Speaker 1: This is Bloomberg business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Maser and Tim Stinebec from Bloomberg Radio
Speaker 1: with us Now. Is Bloomberg your senior markets reporter Katie Greifeld.
Speaker 1: She co wrote the story essentially investors, Katie, I gotta
Speaker 1: tell you it seems like they're fighting the FED right now.
Speaker 1: And for also congratulations on the cover story. Thank you. Yeah,
Speaker 1: it was definitely a career milestone, and it does seem
Speaker 1: like people are fighting the Fed. We've been here before,
Speaker 1: but is this time different. A lot of people would
Speaker 1: tell you it is because they actually have the data
Speaker 1: on their side. I mean, we've gotten six consecutive months
Speaker 1: of headline CPI coming down. You're seeing other measures start
Speaker 1: to roll over as well. Employment costs have gone down.
Speaker 1: So I mean the people lining up again to bet
Speaker 1: against the Fed, but that they will actually have to
Speaker 1: cut rates this year. They've got a lot of ammunition
Speaker 1: on their side. And the Fed, I don't know. We
Speaker 1: heard from Jerome Pale just this week. It doesn't seem
Speaker 1: like he's necessarily pushing back as forcefully as might have
Speaker 1: been expected at this point. All right, can we take
Speaker 1: a step back. Joe Weber comes to you, the editor
Speaker 1: of the magazine, May Katie Big FED meeting first one,
Speaker 1: talk to us a little bit about the conversation you
Speaker 1: guys had and what you were thinking about, kind of
Speaker 1: going into what you guys wanted to put out there.
Speaker 1: I will just say Joel kept us on our toes.
Speaker 1: We didn't know until the afternoon the day before that
Speaker 1: it was going to be the cover, so that was
Speaker 1: a fun surprise. But Liz McCormick and I work really
Speaker 1: closely together, you know, we've known each other for years,
Speaker 1: and where she sits on the bond side, where I
Speaker 1: sit on the cross asset side. It just made sense
Speaker 1: if you look across asset classes right now, there's so
Speaker 1: much optimism built into every market on the idea that
Speaker 1: the FED is actually going to pause rates. So that
Speaker 1: was the genesis of this story, because I mean, the
Speaker 1: thing you hear over and over again it's so tired,
Speaker 1: don't fight the FED is exactly what's happening in every
Speaker 1: single market right now. So listen, I got together as
Speaker 1: it happened. Joel was looking for a big, sweepy take
Speaker 1: on this FED meeting, so it came together really quickly
Speaker 1: and really nicely. I have to say, it's pretty remarkable.
Speaker 1: The feeling of risk on all of a sudden here
Speaker 1: in very different. I don't know if everybody was just
Speaker 1: tired of all the selling that went on in two
Speaker 1: But what's interesting is is it the market people keep
Speaker 1: tweeting to me, Hey, the market is forward looking? Is
Speaker 1: it the case that they are looking forward to the
Speaker 1: FED slowing down, stopping at some point, whether it's this
Speaker 1: year or early next year, and that maybe things are
Speaker 1: better in the second half. That's the rub that it
Speaker 1: is a discounting mechanism. And I mean, there's been so
Speaker 1: many moments just in the past few years where the
Speaker 1: market is seemingly at odds, which with what's actually happening
Speaker 1: in the economy. So it's totally possible that you know,
Speaker 1: we priced in the recession last year. Wall Street now
Speaker 1: is saying it's going to be short and shallow. They're
Speaker 1: looking ahead to a brighter future, or they're saying, you know,
Speaker 1: maybe there is going to be a downturn that causes
Speaker 1: the FED to cut But what's interesting about the complexion
Speaker 1: of this risk on rally is whether it ultimately backfires.
Speaker 1: If you think about things such as financial conditions, which
Speaker 1: we know the FED watches. If you look at market
Speaker 1: based measures of financial conditions, which are very popular on
Speaker 1: Wall Street, they've been easing, and Pale and Company have
Speaker 1: you know, said repeatedly that financial conditions, the tightening of
Speaker 1: those sort of measures are how monetary policy actually touches
Speaker 1: the real economy. You know, influences the wealth effect that
Speaker 1: people feel, It influences how comfortable companies feel about issuing
Speaker 1: dead and piling on leverage. If you do have financial
Speaker 1: conditions easing at the same time that the FED is
Speaker 1: trying to take the economy off the boil, those two
Speaker 1: are kind of working at cross purposes. I was pretty
Speaker 1: struck by this one comment from one Neil cash Car,
Speaker 1: the president of the Minneapolis FED. Here's what he said, quote,
Speaker 1: I've spent enough time around Wall Street to know that
Speaker 1: they are culturally, in institutionally optimistic. This is a guy
Speaker 1: when we go up, he's a guy who spent um
Speaker 1: kind of pushing back against rallies, and it's interesting for
Speaker 1: him to be doing this because this is a guy
Speaker 1: who's traditionally known as being dubbish, and he's increasingly now
Speaker 1: seen as hawkish. How should we read into his comment, Well,
Speaker 1: you forgot the best part of the quote. So this
Speaker 1: is from a New York Times profile. Uh. The author
Speaker 1: asked him about the fact that you do have the
Speaker 1: market pricing in rate cuts against what the central bank
Speaker 1: is saying, and he said, referring to the markets, they
Speaker 1: are going to lose the game of chicken. I can
Speaker 1: tell you that. So that's Neil cush Car saying I
Speaker 1: dare you to b yeah, basically saying like you are
Speaker 1: going to lose money here. So the fact that you
Speaker 1: did again have a president of the Minneapolis FED saying that, uh,
Speaker 1: is pretty amazing. We'll see in the next few days.
Speaker 1: I mean, after we get a FED meeting, you hear
Speaker 1: from Jerome pal the markets move. In the next few days,
Speaker 1: you have a bunch of FED speakers come out and
Speaker 1: either confirm or walk back that message. So the next
Speaker 1: two days are gonna be critical. I think I agree
Speaker 1: with you, Like it's gonna be so interesting because many
Speaker 1: people set off of j. Powell at that first FED
Speaker 1: meeting that it was kind of like he gave everybody something.
Speaker 1: The hawk's got something that does get something. So it
Speaker 1: was like, what bird, what bird is this? I don't know. Well,
Speaker 1: what's interesting too is you know we are off peak
Speaker 1: inflation right, the trend lines are in our favor, and
Speaker 1: I do wonder the job market holding up. I know
Speaker 1: that's frustrating for the Fed, but it also shows maybe
Speaker 1: we could get to that soft landing. I mean, markets
Speaker 1: could be right. It's like, how do you cross that
Speaker 1: with that whole idea of don't fight the Fed. That's
Speaker 1: the thing, like, we could be right this time. We
Speaker 1: could also turn into a situation into a stop and
Speaker 1: start sort of fed. Maybe they do pause, but maybe
Speaker 1: the next move after the pause isn't a rate cut.
Speaker 1: Maybe they have to hike again if inflation doesn't come.
Speaker 1: But they talked about right, didn't Jay say he goes
Speaker 1: doesn't want to stop and then start again? Yeah, he
Speaker 1: definitely got some questions to that effect on Wednesday. I
Speaker 1: feel like he did a polite little tap dance around it.
Speaker 1: But in terms of what actually pans out this time,
Speaker 1: I mean, the market does have a pretty fraud history
Speaker 1: in fighting the FED. I mean I remember when the September.
Speaker 1: Pause was a conversation for about two weeks at this meeting.
Speaker 1: At one point this past summer, there had been a
Speaker 1: cut priced in for February, which obviously didn't happen. So
Speaker 1: this happens. I mean even again, don't fight the Fed.
Speaker 1: It's one of the most tired sayings in finance, and
Speaker 1: yet we do this every single cycle. It's like Luciana
Speaker 1: Charlie Brown. Yeah, they're going to pull the football. But
Speaker 1: the thing is is the football hasn't been pulled yet
Speaker 1: now and and and there has to be a certain point, Katie,
Speaker 1: when the football isn't pulled, when there is indeed evidence
Speaker 1: from the economy. Wait, so what's the football helping? The
Speaker 1: football is okay, so you know in peanuts, Yeah for sure.
Speaker 1: When Charlie Brown tries to kick the football and over
Speaker 1: and over again, he gets fooled. Yeah, Lucy pulls it.
Speaker 1: And this is like the whole idea of the market's thinking, Okay,
Speaker 1: well we think you're done, so the markets are Lucy,
Speaker 1: no fed the FED chairs Lucy. Okay, I really I
Speaker 1: really want to work with you guys, mat or maybe
Speaker 1: or maybe like potential potential cutting of rates is the football. Okay,
Speaker 1: so maybe this was a bad idea now, but the
Speaker 1: idea of kind of what you write that the markets
Speaker 1: keep thinking one way and J Powell yeah, is kind
Speaker 1: of Lucy, I'm pulling the football kids. We're gonna keep
Speaker 1: raising rates and so they keeping In this case, he's
Speaker 1: being open about it. That's that's the difference I think
Speaker 1: Carol is isn't he always open? Yeah? But but he's
Speaker 1: not like Lucy right, Like, he's not fooling anyone that.
Speaker 1: This is why I like Snoopy. Snoopy is very clear,
Speaker 1: the red baron is clear. Um. Having said this, I
Speaker 1: guess time will tell. But it is interesting when you
Speaker 1: see traders pricing in one thing in the markets, you know,
Speaker 1: especially if you like the bond market, the fixing very
Speaker 1: smart market. And I mean a point to to make
Speaker 1: here which has been made to me, is that you know,
Speaker 1: market participants, investors very loud voices. They get to change
Speaker 1: their mine on the FED every single hour, every single
Speaker 1: day if they want to. Whereas we only hear from
Speaker 1: the Fed in very scheduled regular appearances. We're not going
Speaker 1: to get an update on their dot plot at the
Speaker 1: Summary of Economic Projections until March so there's a long
Speaker 1: time between those sort of updates that we all care
Speaker 1: about and focus on so deeply. Whereas you know we can,
Speaker 1: i mean, public opinion consensus changes so quickly, the FED
Speaker 1: by design doesn't do that. You're in the simulcast with this,
Speaker 1: I feel like we'd go round and round the same conversation.
Speaker 1: The one thing that does stick with me that is
Speaker 1: j Pal saying we're gonna get back to two. So
Speaker 1: that is really their benchmark, and they don't deviate from
Speaker 1: that debate from it, then they're going to have to
Speaker 1: keep raising race. That's the thing. That's where financial conditions
Speaker 1: come in because again, when you think about headline CPI
Speaker 1: at nine point one percent, it's a lot easier to
Speaker 1: get to six and a half percent than it is
Speaker 1: to get to two percent. And that's where you know,
Speaker 1: that's where you maybe need to see some labor market pain.
Speaker 1: We haven't seen it yet, we haven't needed to. But
Speaker 1: to get it back to that benchmark, which they had
Speaker 1: a chance to deviate from, they explicitly said they're not.
Speaker 1: That is a lot more would to chop and they're
Speaker 1: willing to feel that labor pain. They seem to be
Speaker 1: right okay, So apart from the labor market, what could
Speaker 1: derail this? What could derail this in terms, let's say
Speaker 1: linus otherwise you're out of here. I don't know who
Speaker 1: Line is is? Are you kidding? Is he the smelly one?
Speaker 1: He's the sweet one with the blanket and doesn't he
Speaker 1: Isn't he kind of stinky? He's Lucy's little brother, right?
Speaker 1: I don't know anything about sense. Oh my god, there's
Speaker 1: I thought there was like a stench cloud that or
Speaker 1: maybe he's dirty. I don't know, all right, For the FED,
Speaker 1: for the market, for Lucy and Charlie Brown, for the markets.
Speaker 1: I guess which would derail this is inflation that's stickier
Speaker 1: than expected, or re accelerates, because right now, I mean,
Speaker 1: it feels like it's come down a lot quicker than
Speaker 1: maybe consensus has said it would. But you know, if
Speaker 1: you do have waged inflation that remains somewhat elevated, if
Speaker 1: you have other pockets of the economy re accelrat if
Speaker 1: you have commodity prices good. I mean, there's a lot
Speaker 1: of potential risks here. For again, this incredible rally that
Speaker 1: we've built so far into this year, that really started
Speaker 1: in mid October. Yeah, like you think about if right
Speaker 1: way to stay higher and companies have to kind of
Speaker 1: eat those costs right to pay for workers. That's going
Speaker 1: to impact margins, which is something we talked about a
Speaker 1: lot here. We love you, Katie Gray felt, thank you
Speaker 1: so much. You're listening to the Bloomberg Business Week podcast
Speaker 1: just Live week days from two to five pm Eastern
Speaker 1: on Bloomberg Radio, The Bloomberg Business a band you too.
Speaker 1: You can also listen live to our flagship New York
Speaker 1: station Just Say Alexa play Bloomberg, Elove and Dirty So
Speaker 1: so dying to do this story. It was a most
Speaker 1: ready when to hit the Bloomberg this week. By the way,
Speaker 1: it is still is for the week overall. It's in
Speaker 1: the new issue of Bloomberg Business Week, which, as you know,
Speaker 1: out on newsstands, on line of Bloomberg dot com, and
Speaker 1: on the Bloomberg. We just want to get right to
Speaker 1: it because the story is how to be eighteen years
Speaker 1: old again for only two million dollars a year. Here
Speaker 1: to reduce us to Brian Johnson and his mission, We've
Speaker 1: got Ashley Vancey's Bloomberg Business Week features writer, also the
Speaker 1: author of Elon Musk Tesla SpaceX and the Quest for
Speaker 1: a Fantastic Future. So actually answer that question for us,
Speaker 1: who is Brian Johnson. I think a lot of people
Speaker 1: use a product that he was instrumental in bringing in
Speaker 1: market quite frequently. Who is this guy? Yeah, you know,
Speaker 1: he's a he's a software entrepreneur. UM loosely, that's how
Speaker 1: he started. Um. There's a company called Braintree, which which
Speaker 1: is not like a household name, but people use it
Speaker 1: all the time. And and it's also acquired Venmo, which
Speaker 1: people probably do know. So it was helps you, you know,
Speaker 1: process mobile payments on on the internet and and process
Speaker 1: credit cards. And Brian ran that company in his in
Speaker 1: his thirties and sold it to pay Pal a few
Speaker 1: years ago for eight hundred million dollars. And that's kind
Speaker 1: of how he made his fortune, all right, And now
Speaker 1: he wants to be young again or so. Jill Weber,
Speaker 1: the editor of Blieberg this week also in studio with us. Okay,
Speaker 1: so I can be eighteen again. If I have a
Speaker 1: team of thirty doctors and a two million dollar a
Speaker 1: year of budget, what do what do I get for
Speaker 1: that treatment? Actually a lot of work, you know, So
Speaker 1: it does sound exhausting. Actually it looks and it looks exhausting,
Speaker 1: you know, I mean Silicon Valley, and I guess other
Speaker 1: people have been kind of obsessed with longevity and and
Speaker 1: reversing aging for a long time. We we've all heard
Speaker 1: these stories. Brian's kind of taken it to the next level.
Speaker 1: So he's got all these doctors, you know, he's his
Speaker 1: his theories. He's trying to add some metrics and measurements
Speaker 1: and proof to this whole field. And so what all
Speaker 1: these people do is literally test every every part of
Speaker 1: his body with as many research grade instruments as they can.
Speaker 1: So we're talking m ris, ultrasounds, blood tests, stool samples, everything.
Speaker 1: And then you know, he does a series of therapies
Speaker 1: um stuff that begins just like eating well and exercising
Speaker 1: and goes up to two laser treatments on his skin
Speaker 1: and things like that to to try and correct issues
Speaker 1: and give him the body of a much younger person.
Speaker 1: There's eating well, you know, as we know it. But
Speaker 1: then there's also what Brian Johnson does, which is like
Speaker 1: you know, you tried it, you tried it. Actually, what
Speaker 1: is this concoction that he puts in a blender Yeah,
Speaker 1: so every day, Brian, it's exactly one thousand, nine hundred
Speaker 1: seventies seven calories, and like he likes to say that
Speaker 1: each calorie has to has to fight for its life
Speaker 1: in his diet. And I went to his house, his
Speaker 1: his kind of mansion in Venice, California, and yeah, so
Speaker 1: I got to see what he has for his daily diet.
Speaker 1: You know, some of it is okay, there's this thing
Speaker 1: that he calls nutty pudding, and it's it's basically berries
Speaker 1: and some yogurt type stuff and and that's good. But
Speaker 1: then you know, the heart of what he eats is
Speaker 1: this this kind of vegetable sludge which starts out at
Speaker 1: call a flower and accole and lentils and things that
Speaker 1: I actually like. But when you mush, yeah, it tastes
Speaker 1: it taste, I mean, it had almost had just like
Speaker 1: no taste. It tasted like dirt. And Brian swears it's delicious,
Speaker 1: but I had trouble getting it all down. Okay, can
Speaker 1: you talk to us about meeting him at the front door. Yeah, well,
Speaker 1: so you know, I've been following Brian for years and
Speaker 1: so I know exactly what he looks like and and
Speaker 1: and all that and you know, I we were setting
Speaker 1: up for this dinner and he sent me a text
Speaker 1: message while I was waiting in my car for him
Speaker 1: to arrive, and he said, I might look a little
Speaker 1: different this time. I just had um some fat injected
Speaker 1: into my face and I had an allergic reaction. And
Speaker 1: then when he finally did appear, I mean, his face
Speaker 1: was swollen about, you know, three times it's normal size,
Speaker 1: but he still had He's got this glowing, very beautiful,
Speaker 1: pale skin. And so you know, in the story, I
Speaker 1: say he looked like a giant porcelain doll, and he
Speaker 1: really did. And were you tempted to to join in
Speaker 1: that experiment? Not on that one? That one looked a
Speaker 1: little outside of my my comfort zone, you know. But Brian,
Speaker 1: to his credit, man, I mean, he really he takes
Speaker 1: all this stuff. It's stride. He just kind of laughed
Speaker 1: about it. His son came in and he just kind
Speaker 1: of had a giggle, like he's seen all this stuff before.
Speaker 1: And so Brian just does it and moves on. Okay,
Speaker 1: So are there takeaways for us mere mortals who who
Speaker 1: don't actually want to rewind the clock this obsessively that?
Speaker 1: But maybe you know, steal a couple of couple of
Speaker 1: things from his wisdom, like what what have you adopted
Speaker 1: from Brian Brian's routine that that I might want to
Speaker 1: consider not as much as I should, you would think,
Speaker 1: be like ave I wish? I wish I could say
Speaker 1: it was. I mean, if anyone's curious. So there's a
Speaker 1: couple of things I took away. If anyone's curious, they
Speaker 1: could go to if they search project blueprint, that's what
Speaker 1: this is called. And Brian John said he's got everything
Speaker 1: listening on this website, that he eats, that he puts
Speaker 1: on his face, all of that, And so you could
Speaker 1: kind of pick and choose where you want to get
Speaker 1: into this thing. I would say the big picture might
Speaker 1: take away is that you know, there really are people
Speaker 1: who are trying to move this field to to a
Speaker 1: better place. I mean, the whole point of this is
Speaker 1: like we hear about fad diets, you hear about the
Speaker 1: TB twelve method, and like no one knows if any
Speaker 1: of this stuff works. And so you know, he's publishing
Speaker 1: everything out the open, all his his data and and um,
Speaker 1: you know, and he's one of many people who are
Speaker 1: trying to advance this field and be open about what's
Speaker 1: going on. Not sure I'm ready to try the nutty pudding.
Speaker 1: Having said that, though, seriously, folks um in terms of
Speaker 1: what's going on inside his body, though, some of his
Speaker 1: doctors are excited, right, yeah, I mean, you know, some
Speaker 1: of this sounds kind of little nuts at first, blush,
Speaker 1: but then you look at his at his metrics is
Speaker 1: pretty good, you know. I mean, first of all, the
Speaker 1: guy is like I mean, if you look at him,
Speaker 1: he has ripped like professional athlete and beyond ripped, and uh,
Speaker 1: you know, like his resting heart rate is like forty three.
Speaker 1: He's got the lung capacity of an eighteen year old,
Speaker 1: He's got the gum inflammation of a seventeen year old,
Speaker 1: and so um, you know, out on me. Well see
Speaker 1: that's the point here. But yeah, no, I mean there's
Speaker 1: there's parts of him that are just clearly incredibly healthy,
Speaker 1: and according to this data, you know, he really has
Speaker 1: sort of reversed the age and the overall health of
Speaker 1: a lot of his innards. I think a lot of
Speaker 1: people might want to live longer so they can spend
Speaker 1: more time doing things that they love, so they contend
Speaker 1: more time with their families, so they can, you know,
Speaker 1: have a longer life. But there's this conundrum and reading
Speaker 1: your story actually just in the last thirty seconds that
Speaker 1: we have is this is so exhausting, and this is
Speaker 1: so all encompassing that it seems like to me he
Speaker 1: doesn't have time to to do those other things. Well, yeah,
Speaker 1: this is the one trick. I mean, like I said,
Speaker 1: I've known him for a while and we always debate this.
Speaker 1: I'm like, look, man, one of my favorite things on
Speaker 1: earth is to go have a really nice late dinner
Speaker 1: with a bunch of friends, a bit of wine, you know,
Speaker 1: And and he's just not that's not even an option
Speaker 1: for him. And um, you know, what he's doing is
Speaker 1: a full commitment. I think he would argue that he's
Speaker 1: at the forefront of this. He's a pioneer. The stuff
Speaker 1: is gonna get cheaper and easy to use over time.
Speaker 1: Is he happy though, He's beyond happy. I mean, this
Speaker 1: is sort of like a religious calling for him, you know. Well,
Speaker 1: next up gene therapies, as you write about some more
Speaker 1: experimental procedures. So we look forward to seeing what's next,
Speaker 1: uh for Brian Johnson. And I'm sure I'll be written
Speaker 1: by Ashley Vance Ashley a Bloomberg Business Week along week
Speaker 1: till Webber. Check out the new issue of the magazine.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 1: live week days from two to five pm Eastern on
Speaker 1: Bloomberg Radio, The Bloomberg Business a band You too. You
Speaker 1: can also listen live to our flagship New York station,
Speaker 1: Just Say Alexa play Bloomberg elve and Dirty. We are
Speaker 1: so excited about our next guest. In fact, sorry Charlie
Speaker 1: if I missed the cute because we were talking with
Speaker 1: him over the next week or so. Just big broad picture.
Speaker 1: We're gonna be hearing from some of the big media
Speaker 1: companies when it comes to earnings. Of course, Netflix already
Speaker 1: reported a blockbuster report thanks to a massive subscriber beat.
Speaker 1: When it comes to the media names, it's about grabbing eyeballs,
Speaker 1: boosting and holding out a subscribers by giving them great
Speaker 1: contact content. And our next guest, Tim really gets his
Speaker 1: space in a big way. Yeah, he's been in it
Speaker 1: as it's evolved in a really big way, from traditional
Speaker 1: broadcast and linear to TV to the explosion and streaming
Speaker 1: and mobile DVDs everything. Josh Stapan is the former president
Speaker 1: CEO of AMC Networks. You know him from such hits
Speaker 1: as Mad Men, Breaking Bad, The Walking Dead. It was
Speaker 1: spun off from table Vision Carol back in two thousand eleven,
Speaker 1: and he's got a new book out. I love it
Speaker 1: the title third Act. I think about my third act
Speaker 1: because I'm still in my first act. Reinventing your next chapter.
Speaker 1: Josh Saypan is in our Bloomberg Interactive Broker Studio. Thank you,
Speaker 1: Thank you so much for coming in. Well, thank you
Speaker 1: for having me pleasure. We have so much to talk about.
Speaker 1: Do you still like the media world when you look
Speaker 1: back at it, do you think it's just kind of
Speaker 1: unbelievable and what it's, what it was, what it's become continues,
Speaker 1: it's wonderful. And uh, I can't get enough television. My
Speaker 1: wife and I sit down every night and no joke, actually, uh,
Speaker 1: particularly new shows. There's this abundance of shows, and I
Speaker 1: think television, many would agree what goes on the screen
Speaker 1: at home has come to dominate so much of the conversation,
Speaker 1: and so we sit down frequently and say what do
Speaker 1: you want to watch? What are you watching? God? Well,
Speaker 1: it's a you know, honestly, it's Academy Awards season after
Speaker 1: saying that, So I'm trying to be current as a voter. Yeah,
Speaker 1: on everything that might be so so I've been racking
Speaker 1: them up all they're also sort of findable, but I
Speaker 1: do have access to them. So, uh, you know, everything
Speaker 1: from Pinocchio, Tatar to Babylon to uh everything everywhere at
Speaker 1: once to the list goes on a spectacular list and
Speaker 1: then documentaries and then foreign films, and so there's not
Speaker 1: enough time. What about what about like quote unquote TV
Speaker 1: these days? Because TV these days is that it's such
Speaker 1: a loose it's like, well, no, I don't even mean linear.
Speaker 1: I mean I mean like you know, HBO weekly or
Speaker 1: a Netflix series drops all at once on Netflix, like
Speaker 1: what are you binging? What are you streaming? That's sure, Well,
Speaker 1: I have particular affection for AMC because of time and
Speaker 1: time there and uh so the AMC bought the and
Speaker 1: Rice Library, and so Mayfair Witches and is new and
Speaker 1: Interview with the Vampire is wonderful, and uh as well
Speaker 1: as finishing up the end of Better Call Soul and
Speaker 1: Dark Winds, and the list goes really on no Better
Speaker 1: Call Soul spoilers place. So it's wonderful, But but we do,
Speaker 1: of course watch HBO, Netflix, Apple, etcetera, etcetera. Jus, how
Speaker 1: do you feel about like it's funny? I watched Bad Sisters,
Speaker 1: which I adored. I don't know if you saw it,
Speaker 1: but I watched it week to week because it was
Speaker 1: one and it was kind of fun to look forward
Speaker 1: to when it came out. And I hadn't done that.
Speaker 1: I mean, so often I just something gets dumped and
Speaker 1: I just sit there for hours. Do you like that model?
Speaker 1: Do you think it's a smart model. Do you think
Speaker 1: it's better that we're kind of waiting for something every week? Well?
Speaker 1: I would I would defer to today's experts who are
Speaker 1: deep in the belly of the beast and can understand
Speaker 1: the implications of all that. I will just say as
Speaker 1: a consumer, I don't mean this to be in any
Speaker 1: sense cute. I like it both ways, you know. Yeah,
Speaker 1: I'd like to binge shows and then I can talk
Speaker 1: about something that was on Hulu, which is my wife
Speaker 1: and I liked a show called Patient with Steve Carrell.
Speaker 1: Wonderful show effets on Hulu and we spent and it
Speaker 1: was anxiously awaited watching new episodes each week. So I
Speaker 1: think it's wonderful both ways, depending upon the content. The
Speaker 1: business imperatives behind it are what they are, and people
Speaker 1: who are closer to it today can tell you more
Speaker 1: than I can. I do think about like the explosion
Speaker 1: and just the demand for content and what that has
Speaker 1: done for directors, producers, actors, right, I mean actors who
Speaker 1: would you think only on the big screen? Right, like
Speaker 1: to to have a series on one of the streaming services.
Speaker 1: It's a really cool thing and I think we all benefit.
Speaker 1: But how do you think about the evolution if you
Speaker 1: go back to your early days right when you I
Speaker 1: forget the name of the firm, but it became harder cable,
Speaker 1: like it's hard to think about what it was. Well,
Speaker 1: I grew up really in a desert of television, um
Speaker 1: paucity of anything that was worthwhile. Um uh, there were
Speaker 1: rare in your book would maybe beg to different to
Speaker 1: talk about, because actually he was a really notable exception.
Speaker 1: Another person in the book named Bill Persky, who did
Speaker 1: who really featured strong women in his comedies and as
Speaker 1: it happens, to be a dear personal friends. So I'm
Speaker 1: very attached to both him and his extraordinary work, which
Speaker 1: began with Dick van Dyke and Katon lle So. But
Speaker 1: it was a different world and it really was, if
Speaker 1: not desert, it was desert with few oasis. And today
Speaker 1: it is land of abundance, and I think it's a
Speaker 1: wonderful land of abundance for creative expression. Do you think
Speaker 1: forgive me, tim, but I just went to it. Do
Speaker 1: you think we're getting better in terms of diversity and
Speaker 1: and really serving different audiences? You know, I'd like to
Speaker 1: think yes. I really would like to think yes rather emphatically. Um.
Speaker 1: And you know, shows are coming to mind that are
Speaker 1: really portraying people who look like the world they don't
Speaker 1: look like a different world. And I think that's a virtuous,
Speaker 1: wonderful and really truly truly important thing. Because media is
Speaker 1: so it actually gets inside people's skin. And so if
Speaker 1: they see an embrace of diverse people, I think it
Speaker 1: really helps and influences behavior rather profoundly. I'll tell you
Speaker 1: an anecdote. Another person who's in the book is ex
Speaker 1: Senator Governor Bob Kerrey, who went on to be university
Speaker 1: president and UM and then banker and is also i
Speaker 1: should say, a poet along the way, and was earlier
Speaker 1: a pharmacy in military person and I think there's a
Speaker 1: fourth and a fifth act in there, but that's okay,
Speaker 1: exactly right. But he made a comment we were fortunate
Speaker 1: enough years ago to have been involved with the show
Speaker 1: in its early years called Queer Eye for This Great Guy.
Speaker 1: And Bob commented that that show when he was in
Speaker 1: Nebraska had perhaps more to do with defanging homophobia than
Speaker 1: some legislation, because it made humans seem familiar who were different.
Speaker 1: And I think one sees that, you know in in
Speaker 1: you know, in theater, you see it in books, you
Speaker 1: see it particularly in TV, which is in your home
Speaker 1: every day. You said theater, you run a theater, as
Speaker 1: you own a theater as well. Game for it? Um,
Speaker 1: you really love media and content, don't you want to
Speaker 1: talk about what's not to like? Well? I think there
Speaker 1: is some stuff that has a lot of people concerned
Speaker 1: and the idea of short form stuff and watching on
Speaker 1: your phone. A study back in October by OMDA said
Speaker 1: that TikTok overtook Netflix to become the second most popular
Speaker 1: service in the US. YouTube was at the top when
Speaker 1: it came for people under thirty five watching. Does that
Speaker 1: concern you at all? You know, I'm not sure I
Speaker 1: am an authority on what the impact of short form
Speaker 1: and TikTok, but from the perspective of art, from the
Speaker 1: perspective of you know, what we are consuming, you know,
Speaker 1: I guess truly if you don't mind, again, don't let
Speaker 1: me feign authority. I think, let's be honest, you know
Speaker 1: a thing or two about media. You've been in this space,
Speaker 1: the social implications of it, the social implications a long
Speaker 1: term social implications of media, social not and even on
Speaker 1: art are hard to predict. For a couple of comments,
Speaker 1: if I may, One is that, um, I think it's
Speaker 1: rich and wonderful that younger people can create. I mean that.
Speaker 1: I don't mean that just to be great great media.
Speaker 1: I think people, young people, kids are at home and
Speaker 1: they may be fashioning sort of expertise and careers in
Speaker 1: media by it was making YouTube videos and making TikTok videos.
Speaker 1: And I think it is an on ramp to being
Speaker 1: creative people because they're learning tools. No kidding, you've seen it,
Speaker 1: you see it in your family. I think it's a
Speaker 1: sort of wonderful thing. And you know, I think then
Speaker 1: there's a whole subject about um implications of and social
Speaker 1: implications of and I think one might need a sociologist
Speaker 1: or anthropologist to talk about and figure out all that
Speaker 1: you've talked about. Some of the people in the book,
Speaker 1: tell us first of all, why you wanted to write
Speaker 1: this together. Sure, thank you for asking. So, about three
Speaker 1: or four years ago, as I contemplated the end of
Speaker 1: a conventional career, was that hard? Well? Yeah, because I
Speaker 1: loved it so much. Great company, great play, great people,
Speaker 1: great shows, and very attached to it. And but there's
Speaker 1: an inevitable time to do something different, and um uh,
Speaker 1: So I just began to observe people, some of them
Speaker 1: like me, some different and what they did if they
Speaker 1: had the benefits of continued health and and a degree
Speaker 1: of means that gave them some flexibility. And I became
Speaker 1: a little interested in what do you do after you
Speaker 1: do what you do if you have that opportunity. And
Speaker 1: so I began to observe sort of the good, the bad,
Speaker 1: the indifferent, and the spectacular. And so I thought it
Speaker 1: was a good subject maybe and I'll see if I
Speaker 1: can write a book about it. And so I presented
Speaker 1: it to a publisher and they said, okay, so how
Speaker 1: do you think about it? In the context of your
Speaker 1: own career though, of your own third act? Well, is
Speaker 1: this book your third act? This book a second act?
Speaker 1: That would be a little meta. Uh So, you know,
Speaker 1: what are you doing? Well? I wrote the book, that's it,
Speaker 1: um So, I think it's a part of it. But
Speaker 1: I have some things that I'm starting to do that
Speaker 1: have been pretty appealing to me. Um. I've been working
Speaker 1: I mentioned to you Columbia University, and I've been volunteering
Speaker 1: actually at the Fortune Society with people who have been
Speaker 1: recently released from prison. What's your friend of mine is
Speaker 1: involved with and working on making some independent films, which
Speaker 1: is near and due to my heart. I was at
Speaker 1: Sundance last week. Uh and so a bunch of different things.
Speaker 1: I think it's so important because I do think there
Speaker 1: are people who get through some really significant accomplishments, you know,
Speaker 1: and maybe think that's it, and then you realize wit
Speaker 1: you've got, You've got another runaway, You've got more things
Speaker 1: you can do. Some of the names in your book, Josh,
Speaker 1: are definitely household names. We would know who they are.
Speaker 1: Some of them aren't. Go through some of the names,
Speaker 1: and I'm curious how you decided the list. Sure, well,
Speaker 1: you know. Um, I worked with a wonderful editor who
Speaker 1: has great judgment and I think helped craft the balance
Speaker 1: of the book. And she and I thought, uh that
Speaker 1: it would be good to have a mix of people
Speaker 1: who are well known and who one would recognize. Robert Redford,
Speaker 1: I mentioned Sundance, was a painter and actor. His first
Speaker 1: film direction job was he won an Academy Award for
Speaker 1: ordinary people and obviously an environmentalist and really then gave
Speaker 1: freedom to independent film through the Institute. The festival's better known,
Speaker 1: So he's involved. Alan alda remarkable guy who had the
Speaker 1: privilege of meeting people my age know him as Hawkeye Mesh.
Speaker 1: But he went on to do eight years of a
Speaker 1: science show on public television and then set up the
Speaker 1: all the Institute for Communications and trained no fewer than
Speaker 1: five thousand doctors in how to communicate better patients. So
Speaker 1: the pretty darn remarkable u use of time and sort
Speaker 1: of agency. Um, and the glorious Steinham really needs no summary.
Speaker 1: She sort of speaks for her self. I think, just
Speaker 1: sort of the modern feminist. How did the people who
Speaker 1: you profiled, who you write about come to mind for you?
Speaker 1: Did you tap into your own network? Did yeah, I did.
Speaker 1: I did a process. I did a bit, and then
Speaker 1: I had the help of the woman named Ellie Strauss
Speaker 1: who did some research. She's a friend of my daughter actually,
Speaker 1: and she's a teacher, and so I was able to
Speaker 1: impose upon her and say, do you have some downtime,
Speaker 1: because she's a very bright young woman. And so she
Speaker 1: did some research and we found people who were not
Speaker 1: known at all. There are forty five of those, and
Speaker 1: they're they're just great to read about. I'll mention a
Speaker 1: couple of there's I was saying it when we were talking.
Speaker 1: Hope partly work. She's seventy two. She had a career
Speaker 1: at Verizon. She had attended the Brooklyn Children's Museum as
Speaker 1: a kid, and then she founded as the chair of
Speaker 1: the Bronx Children's Museum that opened its concrete doors a
Speaker 1: couple of months ago. It was reported in the New
Speaker 1: York Times. Jamal Joseph grew up in New York. He
Speaker 1: was gotten into some trouble twice. He became a black panther.
Speaker 1: He served some hard federal time and then got degrees
Speaker 1: in advanced degrees while in prison, taught at Columbia and
Speaker 1: then developed this thing called impact theater, which really advances
Speaker 1: kids and teachers in theater, and it's immensely helpful to them.
Speaker 1: There's more fanciful people. A guy named Art Chill who
Speaker 1: became a stand up comedian at in his late seventies.
Speaker 1: How wild is well? I love this also. I think
Speaker 1: a woman who became a flight attendant in our fifties,
Speaker 1: somebody who became a firefighter. Yes, I loved those stories.
Speaker 1: You know, they're just they actually just elevate me, you know,
Speaker 1: to think, um, I'm gonna go be a firefighter. Well,
Speaker 1: it's so funny because we had a guest earlier in
Speaker 1: the week and I'm not being critical, but I was
Speaker 1: talking about that by the time you're forty five year
Speaker 1: middle age and nobody wants to hire you, and and
Speaker 1: and then to see the third act. You know, just
Speaker 1: there are people who are so productive well into their
Speaker 1: eighties nineties, and they're doing There's a guy named Leonard
Speaker 1: Tao who is nineties five, four or five, who is
Speaker 1: doing it's indescribable what he is doing with his time
Speaker 1: and resource. What did the research of the book and
Speaker 1: writing the book, putting it together and learning about all
Speaker 1: these people teach you about the way that you want
Speaker 1: to spend this time. Yeah, well I think, um, if
Speaker 1: there was, I guess a lesson and it was for me. Um,
Speaker 1: sort of don't lay on the couch. Uh, it's not
Speaker 1: agreeable anyway, and um, don't watch too much tea. We
Speaker 1: started talking about what working too much television. Maybe don't
Speaker 1: watch daytime television or don't binge during the day, get
Speaker 1: out of the house unless it's Bloomberg TV, unless it's
Speaker 1: what it is interesting in this time post pandemic, where
Speaker 1: it's like, go live life. Yeah, you know, it's really honestly,
Speaker 1: the few little things I've done which sounds they're inconsequential
Speaker 1: in the scope of things, but they've been for me.
Speaker 1: I'm not so sure any they're helping anybody in the world.
Speaker 1: I hope a teeny bit. They're certainly making my eyes
Speaker 1: open to the world because my world has been pretty
Speaker 1: um I wouldn't say monolithic, but um, familiar for a
Speaker 1: very long period of time. We really enjoyed this, and
Speaker 1: good luck with the book. And when you're on your
Speaker 1: third act or fourth act or whatever, come back in
Speaker 1: and come talk with us. Thanks so much for having you.
Speaker 1: We wish you well. Josh Sapan. He's former president and
Speaker 1: CEO of a MC Networks. Check out his book I
Speaker 1: put it out on Twitter. Um Josh. His new book
Speaker 1: is the third Act, reinventing your next Chapter. So delighted
Speaker 1: to have him here in studio. Thanks again. You're listening
Speaker 1: to the Bloomberg Business Week podcast Cat Just Live week
Speaker 1: days from two to five pm Eastern on Bloomberg Radio,
Speaker 1: the Bloomberg Business App, and you too. You can also
Speaker 1: listen live to our flagship New York station, Just Say
Speaker 1: Alexa play Bloomberg Love and Dirty. Uh. If you've spent
Speaker 1: any time in the dairy aisle of the supermarket, you
Speaker 1: have definitely seen cheese, yogurt, butter and more from Tillamook.
Speaker 1: It's a dairy co ops started back in the early
Speaker 1: nineteen hundreds. Today is a one billion dollar brand that
Speaker 1: sells products everywhere from Albertson's to Target, to Walmart and
Speaker 1: so much more. And we got the CEO with us.
Speaker 1: Patrick Kreitzer, the CEO of Tillamook. He joins us now
Speaker 1: via zoom from Oregon. Okay, Patrick, we're gonna talk about
Speaker 1: a lot. We're gonna talk about the business. We're gonna
Speaker 1: talk about inflation. We're gonna talk about what you see
Speaker 1: in the economy, But first, what the heck do you
Speaker 1: put in the ice cream? Because everyone I talked to,
Speaker 1: including you know myself, because I love the Tillamook ice
Speaker 1: cream husband, huge fan, Jason Kelly, our colleague, when he
Speaker 1: found out I was interviewing you, he said, you have
Speaker 1: to try the ice cream. And I'm like, I know,
Speaker 1: We've already talked about the ice cream. What's up with
Speaker 1: the ice cream? Well, there's lots of cream in it.
Speaker 1: We put a lot of dairy in the in every
Speaker 1: one of those ice cream cartons. A lot of a
Speaker 1: lot of love goes into making that, and I'm glad
Speaker 1: you appreciate. So the secret is is the is the
Speaker 1: dairy like it's an extra serving of dairy or something, right?
Speaker 1: It is, Yeah, lots of extra cream. And when you
Speaker 1: make ice cream, uh, you know, you you determine how
Speaker 1: much cream to put in there, and almost also how
Speaker 1: much sort of how much to fluff it up. And
Speaker 1: we do a little less fluffing and a little more
Speaker 1: cream and it tastes fantastic. What's weird, though, is and
Speaker 1: this is a business question, It's not like it's much
Speaker 1: more expensive than sort of competitors right there in terms
Speaker 1: of how you how you think about how it's presented,
Speaker 1: because it comes as like a big you get a
Speaker 1: lot for your money. It's like still a good value.
Speaker 1: How do you make that How do you calculate that move?
Speaker 1: Because the dairy part is the expensive part. It is,
Speaker 1: you're right, the expensive part. And I'm glad you you
Speaker 1: recognize that we we position the brand as it has
Speaker 1: been for over a century, um as everyday premium, which means, yeah,
Speaker 1: you're gonna pay a little bit more for it, but
Speaker 1: there's a lot of value packed into that ice cream
Speaker 1: carton or into that package of cheese and uh. And
Speaker 1: so we're trying to make it accessible and off that
Speaker 1: you're gonna pick it up every week, enjoy it every
Speaker 1: week in your home. Um, but you'll appreciate the quality
Speaker 1: that you paid a little bit more for. Hey, Patrick,
Speaker 1: you know you are in and out of I'm sure
Speaker 1: all of the stores that stuck your items. Um, there's
Speaker 1: a lot of competition out there, So how do you
Speaker 1: make sure that you do stand out? And I'd love
Speaker 1: for you to get into the relationship with your suppliers
Speaker 1: meeting the farmers and the individuals that you work with directly. Yeah, absolutely,
Speaker 1: and um, those two things are very connected for us
Speaker 1: because it all starts with that relationship with the farmers.
Speaker 1: We are a hundred and fourteen year old farmer own
Speaker 1: cooperative UM. And in fact, cheese, which is our primary product,
Speaker 1: is made the same way it was a hundred and
Speaker 1: fourteen years ago, and our farmers, uh, you know, require
Speaker 1: demand that that we that we keep the recipes the
Speaker 1: same and and as we were just talking about, put
Speaker 1: put a bit extra value in in every product, and
Speaker 1: that's important to them, UM, and that's helped to stand
Speaker 1: out on the shelf as we've expanded across the country.
Speaker 1: Up until two thousand fourteen, we were a much beloved
Speaker 1: Pacific Northwest brand, and then beginning in two thousand and fourteen,
Speaker 1: we began expanding around the West. And now we've been
Speaker 1: very pleased with the acceptance we received around the country
Speaker 1: as we've expanded into as you said at the top
Speaker 1: of the show, here every market in the country, and
Speaker 1: we're now in one quarter of US households. But we've
Speaker 1: got a lot more people to introduced, uh introduced to
Speaker 1: the Tillamook brand. Well, I have to say just our
Speaker 1: own personal experience, and I did so my husband a
Speaker 1: quick message. I'm like, guess who we have on We
Speaker 1: have the CEO of Tillamook and he's like, love their
Speaker 1: ice cream. I have to say, the search for it
Speaker 1: sometimes in this market, UM is really tough. I was
Speaker 1: a target recently and there was like only two cartons.
Speaker 1: I mean, so are you continuing to grow? How do
Speaker 1: you like make sure that you can meet all the
Speaker 1: demand as you expand? And yeah, yeah, thank you, Yeah,
Speaker 1: we are continuing to UM to expand. In fact, before
Speaker 1: two thousand eighteen, we were all the west of the Rockies,
Speaker 1: so all the places that folks are are beginning to
Speaker 1: discover us. You know, there might not be quite as
Speaker 1: much on the shelf there as we'd like to like
Speaker 1: to have, and and we're we're trying to rectify that.
Speaker 1: We're bringing product out there as fast as we can. UM.
Speaker 1: But you know, one thing I'll suggests is when you're
Speaker 1: in the store and you don't think there's enough Tillamook product,
Speaker 1: go talk to the store manager and that will help
Speaker 1: a little bit. Hey, uh, do you guys only uh
Speaker 1: produce products at the headquarters in Telemaco Rent, Oregon. No,
Speaker 1: we've actually expanded a bit UM since our early days
Speaker 1: of all the production being in Tillamook. All of the
Speaker 1: dairy farmers UH that own the cooperative UH do live
Speaker 1: and farm in Tilama County. UH. Many people that know
Speaker 1: our brand don't know that Tillamooks a town in a
Speaker 1: place actually the high school mascot is the Cheesemaker. So
Speaker 1: we're very much integrated into that community and and owned
Speaker 1: by that community. UM. But as we've expanded around the country,
Speaker 1: we've partnered with other cooperatives and and and other manufacturing
Speaker 1: partners to make product to our very UH precise and
Speaker 1: high expectations and specifications in other places in the country,
Speaker 1: so we can make sure we're getting product into those
Speaker 1: stores where people are Listen. Is there any discernible difference
Speaker 1: between something made in one facility with with UH dairy
Speaker 1: from one area versus another area? There isn't. UM. You know,
Speaker 1: we do make all of our cheddar cheese, which is
Speaker 1: our core product. We do make all of that in Oregon, UH,
Speaker 1: and then we moved around the country. We cut and
Speaker 1: rapid in a few different places, but it's fundamentally made
Speaker 1: all in Oregon and with our recipe, but where we
Speaker 1: do make other products, for example, cream, cheese or ice
Speaker 1: cream with partners where in those factories are very close partnerships.
Speaker 1: In some cases our partners will put in equipment specific
Speaker 1: to the way we make product because of you know,
Speaker 1: we're not varying the way we make it, so you
Speaker 1: can't tell any difference if you've come visit us at
Speaker 1: our visitor center until MC Oregon, which a lot of
Speaker 1: people do. We we've had one point three million people
Speaker 1: visit us in a single year there in our factory
Speaker 1: on the coast. Become visit us there, the products gonna
Speaker 1: be exactly the same as you find in Wigmants Patrick,
Speaker 1: what's the bulk of your business? Is that the ice
Speaker 1: cream or is it the cheese? As you say, your
Speaker 1: main product and where is the most growth most of
Speaker 1: our business is in the is cheese ice cream has
Speaker 1: been our fastest growing product. It's it's turned out to be,
Speaker 1: you know, as we've expanded into new regions in the US,
Speaker 1: has turned out to be sort of the easiest entry
Speaker 1: point for consumers to kind of find us that you know,
Speaker 1: hopefully that big wall of a full door of of
Speaker 1: ice cream flavors with our bright colored packaging. UM kind
Speaker 1: of draws people into the brand. And then once they
Speaker 1: find us there, they like to move and discover our
Speaker 1: cheese and our cream cheese and our other products. You know,
Speaker 1: consumer product company is always looking for a good brand.
Speaker 1: You seem like you would be ripe for UM. The
Speaker 1: taking UM, staying a coop, cooperative, staying private, still the
Speaker 1: plan and just got about five seconds. Yeah, that is
Speaker 1: the plan. Certainly we get those calls, but our farmers
Speaker 1: are very proud to own this brand and this company
Speaker 1: and what it's meant to our local community. Well to
Speaker 1: come back soon. This is a great story and certainly
Speaker 1: something that is very relevant to our worlds. I'm sure
Speaker 1: Tim will have some ice cream ice cream tonight, and
Speaker 1: I'm sure I will as I get the chocolate chip
Speaker 1: mint that's my husband's. That's what I like to um. Patrick,
Speaker 1: Thank you so much. Patrick kritz Are He's CEO of
Speaker 1: Temo joining spa Zoom from Oregon. Really fun conversation. This
Speaker 1: is Bloomberg. You're listening to the Bloomberg Business Week podcast.
Speaker 1: Catch us live week days from two to five pm
Speaker 1: Eastern on Bloomberg Radio. The Bloomberg Business a band. You two.
Speaker 1: You can also listen live to our flagship New York station.
Speaker 1: Just say Alexa, play Bloomberg. Elvendy. We're gonna stay in
Speaker 1: Miami and welcome in as well our Bloomberg TV audience
Speaker 1: and you too. You and Bloomberg Originals are streaming service
Speaker 1: because we've got a special guest. Cathy Wood is back
Speaker 1: with us. She's the founder, chief investment Officer and CEO
Speaker 1: of our Investment Management, joining us from St. Petersburg, Florida. Kathy,
Speaker 1: great to have you back with us. Happy New Year,
Speaker 1: Happy New Year. I'm I'm really happy to be with you,
Speaker 1: and it is so far a happy new year. It's
Speaker 1: definitely a different tone. Well, you know, it's interesting we
Speaker 1: watched yesterday continuing today even though we're off our highs.
Speaker 1: When it comes to stocks, Kathy, it seemed the more J.
Speaker 1: Powell talked, the more you know excitement you saw, and
Speaker 1: it moves to the upside when it came to both
Speaker 1: stocks and bonds. Does this market reaction make sense to
Speaker 1: you or do you see some irrational exuberance if you
Speaker 1: will know? If anything, I I saw an exaggerated UH
Speaker 1: reaction last year to fears that inflation and interest rates
Speaker 1: were embedded in the system UH like they were in
Speaker 1: the seventies, and we just didn't believe that at all.
Speaker 1: In fact, we were seeing a lot of early lines
Speaker 1: of UH inflation coming down, actual deflation surfacing. So this
Speaker 1: does not surprise us. I think what has happened here
Speaker 1: there there are three people who have weighed in in
Speaker 1: in in the last week who really have changed their
Speaker 1: points of view. One is Larry Summers. Larry Summers was
Speaker 1: almost apoplectic last year, so this is the former Treasury
Speaker 1: sector almost eplectic about inflation. And I think he truly
Speaker 1: influenced the FED because he was so sure that we
Speaker 1: were in a seventies style inflation. If you'll notice in
Speaker 1: the last week he said, okay, now, don't don't signal
Speaker 1: what you're going to do in the future. We're seeing
Speaker 1: some economic weakness year. And I think the other thing
Speaker 1: he was saying, not explicitly, was hey, some prices are
Speaker 1: coming down that I didn't expect to come down. You know,
Speaker 1: the oil prices roughly half of where it was last March.
Speaker 1: So that's that's the first person. The second person was
Speaker 1: Treasury Secretary Janet Yellen. And remember, I think the market
Speaker 1: last year got really upset when she changed her mind
Speaker 1: on transitory and uh and and and I think that
Speaker 1: fed Chairman Powell as well, and uh and and turned
Speaker 1: him into an even more hawkish mode along with the
Speaker 1: rest of the Ford board members. She this week said
Speaker 1: that now that inflation is coming down, we're probably going
Speaker 1: to be looking at the bigger risk being kind of
Speaker 1: mired in low inflation low growth. That was a big
Speaker 1: and it effectively says, wow, maybe it was transitory after all.
Speaker 1: It was just a little longer than we expected. Who
Speaker 1: knew supply chain problems would last two to three years?
Speaker 1: Who knew Russia would invade? And then the third the
Speaker 1: third thing that happened. This was really important. I think
Speaker 1: in the Q and A um Herman Powell himself said,
Speaker 1: I agree with Lyle Brainerd. We do not believe we're
Speaker 1: in the middle of a weight price spiral. And that's
Speaker 1: another code phrase for the seventies style inflation. So I
Speaker 1: think that is what the markets responding to. Cathy, you've
Speaker 1: talked about the threat of deflation, So what's your view
Speaker 1: of that versus inflation right here? Well, a couple of
Speaker 1: things we see the deflation in the pipeline because commodity prices,
Speaker 1: which are at the top of the funnel, have been
Speaker 1: coming down on balance. Now we're we're seeing right now
Speaker 1: some interruptions in that as China moves away from its
Speaker 1: zero COVID policy. But I think the fake out here
Speaker 1: is China has been building inventories, particularly of energy. It's
Speaker 1: been getting Rusha's energy for discount to what the rest
Speaker 1: of us are paying, So why wouldn't it build inventories?
Speaker 1: So I think I think UM that fear is probably
Speaker 1: going to be or has been a little overblown in
Speaker 1: terms of ramifications for inflation. UH. And I also don't
Speaker 1: China's China's taking off. But anyway, we have the funnel.
Speaker 1: We had at a holiday time massive discounting UH. And
Speaker 1: even though we had massive discounting in the fourth quarter,
Speaker 1: inventory accumulation accelerated. That was the biggest surprise to me.
Speaker 1: Wait a minute, final sales where that punk uh. That
Speaker 1: inventories built even though retailers and others were trying to
Speaker 1: clear the shelves with these massive discounts. That was very
Speaker 1: interesting to me. So I think underlying demand here is
Speaker 1: UM Basically the consumer railing against price increases because real
Speaker 1: average wages have gone down and the consumer is going
Speaker 1: to win this battle. Kathy, I want to go back
Speaker 1: to the way that characterize what we heard from the
Speaker 1: FED and J Powell yesterday, because he also said some
Speaker 1: other things like further rate hikes will be appropriate. It's
Speaker 1: premature to declare victory. We have a lot of work
Speaker 1: left to do, and if our outlook turns true, then
Speaker 1: I don't see us cutting rates this year. What convinces
Speaker 1: you that his views have changed. Well, I think he
Speaker 1: is looking at the bond market and he's saying what
Speaker 1: he should say as as a FED chairman who has
Speaker 1: been very concerned about inflation. He can't turn on a dime.
Speaker 1: But just look at what the bond market saying. The
Speaker 1: long term bond yield peaked in October at four point
Speaker 1: three percent, and today we got down to I believe
Speaker 1: three point three five. You know, if if you look
Speaker 1: at the tenure bond yield as a proxy for what
Speaker 1: effectively nominal GDP give or take a little uh nominal
Speaker 1: GDP growth will be over the next ten years, that
Speaker 1: doesn't need leave a lot of room for for much inflation.
Speaker 1: If we're going to have real growth over the next
Speaker 1: ten years. So I think the markets are speaking loudly.
Speaker 1: I think the inverted Yiel curve, we're still around seventy
Speaker 1: basis points haven't been that. We haven't seen it this
Speaker 1: low since the early eighties when Vulcar was trying to
Speaker 1: strangle inflation out of the system, and he did so. Cathy,
Speaker 1: forgive me, I want to jump in for a second,
Speaker 1: because so are you expecting the FED to cut rates
Speaker 1: this year? I would not be surprised to see the
Speaker 1: Fed cut rates this year. Uh. And one of the
Speaker 1: other reasons that we're very focused on this message that
Speaker 1: the bigger risk is deflation, it's also a very big opportunity.
Speaker 1: Um when when we look at deflation, there are there's
Speaker 1: good deflation and there's bad deflation. The bad deflation is
Speaker 1: caused by demand destruction. The good deflation creates demand. And
Speaker 1: that is what our research is centered on, which is
Speaker 1: illogically enabled innovation that rides down learning curves, which are
Speaker 1: expressed by cost declines, which turn into price declines. You'll
Speaker 1: notice that Tesla is cutting cutting prices and many many
Speaker 1: people jump to the conclusion that, oh, they're having so
Speaker 1: much trouble now there's so much more competition. No Tesla
Speaker 1: can cut prices now that supply chain issues are passing
Speaker 1: us because it is riding down a cost curve. The
Speaker 1: battery cost curve declines. And I think it's battery costs
Speaker 1: are lower than anyone else's. It's drive train costs is
Speaker 1: more more correctly, UH said, are are lower than anyone's
Speaker 1: out there. And so he wants he wants to proliferate
Speaker 1: electric vehicles to save us from environmental disaster. That is
Speaker 1: his mission, and he is going to drive down prices.
Speaker 1: When you drive down prices, units explode. It's no surprise
Speaker 1: to us even without price cuts. Last year that electric
Speaker 1: vehicle demand was up more than sixty percent while gas
Speaker 1: powered demand was down. I believe seven percent. The consumer
Speaker 1: pref shift has occurred. We are now in prime time
Speaker 1: for electric vehicles. I want to go back to Tesla
Speaker 1: in a moment, but I want to go back to
Speaker 1: here our innovation E t F. We've done the story
Speaker 1: on Bloomberg. You guys had the best month on record
Speaker 1: for the fund, up twenty eight percent. All r E
Speaker 1: t F s, all the eight ones E t F
Speaker 1: s are up seven of them in double digits. Do
Speaker 1: you see that as vindication for your investment theses, um,
Speaker 1: and do you think it can continue? Yes, we believe
Speaker 1: that Innovation was one of the biggest victims of the
Speaker 1: of a massive interest rate in increase we saw last
Speaker 1: year and less than a year, I think eighteenfold increase
Speaker 1: in interest rates. It was like a massive earthquake. And
Speaker 1: the other victim, of course was the other very long
Speaker 1: duration asset out their long term bonds. Uh. They were
Speaker 1: hit at least through October, if if my numbers are correct,
Speaker 1: The long bond market had not seen that um, that
Speaker 1: bad a year since the seventeen hundreds. We're not We're
Speaker 1: not talking post World War two. We're talking about the
Speaker 1: That gives you a sense of the shock to the system,
Speaker 1: and the shock to our strategy was palpable. Boy, we
Speaker 1: felt it every time Chairman Pale spoke. We're speaking with
Speaker 1: Cathy Wood, CEO of ARC Investment Management. Kathy Carroll just
Speaker 1: asked you about the performance in January and she mentioned
Speaker 1: that it's the best month ever for the ARC Innovation
Speaker 1: e t F. The thing is is that the jump
Speaker 1: in performance hasn't been met with in the way of
Speaker 1: flows with investors putting money back into ARC. Perhaps this
Speaker 1: is because it's been a tough couple of years for
Speaker 1: the e t F and for many of your E
Speaker 1: t f s. How do you win them back? Well, actually,
Speaker 1: I don't think we lost many investors. I think the
Speaker 1: shock to most people is how well we held our
Speaker 1: assets in Our underperformance started in February of twenty one,
Speaker 1: when people were starting to get vaccinated, going back to work,
Speaker 1: and these fears of inflation started to surface. So since
Speaker 1: February of twenty one, we have seen a massive down
Speaker 1: round in our innovation strategies, and in twenty one we
Speaker 1: had very significant inflows, most of which we kept. I
Speaker 1: think the net was seventeen billion that year. Last year
Speaker 1: again a horrific year. I think for the year our
Speaker 1: flagship was so a r k K was in flows
Speaker 1: one more than one point five billion dollars, and I
Speaker 1: think that shocked a lot of people. What we saw
Speaker 1: was averaging down. Uh. Many of our loyal shareholders did
Speaker 1: average down, and I think one of the reasons they
Speaker 1: did is we were out there every step of the way,
Speaker 1: giving away our research, reassuring our clients that actually innovation
Speaker 1: solves problems. And we have so many problems now created
Speaker 1: by supply chain problems, the war created by the FED,
Speaker 1: and the demand destruction which is hurting margins, which technology
Speaker 1: will solve in terms of increasing productivity. And I think
Speaker 1: because we are so prolific in in our research, our
Speaker 1: analysts are amazing in terms of the kind of original
Speaker 1: research they're doing, so our clients and others are reading
Speaker 1: research from us that they're not seeing from anyone else
Speaker 1: or anyone at all. And I wouldn't get even out
Speaker 1: And I want to get into that in a moment,
Speaker 1: because I do love it, Cathy, like you've got over
Speaker 1: a hundred fifty pages and your big ideas for for
Speaker 1: this year, and it's a lot of things that we
Speaker 1: talk about. What I do want to ask you though,
Speaker 1: after a sixty percent drop in our innovation the e
Speaker 1: t F last year, and I know it was a
Speaker 1: tough year for form many assets, do you find any
Speaker 1: of your investors kind of treating ARC a little bit,
Speaker 1: you know, more cautiously. I think one thing that happened
Speaker 1: last year is we were able with a number of papers.
Speaker 1: We were uh we called it our ground war. We
Speaker 1: were trying to help investors and advisors understand that, UM,
Speaker 1: if you take a look at truly disruptive innovation, which
Speaker 1: is all we do UM, and you look at other
Speaker 1: growth portfolios, large cap growth, uh, you know growth generally,
Speaker 1: as well as the major benchmarks like the NASDACK, you
Speaker 1: won't find much truly disruptive innovation in them. And so
Speaker 1: as we were getting hit so badly, what we also
Speaker 1: saw is investors taking tax losses and some of NASTAC
Speaker 1: and other strategies and moving into our strategy, which was
Speaker 1: hit so hard because they did believe that we were
Speaker 1: going to rebound faster. We were the hit hit the hardest.
Speaker 1: Our research would suggest that that the two hundred trillion
Speaker 1: dollars that we expect by twenty thirty to be the
Speaker 1: market valuation pleased on disruptive innovation, that that had changed,
Speaker 1: that that hadn't changed. And so if you have a
Speaker 1: five year investment time horizon, yes, you move into our
Speaker 1: strategy and oh, by the way, we are the new NASTAC,
Speaker 1: which is one of the ways we are trying to convey. Look,
Speaker 1: if you want to look at the future and truly
Speaker 1: disruptive innovation the way the Nasdaq, the NASDAC performed in
Speaker 1: the eighties and nineties. That's where we went avation. Okay,
Speaker 1: look through that now you will not find the kind
Speaker 1: of disruptive innovation. It certainly doesn't dominate those indexes. Maybe them.
Speaker 1: Well that's true. That's the perfect segue, Kathy to gets
Speaker 1: you to weigh in on what we look for from
Speaker 1: the companies that are reporting this afternoon. Companies like Apple, Alphabet, Amazon,
Speaker 1: These are not companies that you necessarily are betting on.
Speaker 1: These are companies that you think can be disrupted. What
Speaker 1: do you watch for with them? What can they tell
Speaker 1: us about how the economy is? And you know what
Speaker 1: what arc should be looking at. Yes, well you know
Speaker 1: when I say we don't own those in our flagship strategy,
Speaker 1: we do own them in some of our more specialized strategies.
Speaker 1: But these two are the companies have enjoyed incredible success.
Speaker 1: They have created big, big markets, and to move up
Speaker 1: tenfold a hundredfold from here is going to be difficult.
Speaker 1: We're not saying they're not going to be successful, but
Speaker 1: we are saying a few things. Take Amazon. Amazon is
Speaker 1: not a social network. We have moved into a world
Speaker 1: of social commerce, so we own Shopify. Shopify is supporting
Speaker 1: Instagram and TikTok and others that have that that are
Speaker 1: taking really social commerce and scaling it. Um and Amazon
Speaker 1: will not become a social network. It is not one.
Speaker 1: It's a good online uh retailer um and I would
Speaker 1: put it in a more mature category of online retail.
Speaker 1: That's not what we do. If you look at Google
Speaker 1: or alphabet UM, everyone's talking about chat GPT, and we
Speaker 1: do believe that it is going to put search at risk.
Speaker 1: Search is of Google's revenues. Now. We also believe, however,
Speaker 1: that the Google is going to harness AI as well.
Speaker 1: I mean it has it owns deep mind. It is
Speaker 1: one of the best AI companies in the world, but
Speaker 1: I think it has been so caught up in fears
Speaker 1: about legal liability associated with the dangers created by about
Speaker 1: Microsoft and Microsoft's big investment chat GPT. Do they have
Speaker 1: the potential to overtake Google when it comes to search
Speaker 1: because of the way they are harnessing AI. I I
Speaker 1: think that's the big threat. I think that's why Sundar
Speaker 1: went to code read at at at Google. I think
Speaker 1: they're going to become very aggressive. So yes, yes, we
Speaker 1: absolutely are are focused on what open AI and Microsoft
Speaker 1: are going to do together. Kathy. You know one thing
Speaker 1: is and you know for our TV and our streaming
Speaker 1: service and YouTube, we've got you know, the share prices
Speaker 1: of Apple, Amazon, Meta and Alphabet up there. I mean
Speaker 1: you're looking at Meta up more than and it was
Speaker 1: higher at its best levels of the session. I do
Speaker 1: like how you think about innovation and things that are
Speaker 1: gonna be impacting us in years to come. Is the metaverse? Uh,
Speaker 1: something that you guys think about that this is an
Speaker 1: important trend or tvd well. Yeah, in Japan we subadvise
Speaker 1: a fund for Nico Asset Management UM called the Metaverse.
Speaker 1: So yes, we are in the very early days of
Speaker 1: what will become very immersive digital experiences. In fact, we
Speaker 1: believe that more than half of our spending will end
Speaker 1: up online as opposed to UH through physical stores. UH.
Speaker 1: And and that's part of our big ideas this year.
Speaker 1: Are Our team UH, led by Frank Downing and Nick Bruce,
Speaker 1: have done a terrific job Andrew as well, pulling together
Speaker 1: how this new world is going to work. So absolutely
Speaker 1: we do. I think what happened with Meta last night
Speaker 1: I listened to the call was fascinating. I think what's
Speaker 1: happening is uh, Meta has an answer to TikTok It's
Speaker 1: reels and Reels is taking off. They're also extremely focused
Speaker 1: on using artificial intelligence as they are activating this platform.
Speaker 1: And What's App is also uh a very important platform
Speaker 1: that they have not monetized and now they're activating it.
Speaker 1: UH so really really fascinating. And you know, just to
Speaker 1: give you a sense, Delta is working through What's App
Speaker 1: right now to inform passengers when something goes wrong UH
Speaker 1: and improving customer service dramatically. So you know this this
Speaker 1: could become a very big business use case. So yes,
Speaker 1: lots of big markets that Facebook. The other thing that
Speaker 1: Mark did was used the word efficiency. He must have
Speaker 1: used times and and and and in that in that vein,
Speaker 1: he was using artificial intelligence as well. Because as we
Speaker 1: in big ideas UH and you can find big ideas
Speaker 1: on our dash invest dot com um in Big Ideas,
Speaker 1: we show the productivity increases that are possible because of
Speaker 1: artificial intelligence. It's these companies who could be some of
Speaker 1: the biggest beneficiaries if they harness AI correctly. I think
Speaker 1: a lot of people are looking for the killer app
Speaker 1: like they look like these viral apps that the Internet delivered.
Speaker 1: The killer app for artificial intelligence is productivity games, and
Speaker 1: any company does not harness it is probably not going
Speaker 1: to be one of the big winners out there. And
Speaker 1: just one other thing on AI. I think a lot
Speaker 1: of a lot of the hype is in companies that
Speaker 1: have AI in their names. We talk, you know, the
Speaker 1: real winners here are going to be those companies that
Speaker 1: have proprietary data and have lots of it, have the
Speaker 1: best domain expertise, best AI expertise, the best pools of
Speaker 1: high quality data. Two basically create new businesses in your
Speaker 1: big ideas paper you again speaking of of big ideas.
Speaker 1: And I love when we talk about this because everybody
Speaker 1: on Twitter has a comment. But you stick to your
Speaker 1: million dollar bitcoin forecast despite what we saw I think
Speaker 1: about six drop in it last year. Um people are
Speaker 1: saying to me, really, does she really stick to this?
Speaker 1: Why the confident in that despite everything? Well, the confidence
Speaker 1: actually was strengthened last year. Now, last year was was
Speaker 1: a terrible year for everything crypto, But if you think
Speaker 1: about what happened, it was the centralized opaque players who
Speaker 1: went bankrupt. F t x Celsius, three hours Capital, Um
Speaker 1: and and what did we see from bitcoin? Bitcoin is
Speaker 1: completely decentralized and transparent. It started because of oh eight
Speaker 1: oh nine, the lack of transparency in the traditional financial
Speaker 1: services ecosystem. And I remember when we did our research
Speaker 1: and Art Laugher I mentioned him. I mentioned him the
Speaker 1: first was on your show. Um, he took us through
Speaker 1: what bitcoin meant to him and it was wow, Art,
Speaker 1: the this is a rules based monetary it's a rules
Speaker 1: based digital monetary system, and it's global and and there's
Speaker 1: no human intervention. Uh, it's very disciplined. It's mathematically metered
Speaker 1: to top out at twenty one million units. Well in
Speaker 1: the last year, the response to the last three years,
Speaker 1: the responses to COVID that the fiscal and monetary responses
Speaker 1: that you know in many countries are causing hyper inflation
Speaker 1: and you know fiscal crises. We're seeing protests and riots
Speaker 1: all over the place. Um, well, where do these people
Speaker 1: go for an insurance policy against an implosion in their
Speaker 1: purchasing power and wealth. It is in something like bitcoin.
Speaker 1: Bitcoin is an insurance policy, and it is an insurance
Speaker 1: policy for the for for everyone, against confiscation of wealth. Uh.
Speaker 1: So you're nice tempering any of your thoughts even with
Speaker 1: what happened last year, and and if anything, you're kind
Speaker 1: of doubling down on your conviction because of what happened
Speaker 1: last year. Is that fair? Yeah? We did. We tempered
Speaker 1: a few assumptions we thought, led by Tesla and block
Speaker 1: formally Square and micro Strategy, that more corporations would put
Speaker 1: coin on their balance sheets. That is that we've dialed
Speaker 1: that one down considerably. And the same thing with nation
Speaker 1: states uh, El Salvador as they're sticking to their guns
Speaker 1: on this one, UH and UH and actually are doubling down.
Speaker 1: I believe in terms of bond issuance backed by bitcoin um,
Speaker 1: but other countries will probably not move as quickly as
Speaker 1: they might have if El Salvador had had, you know,
Speaker 1: a grand swish right off the bat. We do think
Speaker 1: it will happen, it's just we've pushed it out a bit.
Speaker 1: So I think our base case going now is UH,
Speaker 1: in five years, I think roughly six and seventy thousand,
Speaker 1: something like that, and then in by t as as
Speaker 1: we see more use cases and more of these insurance
Speaker 1: policies taken out against they still and policy regimes are
Speaker 1: not healthy, we think it could pass a million dollars, Kathy,
Speaker 1: we don't have a ton of time, and I want
Speaker 1: to make sure to get to a few more of
Speaker 1: your big ideas in your research. For three we've talked
Speaker 1: about AI, We've talked about cryptom we've talked a little
Speaker 1: bit about batteries in Tesla. UH. In the last thirty
Speaker 1: seconds or just the last couple of minutes that we
Speaker 1: have with you, let's talk about a few more specifically robotics.
Speaker 1: What what's appealing to and what's exciting to you. What
Speaker 1: do you see as investment opportunities for robotics. Well, I
Speaker 1: think everyone thinks robots have been around forever, and they
Speaker 1: kind of have, but they've been locked in cages inside
Speaker 1: auto companies. And so what we have now is really
Speaker 1: the dawn of the age of robotics. It's really going
Speaker 1: to happen because of battery technology and artificial intelligence, and
Speaker 1: we're talking about industrial robots. Amazon is adding one thousand
Speaker 1: robots per day UH, and by the year we think
Speaker 1: they will have that Amazon will have more robots than people.
Speaker 1: Even though they will continue to increase their employment UH, roles,
Speaker 1: robots will increase faster. Why is this happening? Well, as
Speaker 1: always with technology. The technology is ready and even more important,
Speaker 1: the costs are low enough now and the technology really
Speaker 1: AI battery technology critically important. Uh. And the costs if
Speaker 1: we use rights law for every cumulative doubling in the
Speaker 1: number of industrial robots produced, costs will decline by FI.
Speaker 1: I think it's even more than that. Given the massive
Speaker 1: labor shortages that have been exposed, and we still have
Speaker 1: around the world, some of its demographics, some of its
Speaker 1: COVID related um, the aftershocks, we think the time is
Speaker 1: right for robotics now. So uh. And you know, Tesla
Speaker 1: is a robotics company autonomous vehicles, which is where we're going. Uh.
Speaker 1: Those are butts, those are robots. So we think we're
Speaker 1: going to see a lot of robots rolling around, flying
Speaker 1: in the air, drones and so forth, so, you know,
Speaker 1: and collapsing the cost of that. I don't know if
Speaker 1: that's so great for me. I don't know, Carol, I'll
Speaker 1: take it. I'll take a robots if you've got some
Speaker 1: new money to commit. What's the name you buy? Is
Speaker 1: it Tesla? Right now? Well, Tesla is the number one
Speaker 1: position in two of our air KK and air k Q,
Speaker 1: and we even have it in air k W because
Speaker 1: it is probably the best case of a convergence between
Speaker 1: and among the most uh massive innovation opportunities of our lifetimes. Robotics.
Speaker 1: Autonomous vehicles are robots, energy storage, they will be electric
Speaker 1: and artificial intelligence. They'll be powered by AI. So that's
Speaker 1: one S curve feeding ANOTHERS curve feeding another. Skert going
Speaker 1: to leave it there. I feel like we go around
Speaker 1: the world with you, Kathy, and so appreciated. Kathy would.
Speaker 1: She's the CEO, she's the founder, She's the ce IO
Speaker 1: of ARC Investment. Check out her big idea fifty three pages.
Speaker 1: You can find it outline at ark Infested. Kathy, thank
Speaker 1: you so much. You're listening to the Bloomberg Business Week
Speaker 1: podcast just live weekdays from two to five pm Easter
Speaker 1: on Bloomberg Radio, the Bloomberg Business app band you too.
Speaker 1: You can also listen live to our flagship New York station,
Speaker 1: Just Say Alexa, play Bloomberg, e Love and Verdi. Well
Speaker 1: as you know, or if you didn't, here's your reminder,
Speaker 1: so mark your calendars. The Grammys are back this upcoming weekend.
Speaker 1: Harry Styles, by the way, just added to the lineup.
Speaker 1: It came out the football games. That's pretty cool. I
Speaker 1: really like Harry Styles. Um so that is an addition
Speaker 1: the award show, of course put on an overseen by
Speaker 1: the Recording Academy. Yeah, we've got the current CEO of
Speaker 1: the Academy right now with us. He's a record producer,
Speaker 1: a songwriter and more. Born into a musical family. It's
Speaker 1: been a while since we've spoken, but very pleased to
Speaker 1: have back with us. Carol Harvey Mason, CEO of the
Speaker 1: Recording Academy with us via zoom from Los Angeles. Harvey,
Speaker 1: so good to have you back with us. Last time
Speaker 1: I think we talked to us the summer of one.
Speaker 1: A lot has happened. Tell us about your world since then. Well,
Speaker 1: thank you, Carol and Tim. Good to be here. I
Speaker 1: appreciate it. It has been a whirlwind for sure. It's
Speaker 1: been a crazy two or three years, as it has
Speaker 1: for everyone. So I guess it's nothing unique for us.
Speaker 1: But we're really excited to be back in l a
Speaker 1: Crypto dot Com arena February five. Got an amazing show
Speaker 1: coming together around music and can celebrate the year in excellence.
Speaker 1: So when you talk about the year and excellence, I
Speaker 1: always think about, you know, who's going to be there.
Speaker 1: How you can watch it? Let's start there, because we
Speaker 1: are kind of obsessed with how you can watch things
Speaker 1: so differently. Um, you can stream it on Grammy dot com.
Speaker 1: You can go to the recording account, me's YouTube channel.
Speaker 1: How is it that most people still watch this show?
Speaker 1: I know I sometimes watch it live. Sometimes I you know,
Speaker 1: are checking out clips the next day. How is it
Speaker 1: that a lot of people are consuming it? First of all,
Speaker 1: I think it's a combination of all the things you mentioned.
Speaker 1: Some people are watching on CBS, some people are going
Speaker 1: on the streaming services, some people are watching online. I
Speaker 1: think it's a multi screen experience now. But we're seeing
Speaker 1: more and more people gravitating towards music content and specifically
Speaker 1: the Grammys. Whether that's as you said in bite sized
Speaker 1: chunks were watching the three hours show. We still have
Speaker 1: work to do to figure out how can we meet
Speaker 1: viewers and consumers where they are. But I'm excited about
Speaker 1: the appetite and the desire for people to want to
Speaker 1: watch great music, great art, great performances. That's what excites
Speaker 1: me about Grammys and about Sunday. Well, how do you
Speaker 1: make this work from a rights perspective? Harvey. If if
Speaker 1: CBS has the broadcast rights to it, how can how
Speaker 1: are you guys allowed to just put it on live
Speaker 1: dot Grammy dot com or on the recording academies YouTube channel.
Speaker 1: Is take us through the deal there, We're great negotiators.
Speaker 1: I mean, this is I mean this is kind of
Speaker 1: you don't see this because because companies, you know, a
Speaker 1: company like CBS wants to recoup its investment and sell
Speaker 1: ads against the content. Well, CBS has been an amazing partner,
Speaker 1: and we only do things that we think will benefit
Speaker 1: or raise awareness of the telecast and the property and
Speaker 1: intellectual property that is the Grammys that are the Grammy.
Speaker 1: So CBS has been in favor of a lot of
Speaker 1: these things. They've been supportive and they are our partners.
Speaker 1: But we also have to make sure we're thinking forward.
Speaker 1: We're seeing around corners, what's going to be next? How
Speaker 1: are people are gonna watch this show? It's in our
Speaker 1: best interest to figure that out as well as CBS
Speaker 1: is well. Speaking of partnering, which you talked about as
Speaker 1: CBS being a great partner, you've got some great partners
Speaker 1: and they read like a who's who of the corporate world. IBM, Google, Pixel, MasterCard,
Speaker 1: Gray Goose, Amazon, United Airlines, Hilton Series exam Um. You know,
Speaker 1: one of the things I do wonder about your platform,
Speaker 1: and I feel like all the award shows, it's been
Speaker 1: a place for artists to come out and be political
Speaker 1: and talk about things, maybe rightfully so that are in
Speaker 1: our world. How does that I don't know. How does
Speaker 1: that impact who you end up partnering with, or does
Speaker 1: it impact talk to us a little bit about that
Speaker 1: when there's so many important things going on right now
Speaker 1: that need to have attention brought to them. That's what
Speaker 1: I was gonna say. I think our partners probably appreciate it.
Speaker 1: I know they don't want to get in the weeds
Speaker 1: of who's going to say what and what their beliefs are.
Speaker 1: But we're not using music, and we're not using the
Speaker 1: power of the Academy and the platform with the Grammys
Speaker 1: for good or for change or for awareness, then we're
Speaker 1: missing an opportunity. I think our partners understand that comes
Speaker 1: with the creative community. We are a unique group of people.
Speaker 1: We care deeply. We're very passionate about a lot of things,
Speaker 1: including music, but also politics or race, relations with the
Speaker 1: economy of the environment. So These are all things that
Speaker 1: you're liable to see on a Grammy telecast. My hope
Speaker 1: is that whether you believe in exactly everything everyone's saying
Speaker 1: or not, you understand and you support and you believe
Speaker 1: in the idea of using your platform for good and
Speaker 1: for change. Can could you expand to on our marketing guys.
Speaker 1: I will tell you that when our newsroom new you
Speaker 1: were coming on, they're like, you know, a lot of
Speaker 1: award show um can generate a lot of revenue through
Speaker 1: these partnerships you've got, as we mentioned, uh, several well
Speaker 1: known household names, Greg Goose Vodka, the official spirit of
Speaker 1: the Grammy Awards. You know, talk to us a little
Speaker 1: bit more about that and the other marketing deals that
Speaker 1: you've got. We've got an amazing partnerships team. They've worked
Speaker 1: really hard to partner and I guess join forces with
Speaker 1: world class organizations. And we do a lot of work
Speaker 1: to make sure that we're attracting and joining with the
Speaker 1: right types of partners And it's not just about a
Speaker 1: one day a year partnership. We like to think of
Speaker 1: these partnerships and arrangements as annual or multi annual year deals.
Speaker 1: We're doing so much throughout the year. It's not just
Speaker 1: about the show. It's about the work through Music Cares
Speaker 1: and giving back to music people. It's about our advocacy
Speaker 1: and DC, our education, our preservation through the museum. These
Speaker 1: are all things that our partners are involved in with us.
Speaker 1: Our Black Music Collective and our HBC. You tour are
Speaker 1: our sponsorships and our opportunities for incoming people into our industry.
Speaker 1: These are things that our sponsors are really really excited
Speaker 1: about and us providing more as I said, good and
Speaker 1: positive outcomes for our community, for the culture, for the world. Well.
Speaker 1: As people consume the content differently, these kinds of sponsorship
Speaker 1: has become increasingly important because perhaps they're not necessarily tuning
Speaker 1: in during the breaks and instead what they're doing is
Speaker 1: they're watching clips or they're watching in in you know, live,
Speaker 1: and then they'll put something else on during the breaks,
Speaker 1: as many people do. Uh. So, give us an idea
Speaker 1: harvey of of of the other types of partners that
Speaker 1: you have that the way you integrate brands into the content,
Speaker 1: and if you can, please just give us some numbers.
Speaker 1: I mean we're Bloomberg, So I mean, how much are
Speaker 1: these brands paying for this type of association. It really varies,
Speaker 1: and I would hate to put everyone's business out on
Speaker 1: the street, but I will say that it depends on
Speaker 1: the level of activation. Some of it is hospitality. Sometimes
Speaker 1: people want to come to our events and be in
Speaker 1: the room with other great people and creators. Others want
Speaker 1: to be featured across all the work that we're doing,
Speaker 1: and as you touched on, we're finding new ways to
Speaker 1: do it. We're a web three, metaverse other things, and
Speaker 1: our partners are coming with us, so I think they're
Speaker 1: seeing this as an opportunity to partner and collaborate with
Speaker 1: an organization the Academy that is seeing into the future
Speaker 1: and finding new ways to attract, attract eyeballs and attention.
Speaker 1: I think we also drag with us a very unique
Speaker 1: subset of fans, consumers, listeners, people that are not only
Speaker 1: the most prolific creators in the world, but also people
Speaker 1: who are crazy, intense, passionate lovers of art and culture.
Speaker 1: And that's a very attractive group of people for advertisers
Speaker 1: and partners to reach. Hey, just got a couple of
Speaker 1: minutes left here, Harvey, And we didn't say in our
Speaker 1: introduction to you that you brought into a musical family.
Speaker 1: You've been a record producer, songwriter. You understand this business.
Speaker 1: You've written for some some heavyweights and been involved with
Speaker 1: some heavyweights in the industry. What do you make of
Speaker 1: kind of the business of the music industry which increasingly
Speaker 1: you have people like Taylor Swift and others really taking
Speaker 1: control of their brand and their music. You've got a
Speaker 1: lot of artists selling their brands, whether it's to private
Speaker 1: equity and other investors. Um good or bad in your view,
Speaker 1: that's a whole show. Care all. We should do another talk.
Speaker 1: We would love to. I know it's not easy. It's
Speaker 1: important to address because it's an evolution of where we
Speaker 1: come from and where we're headed. It's never there's never
Speaker 1: been a time like this. There's a hundred thousand songs
Speaker 1: a day being uploaded to the streaming services, so that's
Speaker 1: going to create different opportunities. We still believe that the
Speaker 1: labels are valuable and important as partners to creators in
Speaker 1: some instances, but I think independent artists are also going
Speaker 1: to be able to reach their fans directly and put
Speaker 1: music up. You make it on a Friday, it's available
Speaker 1: Friday night for somebody to listen to and evaluate and
Speaker 1: love and share. So I think there's a lot of
Speaker 1: innovation and iteration that's happening around our industry. As you said,
Speaker 1: people selling their catalogs. I'm not sure where that's going
Speaker 1: to go because the prices are at a place where
Speaker 1: I'm not sure everyone's figured out how to monetize it
Speaker 1: to accommodate the high trading value of some of these catalogs.
Speaker 1: But I do think what the Academy is doing is
Speaker 1: really important because we're fighting for new legislation to protect
Speaker 1: songwriters and creators and intellectual property and copyrights. So legislation
Speaker 1: changes can increase the value of a lot of these catalogs.
Speaker 1: All right, five seconds. Who you're looking forward to at
Speaker 1: the Grammys. I'm looking forward to all the diversity, all
Speaker 1: the different genres, all the different people all coming together
Speaker 1: one room, February five. I love in the show is
Speaker 1: a mixture of everything, because it really is fun to
Speaker 1: watch Harvey come back soon please, Chief Executive Officer of
Speaker 1: the Recording Academy. Of course, as you know, they oversee
Speaker 1: the Grammys, and the's founder and c of Harvey Mason
Speaker 1: Media via zoom from l A. This is Bloomberg you're
Speaker 1: listening to the Bloomberg Business Week podcast. Catch us live
Speaker 1: weekdays from two to five pm Eastern on Bloomberg Radio,
Speaker 1: the Bloomberg Business Band. You too. You can also listen
Speaker 1: live to our flagship New York station, Just Say Alexa,
Speaker 1: play Bloomberg e Loove and Dirty Full Transparency. Tim and
Speaker 1: I both have Aora rings. Tim has his on. I don't.
Speaker 1: I forgot to. Didn't take it off to do some chores.
Speaker 1: You are supposed to take it off to take you know,
Speaker 1: when you're doing dishes. I was doing something and following
Speaker 1: the rules. It was kind of a rough night white
Speaker 1: and I wasn't diving this time around, all right. As
Speaker 1: you may know, it is a privately held company that
Speaker 1: we follow a lot. The current issue Bloomberg business Week magazine,
Speaker 1: the Pursuit section, it's one of the sleeptrackers profiled as
Speaker 1: part of a deep dive into the business of sleep,
Speaker 1: which we know Tim is big business, but we know
Speaker 1: this ring does a lot more than that. It does.
Speaker 1: Let's stark numbers here though. Um just last week last year,
Speaker 1: the market for sleep tracking devices society at fourteen point
Speaker 1: five billion. It's projected to reach sixty two billion by
Speaker 1: the year. It's a lot of stuff, all right. So
Speaker 1: let's get to our guest, Tom Hale. He was named
Speaker 1: CEO of Order Ring last April. He was former chief
Speaker 1: operating officer at Home Away. They were acquired by Expedia.
Speaker 1: He's an alum to of Adobe Macromedia. He is in
Speaker 1: our Bloomberg Interactive Broker studio. Welcome, Welcome, Nice to have
Speaker 1: you here. Thank you so much. It's great to be here.
Speaker 1: So what's it been like? Wow, it's been incredible joy
Speaker 1: to learn. I mean you think about sort of this
Speaker 1: particular product being the intersection of health, physiology, physics, fashion. Right.
Speaker 1: I never saw myself as a purveyor of jewel, right
Speaker 1: now I am. And in technology you think about what's
Speaker 1: going on in technology where you've got a I processing
Speaker 1: huge amounts of data and the intersection between health and
Speaker 1: technology is super interesting. So I've been climbing a huge
Speaker 1: learning curve. But that's been incredibly thrilling. What have you
Speaker 1: learned the most? Is it that the size of the market,
Speaker 1: or the size of the interest or what you know?
Speaker 1: I think it really is that there's a change underway
Speaker 1: which is about how people are approaching health. I think
Speaker 1: COVID kind of took the covers off. Everyone felt a
Speaker 1: little bit secure about their health. And then COVID came
Speaker 1: along and reminded everybody that health is fragile and you
Speaker 1: need to monitor it and manage it. And everyone started
Speaker 1: thinking about it very differently. And so that change, that's
Speaker 1: a societal maybe even a global change, and in some sense,
Speaker 1: health wearable steers right into it. Okay, So or a
Speaker 1: monitor's health through the finger. It's a ring that you
Speaker 1: wear on your finger at tracks sleep tracks activity throughout
Speaker 1: the day. There a handful of sensors on it. Um.
Speaker 1: I'm wondering about the technology that goes into the ring,
Speaker 1: the hardware, but also what happens on the app and
Speaker 1: sort of which one is. I don't know where you're investing. Well,
Speaker 1: you have to invest in both, of course. I mean.
Speaker 1: Being the only smart ring on the market, we've actually
Speaker 1: got a lot of huge technical challenges that we have
Speaker 1: to manage, right. We have to make sure that the
Speaker 1: quality of the signal that we get is the highest
Speaker 1: and most accurate that is possible. Frankly, we are medical grade,
Speaker 1: you know, in terms of the accuracy of the of
Speaker 1: the device itself. Partially that has to do with just
Speaker 1: the location of where you are measuring on the human bodies.
Speaker 1: You said, doctors measure your pulse and your heartbeat and
Speaker 1: SPO two from the finger. They don't measure on the
Speaker 1: outside of your risk. So we are just structurally advantaged
Speaker 1: in terms of accuracy. Now that being said, where a
Speaker 1: science driven organization, so we take that super super seriously.
Speaker 1: We validate everything, not just across like some small population,
Speaker 1: but across men, women, different ethnicities, different skin tones. A
Speaker 1: lot of the technology that are is used for these
Speaker 1: kinds of wearable sensors is light based. We shine lights
Speaker 1: into your body and based on the signal that comes back,
Speaker 1: the refraction, the absorption, we're making conclusions about your heart rate,
Speaker 1: your respiration, your heart rate variability, these metrics that come
Speaker 1: back to you. Guess what if you don't have the
Speaker 1: same tone in terms of skin color, the melanin in
Speaker 1: your skin absorbs that light differently, and so you have
Speaker 1: to be really thoughtful about how you measure so accuracy,
Speaker 1: the form factor. These are structural advantages and structural things
Speaker 1: that we focus on around at or that's the hardware.
Speaker 1: So how do you technologically account for a white person
Speaker 1: versus a black person versus how do you do it well?
Speaker 1: You have to make sure one we're lucky because we
Speaker 1: measure on the inside of the palm, right, and the
Speaker 1: inside of the palm generally actually is a lot narrower range.
Speaker 1: Even people who have like sunburns or hair or tattoos
Speaker 1: or darker skin on the outside, they tend not to
Speaker 1: have sunburns or tattoos or hair on their palms. Maybe
Speaker 1: some people do, but most don't, So that's actually a
Speaker 1: structural advantage. But we do things like we monitor when
Speaker 1: the light signal goes in what comes back, and we
Speaker 1: start to learn a little bit about like do we
Speaker 1: have to increase the amplitude to get a good signal?
Speaker 1: Do we have to decrease the amplitude Because we're getting
Speaker 1: to like we're we're very intelligent about that. In fact,
Speaker 1: we did a one of our big features last year
Speaker 1: was workout heart Right. You guys might have, I don't know,
Speaker 1: experienced it. So it's basically different things that you can
Speaker 1: use it for. It's super accurate in terms of like
Speaker 1: measuring your heart rate during a workout. It's as accurate
Speaker 1: as a chest strap, which is you know, kind of
Speaker 1: the gold standard for measuring a hurry. All right, So
Speaker 1: when we were testing it right before we shipped it,
Speaker 1: people are like, you know what, we're we want to
Speaker 1: make sure that we validated this across a wide range
Speaker 1: of skin tones. And so we actually did a lot
Speaker 1: of work to test on a wide range of skin
Speaker 1: tones and we felt pretty good about it. We've made
Speaker 1: some tweaks in terms of the power of the signal,
Speaker 1: the light signal that we send into the body, but
Speaker 1: that kind of scientific validation is the key. And that's
Speaker 1: the hardware side. The software side, though, gets a lot
Speaker 1: of updates. The app gets a lot of updates. And
Speaker 1: the reason I ask is is because oftentimes with hardware,
Speaker 1: you see a brand new version each year. If that,
Speaker 1: if that this year, you didn't see a new version
Speaker 1: of of a ring with different sensors. You saw a
Speaker 1: different version in the you know, in a superficial sense.
Speaker 1: And I use the term superficial not in a project
Speaker 1: pejorative way, but you know, the idea that the sensors
Speaker 1: inside didn't change. Correct me if I'm wrong, but that's correct.
Speaker 1: The sensor platform is the same. By the way, we
Speaker 1: have two versions of the ring, right, Yeah, the heritage
Speaker 1: and the horizon. That's what you're talking about exactly. Um,
Speaker 1: do you which sensors would you add right now if
Speaker 1: you could? Or is it is it kind of like
Speaker 1: where it needs to be and the work needs to
Speaker 1: be done on the app side the analysis side, Well,
Speaker 1: we're always looking at new technologies as as they're emerging
Speaker 1: and new capabilities as they're emerging. You know a lot
Speaker 1: of people have have have sort of hypothesized that there
Speaker 1: are lots of things that you can do with new
Speaker 1: sensor technology. Um, really, I think the reality is that
Speaker 1: a lot of the ambitions here, like we can test
Speaker 1: your blood glucose, you know, non invasively, are possible, but
Speaker 1: definitely further away than most people are willing to admit.
Speaker 1: Elizabeth Holmes could do No, she's she's all over. I
Speaker 1: think that's her next process. I know that's I don't know,
Speaker 1: but but but you you you know, the thing is
Speaker 1: that you want to make sure those things are validated acurate.
Speaker 1: The technology that goes into our ring today, some of
Speaker 1: it's very very recent, very very new. Some of it
Speaker 1: has been established, there's lots of science around it. So
Speaker 1: the reality is, I don't know that we need to
Speaker 1: see huge updates in it. I think what's what's really
Speaker 1: important about the ring from it maybe different from your
Speaker 1: your wrist, is that it's also comfortable and non battery consumptive.
Speaker 1: I don't know if this has been your experience. Every
Speaker 1: five days or so, I give it a charge and
Speaker 1: you don't have to think about it. You just don't
Speaker 1: have to think about it. It's just they're sort of
Speaker 1: silently in the background keeping track your metrics. The data
Speaker 1: is being processed, the algorithms are running, the recommendations and
Speaker 1: insights are coming through. And that's the software, right. The
Speaker 1: software is your health condition is different from your health condition.
Speaker 1: Let's understand that and give you the appropriate message. That's personalization,
Speaker 1: that's machine learning. That's that's very different. I think the
Speaker 1: pace of software innovation incredibly rapid. Right we're releasing two
Speaker 1: three features a month, because that's the pace of soft hardware.
Speaker 1: You kind of wanted to be stable, because you don't
Speaker 1: want to change it all the time. I agree, Um,
Speaker 1: who is your typical consumer? Well, what would you guess?
Speaker 1: What would you guess? Um, I'm thinking like a guy
Speaker 1: in his thirties. Guy in his thirties. Kendall Roy from Succession.
Speaker 1: Well yeah, or yeah, that was that was also yeah
Speaker 1: the Billions where we can I just ask you before
Speaker 1: we get into this series, what does that stuff do
Speaker 1: for you? First of all, it's great recognition, but what
Speaker 1: does it do the needle it? Well, you know, funnily enough,
Speaker 1: when when it used to be airtime, it would actually
Speaker 1: you can see it, but but it's not airtimes now
Speaker 1: it's all streaming on demand, right, But I think it
Speaker 1: just puts us in people's consideration. They now understand there
Speaker 1: is a smart ring category and you can wear it
Speaker 1: and if if you're like the cast member of Billions,
Speaker 1: like maybe maybe you want to be a little careful.
Speaker 1: That I was going to say is sometimes, you know,
Speaker 1: sometimes it's worn by somebody who's not necessarily a fan favorite. Right,
Speaker 1: You're not really sympathetic to Kendall Roy. That does that?
Speaker 1: Does that? Bob? Are you h? No? Look? I mean
Speaker 1: what do they say? No? Bad, no bad? Pr um?
Speaker 1: You know? When what is it when the Mr Big
Speaker 1: does he die on a Paltzon I can't remember spoiler?
Speaker 1: Maybe that's maybe that's a bad example. Let's not go there.
Speaker 1: It was not great Plotzon hasn't been doing that. Yeah,
Speaker 1: let's hope you you know, when when the next one
Speaker 1: doesn't die. And my point is all that stuff is
Speaker 1: positive and all all the you know halo around influencers,
Speaker 1: media personality CEO so Davos was crazy. It was lousy
Speaker 1: with or rings. You know, it's crazy. So that's really
Speaker 1: powerful for us. But the reality is I think most people,
Speaker 1: you know, how they learn about it. They learn about
Speaker 1: it from our friend. Well we talk about I feel
Speaker 1: like there's bonding, like when you see somebody's on it's like, yeah,
Speaker 1: it's just really great term you can use, but I
Speaker 1: won't say it on air, but I can't say it. Yeah,
Speaker 1: we'll have to talk about later. I'm not okay, Alright,
Speaker 1: we're gonna come back with Tom Hale. Still got a
Speaker 1: ton of questions to ask him. I want to get
Speaker 1: back to is it Tim, is he the typical demo? Well, actually,
Speaker 1: you know what's interesting is the typical demo is is
Speaker 1: a perfect bell curve around the age thirty five and
Speaker 1: equal male to female. Yah, we're gonna talk more about this,
Speaker 1: and we wanna talk about growth in the business and
Speaker 1: where it's all going. Tom Hale chief executive Officer or
Speaker 1: in our Bloomberg Interactive Broker Studio. Our conversation will continue
Speaker 1: in just a moment. Tom Hale still with US, Chief
Speaker 1: Executive Officer of or A still in our Interactive Brokers studio.
Speaker 1: So we're talking about your demo. So just let's go
Speaker 1: back there. So your your typical buyer, I hate to
Speaker 1: say that your average buyer of an horror ring is who. Yeah,
Speaker 1: it's um it's actually a perfect bell curve on on
Speaker 1: either side of age thirty five. And so you see,
Speaker 1: you know, folks are aging in place who want to
Speaker 1: manage their health, people who have chronic illnesses who are
Speaker 1: trying to make sure they don't get sick. You have
Speaker 1: thirty year old athletes who are training for their marathon
Speaker 1: or their ten k. You have twenty year olds who
Speaker 1: are women who are just coming to maturity and want
Speaker 1: to manage their contraception using you know, non hormonal contraception.
Speaker 1: You've got young kids, fifteen year olds who are training
Speaker 1: for the first time and thinking about recovery and how
Speaker 1: to do it. So it's a pretty broad span. Health,
Speaker 1: of course, is a money killed beast. People are having
Speaker 1: different health situations as they move through their life. Is
Speaker 1: that what's really driving people to ultimately get it. It's
Speaker 1: about sleep and health. So some people people who are
Speaker 1: you know, I mean honestly, I think as you get older,
Speaker 1: sleep becomes this thing. And if you're a woman or
Speaker 1: a man in a certain age, like sleep becomes really important.
Speaker 1: Fads are out of the nest. So sleep is really
Speaker 1: a big driver. And the thing is as like sleep
Speaker 1: as this habit that everybody does, but no one's particularly
Speaker 1: good at, right And when you lose sleep, wow, you
Speaker 1: feel it right acting to acquire looking at Carol right there?
Speaker 1: Sleep is sleep is this? I was just reading that.
Speaker 1: They say there's something that goes on with your brain
Speaker 1: as you get older that affects your ability to kind
Speaker 1: of stay asleep throughout. Lots of things change, right, pressures
Speaker 1: of life, stress, you know, all sorts of things asleep.
Speaker 1: So okay, talk about the scores here because that's mainly
Speaker 1: what I look at on the app when I wake
Speaker 1: up in the morning to see how I slept. What
Speaker 1: do you aim for? What should people be sleeping? Like?
Speaker 1: I think this is the things that everybody's health situation
Speaker 1: is a little bit different. Really, what you're looking at
Speaker 1: is your baseline again, medicine has been practiced for years
Speaker 1: on the averages, and the truth is that we're all different.
Speaker 1: In fact, not only are we different, but we're also
Speaker 1: constantly changing. So the metrics that go into those three scores,
Speaker 1: and the three scores for for clarity are sleep, activity,
Speaker 1: and readiness. And sleep is really like how well did
Speaker 1: you sleep? And it really understands a lot. How quickly
Speaker 1: did you fall asleep, how much disturbances did you have,
Speaker 1: how many how many times did you move around? How
Speaker 1: many times did you wake up? Did you fall asleep quickly?
Speaker 1: Did you fall asleep within your normal bedtime? All these
Speaker 1: things are factors when we come up with one score,
Speaker 1: and that score is like somewhere between zero and a hundred.
Speaker 1: Very few people get a hundred. Some people do. Most people,
Speaker 1: if you look at the bell curve, probably distributed between
Speaker 1: seventy and eighty five. So if you're in that, you're
Speaker 1: pretty good, right and I go for a I go
Speaker 1: for seventy five? Are up? Yeah? Um? But it's not
Speaker 1: easy good. And duration, by the way, is a really
Speaker 1: important factor, right, but it's not the only factor. When
Speaker 1: it comes to the data dump. If you will, there
Speaker 1: is a point where you know it gets to be
Speaker 1: a lot. How do you make sure that you're giving
Speaker 1: people smart information, enough information, like what's the balance socretible? Well,
Speaker 1: I think we think about it as most people just
Speaker 1: want to check how they deviated from their baseline. And
Speaker 1: that's actually one of the things that the software does.
Speaker 1: It learns you kind of learns your patterns and then say, well,
Speaker 1: this is a deviation from that pattern, so maybe something's
Speaker 1: going on, and that the software kind of says, maybe
Speaker 1: you should take a rest. You're gonna look at so
Speaker 1: good today. Did you have a drink last night? You know,
Speaker 1: it's like and and that that kind of like supportive
Speaker 1: approach is really difference, really unique in the in the
Speaker 1: wearable space because we're not saying get your ten thousand
Speaker 1: steps whether you like it or not, or whether you
Speaker 1: feel up to it or not. It's like we actually
Speaker 1: our activity score adjusts, you know, we we actually the
Speaker 1: activity goal we set a just based on your readiness
Speaker 1: or honestly, Okay, let's talk numbers here. Yeah, let's talk
Speaker 1: about the business. Yeah, I want to hear about the business.
Speaker 1: So you know, you can buy one of these rings
Speaker 1: Bucks Bucks, that's a one time revenue hit for you. Guys.
Speaker 1: But then there's the membership six bucks a month. Do
Speaker 1: you need to have the membership in order to get
Speaker 1: to use the ring? Um? No is the answer. Um.
Speaker 1: But I think one of the things that we think
Speaker 1: a lot about is that your health really is priceless.
Speaker 1: And actually the algorithms and the processing and the R
Speaker 1: and D that we do that looks at your data,
Speaker 1: it becomes more valuable over time. Right. It's not just
Speaker 1: did you get your steps in today? And by the way,
Speaker 1: once you figured out what ten thousand steps looks like,
Speaker 1: do you really need to be told you got The
Speaker 1: other thing that I'm curious about is, um, how many
Speaker 1: people like churn people who buy them and keep them
Speaker 1: because wearables are just known for people throwing them in
Speaker 1: a drawer. So I can't give you all the fatigue,
Speaker 1: but the device fatague. And I think that's where the
Speaker 1: software comes in because we think about not only is
Speaker 1: your data changing, right, because let's put it for example,
Speaker 1: a lot of people get sick and the ring tells them, hey, listen,
Speaker 1: you look like you might want to go into rest mode,
Speaker 1: and the app reconfigures itself around you being sick. The
Speaker 1: activity score goes away, the advice changes. The tone changes.
Speaker 1: It goes from being like go for it to be
Speaker 1: like take a break. And that customization, that experience is
Speaker 1: different because your health condition has changed, all right, So
Speaker 1: that idea that your health condition is changing all the
Speaker 1: time and the way the app can figures that's value
Speaker 1: over time. It did this to me when I got COVID.
Speaker 1: It realized that I had COVID, right, you know, it
Speaker 1: was like crazy sleep and stuff, televated body temperature and
Speaker 1: it's you know, asked if I wanted to switch into
Speaker 1: rest mode. You didn't answer my question about how many
Speaker 1: people keep their ring on? Yeah, So two facts that
Speaker 1: I could share. So one is the average wear time.
Speaker 1: So if you look at the mean wear time over
Speaker 1: twenty four hour period, the average mean about twenty two
Speaker 1: hours and thirty minutes. Okay, that's the mean. When you
Speaker 1: look at the median, it's actually twenty three hours and
Speaker 1: thirty minutes. So what does that mean. It means half
Speaker 1: above half a leg exactly. So that means most people
Speaker 1: are wearing it more than twenty three hours. But I
Speaker 1: guess when somebody puts the ring on, do they keep
Speaker 1: it on for twelve months? Do they keep it on
Speaker 1: for the second stat. The second stat is after twenty sorry,
Speaker 1: after fifty two weeks, we have eight eight percent of
Speaker 1: the people still engaged with the app. Now that is
Speaker 1: shocking because, as you said, in the wearable world, the
Speaker 1: typical thing is you get the wearable, you try it on,
Speaker 1: you get some value, and you throw it in the
Speaker 1: drawer because you figured it out, or you have to
Speaker 1: charge it. All right, So how much is the business growing?
Speaker 1: Your private but give us some metrics. Are you growing?
Speaker 1: I think, oh, we're in hyper growth. That would that
Speaker 1: would be the phrase that year. Every year I'm making
Speaker 1: a face. You can't see it on Well, maybe you can.
Speaker 1: But we're growing incredibly quickly, and you are profit in
Speaker 1: a down market. We are investing, you're investing. Will you
Speaker 1: go public? Um? I think we're building the business and
Speaker 1: we want to build a big business. And um, Honestly,
Speaker 1: having been in public companies, I'm not in any rush
Speaker 1: to go public. I want to make sure we're set
Speaker 1: up right. You need to raise any more money? Um, No,
Speaker 1: we're probably set maybe even to a public event. We
Speaker 1: might we might see one more round, even to a
Speaker 1: public event. Yeah, so it could be a consideration. But
Speaker 1: you never you did not hear it here actually did
Speaker 1: and going it alone. Have no plans. Let me put
Speaker 1: it this way to be explicit. We have no plans
Speaker 1: to go public. I mean could an Apple like has
Speaker 1: Apple come out to you? This was also recently a
Speaker 1: think maybe by a colleague of yours. And I said,
Speaker 1: when when when Tim calls, like I'm gonna pick up
Speaker 1: the phone, but he hasn't called yet. All right, this
Speaker 1: was a lot of fun. Come back soon, okay, Tom
Speaker 1: Tom Hale, Chief executive Officer of Or of course. Uh
Speaker 1: Here in our interactive broker studio, you're listening in watching
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