there's 0:06:38.120 --> 0:06:40.000 no doubt I live here in Washington. I see what 0:06:40.040 --> 0:06:42.440 they're trying to do. They're trying to highlight the ways 0:06:42.480 --> 0:06:45.680 people are using TikTok. They're trying to portray themselves as 0:06:45.680 --> 0:06:47.800 good citizens, and probably do the same affaire with them. 0:06:47.880 --> 0:06:51.839 I'm sympathetic to the U S employees of TikTok who currently, 0:06:51.880 --> 0:06:54.640 frankly have to spend a lot of time dancing on 0:06:54.720 --> 0:06:57.680 the head of a pin about the Chinese government's role 0:06:57.800 --> 0:07:00.599 in the app and in their Chinese ownership. I don't 0:07:00.600 --> 0:07:03.360 think there's any doubt that their jobs as lobbyists and 0:07:03.400 --> 0:07:07.120 as as a company would be much easier, and frankly, 0:07:07.320 --> 0:07:09.680 that our national security concerns would be a lot less 0:07:09.720 --> 0:07:13.640 if TikTok were sold um to an American owner. But 0:07:13.760 --> 0:07:15.800 of course that's a big you know, that's a big challenge. 0:07:15.840 --> 0:07:18.920 I mean, I think Beijing officials in Beijing know what 0:07:19.040 --> 0:07:21.480 a powerful platform this is. You've got at one point 0:07:21.480 --> 0:07:24.760 four billion people on TikTok. I think the reason that 0:07:24.880 --> 0:07:27.000 you know, they don't let Chinese citizens use TikTok, I 0:07:27.040 --> 0:07:29.600 think that's a recognition of how powerful it is. But 0:07:29.680 --> 0:07:32.640 we know the Chinese government isn't the business of spreading 0:07:32.640 --> 0:07:35.360 propaganda online, but they did this during the Olympics. They've 0:07:35.400 --> 0:07:38.320 done this with influencers, and so I think there's a 0:07:38.400 --> 0:07:41.000 beyond even the question of data access. There is a 0:07:41.000 --> 0:07:45.680 big question about is TikTok like the next version of 0:07:45.880 --> 0:07:47.840 urt you know, which we kicked out of this country 0:07:47.920 --> 0:07:52.680 after Russia invaded Ukraine. Right much to discuss still. Bloomberg's 0:07:52.680 --> 0:07:56.800 Alex Brinka and Chamber Progress founder and CEO Adam Kobakovitch, 0:07:56.880 --> 0:08:00.520 thank you both. Twitter is complaining that Elon must legal 0:08:00.600 --> 0:08:04.040 team hasn't turned over this text with Morgan Stanley CEO 0:08:04.200 --> 0:08:07.600 James Gorman ahead of next month's trial. Twitter lawyers want 0:08:07.640 --> 0:08:10.760 to sanction Musk and his lawyers for not producing text 0:08:10.800 --> 0:08:13.960 with Gorman, as well as Oracle chairman Larry Ellison. According 0:08:14.000 --> 0:08:17.560 to Twitter, Muskers we've held four text with Gorman, including 0:08:17.600 --> 0:08:20.800 some from April, the day the company announced it was 0:08:20.840 --> 0:08:32.319 accepting masks offer. Our Investment Management has launched is long 0:08:32.360 --> 0:08:35.880 awaited our venture fund. They will target in liquid assets, 0:08:36.080 --> 0:08:39.480 investing in both private and public companies. Along with other 0:08:39.600 --> 0:08:42.920 VC funds. The fund limits how and when investors can 0:08:42.960 --> 0:08:46.600 cash out, but a minimum investment of five dollars means 0:08:46.640 --> 0:08:50.680 potentially any individual US investor can buy in. Here to 0:08:50.720 --> 0:08:55.200 explain the funds goals is ARC chief futurist Brett Winton Brett, 0:08:55.520 --> 0:08:59.439 what are the goals? Well, we aimed a democratized venture 0:08:59.480 --> 0:09:02.280 capital and think you just described exactly what we're trying 0:09:02.320 --> 0:09:05.000 to do. Anybody can right now. You can go into 0:09:05.040 --> 0:09:07.320 your browser and you can type an ARC dot VC 0:09:07.800 --> 0:09:10.320 and you can download the tight NAP and you can 0:09:10.360 --> 0:09:13.960 invest five dollars today into venture capital. I think it's 0:09:14.280 --> 0:09:16.800 if you think about venture as an asset class, it's 0:09:16.840 --> 0:09:20.960 really been held apart from a lot of individual investors. 0:09:21.800 --> 0:09:24.120 These are not assets that should require you to be 0:09:24.280 --> 0:09:26.880 rich in order to invest in them, nor should you 0:09:26.880 --> 0:09:29.640 have to, you know, fill out a lot of PDFs 0:09:29.640 --> 0:09:32.240 and um only be able to get into the top 0:09:32.280 --> 0:09:34.559 funds if you're the Yale Endowment. We think that every 0:09:34.640 --> 0:09:38.040 individual should have access to venture capital, uh if if 0:09:38.320 --> 0:09:40.880 within their risk tolerance limits, and we think this vehicle 0:09:40.920 --> 0:09:43.240 provides a mechanism by which they can do so. So 0:09:43.320 --> 0:09:46.080 we've been waiting on this mechanism, as you called it, 0:09:46.080 --> 0:09:48.199 for a little bit of time. All bloom Bag Intelligence 0:09:48.200 --> 0:09:50.920 et F analyst Eric Baucina, So you guys know Well 0:09:51.280 --> 0:09:54.000 has a note out in response to your launch titled 0:09:54.559 --> 0:09:59.000 Cathy Woods Venture Fund Burdened by tough timing High Phase. 0:09:59.240 --> 0:10:01.840 Let's start with the timing. It's it's been brutal for 0:10:01.920 --> 0:10:05.719 both public and private markets of late. How do you 0:10:05.760 --> 0:10:09.160 get around that this is the perfect timing? This isn't 0:10:09.200 --> 0:10:11.520 tough timing, this is there's never Bill Gurley said it 0:10:11.559 --> 0:10:14.120 the other day there's never been a better moment to 0:10:14.240 --> 0:10:17.280 start a business. And I think there's never been a 0:10:17.320 --> 0:10:21.640 better moment to put your risk capital into a venture 0:10:21.679 --> 0:10:26.480 product like this one, and into innovation companies generally. So UM, 0:10:26.600 --> 0:10:29.920 we think that there's roughly eight trillion dollars in market 0:10:29.920 --> 0:10:33.559 cap attributable to the innovation platforms that we focus on, 0:10:33.800 --> 0:10:37.840 and that's going to more than two trillion. So there's 0:10:37.880 --> 0:10:42.360 incredible technological tail winds in play. And so UM, when 0:10:42.440 --> 0:10:45.480 everybody's running for the exits, is exactly the time to 0:10:45.520 --> 0:10:48.360 be putting your capital to work. It's so about phase then. 0:10:48.440 --> 0:10:53.920 I think typically existing ETFs carry a fee of seventy 0:10:54.000 --> 0:10:57.040 five basis point zero point right, and and in this 0:10:57.120 --> 0:10:59.960 case it's a fee of two point seven and it's 0:11:00.280 --> 0:11:04.960 expense ratio there for full point that seems high. What 0:11:05.120 --> 0:11:08.200 why is it set at that level? Well, think about 0:11:08.280 --> 0:11:11.120 the comparable products you could get if you're investing adventure 0:11:11.120 --> 0:11:15.920 where you're paying two percent management fee plus carry. So 0:11:16.120 --> 0:11:19.360 this is a much more efficient exposure then you would 0:11:19.360 --> 0:11:23.200 get if you were in a top quartile venture fund UM, 0:11:23.200 --> 0:11:26.720 which I've done quite well. Uh. And so the UM 0:11:26.800 --> 0:11:31.559 investment vehicle itself restricts our ability to UM charge carry. 0:11:31.600 --> 0:11:34.760 That's how we could democratize this, and so we believe 0:11:34.760 --> 0:11:38.960 we're charging an extremely efficient rate for getting access to 0:11:38.960 --> 0:11:43.040 top tier companies. This is the likes of Epic Games UM, 0:11:43.080 --> 0:11:47.080 the likes of Mosaic mL, which is really UM delivering 0:11:47.520 --> 0:11:52.320 UM machine learning and advanced AI software to mid market businesses. 0:11:52.640 --> 0:11:55.920 These are companies that UM a typical investor couldn't get 0:11:55.960 --> 0:11:58.920 access to. And so by just going to art dot 0:11:59.040 --> 0:12:02.920 VC right now, you can invest in this fund and 0:12:02.920 --> 0:12:06.520 get access to these kinds of great innovation companies. Redemptions 0:12:06.640 --> 0:12:10.440 capped right at five percent of net asset value on 0:12:10.480 --> 0:12:13.480 a quarterly basis. And what's so interesting here is that 0:12:13.559 --> 0:12:18.479 it the split is seventy percent private public, but Traditionally, 0:12:18.600 --> 0:12:22.840 capital is locked up in VC funds for a very 0:12:22.840 --> 0:12:25.160 extended period of time. You guys are also looking at 0:12:25.200 --> 0:12:28.040 investing in other VC funds. How do you manage that? 0:12:28.360 --> 0:12:30.679 You know, some redemptions with the need to lock up 0:12:30.720 --> 0:12:34.480 capital in the private sector, So redemptions are capped at 0:12:34.520 --> 0:12:38.360 five across the entire fund. But if an individual investor 0:12:38.800 --> 0:12:43.160 UM wants to UM sell their position and the overall 0:12:43.280 --> 0:12:46.079 request for redemptions or below five percent, they'll get their 0:12:46.240 --> 0:12:49.960 entire position UM sold out a net asset value. It's 0:12:49.960 --> 0:12:53.760 only if UM if request to redeem exceed five percent 0:12:53.800 --> 0:12:56.439 in a given quarter, then redemptions happen on a pro 0:12:56.559 --> 0:13:01.680 rata basis. UM. Another difference between UM our fund and 0:13:01.800 --> 0:13:06.040 typical adventure is that UM the money that inflows into 0:13:06.080 --> 0:13:09.640 the fund can get allocated to innovation assets immediately. In 0:13:09.679 --> 0:13:13.520 the public markets, UM as we're negotiating private market deals 0:13:13.679 --> 0:13:16.360 and so you know, at equilibrium, we're seeking to be 0:13:16.800 --> 0:13:21.120 UM like you said, targeting seventy private exposures. But on 0:13:21.160 --> 0:13:24.680 an individual technology basis, we will play arbitrages between the 0:13:24.720 --> 0:13:27.520 public and the private markets. And in some technologies, it's 0:13:27.600 --> 0:13:30.120 very clear to us that the private markets are undervalued 0:13:30.160 --> 0:13:33.320 relative to the public markets and vice versa, and so 0:13:33.760 --> 0:13:36.880 UM we think this is a really interesting way to 0:13:36.880 --> 0:13:40.360 get exposure to innovation tail winds UM that will allow 0:13:40.480 --> 0:13:43.440 us to invest in these companies early and carry them 0:13:43.480 --> 0:13:46.120 all the way through I p O into the public market. 0:13:46.160 --> 0:13:48.120 Book of the portanfol we just showed a shot there 0:13:48.160 --> 0:13:51.480 if the SMP five hundreds out performance relative to our 0:13:51.559 --> 0:13:54.880 innovation e t F Right, this is a different strategy. 0:13:54.920 --> 0:13:58.120 But how do you convince investors that this is right 0:13:58.640 --> 0:14:01.560 to use this new mechanic in this new way of 0:14:01.600 --> 0:14:05.760 getting access to private markets and private companies. I think 0:14:05.800 --> 0:14:09.240 that any innovation exposure should be measured over a business 0:14:09.280 --> 0:14:13.520 cycle length um performance basis. So when we underwrite our 0:14:13.559 --> 0:14:15.960 positions in the private market and in the public market, 0:14:16.160 --> 0:14:18.840 we look forward five years and say, you know what 0:14:19.120 --> 0:14:22.400 is an in market investor going to pay five years forward? 0:14:22.480 --> 0:14:25.040 Who's not even a technological optimists like us, but just 0:14:25.080 --> 0:14:28.400 playing paying a market multiple for the cash flow generation 0:14:28.480 --> 0:14:33.680 capabilities of those businesses? Right? I think that given particularly 0:14:33.720 --> 0:14:36.840 given what's happened with rates and with innovation assets across 0:14:36.880 --> 0:14:41.760 the board, UH investors are are short innovation today, maybe 0:14:41.840 --> 0:14:45.280 unintentionally so the disruptive technologies that we think are going 0:14:45.280 --> 0:14:48.480 to penetrate the marketplace are going to totally turn over 0:14:48.520 --> 0:14:51.120 the business models of incumbents that people have in their 0:14:51.160 --> 0:14:54.400 pore portfolios. All of the problems that we're seeing in 0:14:54.440 --> 0:14:58.240 the world today. Innovation solves those problems, and so owning 0:14:58.240 --> 0:15:00.000 a share of the businesses that are going to solve 0:15:00.080 --> 0:15:03.960 those problems is a way to generate our performance, our invests. 0:15:04.040 --> 0:15:06.720 Chief futurist Brett Winton has been a pleasure to have 0:15:06.800 --> 0:15:09.800 you on. Thank you. Coming up, Netflix has a game plan. 0:15:09.920 --> 0:15:12.720 The tech giant is creating its first in house video 0:15:12.720 --> 0:15:15.440 game studio, but when will the company be seen as 0:15:15.440 --> 0:15:30.960 a gaming competitor? We discussed next This is Bloomberg. Netflix 0:15:31.040 --> 0:15:34.040 is creating its first in house video games studio in 0:15:34.040 --> 0:15:37.120 a push to be less reliant on third party creators 0:15:37.120 --> 0:15:41.040 and expand is gaming offerings. The streaming service platform is 0:15:41.080 --> 0:15:44.920 seeking to increase engagement and differentiate itself with games, but 0:15:44.920 --> 0:15:48.560 Bloomberg Intelligence believes there won't be a significant impact, at 0:15:48.640 --> 0:15:51.520 least in the near term. BI media and list geter 0:15:51.640 --> 0:15:54.200 anger Nathan joins us now to discuss a gee you 0:15:54.240 --> 0:15:56.960 actually put research out before the news of his own 0:15:57.000 --> 0:16:02.800 in house studio, Hit the Bloomberg does change anything to you, Well, unfortunately, 0:16:02.880 --> 0:16:05.680 not really, ad and thanks for having me. So, you know, 0:16:05.720 --> 0:16:08.200 Netflix has kind of been taking baby steps really in 0:16:08.280 --> 0:16:11.960 this space of gaming. They now have about thirty games 0:16:12.040 --> 0:16:15.360 or so. It's been on their platform for about ten months, 0:16:15.440 --> 0:16:17.760 but so far we've seen that, you know, the uptake 0:16:17.800 --> 0:16:20.960 has really been fairly lackluster. We just recently saw a 0:16:21.000 --> 0:16:23.440 report from Autopia which said that less than one percent 0:16:23.480 --> 0:16:26.520 of their subscriber base has actually engaged with the games 0:16:27.160 --> 0:16:29.160 um and so, you know, I think it's going to 0:16:29.240 --> 0:16:32.000 be a case of, you know, too little, too late. Uh. 0:16:32.080 --> 0:16:35.120 This whole news about them developing their their own studio 0:16:35.440 --> 0:16:37.480 is pretty much taking a page out of the same 0:16:37.480 --> 0:16:40.520 playbook that they followed for their original video content. Right, 0:16:40.760 --> 0:16:42.960 they created, They've created their own studios. They have their 0:16:42.960 --> 0:16:46.800 own originals, whether it's you know, A Stranger Things or 0:16:46.840 --> 0:16:50.160 a Witcher. But I think with the video game market, 0:16:50.200 --> 0:16:53.120 it's the dynamics are totally different. It takes years and 0:16:53.240 --> 0:16:58.000 years to create a viable slate of good games, and 0:16:58.040 --> 0:17:00.160 I think Netflix is going to find that out or 0:17:00.160 --> 0:17:03.520 getter to illustrate that point. We've got this chart which 0:17:03.560 --> 0:17:07.159 shows that in the third quarter based on app downloads. 0:17:07.200 --> 0:17:09.479 You could just take Candy Crush. We all know, Candy 0:17:09.480 --> 0:17:14.200 Crush more than thirty nine million downloads every single Netflix 0:17:14.240 --> 0:17:18.280 game that's available, josh a five point five million. And 0:17:18.320 --> 0:17:20.520 I think in your research you point out there are 0:17:20.520 --> 0:17:24.240 some technological restrictions in so far as you can only 0:17:24.280 --> 0:17:27.720 get Netflix games through the mobile app, right, what's the 0:17:27.760 --> 0:17:31.640 problem there? Yeah, absolutely, I think there's you know, so 0:17:31.760 --> 0:17:34.720 much of the problem with why the uptake has been 0:17:34.760 --> 0:17:37.720 so slow, it's because of discovery, right, or or the 0:17:37.800 --> 0:17:39.920 lack of discovery so to speak. So, first of all, 0:17:40.000 --> 0:17:44.800 it's only available on mobile. Remember of Netflix viewing happens 0:17:44.840 --> 0:17:47.760 on connected TV, and there's really no option there to 0:17:47.840 --> 0:17:49.720 even play a game, so you have to be on 0:17:49.760 --> 0:17:52.399 your mobile device. And then once you're on your mobile 0:17:52.440 --> 0:17:54.760 device and you do wish to, you know, kind of 0:17:54.840 --> 0:17:57.720 engage with the Netflix game, you actually have to leave 0:17:57.800 --> 0:18:00.840 the app and go and download the the mobile gaming 0:18:00.840 --> 0:18:02.840 app separately. So there's kind of quite a bit of 0:18:02.920 --> 0:18:06.399 friction there. So it's not exactly the most user friendly 0:18:06.560 --> 0:18:08.480 right now, and I think that's been one of the 0:18:08.520 --> 0:18:12.399 other reasons that has inhibited kind of that uptick, All right, 0:18:12.480 --> 0:18:15.520 get regn a from of Bloomberg Intelligence. Good to catch up. 0:18:15.920 --> 0:18:26.280 Thank you for joining us. This is Bloomberg Technology. I'm 0:18:26.359 --> 0:18:29.240 Ed Ludlow in New York. Meta says it has blocked 0:18:29.280 --> 0:18:33.520 thousands of inauthentic accounts, pages, and groups from Facebook and 0:18:33.560 --> 0:18:37.920 Instagram that originated in Russia and China. Meta says the 0:18:38.000 --> 0:18:41.639 Russia accounts spread propaganda about the war with Ukraine, and 0:18:41.760 --> 0:18:45.720 China based accounts were targeting US users in regards to 0:18:45.880 --> 0:18:49.360 mid term elections. Sarah Fryer leads our big tech coverage 0:18:49.359 --> 0:18:52.000 here at Bloomberg News. So, Sarah, what do we know 0:18:52.040 --> 0:18:55.320 about the accounts that were frozen by Meta? Well, the 0:18:55.400 --> 0:18:58.359 thing that was the most interesting to me about this 0:18:58.480 --> 0:19:02.720 report is that UM Meta made a rare disclosure of 0:19:02.760 --> 0:19:06.080 the amount of advertising that these accounts spent around a 0:19:06.160 --> 0:19:10.480 hundred and five thousand dollars from Russia to spread propaganda 0:19:10.720 --> 0:19:15.160 about the war in Ukraine. And that's significant because this 0:19:15.200 --> 0:19:19.680 company has of course come under criticism for receiving advertising 0:19:19.680 --> 0:19:23.600 dollars from Russia around the US election back in They 0:19:23.600 --> 0:19:26.800 still don't have a way to to block this from happening. 0:19:27.200 --> 0:19:29.280 Um even though it's against their rules. Even though they've 0:19:29.280 --> 0:19:32.440 built up this security team, they have said that that 0:19:32.520 --> 0:19:35.000 they will continue to have problems like this, they will 0:19:35.000 --> 0:19:37.200 try to catch them early. But the fact that there 0:19:37.280 --> 0:19:41.160 was that level of advertising campaign shows that they're still 0:19:41.160 --> 0:19:43.680 work to do right. Sarah, over the last four years, 0:19:43.680 --> 0:19:45.560 I remember, you know, sitting with you looking at these 0:19:45.600 --> 0:19:49.040 kind of blog posts from what was then Facebook now 0:19:49.119 --> 0:19:51.840 met her about the work they were doing and this 0:19:51.920 --> 0:19:54.800 idea that they're trying to be more transparent. Are they 0:19:54.840 --> 0:19:57.640 being more transparent with what they're doing. I do think 0:19:57.680 --> 0:20:00.520 that they are being more more open out what they're 0:20:00.560 --> 0:20:03.280 finding and taking down. UM, But I think that that 0:20:03.440 --> 0:20:05.919 is still, you know, not the major issue here. The 0:20:05.960 --> 0:20:09.639 issue is not that you know, this stuff exists. The 0:20:09.680 --> 0:20:12.879 fact is that they still have a platform where this 0:20:12.960 --> 0:20:16.400 stuff can go viral, that it can be easily gained. UM. 0:20:16.480 --> 0:20:19.800 They have groups where they can um, where these kinds 0:20:19.840 --> 0:20:23.520 of foreign governments can build followings around top. But that 0:20:23.880 --> 0:20:27.920 the fundamentals of how Facebook works has not changed, UM, 0:20:28.000 --> 0:20:30.600 and so they're going to continue to play whackable until 0:20:31.640 --> 0:20:35.199 until that changes. And I think that um, you know, 0:20:35.240 --> 0:20:37.920 the disclosure is is a good thing, but it's only 0:20:38.000 --> 0:20:40.880 one part of the problem that's pivot to TikTok. Your 0:20:40.960 --> 0:20:44.520 team has been writing about what TikTok and in its 0:20:44.520 --> 0:20:47.600 parent company Bye Dance, have been doing in Washington, d C. 0:20:48.320 --> 0:20:51.280 What is the strategy there, what is the latest Well, 0:20:51.320 --> 0:20:54.840 speaking of transparent, they mean people into in DC have 0:20:54.920 --> 0:20:57.520 a lot of questions about TikTok. There. They are under 0:20:57.640 --> 0:21:03.720 fire from from publicans, democrats, everyone around, UM around their 0:21:04.320 --> 0:21:07.800 their issues with their algorithm, UM, whether there's a national 0:21:07.840 --> 0:21:10.720 security risk in the fact that they are owned by 0:21:10.800 --> 0:21:14.920 the Chinese, by a Chinese based a China based company. UM. 0:21:14.960 --> 0:21:18.159 The problem is TikTok has not been willing to to 0:21:18.240 --> 0:21:20.879 speak with some of its loudest critics UM and what 0:21:21.000 --> 0:21:23.360 it has spoken with them and hasn't gone over well. 0:21:23.800 --> 0:21:27.560 So reporters Alex Brink and Emily Burnbaum spoke with multiple 0:21:27.600 --> 0:21:30.080 sources to give the behind the scenes look of of 0:21:30.080 --> 0:21:34.040 how this is working in d C. They know TikTok 0:21:34.200 --> 0:21:38.280 knows that they have some trust issues there UM and 0:21:38.320 --> 0:21:40.720 that they're going to have to work on their credibility. 0:21:40.840 --> 0:21:43.720 That it's going to be difficult UM. There. There's also 0:21:44.359 --> 0:21:48.520 a decision on Scythius blooming UM. So so it's a 0:21:48.520 --> 0:21:51.920 little difficult for them to really come out with a 0:21:52.280 --> 0:21:55.440 strong plan before knowing what that action might be from 0:21:55.440 --> 0:21:58.879 the federal government. Um and in the meantime, their critics 0:21:58.880 --> 0:22:02.560 are only growing louder. All right, Bloomberg, Sarah Fryar, thank 0:22:02.600 --> 0:22:06.280 you very much. Some other Meta news. Cheryl Samberg got 0:22:06.280 --> 0:22:10.960 an applause as she exited the Meta headquarters in Menlo Park, California, 0:22:11.040 --> 0:22:14.000 on Tuesday. This was her last week as CEO, after 0:22:14.080 --> 0:22:17.560 announcing she'd stepped down back in June. Samberg joined the 0:22:17.600 --> 0:22:20.640 company then known as Facebook in two thousand and eight. 0:22:20.720 --> 0:22:24.800 She will remain on the board of directors now. Sam 0:22:24.840 --> 0:22:27.920 Bankman Freed says his m and A spree, including many 0:22:28.000 --> 0:22:32.159 deals with traditional financial firms, will not hinder f t 0:22:32.400 --> 0:22:35.760 x is profitability this year. He's also said he's got 0:22:35.800 --> 0:22:39.240 more cash to burn. Here's some of Bankman Fried's conversation 0:22:39.280 --> 0:22:44.520 earlier on Bloomberg Crypto. We've tried to be somewhat judicious frankly, 0:22:44.600 --> 0:22:46.159 with you know, the deals that we've been doing, and 0:22:46.480 --> 0:22:49.040 you know, obviously that's not going to be perfect, and 0:22:49.560 --> 0:22:52.600 you know, there we have obviously needs an expenditure through that, 0:22:52.720 --> 0:22:55.359 like you know, we have not you know, we have 0:22:55.480 --> 0:22:57.320 not used the majority of the cash that we have 0:22:57.400 --> 0:22:59.960 on our own balance she you know, that's not necessarily 0:23:00.000 --> 0:23:02.399 to say that there are other things imminently here. Um. 0:23:02.560 --> 0:23:05.119 You know, so much is that we want to be flexible, 0:23:05.160 --> 0:23:06.640 and you know, we want to be in a position 0:23:06.680 --> 0:23:11.760 where we are you know, looking forward at uh you know, 0:23:11.840 --> 0:23:15.200