Speaker 1: I'm Caroline Higher, Bloomberg's World headquarters in New York, and
Speaker 1: I'm Ed Ludlow in San Francisco. This is Bloomberg Technology. Netflix,
Speaker 1: a story of subscriber growth and succession. We dig into
Speaker 1: the earnings and the executive changes. As we learned Read
Speaker 1: Hastings will step down as CO as CEO. Plus emails
Speaker 1: from Elon Musk's shed light on his involvement in a
Speaker 1: twenty sixteen demo that exaggerated autopilot capabilities clus the hacks
Speaker 1: to stop hackers taking your money, and they're working. New
Speaker 1: research shows that the fewer companies are paying ransoms, that
Speaker 1: doesn't mean the number of attacks is actually down. We're
Speaker 1: going to discuss that, but first let's dig in on
Speaker 1: all of that, because it's interesting. We're getting succession planning
Speaker 1: and a chairman remaining over at Texas Instruments is similar
Speaker 1: for Netflix succession planning, unlike over at Disney. For many
Speaker 1: would argue, it's interesting, therefore, to bring on Lucas Shore,
Speaker 1: who so intimately understands this company and indeed the in
Speaker 1: the workings of Read Hastings. He himself, of course, a
Speaker 1: man who's focused on culture in so many ways. Lucas,
Speaker 1: what you make of who now steps up, Greg taking
Speaker 1: the co CEO roans and ultimately who's going to have
Speaker 1: the ultimate decision making power here because he remains as
Speaker 1: executive chairman. Yeah. Look, my assumption is that that Read
Speaker 1: will say that that Ted and Greg get ultimate authority
Speaker 1: there now the CEO obviously as chairman of the board,
Speaker 1: as co founder, as a major shareholder. If there were
Speaker 1: some huge transaction Netflix decided to sell itself by something significant,
Speaker 1: I imagine Read would get would get more involved. But
Speaker 1: he has been gradually stepping back from the day to
Speaker 1: day operations of the company already. You know, he delegated
Speaker 1: most of the Hollywood stuff to to Ted. He's put
Speaker 1: Gregg in charge of these two big initiative advertising and
Speaker 1: password sharing, And I think that's how the company is
Speaker 1: mostly going to keep operating with sort of Gregg looking
Speaker 1: at a lot of the kind of product and strategic fit,
Speaker 1: Ted looking at a lot of the you know, the
Speaker 1: more entertainment focused and programming operations. Hey, Lucas, let's think
Speaker 1: about the forward looking nature of this, you know, because
Speaker 1: Greg Peters kind of was already leading the charge on
Speaker 1: the ad supported tier, already leading the charge on the
Speaker 1: crackdown for password shared Ted Surrandos, the man about Hollywood
Speaker 1: doing the deals, thinking about content, given the numbers we
Speaker 1: just got, which was strong beats right, subscribers and on
Speaker 1: the top line is post bond line a bit weaker.
Speaker 1: Where will they focus their energies going forward? Fore, you know,
Speaker 1: it's going to be continued execution on advertising because remember
Speaker 1: that that app here is only two months old, so
Speaker 1: that will be kind of improving some of the technology
Speaker 1: behind it, you know, targeting sales. You know, it got
Speaker 1: off to a relatively slow start, but I think they
Speaker 1: like what they're seeing. It will be rolling out this
Speaker 1: whole password crackdown, which I think is going to start
Speaker 1: this quarter and really ramp up in the middle of
Speaker 1: the year. Um, it's going to be kind of continuing
Speaker 1: to try to improve of programming in certain areas. You know,
Speaker 1: they've they've done really well recently on English language television programming,
Speaker 1: not quite as well on the foreign language television programming.
Speaker 1: I think they want to keep improving their hit rate
Speaker 1: on movies because they release a lot of movies people
Speaker 1: don't know, you know, don't watch. And then there's all
Speaker 1: gaming piece of it, which is still a small part
Speaker 1: of the business, but they're investing a lot of money
Speaker 1: into it. I don't think you're going to see a
Speaker 1: ton of news around that in twenty three, but it
Speaker 1: is something that they will continue to talk about as
Speaker 1: with the future. The one point I do want to
Speaker 1: make is while they had a really strong final quarter
Speaker 1: of the year, at least in terms of subscriber growth,
Speaker 1: the thing to keep in mind, just sort of big picture,
Speaker 1: is that for the full year, they did still post
Speaker 1: their worst subscriber growth since two thousand eleven. Alright, bloom
Speaker 1: bags Luke is sure great reporting on what's changing at
Speaker 1: Netflix and good analysis of the numbers, which I think
Speaker 1: we need more of. So let's bring a branding cats
Speaker 1: industry analysts at Para Analytics. It's interesting the third party
Speaker 1: data suggested that actually in the final three months of
Speaker 1: last year, Netflix is facing great competition from likes of Warned,
Speaker 1: Discovery and Disney, and actually demand over rule is starting
Speaker 1: to pull back. Well, when you saw those net subscribing
Speaker 1: ads for Netflix seven point seven million, what's your reaction, Brandon,
Speaker 1: I'm still not totally surprised. I mean, Netflix has always
Speaker 1: been savvy with its guidance. It likes to set the
Speaker 1: stage for positive narratives, which we are now very much
Speaker 1: engaging in. And we look at Netflix from our angle,
Speaker 1: is still the streaming industry leader. It's the most global
Speaker 1: surprise subscribers, and is the most in demand overall catalog
Speaker 1: with US audiences in all of two and that includes
Speaker 1: original and licensed movies and TV shows. And it also
Speaker 1: still leads the entire industry in global original demand and
Speaker 1: US original demands. So yes, that is shrinking as it
Speaker 1: seeds ground to you know, very hungry competitors that are
Speaker 1: gaining market share, but they still have a massive, massive lead.
Speaker 1: And I think all the doom and gloom around Netflix
Speaker 1: last April perhaps a bit premature, as we're seeing now
Speaker 1: even with what Lucas accurately pointed out there a subscriber
Speaker 1: total in a year since two thousand. Later, Lucas at
Speaker 1: the end of his Bloomberg News report, uh summed up
Speaker 1: the comments about the ads supported tier and they were
Speaker 1: a little bit muted from Netflix there. Please, with the
Speaker 1: progress on the ad supported tier, they're saying that it's
Speaker 1: bringing in cost conscious consumers. Do you think that that
Speaker 1: was part of the beat when it came to subscribe
Speaker 1: a growth in the last three months of last year. Yeah,
Speaker 1: and they even pointed out in their letter to shareholders
Speaker 1: that they aren't seeing a lot of conversions from premium
Speaker 1: subscriptions to add tiers, which is exactly what they wanted.
Speaker 1: They want the ad tire to expand the total addressable
Speaker 1: market from Netflix, and particularly at a time when consumers
Speaker 1: are weighing concession fears and maybe our recession fears, maybe
Speaker 1: a little bit more cost conscious. Now, yes, not the fastest,
Speaker 1: most explosive rollout, but this is going to be a
Speaker 1: must have for all advertisers looking to get into connect
Speaker 1: the TVs and digital TVs. So we are going to
Speaker 1: see that grow throughout. And we gotta remember they turned
Speaker 1: around and from years of an anti ad stance and
Speaker 1: created their ads here and only six months so there
Speaker 1: is a lot of upward potential and room to grow here. Yeah.
Speaker 1: Interesting in that earning statement they said, the early results
Speaker 1: they say they're pleased with, but there's much still to do.
Speaker 1: Can you run in any way talk about sort of
Speaker 1: the culture of innovation over a Netflix, because that is
Speaker 1: of course what we've come to know having read the
Speaker 1: No Rules Rules Book by read Hastings himself. I mean
Speaker 1: it's all about the way in which they set apart
Speaker 1: on different corporate culture. Now it's interesting to compare. Should
Speaker 1: we see succession planning with Disney Plus versus Netflix and
Speaker 1: the kind of operate opposite end of the spectrum. But
Speaker 1: we are seeing Disney Plus and Warner Brothers Discovery taking
Speaker 1: chunks perotentially out of market share from Netflix. How can
Speaker 1: Netflix ensure that it's stunding in goodstead to keep on growing,
Speaker 1: keep on innovating, keep on personalizing. It's funny because Netflix
Speaker 1: has always fanacied itself as the greatest disruptor in Hollywood history,
Speaker 1: and now it's really reached a point where it is
Speaker 1: recreating the playbook of its linear rivals instead of vice versa.
Speaker 1: So the market emphasis has shifted obviously towards profit and revenue,
Speaker 1: which they are clearly emphasizing, and their strategy and public
Speaker 1: narrative has followed suits. So clearly they are adjusting to
Speaker 1: the times. And frankly, they're in a better financial situation
Speaker 1: than every other major streamer. They're the only one really
Speaker 1: that's profitable at the moment. With Disney Plus, HBO, Max,
Speaker 1: Paramount Plus and Peacock all looking at or beyond to
Speaker 1: finally get into black. But in terms of continuing to grow,
Speaker 1: they're really really going to emphasize not only the ads
Speaker 1: here as a more cost effective alternative to cost conscious consumers,
Speaker 1: not only password sharing, where if they convert just ten
Speaker 1: percent of the hundred million or so password shairs, that's
Speaker 1: ten million new subs. But they also want to continue
Speaker 1: investing in non English content and create not just regional
Speaker 1: hits that resonate with the Latin American market or Asia Pacific,
Speaker 1: but that travel globally and we're seeing that steadily increase
Speaker 1: in frequency over the past several quarters. Yeah, really interesting
Speaker 1: to bring up the global perspective of this business. And
Speaker 1: I think what's really interesting is the way in which
Speaker 1: investors have started to buy in. And it was you
Speaker 1: that was on Twitter just saying what we're off more
Speaker 1: up from the lows that Netflix's share price that hit
Speaker 1: analysts looking more far more on the buy side than
Speaker 1: they are on the cull side in terms of ratings. Brandon,
Speaker 1: from your geographical perspective, which leaders can they pull where
Speaker 1: it's going to be growing the most at the moment.
Speaker 1: Is it Latin, is it Asia Visa v U S Europe. Yeah,
Speaker 1: I mean Netflix has years long unrivaled investments in overseas
Speaker 1: content regions, so they really do have a lead on
Speaker 1: the competition in that regard. Asia Pacific has been their
Speaker 1: biggest growth arena over the last five or six corners quarters,
Speaker 1: so they're going to continue to hyper focus on that. Obviously,
Speaker 1: we've seen South Korea become a major international hub for content,
Speaker 1: both his regional hits and hits that can hopefully translate
Speaker 1: to the domestic audience as well. And then there's the
Speaker 1: big White whale and streaming. Everyone is trying to crack
Speaker 1: the code in India. Now. Netflix has gotten off to
Speaker 1: a slow start there. They're behind Amazon and Disney Plus
Speaker 1: in terms of market share, but they continue to experiment
Speaker 1: with morbil only plans with six months and annual plans
Speaker 1: that offer discounts, and they continue to invest in original
Speaker 1: content that covers a variety of regional dialects. So they're
Speaker 1: going to hyper focus on on that area while still
Speaker 1: serving the areas that have proved to be fruitful to them,
Speaker 1: such as Latin America. Alright, Para analytics industry analyst Brandon Cats,
Speaker 1: I think we're gonna have being this conversation about the
Speaker 1: future of Netflix for many weeks to come. Thank you
Speaker 1: so much for joining the program. I want to bring
Speaker 1: a quick correction to our audience, Caroline, because earlier we
Speaker 1: showed a board of the share price of a T
Speaker 1: and T, and after ours when we meant to show
Speaker 1: T mobile, which is disclosed, it will take a significant
Speaker 1: charge from a cybersecurity vulnerability that it disclosed in a
Speaker 1: regulatory filing. After the market close. You can see in
Speaker 1: your screen te Mobile down one point five percent. I
Speaker 1: got my Bloomberg terminal in front of me and I
Speaker 1: can confirm it's down one point five in after hours.
Speaker 1: Will continue to track that story. Now coming up some
Speaker 1: emails shedding light on Elon Musk's involvement in a twenty
Speaker 1: sixteen demo. What does that mean for the ev maker?
Speaker 1: Could it face probes? How does it market its technology?
Speaker 1: Will discuss all of that next. This is Bloomberg. Quite
Speaker 1: the scoop coming from Bloomberg use today. Elon Musk oversaw
Speaker 1: the creation of a video that exaggerated the abilities of
Speaker 1: Tesla's driver assistant system called Autopilot. He even dictated the
Speaker 1: opening text that was claiming the company's car drove itself.
Speaker 1: This is all according to internal emails viewed by Bloomberg
Speaker 1: and our own Dana Hall is here to join us
Speaker 1: and discuss your scoop DNA. And it's extraordinary, really the
Speaker 1: relevancy that this still has, because what's six years on,
Speaker 1: we're still debating whether autopilot is really what it says
Speaker 1: it is. Yeah, and this is pretty extraordinary. I mean,
Speaker 1: this video that I'm referring to is still on Tesla's website.
Speaker 1: It's a pretty seminal video in the history of the company.
Speaker 1: It is this, you know, a great video sent to
Speaker 1: the tune of the Rolling Stone song um Painted Black.
Speaker 1: It's still on Tessel's website, and it purports that this
Speaker 1: car is driving itself and that the only reason why
Speaker 1: a drivers in the cars for legal reasons. But what
Speaker 1: we learned via these emails and via deposition that we
Speaker 1: got a hold of this week is that, you know,
Speaker 1: Musk really oversaw the production of this video, and dozens
Speaker 1: of Tesla staffers were involved, and Musk himself wrote that
Speaker 1: language that you see when the video first starts playing.
Speaker 1: I want to go back to the basics of this
Speaker 1: story because it's important so we're talking about some emails
Speaker 1: that Elon Musque sent to quite a large group of
Speaker 1: the Autopilot team. We have some of it that we
Speaker 1: can bring up that I'll read you. Since this is
Speaker 1: a demo, it is fine to hardcore code some of
Speaker 1: it since we will backfill with production code later in
Speaker 1: an O tier update O T over the air update.
Speaker 1: What is Elon must talking about here? So this was
Speaker 1: so the first email that we got is an email
Speaker 1: that went out to the entire Autopilot team in mid October,
Speaker 1: and he's basically like, all hands on deck for this demo,
Speaker 1: and he's basically saying, don't worry, like we're going to
Speaker 1: continue to work on this code. We're going to continue
Speaker 1: to refine it we find it through over the air
Speaker 1: updates and over their updates. Is something that Tesla regularly does.
Speaker 1: But what's important is that nine days later he in
Speaker 1: a second email, He's basically like, this is the language
Speaker 1: that I want in the video, and the language is
Speaker 1: basically ultimately saying this is going to drive itself. I'm
Speaker 1: telling you where we are going to be rather than
Speaker 1: where we are in this here and now. The here
Speaker 1: and now. Dana is also that there's loads of probes
Speaker 1: into autopilot right from various authorities in the US. Yeah,
Speaker 1: so this is the this is the thing that I
Speaker 1: think will be interesting to watch going forward. You have
Speaker 1: sort of two simultaneous things happening. The first is families
Speaker 1: of drivers that died in crashes where autopilot was engaged
Speaker 1: or may have been engaged, are suing the company. I mean,
Speaker 1: there are several civil cases ongoing, including the case of
Speaker 1: Walter Huang, which is here in the Bay Area, and
Speaker 1: that trial begins in March. And then secondly, you have
Speaker 1: you know, NITZA and the California Department of Motor Vehicles
Speaker 1: looking you know, autopilot kind of on two fronts, both
Speaker 1: the technology itself as well as how it was marketed
Speaker 1: to customers. And you know, bureaucracy moves very slowly. I
Speaker 1: don't know what the latest is on those investigations, but
Speaker 1: this is technology that has been you know, under scrutiny
Speaker 1: for quite some time now, and I think what's what's
Speaker 1: relevant is that, Okay, yes, we got emails that are
Speaker 1: frankly six years old, but they are they show just
Speaker 1: how heavily involved Musk himself was in the creation of
Speaker 1: the video, the production of the video, and what the
Speaker 1: language of the video was going to say. Alright, bloom
Speaker 1: bags down the hole. Just terrific reporting alongside Seawan O.
Speaker 1: Kaine is at in Austin. Thank you so much. Just
Speaker 1: a few years ago people were writing stories about how
Speaker 1: this is stigmatized and how people should not talk to
Speaker 1: AI and this is creepy and strange. Now this is
Speaker 1: not a question anymore. But again, now the question is
Speaker 1: it okay to have any golfer? Is it okay to
Speaker 1: have that outwork? Jenni Acuta, CEO of the AI chatbot Replica,
Speaker 1: which we spoke to last week, And now let's bring
Speaker 1: in Andrew Straight for more context on all of this,
Speaker 1: because he's an Associate director of Emergent Technology and Industry
Speaker 1: Practice over at the Aida Lovelace Institute in London, focusing
Speaker 1: on research on policy on practice. Basically, sure and the
Speaker 1: data and AI work for people, work for society. But
Speaker 1: what's so fascinating about your background is you've long worked
Speaker 1: in AI ethics, you've long worked in content moderation. You
Speaker 1: worked DeepMind, such a standout AI performer over in the
Speaker 1: UK and which is ultimately bought by alphabets. Google talk
Speaker 1: to us about when we're thinking of chat gypt, when
Speaker 1: we're thinking of replica and all the innovations around chatbots
Speaker 1: and AI, are we up to speed with the ethical
Speaker 1: ramifications here. It's a very good question. I would say
Speaker 1: that in general, we have continued to not do the
Speaker 1: best of jobs of communicating limitations and risks. These kinds
Speaker 1: of technologies can raise people society. Um, these are very
Speaker 1: exciting technologies. I think there's no doubt to say that
Speaker 1: general models are raising all kinds of exciting applications from
Speaker 1: home writing to co generation. But they are not magic.
Speaker 1: They're built on hidden a process of labor that are
Speaker 1: oftentimes relying on exploited and underpaid workers, and they can
Speaker 1: have very serious impacts and people's society that needs to
Speaker 1: be better communicated. So it's critical as developers these technologies,
Speaker 1: as policymakers that we create the conditions for these technologies
Speaker 1: to be beneficial to people in society. That's something we
Speaker 1: certainly can see these technic these tech companies doing a
Speaker 1: bit more of. Yeah, it feels like open AI, for example,
Speaker 1: which is behind chatching Piece, is very much trying to
Speaker 1: have the narrative of how do we ethically introduces, how
Speaker 1: do we ensure that it's iterating at a safe pace?
Speaker 1: But what more can be done where in the world,
Speaker 1: for example, is working well with private, with public, with academics,
Speaker 1: with governments, for example. It's a very good question. Um.
Speaker 1: One thing I think that we can see more of
Speaker 1: is initial consideration of the potential uses or misuses of
Speaker 1: these technologies and building in safeguards that are meaningful to
Speaker 1: prevent those misuses. So, to give up a credit, they
Speaker 1: when they release chat GPT, they were very careful to
Speaker 1: put in place safeguards to prevent certain types of toxic
Speaker 1: or harmful content or dangerous content from being shared. But
Speaker 1: as you can see, these these kinds of safeguards could
Speaker 1: very quickly be overcome. If you typed in the appropriate response.
Speaker 1: You could get chat GPT to give you instructions now
Speaker 1: to make a Molotov cocktail or how to hotwire a car. Um.
Speaker 1: And even more concerning is that it's not just the
Speaker 1: story of chat GPT. Even if Chat GPT and Opening
Speaker 1: Eye put in these kinds of of safeguards, other types
Speaker 1: of companies doing creating generative models may not do the same.
Speaker 1: So I think a few things are needed. One is
Speaker 1: there needs to be more cross industry collaboration, communication and
Speaker 1: discussion about the kinds of risk these technologies pose. There
Speaker 1: needs to be more discussion and clarity of the kinds
Speaker 1: of standards need to be met in order for these
Speaker 1: technologies to be released safely. And there also needs to
Speaker 1: be a bit more clarification and communication with members the
Speaker 1: public about those impacts. Um I'm thinking particularly there of
Speaker 1: educators and creators who are most impacted by these technologies
Speaker 1: at the moment. And lastly, we need really strong and
Speaker 1: stringent regulation. We do a lot of public attitude surveying
Speaker 1: and research in our in our institute, and one of
Speaker 1: the most clear messages that comes across is people want
Speaker 1: regulation for AI. They want to feel safe, They want
Speaker 1: to have some sense that government has a grip on
Speaker 1: these technologies and is putting in place the right safeguards,
Speaker 1: keep them, keep them stick, Andrew. The big news headline
Speaker 1: that that I saw on Thursday today in the world
Speaker 1: of AI was the FBI Director Chris A. Ray saying
Speaker 1: he's deeply concerned about China's research in the field of
Speaker 1: AI and it in it's AI program and what it
Speaker 1: might use AI for an independent research group like yours.
Speaker 1: Do you see what China is doing in the field
Speaker 1: of AI is a worry. I think what the FBI
Speaker 1: talking about here and broadly what others have talked about,
Speaker 1: is the military applications of AI that could pose a
Speaker 1: threat to society. It's a it's a concerning development, certainly
Speaker 1: whenever you are kind of rushing into the use of
Speaker 1: AI from military and times weapons. But it's important to
Speaker 1: acknowledge that's not simply a China problem. Many militaries around
Speaker 1: the world are are developing these kinds of technologies, again
Speaker 1: oftentimes without much consideration for the kinds of race dynamics
Speaker 1: that doing so can create between other countries. So in
Speaker 1: the UK and the US, in other parts of the
Speaker 1: world these kinds of Tina's weapons systems are being developed.
Speaker 1: There are as I understand, it's some some excellent work
Speaker 1: being done to develop ethical codes of practice groups like
Speaker 1: them defense, but it is important to acknowledge that those
Speaker 1: are are nut risks unique to China, that those are
Speaker 1: very serious ethical and legal considerations that need to be
Speaker 1: seriously considering the dress on the international level. All Right.
Speaker 1: Andrew Straight, Associate Director of Emerging Technology and industry practice
Speaker 1: at the aid of loves Lace Institry. Thank you for
Speaker 1: staying up so late for us. Welcome back to the technology.
Speaker 1: I'm Caroline Hyde in New York and I made lovelow
Speaker 1: back in San Francisco. And let's get straight back to
Speaker 1: the Netflix news and the future of the company and
Speaker 1: Read Hastings and bring in John Klein, the CEO of
Speaker 1: hang and a former president of CNN. Let's be honest
Speaker 1: while we've got you on the show. You know this industry,
Speaker 1: you know the names in the industry. There was a
Speaker 1: big stock reaction to the news that Read Hastings would
Speaker 1: step back as co CEO go to the executive chair position.
Speaker 1: Greg Peters, a name well known, steps up to cocy
Speaker 1: uh Um, what do you make of all of that?
Speaker 1: Is just an example of good succession planning well. At first, Blush,
Speaker 1: it feels like the opposite of the Bob Eiger situation,
Speaker 1: where he decided to dive back into a horribly messy
Speaker 1: macro environment in the hope of fixing it. Whereas Reid
Speaker 1: looks like he is stepping back a little bit. But
Speaker 1: then as you think about it a little further, you know,
Speaker 1: an executive chairman is very different than a non executive chairman.
Speaker 1: Executive chairman sort of says, I still have to clear
Speaker 1: everything if I want to. I've still got an office
Speaker 1: right there, and you're gonna see me all the time.
Speaker 1: Plus the fact that they brought in a co CEO. Still,
Speaker 1: I thought when they elevated Ted Serrando's to co CEO
Speaker 1: that that was the sign that he was the success
Speaker 1: So imagine now the idea that he was not the successor,
Speaker 1: and in fact he's sort of pemmed in on both sides.
Speaker 1: I don't know how that's gonna play out. I don't
Speaker 1: know any of the psychology involved among these people, but
Speaker 1: I just wonder how that's going to play out. John,
Speaker 1: You've led sort of legacy traditional media companies, You've led
Speaker 1: digital media companies. Um, where does Netflix sit right now?
Speaker 1: For you? And I guess the leadership of this growing
Speaker 1: and increasingly competitive field, you know, Disney, Warner Brother, Discovery.
Speaker 1: The data shows they're growing. They're also considering whether they
Speaker 1: aggressively spend, whether they pull back. You know, is Netflix
Speaker 1: a healthy company despite kind of the shake up they've
Speaker 1: had it management? Well, Netflix transform the entire media industry,
Speaker 1: not so much by the content choice as they made,
Speaker 1: but by deploying AI data crunching to better understand what
Speaker 1: content they ought to make and how to market it.
Speaker 1: So they belong in the Hall of Fame for that.
Speaker 1: But I think everybody's ignoring TikTok. TikTok has passed Netflix
Speaker 1: as the number two streaming choice for US audiences under
Speaker 1: thirty five, and that is huge. Gen Z is part
Speaker 1: of They are a tsunami and they're making their choices
Speaker 1: with short form video that doesn't cost barely anything. And
Speaker 1: and meantime, everybody's obsessing over Netflix subscriber growth, but the
Speaker 1: people are voting with their with their swipey fingers. And
Speaker 1: you know, I run a gen Z platform. Hang enables
Speaker 1: fans to watch sports on TV alongside athletes and entertainers
Speaker 1: and celebrities, and we spend next to nothing on content,
Speaker 1: but we've grown one thousand x primarily with gen Z
Speaker 1: users because they care about the immediate, they care about
Speaker 1: meaningful moments, and they want to be able to dip
Speaker 1: in and out whenever they feel like it. That's very
Speaker 1: different than the beautifully constructed content models that all the
Speaker 1: streaming the traditional streaming platform are using so I think
Speaker 1: everybody's ignoring the TikTok elephant in the room. I think
Speaker 1: that's really interesting ring that, John, because I always remember
Speaker 1: the surprising competitor that Netflix used to reference was gaining
Speaker 1: and really felt that that was where the eyeballs were.
Speaker 1: And of course now setting up their own sort of
Speaker 1: gaming focus, you're saying, look, it's actually really social media,
Speaker 1: but this new generation of social media, and John, to
Speaker 1: that point, let's talk about culture for a minute, because
Speaker 1: you're someone who's had to think about this long and hard.
Speaker 1: Whether you've been in the original media this CNN roles,
Speaker 1: whether you're now with hanging thinking about cultivating that that
Speaker 1: innovative style and and that's really also what Read Hastings
Speaker 1: was known for was shaking things up when it comes
Speaker 1: to a corporate culture, when it comes to reinventing the
Speaker 1: way in which people have responsibility but also freedom. Are
Speaker 1: they able to innovative? Are they innovator? Are they able
Speaker 1: to take over and take on the likes of TikTok
Speaker 1: and there are other competitors at the space with this
Speaker 1: new leadership, do you think it's very, very difficult for
Speaker 1: established incumbens to to change a culture but we've seen
Speaker 1: it happen at Microsoft, and you know here they are
Speaker 1: still players and and so it can be done, but
Speaker 1: it's a big mission. It's a little harder to do
Speaker 1: with three people at the top, which is what Netflix
Speaker 1: now has. And and maybe I'm a little colored by
Speaker 1: the fact that I am the media consultant for the
Speaker 1: show's succession where it's always uh, some sort of diabolical,
Speaker 1: underhanded goings on in the corporate suite and the living room.
Speaker 1: But it just looks to me, you know, culture starts
Speaker 1: at the very top. That's how cultures are set. It's
Speaker 1: a big part of why I think Eiger came back
Speaker 1: in because he was one man who one person who
Speaker 1: created the culture and can enforce it. Um trickier when
Speaker 1: you've got three, especially when you've got the founder of
Speaker 1: the company still there. You know, when I ran CNN,
Speaker 1: Ted Turner had not been there for a good ten years,
Speaker 1: and it would have been kind of awkward for the
Speaker 1: management to make decisions with the founder still sitting there.
Speaker 1: He had a good grace to exit. A lot of
Speaker 1: CEOs and founders realized that it's time to move on.
Speaker 1: You know, when you're done, you're done. I'm not sure
Speaker 1: how this is going to play out. Interesting you talk
Speaker 1: about and it is such a question of corporate governance,
Speaker 1: is also a question of bench now and better Bajaria,
Speaker 1: that was an interesting move that now she takes the
Speaker 1: role of chief content officer, having been heading up the
Speaker 1: global TV side of Netflix. Content is king. We all
Speaker 1: know that. So from your perspective, what are the innovative
Speaker 1: ways she can think about content? Is she going to
Speaker 1: have to start to think about how she keeps people
Speaker 1: glued amid the distraction of social media? Well, you know
Speaker 1: they're they're lucky and neclix And I guess I shouldn't
Speaker 1: say lucky because it was on purpose. They have built
Speaker 1: an incredible data capture and analytics engine that eliminates the
Speaker 1: gut instinct of executives which are so often wrong. They're
Speaker 1: usually wrong. Look at how many news shows are launched
Speaker 1: on a TVCs and versus how many last even a
Speaker 1: month um And I think what she's probably doing even
Speaker 1: as we speak, is doubling down on drilling into those
Speaker 1: thousands of different taste clusters that tell them what you
Speaker 1: like to watch versus what ED likes to watch versus
Speaker 1: what d other people like to watch, and you're all
Speaker 1: getting hit with different suggestions and each presented in a
Speaker 1: different way because they also understand what kind of thumbnail
Speaker 1: pictures you respond to, what kind of previews and highlights
Speaker 1: you tend to click on, rather than anybody else. So
Speaker 1: they say, everybody gets their own Netflix, and that's true.
Speaker 1: That's an advantage for Netflix in in kind of figuring
Speaker 1: their way through this desert. They've doubled down on the
Speaker 1: amount of Korean programming that they're buying now, and that's
Speaker 1: because their algorithms are telling them to do that. So
Speaker 1: you were just talking a lot about AI. Another way
Speaker 1: that a I impacts the entertainment industry and and will
Speaker 1: do even more moving forward, is by its ability to
Speaker 1: make us dumb humans have insights that we never could
Speaker 1: have achieved. Do our own interesting all about the tech
Speaker 1: backbone here and sendly something you're interweaving with Hang. I'm sure,
Speaker 1: of course the sports streaming eventually you're now doing. Co
Speaker 1: founder CEO of Hang, John Klein, we thank you so much.
Speaker 1: Let's pivot here a little bit and let's talk about
Speaker 1: well AI. We've already been worrying about its implications to
Speaker 1: cyber let's talk about cyber attacks more generally now still
Speaker 1: a big concern these days, but few of your companies
Speaker 1: are actually infected with ransomware. Then they're actually having to
Speaker 1: yield to the extortion payments demanded by the hackers. That's
Speaker 1: according to new research on the blockchain forensics firm Chain Analysis.
Speaker 1: What's the reason behind this? Jackie Cohen's with us, head
Speaker 1: of cyber threat intelligence at Chain Analysis. Wonderful Jackie to
Speaker 1: have you right here in the studio and just talk
Speaker 1: to us a little bit. Ransomware, Well, ransom attacks haven't
Speaker 1: died down, but it feels as though companies have some
Speaker 1: of the protections in place to stop them having to
Speaker 1: hand over crypto or whatever they're being asful exactly. It's
Speaker 1: rare we get a good news story associated with ransomware,
Speaker 1: and so it was encouraging to see our results this
Speaker 1: year in terms of ransoms being dulled out, it has
Speaker 1: decreased significantly, as much as forty However, that's not to
Speaker 1: say that ransomware attacks are on the decline. They're actually
Speaker 1: on par or maybe slightly depressed of since last year.
Speaker 1: So what this means is that victims, representatives of victims
Speaker 1: and their insurers are deciding not to pay, and that's
Speaker 1: in part because of concern over sanctions whether they're paying
Speaker 1: a sanctioned entity, but also they're better defended, most of
Speaker 1: them to be able to recover without having to pay
Speaker 1: the ransoms. Jackie, I want to go back some breaking
Speaker 1: news we've got in the last hour or so, which
Speaker 1: mood markets. T Mobile is disclosed that a hacker obtained
Speaker 1: thirty seven million customer accounts data, but it did not
Speaker 1: include payment or card information. The company saying that it
Speaker 1: discovered the hack back on January five. It traced that
Speaker 1: hack to the source and stopped it within a single day.
Speaker 1: They're investigating, but saying early indications that this threat was
Speaker 1: able to obtain the information through a single entry point
Speaker 1: serving customer data. It did not breach the company systems
Speaker 1: or network. I'll ask you, PAS for your reaction to that.
Speaker 1: You know, the information that we have, How common is
Speaker 1: that as a threat that Corporate America Global corporate space. Yeah, unfortunately,
Speaker 1: we do see victims get re victimized. I believe this
Speaker 1: is not the first data breach that has affected T Mobile,
Speaker 1: And what this goes on to to prove is that
Speaker 1: the underground economy that is fueling data breaches and including ransomware,
Speaker 1: is still thriving. There are still threat actors out there
Speaker 1: that are able to sell data for money, whether or
Speaker 1: not they encrypt the victims systems, and there are vibrant
Speaker 1: markets selling user credential as for various purposes. And we
Speaker 1: cannot let our defenses down in despite the promising news
Speaker 1: that we be uncovered in two can you tell us
Speaker 1: about the defenses being used and how we're able to
Speaker 1: keep up with ransomware? With these new threats that Corporate
Speaker 1: America does face and individuals house insurance protecting us, now,
Speaker 1: how are we able to ensure that we feel we
Speaker 1: don't have to call full for the money every time. Well,
Speaker 1: part of it is that insurance companies are now being
Speaker 1: more stringent about the companies that they cover, and then
Speaker 1: in order to cover them, they must incur some security practices.
Speaker 1: They must have backups is a big one, so that
Speaker 1: if the systems do go down, that the company can
Speaker 1: very quickly recover and resume resume businesses. It's not full proof. Um,
Speaker 1: there's no organization or company that is immune unfortunately, and
Speaker 1: companies need to have a plan what happens if they
Speaker 1: do get attacked, how are you going to handle it?
Speaker 1: From illegal pr as well as a security standpoint, and
Speaker 1: go back to the roots of how crypto is involved
Speaker 1: in all of this, because much of the aggravation from
Speaker 1: the crypto community is that it's always tarnished with money
Speaker 1: and laundering speculation and used to drug money, etcetera. But
Speaker 1: the whole beauty of crypto is that you're meant to
Speaker 1: be able to see where it goes, how much is
Speaker 1: the washing still happening, how we're able to ensure that
Speaker 1: the money is moving, and we're able to see who's
Speaker 1: actually at the bad acting front of this. Right, We've
Speaker 1: actually calculated this year that of illicit cryptocurrency use reached
Speaker 1: an all time high. However, only point to four percent
Speaker 1: of all cryptocurrency activity was illicit, and so while the
Speaker 1: raw numbers did increase overall, it is a very small
Speaker 1: fraction and we're only able to calculate that because of
Speaker 1: the transparency of cryptocurrency in the blockchain, and that also
Speaker 1: enables us to track bad actors, to recover funds, to
Speaker 1: pinpoint which cryptocurrency exchanges are our rogue or be able
Speaker 1: to dismantle, and like we did UH like the bits
Speaker 1: Latto exchange yesterday, which was taken down as far as
Speaker 1: an international action dismantled by international law enforcement agencies UM
Speaker 1: also the hydro darknet marketplace, which was taken down to
Speaker 1: We're able to have these successes because of the traceability,
Speaker 1: and it's only a small fraction of overall cryptocurrency activity today, Jackie.
Speaker 1: We started the year with the fascinating conversation with Jenny Stilly,
Speaker 1: the director of SISSA, and her message at CS was
Speaker 1: the private sector has to do a lot more, right
Speaker 1: from when you're designing your producted its origins through to
Speaker 1: how you conduct business. That's why she was there in
Speaker 1: Vegas to kind of get that message. Then, do you
Speaker 1: see the private sector doing enough to ward off the
Speaker 1: threats that you yourself are warning about Now? I really
Speaker 1: view this year's findings of two's ransomware payments on the
Speaker 1: decline as a representative of public and private sector for
Speaker 1: it's working together. We have government entities doing takedowns and sanctions.
Speaker 1: We have private sector partners, insurance companies tightening UH as
Speaker 1: far as what they're willing to pay, being adhering to
Speaker 1: to sanctions concerns as well. As the research community that
Speaker 1: is actively finding vulnerabilities in the encryption that these ransomer
Speaker 1: actors are using. And it really is that fine balance
Speaker 1: of not um not penalizing victims, but being able to
Speaker 1: help them when needed um. It's it's been a really
Speaker 1: phenomenal public and private sector effort, and we rarely get
Speaker 1: the opportunity to quantify what that impact is. Jackie, great
Speaker 1: to have you here in the studio, Jackie Coven think
Speaker 1: you had a slider threat intelligence hutch analysis. I mean
Speaker 1: while coming up the tech behind fake neat and why
Speaker 1: the industry but love by Silicon Body VCS. It's now
Speaker 1: prestling back. We have got to talk about Bloomberg's Big
Speaker 1: Take because it is one of the most read across
Speaker 1: all of our platforms. But it's also about the big
Speaker 1: fake meat a few years ago. Just remember lap made
Speaker 1: meat seemed poised up in the world's one trillion dollar
Speaker 1: meat industry, and now it's belling to look like a fads.
Speaker 1: Tina Shanka wrote the Big Take, joining us, and ultimately
Speaker 1: this is a technology story. It was an idea that
Speaker 1: you could use laboratories, you could use innovation to be
Speaker 1: able to get something that felt and tasted like meat,
Speaker 1: but wasn't had a better footprint on the environment. Now
Speaker 1: we're all putting that we hope that maybe actually lab
Speaker 1: grown like from sells meat is going to be our answer,
Speaker 1: because it feels like Beyond Meat, for example, didn't grow
Speaker 1: in the right way. That's right. Basically, we had these
Speaker 1: founders come out. Ethan Brown founded Beyond Meat in two
Speaker 1: thousand nine, pet Brown in two thousand and eleven with
Speaker 1: impassable Foods, and they made these really big premises. Ethan
Speaker 1: Brown talked about basically copying the structure of meat, but
Speaker 1: doing it with parts that he extracted from plants. Pat
Speaker 1: Brown talked about him which is found in large concentrations
Speaker 1: in in red meat, and he was going to make
Speaker 1: it with a genetically modified yeast and soy and it
Speaker 1: would be uh soily. He like hemoglobin, what he called
Speaker 1: his magic ingredient, and this was going to give his
Speaker 1: burgers this meaty taste. And both companies promised to basically
Speaker 1: up end uh well impossible really went out and said
Speaker 1: they were gonna upbend animal agriculture. Ethan Brown's promises were
Speaker 1: more along the lines of saving uh the world from
Speaker 1: health and environmental disasters. Yeah, just just just little things. UM.
Speaker 1: And that they were going to create products that were
Speaker 1: so identical to the meat that people love that people
Speaker 1: would just swap them in um and sidestep the animal. UM.
Speaker 1: It really hasn't worked out that way. And I think
Speaker 1: most people would agree that these burghers are more a
Speaker 1: lot closer to beef than you know, their forebears, UM,
Speaker 1: like say like morning Star farms from Kellogg. But they're
Speaker 1: they're certainly not close enough and meat eaters just aren't
Speaker 1: that interested or as one expert told me, he said,
Speaker 1: they're just not that into it. Adina. You know, Ethan
Speaker 1: Brown likened it to technology doing away with the horse
Speaker 1: pawn cart, right, that what they were doing in the
Speaker 1: lab would change what's on our plate, do away with
Speaker 1: the meat. I guess it's not quite materialized. We ask
Speaker 1: our own audience, you know what their attitude is too,
Speaker 1: lab grown, lab generated meat. That's the answer for center.
Speaker 1: Respondents said, you know, uh, does you're reporting back up
Speaker 1: the findings of that poll. What is the attitude of
Speaker 1: consumers right now? So basically the market for these products
Speaker 1: is is declining. People UM. A lot of people tried
Speaker 1: them when they first came out, they were really excited
Speaker 1: about them um. And now people are moving away and
Speaker 1: they're going either to maybe they maybe they want to
Speaker 1: keep their meat consumption down, so they're going to something
Speaker 1: like say like lentils or beans um, or maybe they
Speaker 1: are going to chicken, which is less expensive than these
Speaker 1: products and certainly less expensive than beef. A lot of
Speaker 1: people try the products once or maybe even twice, but
Speaker 1: they just don't stick with it. It just does not
Speaker 1: stay as part of their normal routine. The people that
Speaker 1: eat the most of this stuff are vegans and vegetarians,
Speaker 1: who were very much not the target. Interesting and I
Speaker 1: have to say, like from a lincdotal evidence, you know,
Speaker 1: we pour in a lot of beyond meat and impossible
Speaker 1: into our family home, largely because we've got an a
Speaker 1: pair who's vegetarian. But also my husband really didn't like
Speaker 1: the way that meat made him feel. He wanted to
Speaker 1: cut down. But ultimately they weren't kind of healthy enough,
Speaker 1: like they didn't felt like lentils was a better option. Ultimately,
Speaker 1: all these companies trying to uproot themselves, are they trying
Speaker 1: to change, to listen to feedback, to innovate that little
Speaker 1: bit more or is it all just going to go quat? Well,
Speaker 1: yes they do. They do talk about more innovation um,
Speaker 1: and they constantly release new versions. Um. You know the
Speaker 1: Beyond Burger. There's a new Beyond Burger almost every year
Speaker 1: that they say, Um, this one's gonna be juicier, moister,
Speaker 1: or more meat like. Um. And Impossible also does the
Speaker 1: same thing. They also say by doing some of the improvements,
Speaker 1: were also going to make it healthier. But I think
Speaker 1: for a lot of people the the idea of further
Speaker 1: processing is sort of antithetical to making it healthier and
Speaker 1: so um that they might say lower the calories or
Speaker 1: lower the sodium, but that doesn't change whether or not
Speaker 1: it's an ultra processed food. Dana, such great reporting. Fascinating
Speaker 1: to see how the McDonald's deals and this, that and
Speaker 1: the other. Go to Dana Shanka, thank you. Going viral
Speaker 1: today is the influx of venture countal money flowing towards
Speaker 1: social media apps focus on happiness. Take the Berlin based
Speaker 1: Slay app, which lets users send anonymous compliments just raise
Speaker 1: two point six million dollars. Slave reached number one on
Speaker 1: the German iOS app store four days after launch. Then
Speaker 1: there's Gas, an app bought by Discord this week. It's
Speaker 1: here in the US, and it uses anonymous polling to
Speaker 1: send compliments and boost components of users. These apps, said,
Speaker 1: are just putting kind of a spin on social media
Speaker 1: landscape that has kind of improven to thrive on toxicity.
Speaker 1: And I think it's gonna be so fascinating to see
Speaker 1: how basically the science of happiness of kindness, it makes
Speaker 1: you feel good as well as the other person feel good.
Speaker 1: And I wonder if advertisers get into that too. Yeah,
Speaker 1: I mean, Discord's ownership of it is being debated out there.
Speaker 1: But the data behind this was staggering. So in the
Speaker 1: month of October, apparently the app was adding thirty thousand
Speaker 1: new users per hour in October, you know, it's reaching
Speaker 1: a million. And I think everyone needed some feel good
Speaker 1: at that time, right when Twitter was kind of all
Speaker 1: up in the air. And yeah, an interesting one. As
Speaker 1: I say, the kids are going to save us. Keep
Speaker 1: on growing those sorts of happiness and positive apps out there. Meanwhile,
Speaker 1: that does it for this edition of Boomberg Technology. Yes,
Speaker 1: so something very special coming up Friday at noon, Easton
Speaker 1: will round up the biggest tech news of the week
Speaker 1: on our weekly Twitter spaces, Carrol, We've loved doing this,
Speaker 1: hosting our biggest names across Bloomberg News, Bloomberg Intelligence, and
Speaker 1: if you're lucky, if you're lucky, this Friday, we will
Speaker 1: have a special surprise guest in our Twitter spaces. Yeah,
Speaker 1: we're going to talk a bit of VC, the biggest
Speaker 1: stories and let's also interesting anything I'm not promising, I'm promising.
Speaker 1: Tune in and you'll find out this is Bloomberg