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Speaker 1: From the heart of where innovation, money and power collide

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Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with

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Speaker 1: Caroline Hyde and.

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Speaker 2: Ed Louvelow live from New York.

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Speaker 3: This is Bloomberg Technology. We are getting straight to our

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Speaker 3: top story.

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Speaker 2: Out of Washington.

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Speaker 3: TikTok is at the US Supreme Court fighting for its future.

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Speaker 2: Justices are hearing.

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Speaker 3: Arguments only nine days before a federal law is set

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Speaker 3: to ban TikTok in the United States if it isn't

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Speaker 3: sold by its Chinese parent company. Bloemberg's Tyder Kendall standing

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Speaker 3: by at the court and remind us Tyler, the key

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Speaker 3: questions for the court is it national security versus free speech?

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Speaker 2: Here?

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Speaker 4: Yeah, hey, Caroline or all arguments here at the Supreme

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Speaker 4: Court now just reaching about their one hour mark. Lawyers

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Speaker 4: for TikTok started their opening arguments by saying that this

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Speaker 4: is a First Amendment issue, arguing that if that band

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Speaker 4: does go into place, it could potentially curtail the freedom

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Speaker 4: of expression of it's more than one hundred and seventy

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Speaker 4: million US based users. The lawyer for TikTok, arguing today,

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Speaker 4: Noel Francisco, also added that the timeline for the ban

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Speaker 4: is unrealistic and quote very difficult, asking the Court at

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Speaker 4: the very least to delay the ban going into place.

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Speaker 2: Now.

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Speaker 4: On the other side of this is what you mentioned,

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Speaker 4: the national security concerns. In a brief submitted to the

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Speaker 4: Supreme Court today ahead of today's arguments, the US federal

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Speaker 4: government says this is not about freedom of speech, since

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Speaker 4: there is still a viable path on the table for

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Speaker 4: TikTok to operate if they divest. Rather, they're not trying

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Speaker 4: to restrict freedom of speech. They're trying to restrict what

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Speaker 4: they call foreign adversary holding, considering bite Dance's connections to

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Speaker 4: China and what that could mean to national security. Now,

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Speaker 4: that appears to be the thread that we're seeing the

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Speaker 4: support the Supreme Court justices pull on here, potentially expressing

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Speaker 4: some skepticism when it comes to TikTok's arguments. For example, Caroline,

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Speaker 4: the first question out of the gate from Justice Clarence

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Speaker 4: Thomas was whether or not TikTok was trying to convert

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Speaker 4: a potential restriction on byte Dance's ownership of TikTok into

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Speaker 4: a restriction onto the freedom of speech of TikTok and

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Speaker 4: its users.

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Speaker 2: Tyler Kendall, We thank you so much.

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Speaker 3: And look, just reading the tea leaves here shares of

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Speaker 3: snap Meta on the higher side. It doesn't seem as

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Speaker 3: though thus far the arguments are going in TikTok's favor,

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Speaker 3: as has been on our tea live blog on the

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Speaker 3: Bloomberg Frank McCord is with us to keep the conversation going.

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Speaker 3: Executive chairman of the Court Global and founder of Project Liberty,

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Speaker 3: which just made a formal offer to acquire TikTok. You

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Speaker 3: call it the people's bid. Why is Project Liberty and

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Speaker 3: your consortium the right owners if indeed bite Dance says

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Speaker 3: it will divest.

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Speaker 5: Yeah, Hi, Carolyn, how are you good?

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Speaker 3: Good?

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Speaker 6: It's I think we're the right buyers because we have

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Speaker 6: put all the pieces together. We have the funding, we've

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Speaker 6: worked through all the legal issues, We've put a formal offer,

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Speaker 6: as you point out, right in front of Biteden, so

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Speaker 6: they have something now to react to. And most importantly,

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Speaker 6: we have the clean American tech stack to move the

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Speaker 6: user base over to. And we don't need or want

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Speaker 6: the Chinese algorithm. And so I think that the algorithm

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Speaker 6: is something that China's very very beholden to and has

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Speaker 6: it said clearly that they're not going to be selling it.

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Speaker 6: We don't need it or want it, as I point out,

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Speaker 6: So I think we're particularly unique bidder and well positioned,

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Speaker 6: and I think as a matter of fact, we have

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Speaker 6: the leading bidder right now.

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Speaker 3: We were just seeing some of the share price reactions

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Speaker 3: of rivals out there. From your reading into what's happening

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Speaker 3: in Washington right now, does it look to be going

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Speaker 3: in the favor you'd want to see, because would you

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Speaker 3: actually like a delay to proceedings to be able to

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Speaker 3: go forward with a.

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Speaker 6: Bit, Well, we'd like to buy us TikTok, that's what

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Speaker 6: we'd like to see as an end result, and move

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Speaker 6: the user base over to this clean American stack. And

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Speaker 6: I think that it's no surprise that the argument is

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Speaker 6: going well for the government because this is a real

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Speaker 6: national siksecurity issue, a strongly bipartisan piece of legislation that

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Speaker 6: was passed by Congress upheld by the appellate court.

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Speaker 5: So I think the.

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Speaker 6: Conventional wisdom is that the government's position will be upheld,

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Speaker 6: the legislation will will stay in effect, which means on

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Speaker 6: January nineteenth, Byte Dance has to decide are they going

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Speaker 6: to shut it down or sell, and in order to sell,

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Speaker 6: they need to enter into an agreement, which is why

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Speaker 6: we put a formal offer in front of them in

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Speaker 6: the last twenty four hours.

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Speaker 2: What is the price tag of that formal offer.

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Speaker 6: So what we've said to byte Dance is we're not

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Speaker 6: going to be talking about terms of the deal until

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Speaker 6: we get into a formal conversation with them. And we

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Speaker 6: want to be very very respectful of byte Dance because

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Speaker 6: it's a very sensitive time here. We know they're arguing

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Speaker 6: in front of the Supreme Court. We've given them space

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Speaker 6: to do that, and at the point in time where

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Speaker 6: we engage in an active negotiation, we'll be happy to

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Speaker 6: share details once we sort things with them.

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Speaker 3: Have you spoken to any of the current investors in

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Speaker 3: byte Dance who are United States based, General Atlantic, Susquehanna.

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Speaker 3: We also known that Sequoias involved KKR. There's a lot

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Speaker 3: of them.

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Speaker 6: Yeah, there are, and I believe we've spoken to all

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Speaker 6: of them and they've indicated an interest in rolling over

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Speaker 6: their investment. Why not, I mean, they don't want to

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Speaker 6: lose their entire investment in us TikTok. We've put a

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Speaker 6: real proposal forward which gives them value for us TikTok.

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Speaker 5: Having said that, they too.

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Speaker 6: Are waiting to see what byte Edance decides to do

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Speaker 6: before committing.

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Speaker 3: I'm really interested in the fact that investors are interested

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Speaker 3: in rolling over. What value will you reccreate for the

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Speaker 3: business going forward? Because you want as you've articulated a

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Speaker 3: totally different tech stack, how will that change the use

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Speaker 3: of TikTok? How will you monetize it as well? Because

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Speaker 3: you want a different form of social media. You don't

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Speaker 3: want us as content for the ultimate users and being

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Speaker 3: advertised against.

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Speaker 6: Yeah, well they'll be advertisement advertising on the new TikTok.

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Speaker 5: Let's call it TikTok two point zero.

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Speaker 6: But we see an Internet evolving where, rather than an

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Speaker 6: attention economy, meaning algorithms designed to keep us addicted and

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Speaker 6: online in a very unhealthy fashion, why not an intention

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Speaker 6: economy where we just let people know we're interested in

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Speaker 6: buying something or reading something, our information on something, and

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Speaker 6: then we get that from the business or the advertiser.

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Speaker 6: And inference is much less valuable than intention. So rather

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Speaker 6: than have algorithms that surveil us, scrape our data, and

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Speaker 6: then guess that we might want something, why not you

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Speaker 6: and I just be very clear, you know, verify that

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Speaker 6: we're a human being, and be very clear about what

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Speaker 6: we want and then receive it On the Internet. We

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Speaker 6: have technology available now that didn't exist twenty five years

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Speaker 6: ago that enables you and I to actually control our identity,

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Speaker 6: our data, and our relationships. So let's put people in

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Speaker 6: charge of their data. Our data is very valuable, as

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Speaker 6: it turns.

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Speaker 3: Out, I mean, and that's why so much value has

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Speaker 3: been accrued on a private market basis, at least to

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Speaker 3: byte dance and to TikTok. But ultimately by not making

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Speaker 3: these things quote unquote addictive, do you lose.

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Speaker 2: Some of that value? And is that the right compromise here?

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Speaker 6: Well, there are other factors here, right in the case

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Speaker 6: of this Supreme Court hearing and the legislation that's being discussed.

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Speaker 5: There are national security risks.

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Speaker 6: There's also issues around safety to children. There are issues

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Speaker 6: about a viability of our democratic system with such polarization.

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Speaker 6: So the algorithms may be powerful, that doesn't mean that

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Speaker 6: they're good or constructive. We just have an Internet technology

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Speaker 6: that's evolved into one that's attention based, which means these

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Speaker 6: platforms scrape our data. They aggregate it, and to do that,

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Speaker 6: they're actually surveilling us, right, and then they profile us.

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Speaker 6: And this is the problem with what's going on with TikTok,

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Speaker 6: because it's not only the surveillance and the information on

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Speaker 6: one hundred and seventy million people, it's that ByteDance can

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Speaker 6: then provide what they want to feed to the one

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Speaker 6: hundred and seventy million people.

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Speaker 5: So it's an influence device as well.

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Speaker 6: So I think we're all learning together that the current

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Speaker 6: architecture which takes advantage of people is not the best architecture.

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Speaker 6: It's leading to some very poor outcomes. This is just engineering.

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Speaker 6: It's just it can be designed differently to work differently.

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Speaker 6: We can get all the benefits we get from Internet

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Speaker 6: technology without the harms.

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Speaker 5: And it's interesting that this.

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Speaker 6: TikTok problem could actually be the way forward to a

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Speaker 6: much bigger solution to having an Internet that's much healthier

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Speaker 6: for all of us.

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Speaker 3: How has that got ramifications on meta on snow, which

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Speaker 3: on the day are doing well because people feel okay.

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Speaker 3: If TikTok loses this argument, it's out and then the viewers,

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Speaker 3: the followers, the users just go to these other rival platforms.

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Speaker 3: The money the advertising money goes to these rival platforms.

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Speaker 3: Why are analysts like Morgan Stanley that have pointed this

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Speaker 3: out not saying there's a legitimate bid here and we

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Speaker 3: think this could be a whole new dawn future for

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Speaker 3: social media.

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Speaker 2: Why aren't people not taking that seriously?

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Speaker 5: I think they'll begin to now.

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Speaker 6: I think that BYT Dance has been playing out their

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Speaker 6: legal strategy and it's coming to an end.

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Speaker 3: Has been a good legal strategy from your perspective, Sorry,

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Speaker 3: hasn't been a good legal strategy from your perspective.

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Speaker 6: From the vantage point of looking at the legislation and

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Speaker 6: how it was passed strong bipartisan legislation and the real

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Speaker 6: national security risks. I think that the Byte Dance pursuit

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Speaker 6: of a legal strategy was an uphill battle from the

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Speaker 6: very beginning. And I think, as I say, it's coming

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Speaker 6: to an end now that that's that path is closing

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Speaker 6: down on them. Now they're confronted with January nineteenth, So

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Speaker 6: we're talking about not nine days and something has to give,

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Speaker 6: so either that it's going to be shut down or

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Speaker 6: there'll be a transaction. That's why we put a formal

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Speaker 6: offer in place so there's enough time for them to

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Speaker 6: process that, and we hope they do because we want

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Speaker 6: to see TikTok stay alive.

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Speaker 5: We want to see it lit up. We don't want

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Speaker 5: to see.

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Speaker 6: It banned or shut down, just like President Electrump does not.

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Speaker 3: We want to see about President Electrump and ultimately what

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Speaker 3: January the twentieth means for all of this and the

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Speaker 3: request he's made of the Supreme Court to just delay facts.

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Speaker 6: Well, I think the legislation will operate. It will be

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Speaker 6: the legislation and it's a hard and fast date of

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Speaker 6: January nineteenth. So the timing here is very interesting, isn't it.

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Speaker 6: President Biden will still be president. It doesn't get to

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Speaker 6: President Electrump unless the ninety day of the three month

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Speaker 6: extension kicks in. So it's a Biden administration decision to

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Speaker 6: extend the timeframe for Bye Dance in TikTok, and then

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Speaker 6: it gets coot.

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Speaker 3: To allow some sort of delay, which many don't think

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Speaker 3: will happen.

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Speaker 6: Yeah, I'm assuming in answering your question that that won't happen.

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Speaker 6: If it does, it's a different ballgame.

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Speaker 5: I understand that.

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Speaker 6: But you know, when you step back and think about this,

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Speaker 6: why wouldn't Bye dance accept an offer. If it doesn't

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Speaker 6: include the algorithm, they win. President Trump wins because it's

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Speaker 6: not banned. The shareholders that you mentioned win they get

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Speaker 6: value as opposed to getting nothing for us. TikTok Us

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Speaker 6: citizens win because our clean stack will protect them.

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Speaker 5: The national security risk has gone.

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Speaker 6: And of course TikTok users win because the app stays

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Speaker 6: in business.

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Speaker 2: Why aren't there competing bids.

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Speaker 6: The legislation requires that you have a clean stack. If

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Speaker 6: this be independent of by dances technology, that's not an

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Speaker 6: easy thing to do. If we hadn't been working on

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Speaker 6: the technology and invested a half a billion dollars over

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Speaker 6: the last five years, we wouldn't be in a position

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Speaker 6: to bid. It's very serendipitous in a way that the

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Speaker 6: work that Project Liberty has been doing to reimagine how

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Speaker 6: the Internet works just so happens to be right place,

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Speaker 6: right time to actually be the winning bidder for TikTok

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Speaker 6: keep the app going, move the user base to a

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Speaker 6: clean stack, and at the same time demonstrate to people

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Speaker 6: that there's another version of the Internet where they're in

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Speaker 6: charge of themselves. They own their data, they own their relationships,

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Speaker 6: they can get value for it.

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Speaker 5: They can parse out and permission.

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Speaker 6: Its use as opposed to being surveilled and having the

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Speaker 6: data be in the hands of someone else who's deciding

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Speaker 6: what to feed them, what to tell them.

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Speaker 2: Briefly, next steps for you.

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Speaker 3: You've kind of given us your time today, But what

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Speaker 3: happens after we start the arguments finish at the Supreme Court.

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Speaker 6: I think we're all anxiously awaiting the Supreme Court to

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Speaker 6: make their decision, and then we'll look forward to a

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Speaker 6: conversation with ByteDance and see if we can.

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Speaker 5: Get something.

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Speaker 6: Completed prior to the nineteenth so that the Biden administration

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Speaker 6: can get it this Roe month extension.

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Speaker 3: Please come back if that conversation happens. Frank McCourt, executive

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Speaker 3: chairman of McCourt Global, Founder of Project Liberty, and the

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Speaker 3: beard on.

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Speaker 2: The table for us TikTok.

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Speaker 3: Coming up, we'll take a look at some of the

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Speaker 3: tech themes dominating the deal sector in twenty twenty five.

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Speaker 3: Maybe this is a deal we need to talk about,

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Speaker 3: potentially a purchase of US TikTok with Barack ravin Is

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Speaker 3: of Ey America's that's next.

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Speaker 2: This is blue Meg technology.

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Speaker 3: A quick check on the market, so look broader benchmarks

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Speaker 3: are down today because the job's numbers were so hot.

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Speaker 3: Once again, we question whether the rake cuts will come

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Speaker 3: from the Federal Reserve or off by two percent on

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Speaker 3: the NASDAP. But we want to shine a light on

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Speaker 3: the key story in the Supreme Court today.

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Speaker 2: TikTok fighting for its future.

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Speaker 3: Meta platforms hire by five tens of percent, snap up

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Speaker 3: seven point seven percent.

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Speaker 2: This as investors tried to.

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Speaker 3: Descend the Actually, some of the oral arguments thus far

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Speaker 3: don't seem to be going in TikTok's favor.

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Speaker 2: Let's just dwell on TikTok a little bit more, because

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Speaker 2: couldn't it be a deal.

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Speaker 3: To watch for twenty twenty five as we hear those

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Speaker 3: oral arguments over in the Supreme Court, as we discern

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Speaker 3: the future of TikTok and the United States tech deals

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Speaker 3: continue to be really impressive as they were in twenty

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Speaker 3: twenty four. Remember US volumes werep thirty two percent. Bak

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Speaker 3: Revied is the man to ask ey America's strategy and

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Speaker 3: Transactions technology sector leader joining us Now, Barak, I know

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Speaker 3: you can't tell us about the intricacies of whether it

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Speaker 3: or not we actually get a deal out of us TikTok,

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Speaker 3: But have you been thinking through that particular deal. Is

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Speaker 3: the deal outlook for tech a strong one?

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Speaker 7: Yeah, Caroline, thank you for having me appreciate it. The

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Speaker 7: outlook is actually very strong, and we feel generally pretty poor,

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Speaker 7: I think on you know, you're obviously you're talking about

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Speaker 7: TikTok today and it's a it's it's capturing a lot

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Speaker 7: of the imagination. But you know, when we think about

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Speaker 7: this deal, obviously we can't talk about it specifically, but

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Speaker 7: if you think about any large transaction, obviously it gets

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Speaker 7: very complex. And this is the kind of stuff that

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Speaker 7: generally tends to move the market and tends to show

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Speaker 7: that other M and A is possible and really can

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Speaker 7: help ignite the market if it was to happen. But

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Speaker 7: I do think that, you know, if we were to

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Speaker 7: go through this, when we talk to our clients about

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Speaker 7: complicated and complex carve outs, typically we talk about months

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Speaker 7: and quarters in terms of timelines to getting it done,

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Speaker 7: not you know, not generally not days or weeks, And

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Speaker 7: so you know, to the extent that some of that

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Speaker 7: work has been going on, that's that's fantastic. Depends on

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Speaker 7: who the buyer is in terms of what the stack

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Speaker 7: actually looks like, and how how capable they are to

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Speaker 7: receive it. All of that, you know, will will drive

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Speaker 7: the timeline here no matter what happens, and obviously you

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Speaker 7: need willing buyers and sellers.

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Speaker 3: Ultimately, this is a geopolitical discussion that drives the potential

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Speaker 3: sale of TikTok. How much is geopolitics going to play

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Speaker 3: into M and A into carve outs as perhaps relationships

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Speaker 3: between the US and China become ever more tense.

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Speaker 7: Yeah, that's a great question, Caroline. It's impossible to underestimate

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Speaker 7: the impact that it already has had, in the chilling

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Speaker 7: effect it has had, particularly when you think about big tech,

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Speaker 7: particularly when you think about the semiconductor space, I think

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Speaker 7: anti trust enforcement in the US, I think tariff wars

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Speaker 7: or skirmishes or battles. However you define those between the

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Speaker 7: US and China and potentially the EU and other countries,

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Speaker 7: suddenly adds complexity to that. So when you think about

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Speaker 7: big tech and semiconductors and social media getting caught in

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Speaker 7: that crosshet, it really is a big has a big

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Speaker 7: chilling effect on M and A More broadly, Now, if

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Speaker 7: you think about the market more broadly than that ninety

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Speaker 7: something percent of the market, it isn't really involved in

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Speaker 7: that doesn't get caught up in that. So it's only

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Speaker 7: the US anti trust enforcement which will matter to them.

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Speaker 7: And if that kind of easies off under an incoming

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Speaker 7: Trump administration, I think that's generally a nice tailwind for

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Speaker 7: M and A going into twenty twenty five.

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Speaker 3: And you said, of course there need to be willing

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Speaker 3: sellers and willing buyers. What's interesting is we're talking with

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Speaker 3: frant McCord is. He's got other in his combined concilidation

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Speaker 3: of people coming forward to want to buy it, private equity,

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Speaker 3: family offices. For you, who are the willing buyers? Is

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Speaker 3: PE a big player here?

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Speaker 5: Yeah?

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Speaker 7: Pe, when you know, thinking more broadly about the market,

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Speaker 7: PE definitely has a role to play, I think, whether

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Speaker 7: it's in this deal and more broadly, you know, they're

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Speaker 7: experts at getting deals done. They've seen all the most

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Speaker 7: difficult deals, they've seen the easy deals, they've seen it all.

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Speaker 7: They add balance sheet, they add availability of capital. So

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Speaker 7: they are fantastic owners to be part of any kind

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Speaker 7: of bid, particularly as a It's very complex, and I

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Speaker 7: think the industry has a lot of experience in you know,

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Speaker 7: looking at carve outs come you know, this would be

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Speaker 7: effectively a carve out, and so looking at big carve

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Speaker 7: outs coming out of you know, large enterprises. I think

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Speaker 7: private equity has a very large role to play in that,

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Speaker 7: whether it's this still specifically or more broadly, I think

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Speaker 7: in general, PE is very interested in items that get

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Speaker 7: carved out of larger take enterprises. Generally, their viewers that

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Speaker 7: these are you know, these have been unloved a little bit,

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Speaker 7: they're potentially undermanaged. This isn't obviously the TikTok example we're

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Speaker 7: talking about here, but this is more broadly, and they

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Speaker 7: do see it as an opportunity to create value and

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Speaker 7: and and drive shareholder it time.

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Speaker 2: You can have a busy year. Thanks for fitting us in.

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Speaker 2: Eric Ravid of Ey America.

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Speaker 3: I just want to check in on in video Stock

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Speaker 3: right now because the company has been criticizing what we

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Speaker 3: expect to be new export restrictions coming from the Biden

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Speaker 3: White House ahead of any announcement that we expect later today,

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Speaker 3: and video is saying it's trying to undercut the incoming

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Speaker 3: Trump administration by imposing last minute rules. Bloomberg's Mike Shppard

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Speaker 3: joins us a more in video setting off three percent.

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Speaker 3: More to do with the macro jobs data, I'm sure,

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Speaker 3: but tell us a little bit about what also could

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Speaker 3: be a key headwind in terms of selling their devices worldwide.

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Speaker 8: Well, this really would be a headwind, and it would

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Speaker 8: come on top of other restrictions on AI chip sales

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Speaker 8: in China and Video is already facing from the US.

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Speaker 8: Those were imposed about a year and a half ago

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Speaker 8: by the Biden administration. In this new set of proposed

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Speaker 8: restrictions that could come in the next few days, this

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Speaker 8: would add a velvet rope to the world where the

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Speaker 8: US would be controlling access to these chips. It would

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Speaker 8: be capped. Your access would be capped on a company

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Speaker 8: and country basis, and the closest US allies, say Europe,

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Speaker 8: the UK, Pan Australia, they would have the most and

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Speaker 8: easiest access. Most of the rest of the world would

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Speaker 8: face tougher restrictions. They would have to meet security requirements

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Speaker 8: and also human rights requirements as well. And then there

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Speaker 8: are a handful of US adversaries, namely China and Russia

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Speaker 8: that would face the most restrictions in the least likelihood

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Speaker 8: of having access to this sophisticated AI technology. That is

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Speaker 8: coming from the US and principally from Nvidia.

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Speaker 3: Mike, what is so fascinating is it hasn't even been

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Speaker 3: announced yet and we've heard this strong response. I'm not

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Speaker 3: aware of how often we tend to hear these strong

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Speaker 3: rebuttals coming from companies, and video usually keeps relatively quiet

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Speaker 3: about these political changes.

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Speaker 8: You know, Carolyn, I'm glad you framed it that way,

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Speaker 8: because this was a really unusual comment from Nvidia, and

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Speaker 8: we also heard objections more broadly from the group here

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Speaker 8: in Washington that represents the chip maker's industry, and they

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Speaker 8: together were curative criticizing very harshly the Biden administration move

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Speaker 8: ahead of its release. Seeing would be unnecessarily restrictive on

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Speaker 8: whatever Trump may want to do is foreign policy, but

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Speaker 8: it would also inflict wide pain on other parts of

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Speaker 8: the economy. Think the gaming industry, think computing, and just think.

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Speaker 8: Back in September, when he was asked by our own colleague,

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Speaker 8: Tyler Kendall, Jensen, Wang said, look, we will abide by

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Speaker 8: any restrictions and government policies, and now he is saying

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Speaker 8: earlier this week he told our friend Ed Ludlow he

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Speaker 8: is interested in meeting with Donald Trump, and so this

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Speaker 8: would give them something very much to talk about as

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Speaker 8: a new administration takes office.

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Speaker 3: It would then Meg's Mike Shepherd across what we anticipate

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Speaker 3: to be the latest amount of the announcement out of

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Speaker 3: the White House. Thank you, Welcome back to Blue Meg Technology.

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Speaker 3: I'm Karen Hyde in New York. A quick check on

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Speaker 3: these markets. Look, I want to focus in on what

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Speaker 3: has been a macro story of the day as well.

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Speaker 3: Job's numbers really strong, two hundred and fifty six thousand added.

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Speaker 3: What does that mean in terms of the Fed policy

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Speaker 3: rate cuts on pause?

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Speaker 2: Of course, growth stocks pull back.

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Speaker 3: We're down one point nine percent on the NASDAK biggest

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Speaker 3: drags to the downside, also Apple in Vidia. Of course

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Speaker 3: we've got key nines on what is going to be

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Speaker 3: announced from the White House in terms of further limitations

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Speaker 3: on exports from Nvidia to the rest of the world.

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Speaker 3: That's playing on the stock but on the upside. Key

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Speaker 3: point driver on the green side is Meta and of

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Speaker 3: course that is feeling into where our key story is today.

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Speaker 3: TikTok what to expect today around what's happening over in Washington.

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Speaker 3: Of course, the Supreme Court hearing arguments about the future

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Speaker 3: of TikTok. That of course plays into Meta's hand if

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Speaker 3: indeed TikTok is indeed banned. Let's get to Bloomberg's Kurt

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Speaker 3: Wagner because it's interesting Snap and Meta trading higher. It

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Speaker 3: feels as though in the court it doesn't seem to

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Speaker 3: be going their direction for TikTok.

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Speaker 2: Kert.

441
00:22:48,440 --> 00:22:50,879
Speaker 9: Yeah, I mean, we're only halfway through right now. The

442
00:22:51,119 --> 00:22:54,919
Speaker 9: lawyer for the creator aspect of the lawsuit is making

443
00:22:55,119 --> 00:22:58,320
Speaker 9: his arguments before the court. But the first hour was

444
00:22:58,480 --> 00:23:01,399
Speaker 9: TikTok's lawyer, and I listened to the whole thing. I

445
00:23:01,440 --> 00:23:04,520
Speaker 9: don't listen to a ton of Supreme Court oral arguments,

446
00:23:04,520 --> 00:23:07,359
Speaker 9: but I walked away feeling that TikTok's in real trouble.

447
00:23:07,400 --> 00:23:09,879
Speaker 9: A lot of the justices did not seem convinced with

448
00:23:09,920 --> 00:23:13,080
Speaker 9: TikTok's argument that this is a free speech issue. A

449
00:23:13,080 --> 00:23:14,879
Speaker 9: lot of them push back on the idea that you know,

450
00:23:15,119 --> 00:23:17,040
Speaker 9: it's not just speech, this is also a data in

451
00:23:17,080 --> 00:23:20,560
Speaker 9: a security issue, and so they did not seem convinced

452
00:23:20,680 --> 00:23:23,760
Speaker 9: from my opinion, as to what the TikTok lawyer was

453
00:23:23,800 --> 00:23:25,200
Speaker 9: presenting this morning, and.

454
00:23:25,200 --> 00:23:29,120
Speaker 3: Certain analysts Morgan Stanley, for example, have theorized what would

455
00:23:29,160 --> 00:23:33,640
Speaker 3: happen if indeed TikTok is banned, money goes to Snap potentially,

456
00:23:33,640 --> 00:23:36,560
Speaker 3: but the key winner is Meta YouTube. Can you spell

457
00:23:36,600 --> 00:23:39,040
Speaker 3: out who the winners and losers are and what it

458
00:23:39,080 --> 00:23:40,800
Speaker 3: means in terms of advertising revenue here?

459
00:23:41,600 --> 00:23:43,960
Speaker 9: Yeah, I mean you hit the top three. I think

460
00:23:44,080 --> 00:23:48,800
Speaker 9: Meta and Google and YouTube in particular are probably one

461
00:23:48,840 --> 00:23:51,760
Speaker 9: A and one B there because they both have products

462
00:23:52,160 --> 00:23:55,040
Speaker 9: in YouTube shorts and in reels at Meta that are

463
00:23:55,080 --> 00:23:57,560
Speaker 9: you know, essentially TikTok clones, right, So if you are

464
00:23:57,600 --> 00:24:00,720
Speaker 9: a TikTok creator, if you're a TikTok user, very easy

465
00:24:00,760 --> 00:24:03,359
Speaker 9: to migrate to one of these other services, And they

466
00:24:03,400 --> 00:24:07,080
Speaker 9: both have massive advertising businesses already, so I think they don't,

467
00:24:07,119 --> 00:24:08,800
Speaker 9: you know, they don't have to do a lot different

468
00:24:08,840 --> 00:24:11,119
Speaker 9: to really capitalize on the fact that all of the

469
00:24:11,119 --> 00:24:13,119
Speaker 9: money that's currently going and TikTok will need to go

470
00:24:13,200 --> 00:24:15,760
Speaker 9: somewhere else. So I think there's a very you know,

471
00:24:16,080 --> 00:24:19,560
Speaker 9: obvious reason why MetaStock is up right now today. It's

472
00:24:19,600 --> 00:24:22,119
Speaker 9: that people see there's a real potential for this mass

473
00:24:22,119 --> 00:24:25,480
Speaker 9: migration of users from TikTok over to reels if indeed

474
00:24:25,520 --> 00:24:26,399
Speaker 9: TikTok gets banned.

475
00:24:26,640 --> 00:24:28,960
Speaker 3: Kut Wagner the the latest from the court and what

476
00:24:29,000 --> 00:24:31,040
Speaker 3: it means for the rivals. We thank you more on

477
00:24:31,080 --> 00:24:34,080
Speaker 3: TikTok's impact on the social media landscape. But please to

478
00:24:34,080 --> 00:24:37,239
Speaker 3: welcome Spreta Coajuria, Will Research Global Internet Managing director who

479
00:24:37,280 --> 00:24:39,240
Speaker 3: has thought long and hard about who the.

480
00:24:39,160 --> 00:24:40,240
Speaker 2: Winners and the losers are.

481
00:24:40,440 --> 00:24:42,520
Speaker 3: Schwetter just take us to what you're reading of the

482
00:24:42,560 --> 00:24:44,360
Speaker 3: tea leaves of the arguments right now.

483
00:24:44,400 --> 00:24:46,000
Speaker 2: It doesn't seem to look good for TikTok.

484
00:24:46,960 --> 00:24:49,960
Speaker 10: I agree, first fall, thanks for having me. I actually

485
00:24:49,960 --> 00:24:52,800
Speaker 10: listen to part of the argument this morning, and I

486
00:24:52,840 --> 00:24:56,000
Speaker 10: know it's far from over. But my understanding from and

487
00:24:56,040 --> 00:24:59,840
Speaker 10: I don't do a lot of these Supreme Court argument hearings,

488
00:25:00,320 --> 00:25:03,879
Speaker 10: but I guess my understanding is that the TikTok lawyer

489
00:25:03,960 --> 00:25:07,880
Speaker 10: did not come off convincing enough for the justices, and

490
00:25:08,520 --> 00:25:12,480
Speaker 10: not only around free speech, but also around the privacy

491
00:25:12,520 --> 00:25:17,240
Speaker 10: and security natural security of US citizens. So with that,

492
00:25:17,440 --> 00:25:20,399
Speaker 10: why is we are already seeing stock reactions as it

493
00:25:20,440 --> 00:25:23,440
Speaker 10: relates to the internet name Snap is up, as is Meta,

494
00:25:23,480 --> 00:25:27,320
Speaker 10: and as is Google. Based on our research, we think

495
00:25:27,359 --> 00:25:30,000
Speaker 10: that there is an eight to ten percent upside to

496
00:25:30,200 --> 00:25:33,880
Speaker 10: metas earnings per share. That's quite meaningful because we think

497
00:25:33,920 --> 00:25:36,960
Speaker 10: that over fifty percent of the time spent can actually

498
00:25:36,960 --> 00:25:40,480
Speaker 10: be going to meta reels as the number one beneficiary

499
00:25:40,520 --> 00:25:43,160
Speaker 10: for YouTube shorts, we think that about thirty to forty

500
00:25:43,200 --> 00:25:45,439
Speaker 10: percent of the time spent on TikTok today could go

501
00:25:45,480 --> 00:25:47,960
Speaker 10: to YouTube short and we think that there is about

502
00:25:48,000 --> 00:25:50,960
Speaker 10: five to eight percent upside to YouTube's revenue. And then

503
00:25:51,000 --> 00:25:53,800
Speaker 10: for Snap, part of the reason why it's trading up

504
00:25:53,800 --> 00:25:56,760
Speaker 10: so much is because of the volatility around how much

505
00:25:56,960 --> 00:25:59,800
Speaker 10: benefit Snap could have on a smaller base, and we

506
00:25:59,840 --> 00:26:01,919
Speaker 10: think that it could be about five to ten percent

507
00:26:01,960 --> 00:26:05,119
Speaker 10: of its revenue even if only ten to fifteen percent

508
00:26:05,160 --> 00:26:08,760
Speaker 10: of the time spent today on TikTok goes to Snapchat Wow.

509
00:26:08,880 --> 00:26:13,680
Speaker 3: And of course eyeballs and focus of a consumer means

510
00:26:13,680 --> 00:26:17,080
Speaker 3: more advertising revenue. Ultimately, is that also how it's a

511
00:26:17,200 --> 00:26:19,919
Speaker 3: portioned meta gets the bulk of the advertising revenue that

512
00:26:20,000 --> 00:26:23,320
Speaker 3: currently is sent towards TikTok's direction, and then it's apportioned

513
00:26:23,400 --> 00:26:24,880
Speaker 3: to YouTube and then Snap as well.

514
00:26:25,680 --> 00:26:30,000
Speaker 10: That's exactly right, and what we're actually hearing from advertisers

515
00:26:30,080 --> 00:26:33,760
Speaker 10: right now is that the budgets have actually not yet migrated,

516
00:26:34,200 --> 00:26:36,960
Speaker 10: even with the upcoming risk of TikTok being banned. I

517
00:26:36,960 --> 00:26:40,360
Speaker 10: think the advertisers want to see the ban being implemented

518
00:26:40,440 --> 00:26:44,200
Speaker 10: and then transition the ad dollars in part with snap

519
00:26:44,280 --> 00:26:47,159
Speaker 10: There will be integrations required for those advertisers who have

520
00:26:47,280 --> 00:26:50,080
Speaker 10: not integrated with Snapchat just yet. But what we're also

521
00:26:50,119 --> 00:26:52,920
Speaker 10: hearing is that that work has already begun Shutta.

522
00:26:52,920 --> 00:26:56,680
Speaker 3: That's so interesting because if advertised, if marketers aren't changing yet,

523
00:26:56,680 --> 00:26:59,160
Speaker 3: the reason is because there is one hundred and seventy

524
00:26:59,240 --> 00:27:02,280
Speaker 3: million US users of TikTok who really like the product.

525
00:27:02,680 --> 00:27:05,639
Speaker 3: And from that perspective, do you think that actually it

526
00:27:05,680 --> 00:27:07,960
Speaker 3: does just overnight go away. Have you thought through the

527
00:27:08,000 --> 00:27:11,360
Speaker 3: action of if indeed it is banned, what technically happens

528
00:27:11,400 --> 00:27:14,000
Speaker 3: and if we see users migrade, how long that takes.

529
00:27:14,960 --> 00:27:15,120
Speaker 11: Oh?

530
00:27:15,320 --> 00:27:19,560
Speaker 10: I believe that it will be a moderately fast leak.

531
00:27:19,920 --> 00:27:22,360
Speaker 10: I don't think it will be overnight that the advertising

532
00:27:22,359 --> 00:27:25,200
Speaker 10: budgets will be shut down, in part because there will

533
00:27:25,240 --> 00:27:28,280
Speaker 10: be still some TikTok users in the United States. I mean,

534
00:27:28,280 --> 00:27:30,480
Speaker 10: you won't be users won't be able to download them,

535
00:27:30,480 --> 00:27:32,520
Speaker 10: and service providers will say that we are not going

536
00:27:32,600 --> 00:27:35,400
Speaker 10: to be supporting TikTok, but there will still be millions

537
00:27:35,440 --> 00:27:39,359
Speaker 10: of users and eyeballs on TikTok platform, and the technological

538
00:27:39,359 --> 00:27:43,400
Speaker 10: integrations of ad dollars going away from TikTok into meta

539
00:27:43,560 --> 00:27:46,800
Speaker 10: may not all happen overnight, as advertisers still try and

540
00:27:46,880 --> 00:27:49,760
Speaker 10: figure out how they want to shift their budgets and

541
00:27:49,880 --> 00:27:52,439
Speaker 10: what kind of targeting they want to do, so it

542
00:27:52,480 --> 00:27:54,240
Speaker 10: will be a slow lead. My guess is that it

543
00:27:54,240 --> 00:27:57,320
Speaker 10: will probably take about a quarter or two before most

544
00:27:57,359 --> 00:27:58,359
Speaker 10: of the budgets will move.

545
00:27:59,160 --> 00:28:01,120
Speaker 3: At the start of the show, we had Franklin Court,

546
00:28:01,200 --> 00:28:02,880
Speaker 3: junior joint of Project Liberty.

547
00:28:03,160 --> 00:28:04,280
Speaker 2: He, as far as he's.

548
00:28:04,119 --> 00:28:08,000
Speaker 3: Aware, has made the only bid for us TikTok, asking

549
00:28:08,080 --> 00:28:10,760
Speaker 3: Byte Dance ultimately to sell, which they promised us far

550
00:28:10,840 --> 00:28:13,560
Speaker 3: not to do. But have you thought through the likelihood

551
00:28:13,720 --> 00:28:18,080
Speaker 3: of Bite Dance selling TikTok based.

552
00:28:17,800 --> 00:28:20,160
Speaker 10: On the arguments of this morning, It did not sound

553
00:28:20,280 --> 00:28:23,840
Speaker 10: like that would be a very high likelihood outcome, whether

554
00:28:23,920 --> 00:28:27,159
Speaker 10: that was even a possibility in a ninety day window

555
00:28:27,320 --> 00:28:29,800
Speaker 10: or even in a one hundred and eighty day window,

556
00:28:29,840 --> 00:28:31,879
Speaker 10: So I would be very surprised. I would put it

557
00:28:31,920 --> 00:28:36,120
Speaker 10: in a low probability scenario where that actually happens. I'm

558
00:28:36,119 --> 00:28:38,800
Speaker 10: not sure if they actually want that to happen. If

559
00:28:38,880 --> 00:28:42,160
Speaker 10: we're speculating, so to speak, on who the buyer could be.

560
00:28:42,520 --> 00:28:45,960
Speaker 10: I mean, I wouldn't be surprised if Elon Musk makes

561
00:28:45,960 --> 00:28:50,080
Speaker 10: a bid. He already has Twitter and he has the

562
00:28:50,120 --> 00:28:52,560
Speaker 10: resources to do so too. But I just don't think

563
00:28:52,560 --> 00:28:55,160
Speaker 10: that that will be a high likelihood scenario that they

564
00:28:55,200 --> 00:28:57,360
Speaker 10: actually sell the asset.

565
00:28:58,160 --> 00:29:00,560
Speaker 3: Amazon has been another name that and thrown out that

566
00:29:00,600 --> 00:29:03,440
Speaker 3: would benefit by purchasing TikTok, for example.

567
00:29:04,080 --> 00:29:07,400
Speaker 2: So the next steps from your perspective, how do you start.

568
00:29:07,200 --> 00:29:11,040
Speaker 3: To judge the day reactions of these companies? Followed by

569
00:29:11,080 --> 00:29:14,360
Speaker 3: the as you say potential? What did you mention for

570
00:29:14,440 --> 00:29:16,880
Speaker 3: Meta up to like eight to ten percent upside in

571
00:29:16,960 --> 00:29:19,640
Speaker 3: terms of revenue? How long apath for this share price

572
00:29:19,680 --> 00:29:20,440
Speaker 3: reaction to last?

573
00:29:20,520 --> 00:29:25,320
Speaker 10: You think, I think it'll be sustained. Today's hearing will

574
00:29:25,360 --> 00:29:29,240
Speaker 10: be whether the Supreme Court tells us their decision today

575
00:29:29,360 --> 00:29:32,040
Speaker 10: or not. The way it goes will be very telling

576
00:29:32,080 --> 00:29:34,680
Speaker 10: in terms of the likelihood of the outcome, because it

577
00:29:34,720 --> 00:29:37,840
Speaker 10: seems like it will be binary whether TikTok is banned

578
00:29:37,880 --> 00:29:39,520
Speaker 10: or Supreme Court is going to bring it as a

579
00:29:39,560 --> 00:29:43,000
Speaker 10: hearing to see what happens if TikTok is expected to ban,

580
00:29:43,120 --> 00:29:46,120
Speaker 10: then the rally actually stays and there will be a

581
00:29:46,160 --> 00:29:49,000
Speaker 10: lot more interest from investors on Meta and in fact

582
00:29:49,040 --> 00:29:52,920
Speaker 10: the potential overhand on these stocks on Meta and Snap

583
00:29:52,960 --> 00:29:56,080
Speaker 10: on the uncertainty of where TikTok, whether TikTok will be

584
00:29:56,080 --> 00:29:58,680
Speaker 10: banned or not, will be lifted, so that in part

585
00:29:58,720 --> 00:30:00,280
Speaker 10: will also be a relief.

586
00:30:00,440 --> 00:30:03,440
Speaker 3: Treider Conjuria of all for research. Great to get your

587
00:30:03,480 --> 00:30:05,400
Speaker 3: take on the implications of social media.

588
00:30:05,480 --> 00:30:05,880
Speaker 2: Thank you.

589
00:30:06,040 --> 00:30:08,959
Speaker 3: Coming up, look, we're going to delve into LTK President

590
00:30:08,960 --> 00:30:11,880
Speaker 3: Ama Ven's Boxes perspective. She's got the take on the

591
00:30:11,880 --> 00:30:15,440
Speaker 3: frade of TikTok as it impacts the creator economy.

592
00:30:15,920 --> 00:30:17,040
Speaker 2: This is blome meg Technology.

593
00:30:27,280 --> 00:30:29,480
Speaker 3: Now, as the Supreme Court is hearing arguments on the

594
00:30:29,520 --> 00:30:31,920
Speaker 3: future of TikTok and the United States, let's take a

595
00:30:31,920 --> 00:30:34,480
Speaker 3: look at the apps impact on the creator economy. Here's

596
00:30:34,480 --> 00:30:36,440
Speaker 3: what TikTok CEO had to say about that.

597
00:30:36,480 --> 00:30:39,840
Speaker 11: A couple of months ago, creators from all around the

598
00:30:39,840 --> 00:30:43,000
Speaker 11: world come to TikTok to be discovered, to find an

599
00:30:43,040 --> 00:30:47,480
Speaker 11: audience that live their dreams of fame and fortune. Now,

600
00:30:47,600 --> 00:30:52,120
Speaker 11: in addition to launching countless global stars. The discovery and

601
00:30:52,200 --> 00:30:56,120
Speaker 11: authenticity that defined the TikTok experience have also made the

602
00:30:56,160 --> 00:31:00,120
Speaker 11: platform home the serious issues that are vital to the

603
00:31:00,160 --> 00:31:00,800
Speaker 11: global good.

604
00:31:01,600 --> 00:31:05,320
Speaker 3: Let's bring an LTK co founder president Ammaven's Box, who

605
00:31:05,360 --> 00:31:09,320
Speaker 3: knows a thing or two about these content creators worldwide.

606
00:31:09,520 --> 00:31:11,080
Speaker 3: How are they reacting at the moment.

607
00:31:12,720 --> 00:31:14,720
Speaker 12: Well, Kiln, I have to start out by acknowledging what's

608
00:31:14,720 --> 00:31:17,720
Speaker 12: happening with the wildfires in La are the arts and

609
00:31:17,760 --> 00:31:21,160
Speaker 12: prayers are with the huge portion of the LTK community.

610
00:31:20,720 --> 00:31:21,680
Speaker 13: That's impacted today.

611
00:31:21,720 --> 00:31:25,360
Speaker 12: We have ten thousand creators that are operating their businesses

612
00:31:25,400 --> 00:31:27,920
Speaker 12: out of La County, and so I'd be remiss not

613
00:31:28,000 --> 00:31:30,640
Speaker 12: to acknowledge that they really have had a struggle in

614
00:31:30,720 --> 00:31:32,840
Speaker 12: the start of this year, both with how they will

615
00:31:32,840 --> 00:31:35,440
Speaker 12: operate out of their homes and with what products that

616
00:31:35,880 --> 00:31:38,400
Speaker 12: they show to their audience, and then now also thinking

617
00:31:38,440 --> 00:31:40,280
Speaker 12: about rehoming their community.

618
00:31:40,360 --> 00:31:41,640
Speaker 13: So I did want to start there.

619
00:31:41,520 --> 00:31:45,560
Speaker 3: Well said thank you, Ama, do you want to then,

620
00:31:46,120 --> 00:31:49,520
Speaker 3: having discussed, of course the heart that goes out to

621
00:31:49,560 --> 00:31:51,360
Speaker 3: a lot of your user base, a lot of your

622
00:31:51,400 --> 00:31:54,160
Speaker 3: user base are therefore also having to analogize what's happening

623
00:31:54,200 --> 00:31:54,960
Speaker 3: in Washington.

624
00:31:54,680 --> 00:31:55,560
Speaker 2: At the same time.

625
00:31:56,920 --> 00:31:57,440
Speaker 13: Exactly.

626
00:31:57,560 --> 00:31:59,640
Speaker 12: Well, you know, on the TikTok side, we've had nine

627
00:31:59,680 --> 00:32:02,840
Speaker 12: months to prepare, and so we have been educating our

628
00:32:02,880 --> 00:32:05,720
Speaker 12: creators about what they can do to get their arms

629
00:32:05,720 --> 00:32:08,640
Speaker 12: around their audience. We call it meat and keep, and

630
00:32:08,680 --> 00:32:11,760
Speaker 12: so over that period of time, they've been educating their

631
00:32:11,760 --> 00:32:13,040
Speaker 12: communities of where.

632
00:32:12,840 --> 00:32:13,719
Speaker 13: They can be found.

633
00:32:14,040 --> 00:32:15,800
Speaker 12: What we've seen in the numbers is that with our

634
00:32:15,800 --> 00:32:19,880
Speaker 12: TikTok creators specifically they've launched their LTK pages, they've actually

635
00:32:19,880 --> 00:32:23,480
Speaker 12: produced twice the number of video in twenty twenty four

636
00:32:23,920 --> 00:32:26,520
Speaker 12: versus the year prior, and I would describe that as

637
00:32:26,560 --> 00:32:28,440
Speaker 12: really making a house a home. They want to make

638
00:32:28,440 --> 00:32:32,040
Speaker 12: sure that when that community transitions to the LTK that

639
00:32:32,080 --> 00:32:33,760
Speaker 12: they have a place that they love and they're getting

640
00:32:33,840 --> 00:32:34,920
Speaker 12: tons of content there.

641
00:32:35,160 --> 00:32:37,680
Speaker 13: That has returned in material growth in their earnings.

642
00:32:37,720 --> 00:32:40,720
Speaker 12: Our TikTok creators earned twice as much last year as

643
00:32:40,760 --> 00:32:43,040
Speaker 12: the year prior, so they've got a way to.

644
00:32:43,000 --> 00:32:44,760
Speaker 13: Really transition that community.

645
00:32:45,200 --> 00:32:47,600
Speaker 12: And then on the brand side, we've actually seen that

646
00:32:47,640 --> 00:32:50,320
Speaker 12: brands intend to spend more on creator marketing in twenty

647
00:32:50,360 --> 00:32:53,240
Speaker 12: twenty five. That was a finding from our Northwestern study

648
00:32:53,480 --> 00:32:56,719
Speaker 12: where we pull the cmos both inside of LTK, all

649
00:32:56,760 --> 00:32:59,720
Speaker 12: eight thousand of them, plus those outside of our universe.

650
00:33:00,120 --> 00:33:03,400
Speaker 12: They all expect to continue to grow their investment, and

651
00:33:03,440 --> 00:33:06,200
Speaker 12: I know Goldman still says that by twenty twenty seven

652
00:33:06,240 --> 00:33:09,120
Speaker 12: they expect this industry to be worth five hundred billion.

653
00:33:09,160 --> 00:33:12,000
Speaker 12: So these brands are not slowing down their investment creators.

654
00:33:12,280 --> 00:33:14,640
Speaker 12: They're really seeing it as a channel play and not

655
00:33:14,840 --> 00:33:15,760
Speaker 12: a platform play.

656
00:33:16,400 --> 00:33:19,560
Speaker 3: As you mentioned, money marketers looking at LTK. But where

657
00:33:19,600 --> 00:33:22,480
Speaker 3: else do you think we'll ultimately benefit if, for example,

658
00:33:23,400 --> 00:33:26,720
Speaker 3: it is indeed banned, is it immediately Meta that benefits

659
00:33:26,760 --> 00:33:28,640
Speaker 3: the most? Is CMO is going to be putting most

660
00:33:28,640 --> 00:33:30,280
Speaker 3: of the advertising dollars that they would have spent on

661
00:33:30,320 --> 00:33:32,000
Speaker 3: TikTok to Instagram?

662
00:33:33,240 --> 00:33:33,400
Speaker 13: Right?

663
00:33:33,440 --> 00:33:36,880
Speaker 12: I think on the biggest losers certainly would be TikTok themselves.

664
00:33:36,960 --> 00:33:39,800
Speaker 12: You know, they're losing eight billion dollars it's expected of revenue,

665
00:33:39,800 --> 00:33:42,280
Speaker 12: and of course they are based in Asia and so

666
00:33:42,320 --> 00:33:45,520
Speaker 12: that revenue is going to their kind of homeland. On

667
00:33:45,800 --> 00:33:47,680
Speaker 12: kind of the biggest winners, I do think that Meta

668
00:33:47,720 --> 00:33:49,360
Speaker 12: will be the biggest winner out of this. I echo

669
00:33:49,400 --> 00:33:52,480
Speaker 12: your other guests that we saw here today. Really from

670
00:33:52,520 --> 00:33:55,640
Speaker 12: the creator industry side, though cmos are putting their dollars

671
00:33:55,680 --> 00:33:59,800
Speaker 12: with the creators themselves. Those creators are on average four

672
00:34:00,040 --> 00:34:04,320
Speaker 12: different platforms today, and so it will ultimately drive content

673
00:34:04,520 --> 00:34:06,520
Speaker 12: into the other existing social platforms.

674
00:34:06,600 --> 00:34:08,480
Speaker 13: I think Meta will be the biggest winner.

675
00:34:08,160 --> 00:34:12,120
Speaker 12: There, followed by YouTube and then on down the line.

676
00:34:13,280 --> 00:34:18,720
Speaker 3: What's interesting is ultimately how creators themselves not only using

677
00:34:18,760 --> 00:34:21,560
Speaker 3: TikTok and other platforms to tell people how to circumvent

678
00:34:21,760 --> 00:34:25,080
Speaker 3: any future ban, maybe trying to advocate the use of VPNs,

679
00:34:25,480 --> 00:34:28,120
Speaker 3: but have they been migrating their user based to other platforms.

680
00:34:28,160 --> 00:34:30,480
Speaker 3: They said, they've come to you a lot more with LTK,

681
00:34:30,840 --> 00:34:33,719
Speaker 3: But have they managed to convert their YouTube audience and

682
00:34:33,760 --> 00:34:36,600
Speaker 3: not their YouTube audience TikTok audience over to YouTube, over

683
00:34:36,680 --> 00:34:38,080
Speaker 3: to Instagram ahead of this.

684
00:34:39,960 --> 00:34:42,399
Speaker 12: Yes, and actually so for LTK, the way they're thinking

685
00:34:42,400 --> 00:34:44,640
Speaker 12: about us is like the home base for across all

686
00:34:44,680 --> 00:34:47,719
Speaker 12: of their platforms, Like where can they gain ownership of

687
00:34:47,719 --> 00:34:50,000
Speaker 12: that community? Because you have to think, what's happening with

688
00:34:50,040 --> 00:34:52,760
Speaker 12: TikTok is a revolution. This is a moment in time

689
00:34:52,840 --> 00:34:55,439
Speaker 12: where it might go away entirely. But what we've seen

690
00:34:55,480 --> 00:34:59,680
Speaker 12: over twenty twenty four is an evolution of every other platform.

691
00:35:00,200 --> 00:35:02,399
Speaker 12: You're looking at YouTube shorts, or you're looking at what's

692
00:35:02,440 --> 00:35:05,040
Speaker 12: happened across Instagram. It's no longer a place to follow

693
00:35:05,040 --> 00:35:07,480
Speaker 12: people or be part of a community. It's an interest

694
00:35:07,600 --> 00:35:12,560
Speaker 12: based entertainment platform. So creators across the entire creator economy

695
00:35:12,560 --> 00:35:14,560
Speaker 12: have been looking for where they are going to house

696
00:35:14,600 --> 00:35:18,200
Speaker 12: and have ownership of their audience. We've seen that, you know,

697
00:35:18,239 --> 00:35:20,919
Speaker 12: in Q four, specifically those last three months of the year,

698
00:35:20,960 --> 00:35:25,480
Speaker 12: we saw a tremendous uptick in TikTokers applying to LTK

699
00:35:25,640 --> 00:35:27,719
Speaker 12: to get their shops launched so that they can have

700
00:35:27,760 --> 00:35:31,080
Speaker 12: their home base there. But it's a trend across the

701
00:35:31,239 --> 00:35:33,680
Speaker 12: entire creator universe where they know they've got to get

702
00:35:33,719 --> 00:35:37,200
Speaker 12: their arms around that community because the most important thing

703
00:35:37,239 --> 00:35:41,080
Speaker 12: about their ability to continue their business is their reachable,

704
00:35:41,320 --> 00:35:43,759
Speaker 12: engaged audience. And the problem is not just here on

705
00:35:43,800 --> 00:35:45,800
Speaker 12: TikTok it's across all platforms today.

706
00:35:46,680 --> 00:35:50,839
Speaker 3: What's interesting is there is a smaller probability that bite

707
00:35:50,920 --> 00:35:54,200
Speaker 3: dance does decide to sell. If it does and we

708
00:35:54,320 --> 00:35:56,200
Speaker 3: have a change of ownership and a change of the

709
00:35:56,280 --> 00:35:59,200
Speaker 3: underlying algorithm, how sticky do you think the one hundred

710
00:35:59,200 --> 00:36:01,279
Speaker 3: and seventy million used reso of TikTok, or indeed the

711
00:36:01,280 --> 00:36:02,919
Speaker 3: content courage is on that actually are.

712
00:36:04,239 --> 00:36:07,239
Speaker 12: You know, I actually believe it's an algorithm preference. There

713
00:36:07,239 --> 00:36:09,960
Speaker 12: are some unique things about TikTok when they first started,

714
00:36:10,280 --> 00:36:12,600
Speaker 12: specifically around music. I think those things have become a

715
00:36:12,600 --> 00:36:15,319
Speaker 12: little bit more ubiquitous. But I think we learn a

716
00:36:15,320 --> 00:36:17,880
Speaker 12: lot by looking to Europe. You know, TikTok does exist

717
00:36:17,920 --> 00:36:21,400
Speaker 12: in Europe, except that they have much more restrictive privacy

718
00:36:21,800 --> 00:36:24,360
Speaker 12: over there versus what we have here in the United States,

719
00:36:24,360 --> 00:36:27,560
Speaker 12: and TikTok has not really been able to grab hold

720
00:36:27,719 --> 00:36:30,359
Speaker 12: of the European customer the way it has the United

721
00:36:30,400 --> 00:36:32,880
Speaker 12: States customer. If you have a TikTok, that's not I

722
00:36:32,920 --> 00:36:35,279
Speaker 12: mean it, excuse me. If you few an algorithm that's

723
00:36:35,320 --> 00:36:38,279
Speaker 12: informed by less data, it's just inherently lesser, and so

724
00:36:38,400 --> 00:36:42,040
Speaker 12: ultimately this becomes an algorithm choice for our US consumers.

725
00:36:42,120 --> 00:36:44,520
Speaker 12: I do expect that you know the patterns that we've

726
00:36:44,560 --> 00:36:47,520
Speaker 12: created as individuals of how much time and how frequently

727
00:36:47,560 --> 00:36:49,560
Speaker 12: we are picking up our phone. I think I just

728
00:36:49,680 --> 00:36:52,479
Speaker 12: read that the average American user picks up their phone

729
00:36:52,480 --> 00:36:55,960
Speaker 12: over twenty two hundred times a day. What are they opening?

730
00:36:56,000 --> 00:36:58,520
Speaker 12: They're looking for entertainment. I don't think that they're going

731
00:36:58,560 --> 00:37:00,840
Speaker 12: to stop that behavior. I do believe that there's going

732
00:37:00,880 --> 00:37:03,080
Speaker 12: to be a lift and shift to other platforms, and

733
00:37:03,120 --> 00:37:06,319
Speaker 12: creators are hoping that that lift comes directly then over

734
00:37:06,400 --> 00:37:09,160
Speaker 12: to them as creators so they can continue their businesses.

735
00:37:09,320 --> 00:37:12,600
Speaker 12: Because remember, the platforms are not the ones that pay creators.

736
00:37:12,760 --> 00:37:14,480
Speaker 13: Creators are responsible.

737
00:37:13,880 --> 00:37:16,320
Speaker 12: For building their own business in their own revenue streams,

738
00:37:16,560 --> 00:37:19,440
Speaker 12: but except for a YouTube and long format, they are

739
00:37:19,480 --> 00:37:23,320
Speaker 12: really not being paid at scale or really any meaningful

740
00:37:23,360 --> 00:37:25,840
Speaker 12: way by the platforms directly. So it's very critical that

741
00:37:25,880 --> 00:37:28,520
Speaker 12: they own that customer relationship so that they can create

742
00:37:28,560 --> 00:37:30,520
Speaker 12: those businesses around their reach.

743
00:37:31,680 --> 00:37:32,520
Speaker 2: I'm a ven's box.

744
00:37:32,520 --> 00:37:34,360
Speaker 3: I let you go back and tap for one of

745
00:37:34,400 --> 00:37:36,279
Speaker 3: the twenty two hundred times you're going to be picking

746
00:37:36,320 --> 00:37:39,360
Speaker 3: up your phone today. LTK co founder president, It's always

747
00:37:39,360 --> 00:37:39,920
Speaker 3: great to have you.

748
00:37:40,160 --> 00:37:50,680
Speaker 2: Thank you. TikTok fighting for its future in the Supreme Court.

749
00:37:50,960 --> 00:37:53,520
Speaker 3: Let's bring back Bloomberg's Tyler Kendall, who is outside that

750
00:37:53,600 --> 00:37:56,040
Speaker 3: court and the latest in terms of the arguments, I

751
00:37:56,080 --> 00:38:00,000
Speaker 3: understand US Solicitor General Elizabeth Prologar is now testify.

752
00:38:02,600 --> 00:38:05,759
Speaker 4: Yes, she's representing the federal government in this case, who

753
00:38:05,840 --> 00:38:08,799
Speaker 4: is arguing that this is an issue of national security.

754
00:38:08,840 --> 00:38:12,120
Speaker 4: Before that happened that we just heard the lawyer representing

755
00:38:12,160 --> 00:38:15,840
Speaker 4: TikTok creators wrap up his statements to the Supreme Court,

756
00:38:15,920 --> 00:38:18,759
Speaker 4: and Jeffrey Fisher made similar arguments to what we heard

757
00:38:18,840 --> 00:38:22,080
Speaker 4: from TikTok's lawyer earlier today, that this is an issue

758
00:38:22,239 --> 00:38:25,040
Speaker 4: of freedom of speech and potentially curtailing the freedom of

759
00:38:25,040 --> 00:38:27,920
Speaker 4: expression of the nearly one hundred and seventy million US

760
00:38:27,920 --> 00:38:30,640
Speaker 4: based users who use the app. Now, it does appear

761
00:38:30,719 --> 00:38:33,920
Speaker 4: that the Supreme Court justices are signaling they are skeptical

762
00:38:34,000 --> 00:38:36,120
Speaker 4: to that argument. I've been struck just how many times

763
00:38:36,160 --> 00:38:38,160
Speaker 4: they had brought up the specifics of the text of

764
00:38:38,200 --> 00:38:41,080
Speaker 4: the bill that Congress passed, saying that this is not

765
00:38:41,160 --> 00:38:43,520
Speaker 4: an outright ban, that the lag could knew that the

766
00:38:43,600 --> 00:38:46,920
Speaker 4: app could still continue to operate. Rather, it is a choice,

767
00:38:46,960 --> 00:38:49,520
Speaker 4: and that the app has to divest in order to

768
00:38:49,600 --> 00:38:54,280
Speaker 4: maintain its platform. You overcall, of course, that this text

769
00:38:54,320 --> 00:38:57,120
Speaker 4: was originally introduced by the China Select Committee on a

770
00:38:57,360 --> 00:39:00,680
Speaker 4: partisan basis over those national securities cancers. We even heard

771
00:39:00,719 --> 00:39:03,560
Speaker 4: Chief Justice John Roberts hit on that saying that Congress

772
00:39:03,640 --> 00:39:06,160
Speaker 4: is not concerned about what is on the platform. They

773
00:39:06,200 --> 00:39:09,640
Speaker 4: are concerned about what the federal government calls a foreign adversary,

774
00:39:09,640 --> 00:39:10,560
Speaker 4: holding who.

775
00:39:10,400 --> 00:39:11,839
Speaker 2: Owns the platform.

776
00:39:12,200 --> 00:39:15,640
Speaker 3: Tyler, what's also some intriguing about all of this is

777
00:39:15,680 --> 00:39:19,240
Speaker 3: President elect Trump and where he feels the delay should

778
00:39:19,239 --> 00:39:19,560
Speaker 3: come in.

779
00:39:22,320 --> 00:39:25,520
Speaker 4: Right exactly so, a lawyer for Trump actually filed a

780
00:39:25,560 --> 00:39:28,239
Speaker 4: Friend of the Court brief last month of requesting that

781
00:39:28,239 --> 00:39:31,400
Speaker 4: there be a delay and citing Trump's own negotiation skill,

782
00:39:31,480 --> 00:39:33,680
Speaker 4: saying that he could ultimately help reach some sort of

783
00:39:33,719 --> 00:39:37,399
Speaker 4: agreement between the parties to get this done and as

784
00:39:37,440 --> 00:39:40,440
Speaker 4: well as address those national security concerns. Now, if this

785
00:39:40,480 --> 00:39:42,920
Speaker 4: span is put into place, we actually heard this come

786
00:39:43,000 --> 00:39:45,720
Speaker 4: up in the questioning whether or not Trump could delay it. Further,

787
00:39:45,800 --> 00:39:47,880
Speaker 4: we know that the law was written to include a

788
00:39:47,960 --> 00:39:51,600
Speaker 4: ninety day pause if there is a potential deal on

789
00:39:51,840 --> 00:39:54,400
Speaker 4: the table, but of course that would have to materialize.

790
00:39:54,400 --> 00:39:57,120
Speaker 4: He also could potentially instruct his Department of Justice to

791
00:39:57,200 --> 00:39:59,840
Speaker 4: not enforce it, however, that would open him up to

792
00:40:00,080 --> 00:40:02,279
Speaker 4: legal scrutiny. And then lastly, you could try to work

793
00:40:02,280 --> 00:40:04,759
Speaker 4: with Congress to repeal the law that they put into place,

794
00:40:04,800 --> 00:40:09,080
Speaker 4: but that appears highly unlikely considering the bipartisan support that

795
00:40:09,120 --> 00:40:11,680
Speaker 4: this bill originally received when it passed back in April.

796
00:40:11,680 --> 00:40:14,880
Speaker 4: I'm talking about unlikely allies coming together to push it forward,

797
00:40:15,000 --> 00:40:18,279
Speaker 4: such as the Democratic House Leader Hackeing Jeffreys and House

798
00:40:18,320 --> 00:40:20,920
Speaker 4: Speaker Mike Johnson working hand in hand on this one.

799
00:40:21,800 --> 00:40:25,839
Speaker 3: Bipartisan ship perhaps has its limits. Tyder Kendall, we thank

800
00:40:25,880 --> 00:40:28,840
Speaker 3: you so much. Let's get out more for intricacies around

801
00:40:28,840 --> 00:40:31,880
Speaker 3: the legal arguments. Bloom back Sarah Forden for more in DC.

802
00:40:32,400 --> 00:40:35,799
Speaker 3: And you're really analyzing how it's all unfolding inside the

803
00:40:35,840 --> 00:40:36,800
Speaker 3: court the arguments.

804
00:40:36,840 --> 00:40:37,799
Speaker 2: Anything struck here?

805
00:40:39,120 --> 00:40:42,160
Speaker 14: Well, first, let's go back to the legal framework. Why

806
00:40:42,200 --> 00:40:45,360
Speaker 14: this is in front of the Supreme Court. They're basically

807
00:40:45,400 --> 00:40:48,920
Speaker 14: being called to decide on a request from Trump to

808
00:40:49,080 --> 00:40:52,919
Speaker 14: pause the start of the band January nineteenth. So they're

809
00:40:52,960 --> 00:40:54,799
Speaker 14: going to have to decide do they pause the band

810
00:40:55,320 --> 00:40:57,600
Speaker 14: and if they do, is it just a temporary pause

811
00:40:57,680 --> 00:40:59,360
Speaker 14: so they can figure out what they want to do

812
00:40:59,440 --> 00:41:02,759
Speaker 14: on the underling issues of the law, or is it

813
00:41:02,840 --> 00:41:07,120
Speaker 14: a permanent band. They're also being asked by TikTok to

814
00:41:07,280 --> 00:41:12,640
Speaker 14: ponder the national security versus the First Amendment rights question.

815
00:41:12,760 --> 00:41:16,000
Speaker 14: Of course, TikTok is really really bearing down hard on

816
00:41:16,040 --> 00:41:20,759
Speaker 14: the fact that this reflects a violation of people's First

817
00:41:20,760 --> 00:41:24,040
Speaker 14: Amendment rights. But then you have the Justices coming in

818
00:41:24,080 --> 00:41:28,360
Speaker 14: and saying, well, actually, foreign actors don't have First Amendment

819
00:41:28,440 --> 00:41:30,520
Speaker 14: rights the way Americans do. So there's a lot of

820
00:41:31,239 --> 00:41:34,040
Speaker 14: parsing there. You know, is TikTok considered a foreign actor.

821
00:41:34,480 --> 00:41:37,520
Speaker 14: It's technically a US company, but it's owned by a

822
00:41:37,600 --> 00:41:40,880
Speaker 14: Chinese company, and so there is so much to unpack

823
00:41:40,920 --> 00:41:42,400
Speaker 14: in these arguments.

824
00:41:42,560 --> 00:41:46,040
Speaker 3: That is very briefly, probability of thirty percent that TikTok

825
00:41:46,080 --> 00:41:47,960
Speaker 3: wins is what Bloing Bag Intelligence thinks. Have you got

826
00:41:48,000 --> 00:41:49,800
Speaker 3: a probability what people have been saying?

827
00:41:50,680 --> 00:41:53,320
Speaker 14: Yeah, I mean, I think that our analyst is really

828
00:41:54,000 --> 00:41:57,600
Speaker 14: calling it pretty pretty correctly. And as we're seeing, as

829
00:41:57,680 --> 00:42:00,200
Speaker 14: Tyler mentioned, you know, the Justices are expressing a lot

830
00:42:00,200 --> 00:42:03,759
Speaker 14: of skepticism about the First Amendment arguments, and they are

831
00:42:03,800 --> 00:42:07,520
Speaker 14: also raised in concerns about the national security arguments. It's

832
00:42:07,560 --> 00:42:10,319
Speaker 14: true that we don't have as much visibility on what

833
00:42:10,480 --> 00:42:14,680
Speaker 14: the government feels as the most concerning about TikTok, but

834
00:42:15,160 --> 00:42:19,399
Speaker 14: we've had a lot of examples of propaganda and data security,

835
00:42:19,960 --> 00:42:21,480
Speaker 14: privacy and more.

836
00:42:22,080 --> 00:42:23,879
Speaker 2: Sarah Forden the latest from DC.

837
00:42:24,320 --> 00:42:27,359
Speaker 3: We so appreciate it on those legal arguments, But that

838
00:42:27,400 --> 00:42:29,760
Speaker 3: does it for this particular edition of Bloomberg Technology.

839
00:42:29,800 --> 00:42:32,000
Speaker 2: Do not forget to check out the podcast. You'll find

840
00:42:32,000 --> 00:42:32,239
Speaker 2: it on the

841
00:42:32,320 --> 00:42:34,960
Speaker 3: Terminal as well as online on Apple, Spotify, Aniheart, this

842
00:42:35,040 --> 00:42:35,640
Speaker 3: is Bloomberg