WEBVTT - Bloomberg Businessweek Weekend - May 13th, 2022 0:00:01.040 --> 0:00:05.400 This is Bloomberg Business Week inside from the reporters and 0:00:05.559 --> 0:00:09.200 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:13.200 global business finance and tech news. As it happened, Sloomberg 0:00:13.240 --> 0:00:16.759 Business Week with Carol Messier and Bloomberg Quick Takes. Tim 0:00:16.800 --> 0:00:21.360 Stinovic on Bloomberg Radio. Hi, everyone, welcome to the weekend 0:00:21.520 --> 0:00:23.959 edition of Bloomberg Business Week. Tim. I gotta say it 0:00:24.000 --> 0:00:27.040 was another crazy week, another ballatole week, and then we 0:00:27.080 --> 0:00:29.280 had that hot inflation print that had us all thinking 0:00:29.400 --> 0:00:31.040 is it peak or is it not peak? Yeah, that's 0:00:31.040 --> 0:00:33.080 the question that remains, and we have a great group 0:00:33.159 --> 0:00:35.239 of people to help really break down and help us 0:00:35.280 --> 0:00:38.040 find some answers, starting with legendary investor Alan patrick Off 0:00:38.159 --> 0:00:41.040 from Greycroft Carroll. He. I mean, look, it's fair to 0:00:41.080 --> 0:00:44.239 say that he's seen a cycler to write early investor 0:00:44.280 --> 0:00:47.559 in Apple, so he knows what's up with markets like this, 0:00:47.680 --> 0:00:49.360 and he had an interesting perspective on some of the 0:00:49.400 --> 0:00:50.839 tech sell off that we've seen in some of those 0:00:50.880 --> 0:00:52.960 well known names. Plus we're going to get a good 0:00:53.040 --> 0:00:56.080 check on the consumer. The CEO of Tapestry talking about 0:00:56.080 --> 0:00:59.000 our company's latest earnings, little hint they've been raising prices. 0:00:59.080 --> 0:01:01.160 All of that to come. We begin, though, with a 0:01:01.240 --> 0:01:04.000 Bloomberg Big Take this week and this week's issue of 0:01:04.040 --> 0:01:07.840 Bloomberg Business Week. It's an incredible piece to view online. 0:01:07.880 --> 0:01:11.000 It's interactive, it's really well told visually, so I encourage 0:01:11.080 --> 0:01:14.160 everybody to check it out. It's all about exploring Japan's 0:01:14.319 --> 0:01:17.839 front lines. It's where for millions of Japanese, the confrontation 0:01:17.920 --> 0:01:20.640 between the U S and China it's already a reality. 0:01:20.720 --> 0:01:23.600 Here to explain Bloomberg Business Week editor Joe Weber along 0:01:23.640 --> 0:01:26.560 with Matt Campbell, who's Asia editor for Business Week. It's 0:01:26.560 --> 0:01:30.200 actually a series of islands, um and what's interesting. I 0:01:30.240 --> 0:01:34.039 think Americans would probably be most most familiar with Okinawa, 0:01:34.040 --> 0:01:37.880 which is one of them, and this series of islands, uh, 0:01:38.319 --> 0:01:42.000 you know, you end up closer to Shanghai and mainland 0:01:42.080 --> 0:01:45.039 China than to Tokyo, which is pretty incredible when you 0:01:45.080 --> 0:01:47.119 see it on a map. And I do recommend reading 0:01:47.160 --> 0:01:50.600 it online because the immersive experience that we built for 0:01:50.600 --> 0:01:53.800 this story is pretty incredible. And what's interesting is obviously 0:01:53.960 --> 0:01:57.560 the tensions between US and China have been palpable and 0:01:57.600 --> 0:02:00.440 if anything, have been simmering and during the trumpet aministration 0:02:00.560 --> 0:02:04.280 escalated UH. And this is like a little quiet area 0:02:04.600 --> 0:02:07.800 that's right next to Taiwan. As we've been talking about 0:02:08.120 --> 0:02:12.200 Ukraine and the tensions there, obviously a lot of UH 0:02:12.320 --> 0:02:17.280 tai Taiwan UH interest has been peaked, I think. And 0:02:17.480 --> 0:02:20.080 what's really interesting about these islands is, you know, there's 0:02:20.120 --> 0:02:24.720 this demographic crisis in Japan. UH don't have enough workers. 0:02:24.760 --> 0:02:26.720 A lot of the workers that they would have on 0:02:26.760 --> 0:02:30.720 these islands have traditionally come from China, and obviously with 0:02:30.919 --> 0:02:34.000 zero COVID China has not had that. That means there's 0:02:34.040 --> 0:02:37.480 now tourism dollars coming from China as well. And obviously 0:02:37.480 --> 0:02:41.079 there's a huge American military presence there, which makes all 0:02:41.160 --> 0:02:43.280 of this really interest because this is this is a 0:02:43.400 --> 0:02:47.320 frontline right even though there isn't an active conflict, that 0:02:47.400 --> 0:02:50.880 doesn't mean that there isn't tension and that it's all 0:02:51.000 --> 0:02:53.919 rooted right in this place, and it has some really 0:02:54.000 --> 0:02:59.920 interesting and fascinating domestic implications for for Japan and geopolo 0:03:00.080 --> 0:03:03.560 politics and even American foreign policy. So so, Matt, what 0:03:03.600 --> 0:03:06.920 was the thing, the initial thing that sparked your interest 0:03:06.960 --> 0:03:09.880 about what Yoshi set out to tell him this story. Well, 0:03:09.919 --> 0:03:13.480 I always look for what I call small stories that 0:03:13.520 --> 0:03:16.320 tell big stories of ways to go to one place 0:03:16.440 --> 0:03:18.880 or one company, or one series of events, and then 0:03:19.000 --> 0:03:22.280 go from there into a better understanding of big, mega trends. 0:03:22.960 --> 0:03:26.080 And what's cool about this story is Yoshi, fabulous reporter 0:03:26.120 --> 0:03:28.720 in Japan who put this together, was he found the 0:03:28.760 --> 0:03:32.280 series of communities in Japan which are struggling with the 0:03:32.320 --> 0:03:35.280 exact same problem that Japan as a whole has, which is, 0:03:35.680 --> 0:03:38.400 on the one hand, economic dependence on China and in 0:03:38.440 --> 0:03:42.680 fact growing economic dependence on China, but a deepening security 0:03:42.680 --> 0:03:47.120 alliance with the US. And obviously there's a contradiction there. Well, 0:03:47.280 --> 0:03:50.000 and you know, part of what I have to say, 0:03:50.040 --> 0:03:51.800 as I was reading through it was really stark for me. 0:03:51.920 --> 0:03:54.440 And where you said where he said, you know, should 0:03:54.440 --> 0:03:56.440 a war come between the US and China basically and 0:03:56.520 --> 0:04:00.400 unlikely but increasingly plausible Senar scenario because what's going on 0:04:00.400 --> 0:04:02.280 in Ukraine, Like I don't even I mean I do 0:04:02.320 --> 0:04:05.320 think about it, but not and I feel like you realize, Okay, 0:04:05.320 --> 0:04:09.880 how vulnerable or how how this might play out ultimately, Matt, Well, indeed, 0:04:10.000 --> 0:04:13.200 and Japan something that that is very apparent if you 0:04:13.240 --> 0:04:15.080 go back in the history a little bit, is Japan 0:04:15.200 --> 0:04:18.480 is deeply involved in the Taiwan issue, but Taiwan was 0:04:18.520 --> 0:04:24.360 a Japanese colony from until ninety Actually, in Taiwan there 0:04:24.360 --> 0:04:28.320 are somewhat fonder feelings about Japan than there are many 0:04:28.400 --> 0:04:33.360 parts of Asia. Japanese governments have said in various terms 0:04:34.040 --> 0:04:36.920 that they view the security of Taiwan as a strategic interest. 0:04:37.400 --> 0:04:40.400 So if things really kick off, Japan will absolutely be 0:04:40.480 --> 0:04:43.600 part of the story. What's happening militarily on the on 0:04:43.640 --> 0:04:46.640 the islands, well, there are two things happening. One is, 0:04:46.760 --> 0:04:51.520 Japan is an increasingly strong military power. Military spending in 0:04:51.560 --> 0:04:55.200 Japan has increased dramatically over the last decade or two, 0:04:55.560 --> 0:04:57.520 and we'll continue to do so. And the other thing 0:04:57.600 --> 0:05:01.280 is as the US pivots more of security strategy toward 0:05:01.320 --> 0:05:04.920 containing China, a huge amount of that investment ends up 0:05:05.080 --> 0:05:08.760 in Japan overall, and particularly in places like Okinawa, which 0:05:08.760 --> 0:05:12.719 has something like seventy U S military bases on one island, 0:05:12.720 --> 0:05:15.760 if you can imagine that. So, so really this is 0:05:15.800 --> 0:05:19.240 the front line of geopolitical conflict. Yeah. One of the 0:05:19.240 --> 0:05:22.400 things that interests me about the story was a parallel 0:05:22.400 --> 0:05:26.080 with Germany, which obviously Germany has had no military spending 0:05:26.160 --> 0:05:29.080 since World War Two. Now it's established that it will 0:05:29.120 --> 0:05:31.640 be a big presence. One of the surprising elements to 0:05:31.640 --> 0:05:33.680 me about this is Japan. It was sort of in 0:05:33.680 --> 0:05:38.200 a similar role, except that spending his increased as has 0:05:38.240 --> 0:05:40.520 its alliance in the US. So, Matt, how has that 0:05:40.520 --> 0:05:43.839 played out domestically in recent years in Japan? Well? So, 0:05:44.000 --> 0:05:47.120 Japan under its post war constitution, which was actually drafted 0:05:47.160 --> 0:05:50.240 by the US military, has a clause that says, in 0:05:50.279 --> 0:05:52.640 as many words, Japan and will not have armed forces. 0:05:53.200 --> 0:05:56.320 That has never really been observed. It's always in the 0:05:56.360 --> 0:05:59.000 post war era had a military. That military is now 0:05:59.040 --> 0:06:03.960 growing in seemingly well funded, increasingly oriented towards containing China 0:06:04.560 --> 0:06:07.280 in very forceful ways should the need arise. That was 0:06:07.320 --> 0:06:10.360 Bloomberg's Matt Campbell, along with Business Week editor Joe Weber, 0:06:10.600 --> 0:06:13.000 coming up coach Kate Spade, Stuart Whitesman. You've heard of 0:06:13.040 --> 0:06:15.640 those brands have all right, Well, they're all under the 0:06:15.680 --> 0:06:18.720 Tapestry umbrella and they wait in with their latest quarterly update, 0:06:19.000 --> 0:06:21.200 and also talked about the outlook. We're gonna get an 0:06:21.240 --> 0:06:24.960 update from Tapestry's CEO. You're listening to Bloomberg Business Week. 0:06:25.200 --> 0:06:44.080 This is Bloomberg. This is Bloomberg Business Week with Carol 0:06:44.120 --> 0:06:50.400 Masser and Bloomberg Quick Takes Tim Stenoby from Bloomberg Radio. Tapestry, 0:06:50.440 --> 0:06:52.799 you know the brand, well, they owned Coach, Kate Spade, 0:06:52.839 --> 0:06:55.119 and Stuart Whitesman. They came out with their quarterly update 0:06:55.200 --> 0:06:58.159 this week. They talked about prices, they talked about the outlook, 0:06:58.160 --> 0:07:00.080 and they also talked about China. And we got to 0:07:00.160 --> 0:07:03.080 check in with the company's CEO, joe An crevoice Ran 0:07:03.240 --> 0:07:05.479 and she joined us to give us her take on 0:07:05.520 --> 0:07:08.080 earning season, and really, let's understand the health of the 0:07:08.120 --> 0:07:10.960 American consumer in the global consumer right so important to 0:07:11.040 --> 0:07:14.360 our economy. What we're seeing in our business is strength 0:07:14.480 --> 0:07:17.520 and momentum across our business. As you mentioned, our third 0:07:17.600 --> 0:07:21.640 quarter outperformed, led by strength in North America, and we 0:07:21.760 --> 0:07:25.200 drove double digit global sales growth across all of our 0:07:25.240 --> 0:07:28.640 brands at Coach, at Cape Spade, and at Stuart Whitzman. 0:07:29.240 --> 0:07:32.600 And you know, Tapestry is a powerful combination of iconic 0:07:32.720 --> 0:07:36.320 brands that offer tremendous value for consumers. And we have 0:07:36.360 --> 0:07:41.200 a platform that we've transformed to drive innovation and customer engagement, 0:07:41.680 --> 0:07:44.840 and that model is delivering results. We're seeing that in 0:07:44.920 --> 0:07:49.240 the strength of our digital business, increased customer acquisition and 0:07:49.440 --> 0:07:52.360 pricing power across brand. So a lot of things are 0:07:52.680 --> 0:07:55.720 are working and performing, and it really reflects the strategies 0:07:55.760 --> 0:07:58.280 that we've put in place over the last few years, 0:07:58.800 --> 0:08:01.800 UM to stay closer to consumers and drive growth behind 0:08:01.840 --> 0:08:04.360 our our powerful brands. So we want to dig deeper 0:08:04.360 --> 0:08:05.840 into that. But let me ask you, if you had 0:08:05.880 --> 0:08:08.760 to describe the consumer in a word or a few words, 0:08:08.760 --> 0:08:10.400 how would you do it? And would you say that 0:08:10.440 --> 0:08:13.440 the consumers back at pre pandemic levels or maybe even better, 0:08:13.480 --> 0:08:15.600 are still a little bit under it. Yeah, the consumer 0:08:15.680 --> 0:08:19.120 is quite resilient. UM. You know, we've been driving growth 0:08:19.160 --> 0:08:24.120 above pre pandemic levels for several quarters, UM. And you 0:08:24.160 --> 0:08:27.040 know that's that's most apparent in our Coach brand, where 0:08:27.040 --> 0:08:29.280 we've had more quarters in a row, but also true 0:08:29.320 --> 0:08:33.240 at Cape Spade and its Stuart Whitzman and UM. You know, 0:08:33.320 --> 0:08:36.520 our business in the third quarter reflects really the strength 0:08:36.600 --> 0:08:39.599 and momentum we're seeing around the world. You know, we 0:08:39.679 --> 0:08:43.360 talked about our growth in North America. We drove growth 0:08:43.440 --> 0:08:46.120 in North America in the last UH in the last 0:08:46.200 --> 0:08:49.400 quarter UM. But we also saw strength around the world 0:08:49.400 --> 0:08:52.320 in all areas except for China. So we saw strength 0:08:52.360 --> 0:08:55.920 in Europe UM and strong growth in rest of Asia 0:08:56.000 --> 0:09:00.360 as well as in Japan. So UM business is performing UM. 0:09:00.400 --> 0:09:03.000 In fact, even in China going into the quarter, we 0:09:03.040 --> 0:09:06.120 saw strength and and UM. You know that business only 0:09:06.720 --> 0:09:09.120 started to weekend when we saw the disruption related to 0:09:09.160 --> 0:09:12.559 COVID in the market towards the end of the quarter. Joann, 0:09:12.600 --> 0:09:13.840 I want to I want to hit on the China 0:09:13.880 --> 0:09:16.600 point and dig into that a little bit, because you 0:09:16.640 --> 0:09:19.600 had to have in North America, you overcame pandemic related 0:09:19.640 --> 0:09:21.560 weakness in China when you look at the results overall. 0:09:21.600 --> 0:09:23.960 But I'm but I'm wondering from a planning perspective, how 0:09:24.000 --> 0:09:27.360 you're thinking about how long these lockdowns last and how 0:09:27.360 --> 0:09:29.080 long you're going to see that weakness in China where 0:09:29.120 --> 0:09:32.240 business has just dried up since this resurgence of COVID. Yeah, 0:09:32.240 --> 0:09:35.120 the business was disrupted, but it was disrupted in a 0:09:35.240 --> 0:09:38.120 very discrete way. UM. You know, by the by the 0:09:38.160 --> 0:09:40.800 impact of COVID in the market. And you know, our 0:09:40.840 --> 0:09:44.200 business has been quite resilient over the last two years. 0:09:44.240 --> 0:09:46.560 As I said, you know, we've been driving growth above 0:09:46.600 --> 0:09:50.120 pre pandemic levels for some time, UM, and that shows 0:09:50.160 --> 0:09:52.320 the resilience of our model and the way that we're 0:09:52.320 --> 0:09:55.400 able to shift. UM two changes that we're seeing in 0:09:55.440 --> 0:10:00.000 demand and changes in the supply chain and supply around 0:10:00.000 --> 0:10:03.559 in the world. And our latest disruption has been in China. 0:10:03.640 --> 0:10:06.080 But as as I mentioned, we had strength in the 0:10:06.120 --> 0:10:09.000 market and we've been driving strength as as China came 0:10:09.040 --> 0:10:12.320 out of the first round of lockdowns, the consumer was 0:10:12.360 --> 0:10:16.240 incredibly resilient to in. There's so much stress out there. 0:10:16.240 --> 0:10:18.480 It feels like certainly when we watch the financial markets, 0:10:18.559 --> 0:10:21.079 right and we look at some individual names, even though 0:10:21.120 --> 0:10:24.839 your stocks rallying, it's down about this year, but it's 0:10:24.920 --> 0:10:27.680 it's broad based selling. It feels like no market or 0:10:27.720 --> 0:10:31.600 sector is immune. It certainly seems in the stocks sell off. 0:10:31.640 --> 0:10:34.280 You sound pretty calm, and you sound I don't know, 0:10:34.400 --> 0:10:40.040 is it cautiously optimistic optimistic? UM, help me understand fundamentally 0:10:40.440 --> 0:10:42.800 what the outlook looks like. That might you know, I 0:10:42.880 --> 0:10:44.400 think we're all trying to figure out what is the 0:10:44.440 --> 0:10:47.440 outlook amid a rising rate environment and what is the 0:10:47.480 --> 0:10:50.600 business environment and what's the market environment? Um becauld You 0:10:50.640 --> 0:10:55.000 seem pretty calm, Yeah, well, and we are optimistic. We're 0:10:55.120 --> 0:10:58.840 very confident. You know, we have such iconic brands in 0:10:58.880 --> 0:11:02.280 our in our portfolio, and our focus has been on, 0:11:02.520 --> 0:11:06.440 you know, restoring the health of our brands and driving 0:11:06.480 --> 0:11:09.599 better and stronger engagement with consumers. And when we do that, 0:11:09.760 --> 0:11:13.880 the business perform. So we're really focused on fundamentals UM 0:11:13.960 --> 0:11:16.319 and you know when we talk about transformation, actually I 0:11:16.960 --> 0:11:20.960 heard you discussing investment UM in the business in the 0:11:21.200 --> 0:11:23.520 in the show just prior to when I came on. 0:11:23.640 --> 0:11:27.560 You know, we're investing, and we're investing in digital tools 0:11:27.600 --> 0:11:31.000 and innovation and technology that's making us better. And as 0:11:31.080 --> 0:11:35.720 we focus on the fundamentals, we're seeing traction. We're engaging customers, 0:11:35.720 --> 0:11:39.360 were acquiring more customers. We acquired one point four million 0:11:39.360 --> 0:11:43.120 customers in the last quarter alone, and since we've embarked 0:11:43.160 --> 0:11:46.960 on our transformation, we've acquired thirteen million new customers to 0:11:47.000 --> 0:11:49.839 our brands over the last twenty one months. And these 0:11:49.840 --> 0:11:52.760 are customers who are coming in and engaging with our brands. 0:11:52.800 --> 0:11:57.000 They're shopping at higher au are higher prices than average, 0:11:57.080 --> 0:12:00.600 and they're coming back more frequently, um And the customers 0:12:00.600 --> 0:12:03.800 are also increasingly younger. So as we focus on the 0:12:03.800 --> 0:12:07.079 fundamentals of our business, it gives us confidence because we're 0:12:07.080 --> 0:12:10.520 seeing much stronger engagement, much healthier brands, and much stronger 0:12:10.559 --> 0:12:13.400 engagement with our consumers. Joann, I'm wondering about your pricing 0:12:13.400 --> 0:12:16.240 power because you said that there these customers are paying 0:12:16.280 --> 0:12:18.880 more than they were paying earlier. How much of that 0:12:18.920 --> 0:12:21.400 has to do with inflation? Where where are you seeing 0:12:21.400 --> 0:12:24.160 a rise in costs right now on your production end 0:12:24.160 --> 0:12:26.200 and in your supply chain, And how much are you 0:12:26.200 --> 0:12:28.600 absorbing of that versus passing it along to the customer, 0:12:29.040 --> 0:12:31.720 Because as Nil Saunders, an analyst with Global Data set 0:12:31.720 --> 0:12:35.400 in a note after your results, Uh, the customers that 0:12:35.440 --> 0:12:39.360 you have at Tapestry can cope better with inflationary impacts 0:12:39.400 --> 0:12:43.480 than the average customer. Yeah. And the way we think 0:12:43.520 --> 0:12:47.520 about our pricing power is really in terms of delivering 0:12:47.640 --> 0:12:50.840 value to consumers um And, and that's how we've been 0:12:50.840 --> 0:12:53.480 thinking about In fact, we started this pre pandemic before 0:12:53.559 --> 0:12:56.600 we started to see pressure on the cost side of 0:12:56.600 --> 0:13:00.000 the equation, and those pressures are real. We're seeing pressure 0:13:00.000 --> 0:13:02.080 on the cost side of the equation. Like others in 0:13:02.120 --> 0:13:05.840 the industry, UM a lot of pressure in freight related 0:13:05.840 --> 0:13:08.839 to the supply chain dislocations that we're seeing, but our 0:13:08.880 --> 0:13:12.200 focus really on the pricing side of it, and the 0:13:12.240 --> 0:13:16.199 pricing powers really driven by the value we're delivering to 0:13:16.360 --> 0:13:21.360 consumers and those emotional connections that we're developing are allowing 0:13:21.480 --> 0:13:23.760 us to drive pricing power, and we're seeing that across 0:13:23.760 --> 0:13:26.560 our brands. You know, some of the investments we've we've 0:13:26.600 --> 0:13:30.240 made and tools and technology or helping us leverage data 0:13:30.520 --> 0:13:34.320 better in across our value chain, so that's making us 0:13:34.480 --> 0:13:37.719 more informed on pricing decisions. It's also making us more 0:13:37.720 --> 0:13:41.600 informed on our assortment decisions and our inventory management, so 0:13:41.640 --> 0:13:45.120 we've got the right inventory. We're seeing higher skew productivity 0:13:45.720 --> 0:13:48.960 UM with more concentration behind more powerful items, and that 0:13:49.040 --> 0:13:52.199 allows us UM to drive pricing power as well and 0:13:52.520 --> 0:13:56.000 to clarify our messages with consumers. So on the value 0:13:56.040 --> 0:13:59.760 side of the equation, we continue to deliver unbeatable value 0:14:00.080 --> 0:14:03.480 for our consumers across all of our brands, and that's 0:14:03.480 --> 0:14:07.160 helping us more than offset the pricing pressure that we're 0:14:07.160 --> 0:14:10.320 seeing UM in terms of cost. In terms of our 0:14:10.360 --> 0:14:14.319 expectations going forward. That was Joanne kravoice Rat, the CEO 0:14:14.559 --> 0:14:17.480 of Tapestry. Still ahead on Bloomberg Business Week, measuring and 0:14:17.520 --> 0:14:20.480 tracking how we watch, where we watch media and apps, 0:14:20.480 --> 0:14:23.960 a company that does it all increasingly important, Carol, because 0:14:24.040 --> 0:14:27.840 now we're talking about ads with Disney Plus and of 0:14:27.880 --> 0:14:31.240 course with Netflix. We're gonna be joined by the president 0:14:31.240 --> 0:14:33.600 of TV squared by in event on the changing patterns 0:14:33.600 --> 0:14:39.960 of target consume media broadcasting from the financial capital of 0:14:40.000 --> 0:14:43.720 the world, Bloomberg eleven Frio in New York to Washington, 0:14:43.800 --> 0:14:47.880 d C. Bloomberg to Boston, Bloomberg one oh six one 0:14:48.000 --> 0:14:51.480 does San Francisco, Bloomberg nine sixty to the country Sirius 0:14:51.600 --> 0:14:54.240 XM Chado one nine team and around the globe the 0:14:54.240 --> 0:14:58.520 Bloomberg Business app and Bloomberg Radio dot com. This is 0:14:58.600 --> 0:15:02.080 Bloomberg Business Week, alright, So how are we view and 0:15:02.120 --> 0:15:03.880 listen to media? Right? Like? I don't even know how 0:15:03.920 --> 0:15:05.520 you're doing it right now? Are you on your phone 0:15:05.600 --> 0:15:07.800 right now listening to us? Are you on Bloomberg Radio 0:15:07.960 --> 0:15:10.520 listening through tune in on? So nos, exactly right. There's 0:15:10.520 --> 0:15:13.320 so many different ways, there's many options, and increasingly all 0:15:13.320 --> 0:15:15.800 of this is converging and our next guest gets that 0:15:15.840 --> 0:15:18.560 big time. It's Joe can sella president of TV squared 0:15:18.600 --> 0:15:21.600 by Innovative. This is a global measurement and attribution platform 0:15:21.680 --> 0:15:25.239 for converged TV. Essentially, it means that it measures audiences 0:15:25.280 --> 0:15:27.520 in a in a media world that's coming together right now, 0:15:27.600 --> 0:15:30.680 so people who consume media via different platforms like smart 0:15:30.720 --> 0:15:33.680 TV and set top boxes. Thank you so much for 0:15:33.720 --> 0:15:35.560 having me, guys, it's great to be here. Well, I 0:15:35.600 --> 0:15:37.640 just want to get your your takes before we get 0:15:37.720 --> 0:15:39.600 right into the analytics here. I just want to get 0:15:39.600 --> 0:15:42.160 your take on the streaming environment because we did see 0:15:42.200 --> 0:15:46.920 that Disney beat expectations when it came for Disney Plus subscribers, 0:15:46.920 --> 0:15:50.400 shares moving higher in the after hours. Different story than Netflix. 0:15:50.400 --> 0:15:52.960 And I'm just wondering how you would characterize the environment 0:15:53.040 --> 0:15:57.000 right now, because it's it's interesting like this incumbent Disney 0:15:57.120 --> 0:16:00.640 that Netflix disrupted. Uh now Net is on the other 0:16:00.680 --> 0:16:02.640 side of that with shares down, you know, more than 0:16:02.720 --> 0:16:06.600 seventy from its highs last year. Yeah, A vod is 0:16:06.680 --> 0:16:11.800 definitely the cool kid. So I think you know, Netflix 0:16:11.840 --> 0:16:14.160 held out as long as it could, and you know 0:16:14.240 --> 0:16:16.680 they they held off from bringing ads in for the 0:16:16.720 --> 0:16:19.120 longest time, and then we saw the fluctuations with the 0:16:19.120 --> 0:16:22.600 share price, and here we are. I have not had 0:16:22.760 --> 0:16:26.520 any early indication as to what the Netflix offering is 0:16:26.560 --> 0:16:30.160 going to be, UM, but you know, thinking that it's 0:16:30.200 --> 0:16:32.240 probably going to be the same as or similar to 0:16:32.320 --> 0:16:36.960 what everyone else is doing. But you asked me, Tim, 0:16:37.040 --> 0:16:40.000 you know, to describe the streaming world right now, I 0:16:40.040 --> 0:16:44.440 think I can use a very nice British term, which 0:16:44.480 --> 0:16:49.120 is bonkers um. And you know, the latest statistics that 0:16:49.160 --> 0:16:54.200 were that we're seeing because TV squared by Innovid actually 0:16:54.240 --> 0:17:00.080 measures linear and streaming, but streaming is actually now accounting for, 0:17:00.200 --> 0:17:03.680 according to the I A B about twenty one point 0:17:03.720 --> 0:17:08.080 two billion dollars worth of TV inventory. So it's really 0:17:08.480 --> 0:17:13.080 we've seen this massive transformation and shift to CTV during COVID. 0:17:13.240 --> 0:17:15.440 Help me out, though a number a loan doesn't always 0:17:15.440 --> 0:17:18.000 give you perspective. So twenty one point two billion in 0:17:18.040 --> 0:17:22.440 TV inventory, what percentage is that in terms of streaming? 0:17:23.400 --> 0:17:25.840 Look at it this way, Carol, It's a seventy billion 0:17:25.920 --> 0:17:30.080 dollar universe in the US. It's about two hundred billion globally, 0:17:30.359 --> 0:17:33.080 so it's small. I would say if you look at 0:17:33.119 --> 0:17:36.560 local television So you think about local broadcast local cable 0:17:36.600 --> 0:17:40.160 in the US that is also twenty two billion, and 0:17:40.520 --> 0:17:44.960 think about how old, um, that kind of industry has 0:17:45.000 --> 0:17:48.240 been in existence, you know, thinking about the cable companies 0:17:48.240 --> 0:17:51.320 and everything else. So if you think that CTV is 0:17:51.400 --> 0:17:54.720 now the same size as local broadcast on local cable, 0:17:55.040 --> 0:17:58.040 it's really come from nowhere. And at the end of 0:17:58.080 --> 0:18:01.640 the day, everybody is now watching TV in such a 0:18:01.680 --> 0:18:06.320 different way that we're going to continue to see this 0:18:06.320 --> 0:18:10.640 this huge growth in CTV. Joe, how does the technology 0:18:10.720 --> 0:18:14.080 at TV squared by innovd work Because when you talk 0:18:14.160 --> 0:18:17.240 about a streaming the streaming landscape, it's really fractured in 0:18:17.359 --> 0:18:20.000 terms of that end user and how the end user 0:18:20.160 --> 0:18:22.440 gets that signal could be on a row who, it 0:18:22.480 --> 0:18:24.560 could be on his Amazon fire Stick, it could be 0:18:24.560 --> 0:18:27.720 on a smart TV by l G or Sony. So 0:18:27.920 --> 0:18:32.000 the data is really disparate, and I'm wondering what technology 0:18:32.040 --> 0:18:35.080 you have to be able to provide companies that are 0:18:35.119 --> 0:18:37.480 looking for this data with accurate info. Yeah, it's a 0:18:37.520 --> 0:18:40.719 great question, um, and one that we've tried to solve 0:18:40.800 --> 0:18:43.840 tim in software. We believe that the only way that 0:18:43.880 --> 0:18:46.000 you can solve for the challenges of the modern day 0:18:46.040 --> 0:18:49.879 advertiser is to be global um and to have a 0:18:49.920 --> 0:18:54.080 solution that is software based that truly scales. And that's 0:18:54.119 --> 0:18:58.160 easy to say, but it's actually harder to do. What's 0:18:58.200 --> 0:19:01.879 been amazing about the recent acquisition by Innovid is that 0:19:01.920 --> 0:19:06.200 we've basically been able to kind of superpower our measurement, 0:19:06.600 --> 0:19:10.960 which is, think about it this way. Innovid has a 0:19:10.960 --> 0:19:17.920 ad server that delivers ads for the of the top 0:19:18.000 --> 0:19:22.280 two hundred advertisers. What does that mean. That means everything. 0:19:22.320 --> 0:19:26.159 That means about a billion ads a day UM, and 0:19:26.240 --> 0:19:30.000 it means that we can take every impression that gets 0:19:30.040 --> 0:19:34.359 served and pump it straight into TV squared and either 0:19:34.520 --> 0:19:37.879 map it to like who did I reach, what was 0:19:37.920 --> 0:19:41.800 the audience demo? And did they take an action? So 0:19:42.840 --> 0:19:45.280 I want you to think of this as we've done 0:19:45.280 --> 0:19:48.800 the hard bit. We've done the stitching together of all 0:19:48.840 --> 0:19:53.560 of these different platforms, and because Innovid actually delivers the 0:19:53.640 --> 0:19:57.000 ad we can see if it's a show that runs 0:19:57.119 --> 0:20:00.520 on Peacock, on a Roku device, on a Sam's on TV, 0:20:01.359 --> 0:20:05.119 we can still see that impression. Therefore, for ours, what's 0:20:05.200 --> 0:20:09.399 beautiful is there's no walled gardens and we're independent. So 0:20:09.440 --> 0:20:13.480 if you're an advertiser, everyone's calling us saying, hey, wait 0:20:13.520 --> 0:20:16.399 a second, you can see all the way through the 0:20:16.440 --> 0:20:20.480 customer journey. What happened? That's Joe can Sella, the president 0:20:20.480 --> 0:20:22.480 of TV squared by inn of It. You are listening 0:20:22.480 --> 0:20:24.840 to Bloomberg Business Week More to Come. You know the 0:20:24.960 --> 0:20:28.280 name venture capitalist Alan patrick Of. He checked in with 0:20:28.359 --> 0:20:32.040 us about today's market volatility as well as opportunity. You've 0:20:32.080 --> 0:20:36.040 had a career that's bounced fifty years. This is Bloomberg. 0:20:41.320 --> 0:20:44.800 You're listening to Bloomberg Business Week with Carol Messer and 0:20:44.920 --> 0:20:50.040 Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio. All right, 0:20:50.040 --> 0:20:52.480 with all the market volatility again this week. I mean 0:20:52.480 --> 0:20:56.480 it's really been the theme of market volatility. So we 0:20:56.600 --> 0:20:59.280 recently caught up with a perfect guest to talk about it. 0:20:59.359 --> 0:21:01.679 He has seen a lot of market cycles. Fair to 0:21:01.680 --> 0:21:04.600 call him legendary Alan patrick Off an early VC. He 0:21:04.600 --> 0:21:08.280 helped build and grow such companies as America Online, Office Depot, 0:21:08.840 --> 0:21:12.439 a little company called Apple Audible as well. He's the 0:21:12.480 --> 0:21:15.160 chairman emeritus and co founder of gray Croft. He's also 0:21:15.200 --> 0:21:17.560 got a new book out, Carol. It's called no red lights. 0:21:17.680 --> 0:21:21.240 Reflections on life fifty years in venture capital and never 0:21:21.480 --> 0:21:25.480 driving alone. You know, everybody I meet has lived for 0:21:25.520 --> 0:21:28.440 such a short time relatively in this market that they 0:21:28.480 --> 0:21:31.239 only see everything going up. And I've lived through so 0:21:31.280 --> 0:21:35.560 many cycles that to me, this was inevitable. It's going 0:21:35.640 --> 0:21:38.360 to come. Everybody was living in a euphoric state that 0:21:38.560 --> 0:21:40.240 things are only going to go up. And I think 0:21:40.760 --> 0:21:43.520 you better be prepared for some kind of hiccup. And 0:21:43.560 --> 0:21:45.320 I don't know why it's going to happen, but that's 0:21:45.320 --> 0:21:47.399 just the way the markets work. How big of a 0:21:47.480 --> 0:21:50.080 hiccup and how long of a hiccup, Well, I think 0:21:50.119 --> 0:21:52.720 it depends on what the after fall is after the 0:21:53.359 --> 0:21:58.240 this initial setback. You know, well the market stabilizer is 0:21:58.280 --> 0:22:00.600 it gonna, you know, after a certain period of time, 0:22:00.840 --> 0:22:03.560 go down again. I mean the levels that the markets 0:22:03.640 --> 0:22:07.280 at has just been increasing steadily until the beginning of 0:22:07.359 --> 0:22:09.560 this year. I mean last year was dramatic. The whole 0:22:09.600 --> 0:22:13.960 Trump era was dramatic. I always follow the theory the 0:22:14.000 --> 0:22:18.200 markets stone like surprises, and all we had with surprises 0:22:18.240 --> 0:22:21.480 for four years and the market kept going on. So 0:22:21.760 --> 0:22:25.679 I think we've got an after effect of that. And uh, 0:22:26.040 --> 0:22:28.040 I just say one thing, This is not the time 0:22:28.080 --> 0:22:31.000 to sell. I think you've got to ride the rocky 0:22:31.119 --> 0:22:34.360 periods and watch how and see how it stabilizes. Even 0:22:34.359 --> 0:22:37.480