Speaker 1: From the heart where Innovation, Money and power. Collie in
Speaker 1: Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde.
Speaker 2: And Ed Ludlove.
Speaker 3: I'm Caroline Heyde of Bloomberg's World headquarters in New York
Speaker 3: and Imed Ludlow in San Francisco.
Speaker 4: This is Bloomberg Technology.
Speaker 3: Coming up, we break down Disney's results. As the media
Speaker 3: giant takes a hit amid the battle for streaming dominance class.
Speaker 5: We'll bring you my conversations from Google io and here
Speaker 5: from the SAP CEO as the company's team up with
Speaker 5: Google Cloud to maximize AI usage, and.
Speaker 3: Microsoft announcing it's freezing salaries this year. As the tech
Speaker 3: giant looks to navigate economic uncertainty, we'll bring you the
Speaker 3: details so much more this hour. And the market too
Speaker 3: is trying to navigate economic concertainty at the moment. War
Speaker 3: is about the debt ceiling, worries about the ongoing concerns
Speaker 3: around US banks, and yet tech in outperforms. We're up
Speaker 3: only a tenth of a percent and managed to shake
Speaker 3: off some of the nerves and the rest of the
Speaker 3: market at the moment, we're up just some fifteen points. Now,
Speaker 3: there was economic data that the jobless claim showed some
Speaker 3: worry about the slowing in the jobs market, inflatory pressure
Speaker 3: dialing back a little bit when it comes to producer prices,
Speaker 3: the two year yield is coming down on that perhaps
Speaker 3: fall down in the inflationary pressure. But does this mean
Speaker 3: some sort of restrastionary environment? That is probably the watchword
Speaker 3: for today. We're look at KBW bank index under pressure
Speaker 3: with of course pack West the one that we look
Speaker 3: at front and center. Let's stal it on AND's of
Speaker 3: cour's happening in terms of the desire to get into
Speaker 3: a haven means the dollar is going higher, it means
Speaker 3: crypto is going lower off by two and a half percent.
Speaker 3: So Bitcoin currently training at twenty seven thousand on the
Speaker 3: day ed. But go into some of the micro the
Speaker 3: earnings and the like.
Speaker 5: Yeah, actually, outside of earnings, there's quite a lot of newsflow.
Speaker 4: There's driving these moves.
Speaker 5: Peloton a recall of two point two million bits. We're
Speaker 5: going to get into that late in the show with
Speaker 5: Bloomber's Mark Gunman. But at one point in the session
Speaker 5: that's stock at a record low. It's having an impact.
Speaker 5: Alphabet pair of Google up significantly five percent, biggest jump
Speaker 5: since the first week of February.
Speaker 4: It's trading at August high.
Speaker 5: The market like what it heard about what they're doing
Speaker 5: in the field of AI, and we will hear more
Speaker 5: about that as well. Interesting that some of its peers
Speaker 5: in the AI space, Microsoft and Video a little softer,
Speaker 5: both of them down around to both of them down
Speaker 5: around eight tenths of one percent. Disney is the big
Speaker 5: mover to the downside, and that one is on earnings
Speaker 5: and miss on subscribers and profit in the current period
Speaker 5: a loss will be wider or widening from the past quarter.
Speaker 5: It's interesting because they're still on track to meet that
Speaker 5: cost reduction goal, but there are some worrying signs about
Speaker 5: the cost of streaming. It's streaming or nothing, so let's
Speaker 5: stick with Disney. Bringing bloombergs Chris Palmery from LA That
Speaker 5: subscriber miss Chris was quite interesting because it seems to
Speaker 5: be showing the impact of bringing in an AD supported
Speaker 5: tier in the quarter gone right.
Speaker 6: I mean, some people would argue a cheaper air supported
Speaker 6: a tier would bring in new subscribers, but need out
Speaker 6: for the second quarter has lost Disney plus subscribers overall.
Speaker 4: That's partly with.
Speaker 6: When they introduced the new tier, they really raised the
Speaker 6: cost of the ad free version thirty eight percent, and
Speaker 6: so I think you're definitely seeing some people canceled for
Speaker 6: that reason, and there's concern now have we peaked in
Speaker 6: streaming penetration.
Speaker 4: That's that obviously is worrisome.
Speaker 3: Christy McCarthy, the CFO, though, trying to cast this as
Speaker 3: a blit when it comes to increased spending from a
Speaker 3: marketing perspective, Chris, why don't investor sort of seeing it
Speaker 3: as that.
Speaker 6: Well, you know, that's the thing is that there's been
Speaker 6: so much focus in the last few months and less
Speaker 6: on subscriber growth in these companies and more on let's
Speaker 6: ring profits from this, but now this seems to be
Speaker 6: now a focus on both as well. It's going to
Speaker 6: be difficult. There was a lot of things on the
Speaker 6: call to ponder suggestions. For example, that Dieiger now lights
Speaker 6: the WHO streaming service, wants to keep to that and
Speaker 6: that which means they'll have to buy out the one
Speaker 6: third of WHO that they done. There's also a big
Speaker 6: write off on content that they're now no longer putting
Speaker 6: on the services.
Speaker 4: So at the same time they're talking.
Speaker 6: About raising the cost of the Disney Plus service, they're
Speaker 6: reducing the programming on it, so there's a lot of
Speaker 6: uncertainty and streaming right now.
Speaker 4: And also, I.
Speaker 3: Mean the people who've left from the streaming unit as well,
Speaker 3: the fact that all at the same time they are
Speaker 3: thinking about costs, they are cutting into their labor, into
Speaker 3: their talent pool, and a large lot of that comes
Speaker 3: from the people who actually launched Disney Plus right right, And.
Speaker 6: You know, overall we're in the midst of Disney's in
Speaker 6: the midst of a seven thousand person reduction, hoping to
Speaker 6: say five and a.
Speaker 4: Half million billion dollars in costs.
Speaker 6: You know, this was not the maximum quarter for that.
Speaker 6: It'll be the current one where a lot of the
Speaker 6: people were let go. But there wasn't a lot of discussion.
Speaker 6: They said they're on progress to meet those targets, but
Speaker 6: not a lot of discussion about how much they're really saving.
Speaker 6: And we'll see this year. So that's another concern. The
Speaker 6: discussion across.
Speaker 5: Spinningbek Television Radio Morning is whether Disney is a technology
Speaker 5: company or if it's a media and entertainment company.
Speaker 4: And it's interesting the.
Speaker 5: Bright Spot Chris the Park's business technology company that operates
Speaker 5: a park's business.
Speaker 6: Well, they would certainly like to think that they're technologically savvy.
Speaker 6: You know, they have all these you know, you can
Speaker 6: order online, everything's you know, through your app nowadays you're
Speaker 6: you know, you pay a little extra ZiT the app
Speaker 6: and you can cut the line on the rides.
Speaker 4: So there's a whole lot going on there.
Speaker 6: But yeah, but basically this is an experiential business.
Speaker 2: Uh.
Speaker 6: And you know it's certainly in the future we'll all
Speaker 6: be watching things online. But you know, it depends on
Speaker 6: you know, really human interaction to to make those great
Speaker 6: movies and TV shows work. So you know, I would
Speaker 6: put Disney in the media and entertainment category more than tech.
Speaker 7: And Chris, did they mention AI, Yes, it was a
Speaker 7: discussion of that, And you know, I don't think that
Speaker 7: there's there's there seems to be agreement in Hollywood that
Speaker 7: this is not going to completely replace the screenwriter and
Speaker 7: and so we'll see how that plays out in negotiations
Speaker 7: with the writers strike because the writers want that sort
Speaker 7: of in writing.
Speaker 3: Well, thanks for bringing it back to all things Hollywood
Speaker 3: that you cover as well, Chris, how mary brilliant breakdown
Speaker 3: on what's happening with Disney, and let's talk a little
Speaker 3: bit more about how AI is uphending the way in
Speaker 3: which people are thinking about investing in tech and otherwise
Speaker 3: in the moment, please to just dive into the markets
Speaker 3: a little bit more with Sylvia Jablonski. She's to find
Speaker 3: CTF CEO CIO overseeing what nine hundred million dollars in
Speaker 3: assets under management and some of your ETFs really catering
Speaker 3: to the focus on AI at the moment, Sylvia, And
Speaker 3: do you worry that there's hype priced in or are
Speaker 3: we underestimating the amount of change and the amount of
Speaker 3: well value that can be found.
Speaker 8: Oh, good wording and great to be here with you today. Well,
Speaker 8: I think that we're you know, I think the rise
Speaker 8: in the stack price this year is you know, perhaps
Speaker 8: on some of the zuber ands over AI. But don't
Speaker 8: forget that twenty twenty too. It's very much a tech
Speaker 8: recession here. So I think a lot of that is
Speaker 8: catch up and then the inertia behind the AI build
Speaker 8: out is something that you know, helped propel gains. But
Speaker 8: I do think it's underestimated. I do think that tech
Speaker 8: has a long way to go, and you know, with
Speaker 8: that comes some other components of tech like semiconductor companies.
Speaker 8: For example, AI is just beginning and it's been around
Speaker 8: for a couple of decades, but it is now just
Speaker 8: sort of coming to fruition and becoming monetizable. So if
Speaker 8: you think about what AI can change, it's pretty much
Speaker 8: every sector out there, everything from healthcare you know, robotic surgery,
Speaker 8: research to defense, you know, precise information targeting things like that, banks,
Speaker 8: accuratetit risk, you know, preventing.
Speaker 9: SBB types of crisses.
Speaker 8: So we're just at the beginning of what is going
Speaker 8: to be a major innovation in the way that we
Speaker 8: use technology for the next decade to come.
Speaker 3: It was interesting and yesterday when we had Scale AI
Speaker 3: on and he was saying there's a lot of AI
Speaker 3: tourists is what he's calling them, not much actually being
Speaker 3: applied in the market right here right now. But are
Speaker 3: you thinking along the hype or the reality side of things?
Speaker 5: Well, I think it's interesting in your case, Sylvia, because
Speaker 5: Defiance operates the Defiance quantum etf right, real emphasis on
Speaker 5: those companies' best position to take advantage of developments and
Speaker 5: machine learning and quantum computing.
Speaker 4: It's not performed as well.
Speaker 5: Here today is an as that one hundred down thirty
Speaker 5: percent last year. What within that basket has worked well
Speaker 5: for you and what has let you down.
Speaker 4: Well?
Speaker 9: So we kind of look at it a little bit differently.
Speaker 9: I think what we try to you know, the way we.
Speaker 8: Try to really cater this product and build this product
Speaker 8: is to give investors access to everything that has to
Speaker 8: do with the future of technology, machine learning, and artificial intelligence.
Speaker 8: So in order to do that, you have to include
Speaker 8: the big generals that are performing well, like the Apples
Speaker 8: and Microsoft's you know, ibms NA videos on the semiconductor side,
Speaker 8: and then you also have to include some of the
Speaker 8: smaller companies like Amberella for example, that will be part
Speaker 8: of the you know, the visual aspect of it.
Speaker 9: So there are a lot of things that have to
Speaker 9: happen in order for AI to work right.
Speaker 8: You need to be able to gather data, you need
Speaker 8: to be able to process data. You need a computer
Speaker 8: that's fast enough to do it. So that's you know,
Speaker 8: that's why it's called quantum, right. Quantum computing and the
Speaker 8: speed to sort of process and use all of the
Speaker 8: data is really the key to.
Speaker 9: All of this working right.
Speaker 8: And we already hear the criticisms of that that you
Speaker 8: know AI or you know the initial Bard presentations.
Speaker 9: About bad data, right, so you need all of that.
Speaker 8: So what performed badly well, you know, high interest rates
Speaker 8: and small cap growth stocks perform badly. But when they
Speaker 8: do really, really well is when this innovation truly starts
Speaker 8: to you know, transform industries and take off interest rates
Speaker 8: start coming down, and then you get the whole basket performance.
Speaker 8: For you put the hedge right now or the top
Speaker 8: leading tech companies that are guiding it forward.
Speaker 5: Defines quantum ETF up around twelve percent year today. I
Speaker 5: think the a's that one hundreds up and twenty two
Speaker 5: percent of something single names. What are the companies that
Speaker 5: excite you most of what you just outlined?
Speaker 8: Yeah, so I mean for now, just because of the
Speaker 8: type of market environment you know we're in, I'm sort
Speaker 8: of sensitive to that. So I'll kind of give you
Speaker 8: the obvious ones. I think Microsoft, I think Google, Apple, Amazon, Navidia,
Speaker 8: A M D on semiconductor. You know, all of these
Speaker 8: companies I name first because right now, they have balance sheets,
Speaker 8: they have cash, they can invest in R and D,
Speaker 8: they can do M and A acquisitions, and you know,
Speaker 8: take over companies like in the case of you know,
Speaker 8: Microsoft big investment in open.
Speaker 9: Ai to get chat GBT going, right.
Speaker 8: So I think that right now they're the companies that
Speaker 8: are going to be sort of the performers and this
Speaker 8: you know, kind of the safest place to sit.
Speaker 9: But some of the smaller.
Speaker 8: Plays out there, I think again, like an umbrella we
Speaker 8: just haven't heard about for a really long time, or
Speaker 8: Eve going to pound here. You know, you saw them
Speaker 8: crush earnings. I think these companies are going to start
Speaker 8: coming to the forefront in the.
Speaker 9: Next couple of years as they.
Speaker 8: You know, kind of improve and exceed expectations with their
Speaker 8: innovations that they're working on.
Speaker 3: And Sylvia taking a more macro perspective, can those light
Speaker 3: now aims outperform even if we see growth continue to
Speaker 3: even slow down if we worry that we do hit
Speaker 3: some sort of recessionary environment because the jury seems to
Speaker 3: be out as to whether the tech is some sort
Speaker 3: of safety play in this environment or whether it is
Speaker 3: beholden to macrowing economic environments.
Speaker 9: Well, I think it's a great question.
Speaker 8: And I think that all of the you know, major
Speaker 8: kind of indices and sectors and the top performing stocks
Speaker 8: in those sectors are susceptible to what happens in the
Speaker 8: macro environment. And you know, that feels like an obvious answer,
Speaker 8: but it's sort of not. I mean, we have a
Speaker 8: unique situation now where we have a FED that has
Speaker 8: you know, kept hitting the gas pedal and rising rates
Speaker 8: and slowing down growth. So there are very few companies
Speaker 8: that can truly, truly withstand that and come out.
Speaker 9: With you know, double digit performance.
Speaker 8: But we have to believe that we're getting towards the
Speaker 8: end of that.
Speaker 9: You know, we saw a PPI member.
Speaker 8: It looks like inflation is coming down across all sides CPI, PPI,
Speaker 8: we're seeing, you know, kind of grow slow. So if
Speaker 8: the FED kind of gives us a little bit of
Speaker 8: relief there and these companies that have stood all of
Speaker 8: this can now actually start to spend and increase and
Speaker 8: speed up there R and.
Speaker 9: D and roll out.
Speaker 8: You know, I think it will be a different story,
Speaker 8: and I think tech will need the market. We need
Speaker 8: tech right. We don't have enough people filling jobs. We
Speaker 8: don't have enough factories that can you know, kind of
Speaker 8: meet the supply and demand function out there. We had
Speaker 8: so many inventory issues. So tech solves all of this.
Speaker 8: So if anything, the need for tech and increase of
Speaker 8: spending there is going to increase.
Speaker 3: And what about you know, we talk a lot about
Speaker 3: the FED, which is a central bag to the world.
Speaker 4: What about world stocks?
Speaker 3: So what about I looked at Quantum has orangine there
Speaker 3: of course the French company Airbus. How much are you
Speaker 3: thinking about positioning yourself globally? Are there winners in Asia
Speaker 3: as well that you want to be owning?
Speaker 9: Yeah?
Speaker 8: Absolutely, And this is very much a global story, right,
Speaker 8: I mean it's it's been, you know, very much discussed
Speaker 8: that the US isn't a race towards artificial intelligence, for example,
Speaker 8: versus China.
Speaker 9: So you are going to.
Speaker 8: Have some companies in China that are leading the charge there,
Speaker 8: and you're going to have some companies in the US
Speaker 8: that are, you know, kind of catching up there. But
Speaker 8: over all, the ideas to get this global exposure to
Speaker 8: the top companies that are investing in machine learning, AI
Speaker 8: and quantum computing.
Speaker 5: All right, thanks to Sylvia Jablonski's CEO and CIL the
Speaker 5: defiant ETFs.
Speaker 4: Good to see.
Speaker 10: We take a number of steps to try and increase
Speaker 10: the factuality of the information.
Speaker 1: The first that we do is we train our models.
Speaker 10: To actually understand what is the information on the web
Speaker 10: that corroborates it, that backs up the information, and if
Speaker 10: we can't corroborate it, then we will not output.
Speaker 4: It, and you just won't show We just want to
Speaker 4: do the US.
Speaker 10: We won't show a piece of information. And if we
Speaker 10: think a particular query is unsafe, it's harmful, then we
Speaker 10: will also not provide an AI power.
Speaker 5: At Snapshot, Liz Read Carolina, twenty year veteran of Google,
Speaker 5: we wanted to know what search with generative AI looks like.
Speaker 5: They went on stage and demoed it and it became
Speaker 5: really clear what it actually looks like to the consumer.
Speaker 3: But what's so interesting about the path that Alphabet and
Speaker 3: Google are taking is a cautious one that almost sort
Speaker 3: of the antiphasis to the way in which Microsoft has
Speaker 3: folded it in with being they're really aware that this
Speaker 3: can't go wrong. I thought it was interesting that they're
Speaker 3: calling it a lab.
Speaker 5: Yes, so just like with BARD, they will do a
Speaker 5: waitlisted slow roll out for access testing initially, but we
Speaker 5: also saw how it relates to docs and sheets and
Speaker 5: everyday things that people use.
Speaker 4: And you look at the market reaction. They've really cheered it.
Speaker 5: So slow rollout, but substantive evidence of progress. Here's another
Speaker 5: Google story for you. By the way, Caroline, SAP and
Speaker 5: Google Cloud just announced an extensive expansion of their partnership
Speaker 5: to make enterprise data more open and valuable and to
Speaker 5: advance enterprise AI development. I spoke all about that with
Speaker 5: the Google Cloud CEO Thomas Currian and the SAP CEO
Speaker 5: Christian Client earlier this week.
Speaker 11: Have a listen, sales teams can sell the new offering.
Speaker 11: It will happen, you know, on one paper, with one
Speaker 11: commercial offering, so we actually simplifying it. And actually for us,
Speaker 11: it was actually very important that it comes with an
Speaker 11: attractive price because this has.
Speaker 4: To be a win win win situations.
Speaker 11: Of course, yeah, we want to give our customers more
Speaker 11: reasons to go to SAP and Google, but of course
Speaker 11: we also want to offer this new solution at a
Speaker 11: very attractive price point.
Speaker 5: And Thomas, we come to you and ask how does
Speaker 5: Google Cloud make money from this arrangement?
Speaker 2: Most importantly, I would say, what's the value that customers
Speaker 2: get out of this? Customers get the value they can
Speaker 2: improve their understanding of customer, of their end customers or helping,
Speaker 2: for example, Reschmall in the luxury industry, do that customers
Speaker 2: can improve the way they manage inventory. The work that
Speaker 2: are two organizations that done at home depot, customers can
Speaker 2: be more recise in responding. For example, if you're e
Speaker 2: commerce company and you're making commitments to deliver products on time,
Speaker 2: as we've done with Marcado Libre, customers can plan better
Speaker 2: as our two organizations have helped Motiformed. So the value
Speaker 2: that we both bring is helping people use their business
Speaker 2: systems SAP and Google cloud their data and to transform
Speaker 2: the way that this of customers and manage their business.
Speaker 2: That's what drives value and that's what brings customers to
Speaker 2: both of us.
Speaker 5: Christian In the competitive landscape for corporate applications, you look
Speaker 5: at what Microsoft's done to move early to bring AI
Speaker 5: into corporate applications. I'm thinking about of course Dynamics three
Speaker 5: sixty five Copilot is one example. How much of this
Speaker 5: arrangement is you being conscious of that competitive landscape right now?
Speaker 11: And a good piece is at a lot of partners,
Speaker 11: especially in AI, they are reaching out to SAP because
Speaker 11: I feel a lot of companies have one challenge today
Speaker 11: they are buying AI technology, but what about adoption? And
Speaker 11: now thick about it, eighty percent of the world's transactions
Speaker 11: are touched by an SEP system. So if you're going
Speaker 11: to embed machine learning and going forward generative AI in
Speaker 11: our products, you're immediately going to see high adoption and
Speaker 11: you immediately unfold a lot of value for the customers
Speaker 11: in their business processes. And this is why we are
Speaker 11: so excited about AI and about this partnership, because you
Speaker 11: also need high quality data to really pring AI to
Speaker 11: the next level.
Speaker 5: And to that point, Thomas, both parties are expressing confidence
Speaker 5: that open data cloud is going to basically spur innovation
Speaker 5: in the field of AI.
Speaker 4: What does that look like.
Speaker 2: First of all, we've fundamentally believe data has a critical
Speaker 2: asset for a company, and it's both SAPA and Google's
Speaker 2: joint belief that that should be open so people can
Speaker 2: use whatever tools they want to access the data. Second,
Speaker 2: we are unlocking data and simplifying the use of that
Speaker 2: data in the context of business processes that large customers have.
Speaker 2: I mean, the world's largest, most sophisticated companies in virtually
Speaker 2: every industry round SAP, many are using Google Cloud. The
Speaker 2: combination is unlocking how AI is applied every day. Think
Speaker 2: about a merchandising manager in e commerce trying to figure
Speaker 2: out how much inventory and what product do I maintain
Speaker 2: in what location? A supply chain manager trying to figure
Speaker 2: out where do I need to put capacity in which country.
Speaker 2: Every one of those customers and many more will be
Speaker 2: able to use our joint solution to open up how
Speaker 2: AI is going to help them every day in their
Speaker 2: day to day work.
Speaker 5: Well, on that note, Thomas, are there any specific verticals
Speaker 5: where you expect this relationship with SAP to help you
Speaker 5: do better than AWS and azure?
Speaker 2: Well, we have very strong partnerships in many verticals manufacturing, automotive, retail, healthcare,
Speaker 2: supply chain, and logistics. These are all different industries in
Speaker 2: which we work very closely with the SAP team. There
Speaker 2: are a super strategic partner with us, not just in
Speaker 2: how we bring solutions to customers, but also in the
Speaker 2: deep engineering collaboration and every step as we evolve our
Speaker 2: offerings together. We think it'll bring value and competitive differentiation.
Speaker 3: Just a brilliant interview and really assessing how this is
Speaker 3: going to impact enterprise. Google House CEO there as well
Speaker 3: as the SAP CEO ed.
Speaker 5: Yeah, there was an interesting one to conduct as well.
Speaker 5: Between two big name CEOs are coming up. Microsoft buckling
Speaker 5: down on the costs during a time of mounting economic uncertainty.
Speaker 5: More of the changes to work as salary's coming up next.
Speaker 4: Karen, And this is an interesting one.
Speaker 3: Another company we're watching at Chinese company JD dot com
Speaker 3: e commerce giant Okay just announced that it's relatively recent
Speaker 3: CEO is actually gonna be retiring already, although a long
Speaker 3: term person at the business, handing over the reins to
Speaker 3: a female CFO. As this is a company that is
Speaker 3: struggling with a focus on profitability at this moment. Shares
Speaker 3: spiking up more than three percent corn of sales. Earnings
Speaker 3: actually did beat and the estimates. It's a slowdown when
Speaker 3: they managed to beat what the street had anticipated. From
Speaker 3: New York from San Francisco, this is a bloomberg. It's
Speaker 3: time now for talking tech. First up, Honheim reports its
Speaker 3: third straight quarterly profit miss look. It's the company that's
Speaker 3: the main assembler for most of Apple's signature devices. It's
Speaker 3: a rebound in the iPhone sales last quarter just failed
Speaker 3: to offset the weakness and the overall smartphone market. Meanwhile,
Speaker 3: SoftBank's Vision Fund look as we're losing money again. That's
Speaker 3: despite the rebound in tech stocks here in the United States.
Speaker 3: The unit lost about two billion dollars in March. From
Speaker 3: March even, and its investments in startups in particular, the
Speaker 3: private company has fallen about ninety percent during the year. Meanwhile,
Speaker 3: though the firms are unit that posted some record revenue
Speaker 3: on a quarter a union basis, but some mixed results.
Speaker 3: That's a SoftBank pairs to take that chip designer public
Speaker 3: plus Microsoft. It's freezing pay for all full time workers
Speaker 3: this year for what it says to help navigate macroeconomic uncertainty. However,
Speaker 3: it will consider raising rates for hourly workers. It's the
Speaker 3: latest US tech leader to really tighten its belt for
Speaker 3: investments in other areas.
Speaker 4: En Yeah, we're going to go to Disney next.
Speaker 5: I'm looking at the shares down the most since November,
Speaker 5: subscriber miss widening loss.
Speaker 4: We've got to get to that conversation. This is Bloomberg.
Speaker 9: Welcome back to Bluemare Technology.
Speaker 3: I'm Caroline Hyde in New York and our.
Speaker 5: Meed Lovelow and San Francisco News data earnings. We better
Speaker 5: get a check in on these markets when it comes
Speaker 5: to the technology sector. Actually and a's that one hundred
Speaker 5: slightly outperforming up three tens percent relative to a slightly
Speaker 5: down market. But there's underperformance in chip stocks. A part
Speaker 5: of that some names giving up recent gains, some moving
Speaker 5: to the downside. Maybe some repositioning on who the leading horses.
Speaker 4: In the AI race.
Speaker 5: Interesting as well as to look at the yield on
Speaker 5: US ten years softer buy around six and a half
Speaker 5: basis point seven basis points three point three seven percent
Speaker 5: Bitcoin as well, we're going back towards twenty seven thousand
Speaker 5: US dollars per token. That was a level we were
Speaker 5: at at the end of March. We've lost some momentum
Speaker 5: when it comes to the biggest cryptocurrency by market cap.
Speaker 4: In the equity there is one clear move.
Speaker 5: To the downside, and that is Disney, dropping by the
Speaker 5: most since November. Is subscribe a miss and looking at
Speaker 5: a widening loss, which the company describes as a blip.
Speaker 4: It's all streaming, Carrie, The story is streaming.
Speaker 5: No matter how much we wanted to talk about parks
Speaker 5: and whether this is a tech company or a media
Speaker 5: and entertainment company, we are talking about streaming, and.
Speaker 3: Let's talk about the tech angle with none other than
Speaker 3: Rich Greenfield. He's in the house here in New York
Speaker 3: Lightshed Partners. Of course, I mean you said it. We
Speaker 3: made it in to talk about this today because you
Speaker 3: don't often see a juggernaut like this move eight percent
Speaker 3: of the downside.
Speaker 12: This is a pretty big move for Disney, and I
Speaker 12: think you're seeing sort of the whole media.
Speaker 1: Sectors under a lot of pressure.
Speaker 12: And it's because the traditional, the core business of many
Speaker 12: of these media companies are broadcasting cable networks, and you're
Speaker 12: just seeing those businesses really really struggle. I mean, cord
Speaker 12: cutting is accelerating. You're you know, you're seeing that from
Speaker 12: all of the major players, whether that's Comcast or Charter.
Speaker 12: You've seen it with Issue, just seeing really a real
Speaker 12: acceleration in cord cutting, meeting high single digits.
Speaker 1: You're seeing companies like Comcasts have double.
Speaker 12: Digit declines in their video subscriber businesses. That's having a
Speaker 12: real impact on companies like Disney. You saw it at
Speaker 12: Paramount last week with a huge move to the downside,
Speaker 12: and Paramount forced them to cut their dividend. All of
Speaker 12: these companies are struggling with what is the future there,
Speaker 12: because remember streaming, they're losing money.
Speaker 1: Yeah, they're cutting the losses as you.
Speaker 12: Just profiled, which is good, but their core businesses are
Speaker 12: facing more and more headwinds where revenues both subscription revenue
Speaker 12: and advertising revenue are going down and their cost structures
Speaker 12: are going up, and their only choice is to massively
Speaker 12: cut costs. And that's what you're seeing across the board
Speaker 12: and media now.
Speaker 3: Or indeed charge us more when we do get addicted
Speaker 3: to sentence of screen mass The overall view of Disney
Speaker 3: Plus is charge them for it or get good advertising.
Speaker 12: I think Disney Plus is very similar to what you're
Speaker 12: seeing out of w Warner Brothers, Discovery WBD. You're seeing
Speaker 12: similar strategies of both company wanted to be Netflix, Like
Speaker 12: their goal was to take on and be Netflix, meaning
Speaker 12: a little bit of something for everyone. It was not
Speaker 12: just HBO within HBO Max now called Max. I think
Speaker 12: with Disney they were trying to be a little bit
Speaker 12: of everything, really broadened out the programming, and I think
Speaker 12: what you're seeing now is really a contraction back to
Speaker 12: what their core is. HBO is really centering back on HBO.
Speaker 12: Disney is sort of saying we're going to cut a
Speaker 12: billion and a half of content out of the pipeline
Speaker 12: as well as on the service itself. They just aren't
Speaker 12: equipped really financially to go compete at the level of
Speaker 12: what Netflix is trying to do globally. I think it's
Speaker 12: actually a very very bullish sign for anyone looking at
Speaker 12: this space.
Speaker 1: You should be buying Netflix this morning.
Speaker 12: I mean, that is the career takeaway is that Netflix
Speaker 12: is increasingly quote unquote one.
Speaker 5: Rich consolidation of platforms. The combination of Hulu and Disney Plus.
Speaker 5: This is what Bobaga had to say. There seems to
Speaker 5: be real value in general having general entertainment combined with
Speaker 5: Disney Plus and if ultimately Hulu's that solution with botish
Speaker 5: about that?
Speaker 4: Ay boitish about that?
Speaker 12: Well, it's really interesting, honestly, because ed just a few
Speaker 12: months ago Iiger was talking about how general entertainment was
Speaker 12: undifferentiated sort of you know, sort of calling into question
Speaker 12: the future of Hulu. They had retained that in usent
Speaker 12: Bank to look at selling Hulu. My guess is they
Speaker 12: couldn't find a buyer for Hulu, and they realized that
Speaker 12: they really have no choice other than to absorb it,
Speaker 12: and so I think and they're also looking at Disney
Speaker 12: Plus slowing, and so they're looking at broadening the content out.
Speaker 12: But remember what they announced last night is not really
Speaker 12: a combination of Disney Plus and Hulu. If you subscribe
Speaker 12: to both, you'll see a Hulu tile inside of Disney Plus.
Speaker 12: You won't even get all of the content that's on
Speaker 12: Hulu inside of that Disney Plus tile. You'll have to
Speaker 12: go to the Hulu app for all of the content.
Speaker 12: But it really I think the key trigger is this
Speaker 12: essentially is a signed to Wall Street into the broader
Speaker 12: media industry.
Speaker 1: Disney knows they're going to be buying Hulu.
Speaker 12: It's probably going to cost them at a minimum nine billion,
Speaker 12: but probably ten, eleven, twelve or thirteen billion dollars to
Speaker 12: buy comcasts out of their Hulu stake, and I think
Speaker 12: that's also adding to the pressure on Disney stock because
Speaker 12: it's another financial burden that's coming over the course of
Speaker 12: the next twelve.
Speaker 1: Or eighteen months.
Speaker 5: Rich are Star Wars fans out there in the audience
Speaker 5: will notice they're going into May the fourth there were
Speaker 5: in platform and out platform ads about all of the
Speaker 5: content that was coming relating to that may the fourth
Speaker 5: be with you date? Was that the shifting marketing costs
Speaker 5: that the CFO blamed a widening loss on.
Speaker 12: Look, I think one of the big questions for Disney
Speaker 12: this is broader than just your question on Star Wars.
Speaker 12: A lot of the core franchises have not been firing
Speaker 12: on all cylinders. I mean, look, even Guardians of the Galaxy,
Speaker 12: very well reviewed third film is clearly doing worse than
Speaker 12: the second film. There is really questions, you know, you
Speaker 12: saw it with Black Panther like, Disney's having trouble both
Speaker 12: in their sort of live action film making with their
Speaker 12: major franchises as well as animation. I mean, animation is
Speaker 12: probably the story no one's talking enough about. I mean,
Speaker 12: last night on the call, Bob Iger congratulated Universal, a competitor,
Speaker 12: on their animation success with Super Mario. The lifeblood of
Speaker 12: Disney is animation, and ed think about what was the
Speaker 12: last Disney animated movie that.
Speaker 1: People were really excited about.
Speaker 12: It's been years now, and they're really getting beaten to
Speaker 12: the punch day after day by Universal. And I think
Speaker 12: it's a problem for Disney. And I think it's what Iiger.
Speaker 12: I think more than anything, Iiger is slowing down production,
Speaker 12: focusing on quality over quantity. So it's absolutely the right
Speaker 12: decision for Iger to do. The problem is, it's not
Speaker 12: a quick fix. Last time, when he came in originally
Speaker 12: to Disney the very first time, what did he do.
Speaker 12: What was his quick fix was buying Pixar. There's no
Speaker 12: quick fix. It takes years to turn around animation and
Speaker 12: even just content. More broadly, you don't just change your
Speaker 12: movie schedule overnight. And so this is I think sort
Speaker 12: of what you're seeing in terms of investors. They're becoming
Speaker 12: aware that the fix for Disney is going to take time.
Speaker 5: Fantasia nineteen forty. To answer your question, Caroline, what Disney
Speaker 5: faces is problems in common with the rest of the industry,
Speaker 5: one of them being a writer's strike in Hollywood.
Speaker 3: Yeah, and to that end, costly labor at a time
Speaker 3: where they need people to be writing just rich How
Speaker 3: much is that? Obviously we're seeing overall people worrying about
Speaker 3: writers strike, about the cost of labor, about trying to
Speaker 3: tintrim down. Is this something that affects Disney in particular
Speaker 3: that we spoke about it.
Speaker 12: On the Well, I think you should think about all
Speaker 12: of these companies are losing leave off Netflix, which is
Speaker 12: making billions in you know, ebitdah and free cash flow.
Speaker 12: But all of the other legacy media companies, whether it's
Speaker 12: Disney or paramount ors, Comcast, NBCUniversal, they're losing not a billion,
Speaker 12: they're losing billions on streaming. So anything that slows production
Speaker 12: is actually, in the short term financially on.
Speaker 1: A cash basis, is actually good for them.
Speaker 12: I meaning they will lose less money this year because
Speaker 12: of a long strike. That's sort of perverse, but that's
Speaker 12: essentially what's actually good for these companies on a cash basis.
Speaker 12: The problem is, and I think this is the obvious one,
Speaker 12: a long writer strike clearly is going to impact linear television.
Speaker 1: Come the fall.
Speaker 12: You may not see a lot of your favorite shows
Speaker 12: on air because you need writers for these shows on
Speaker 12: linear TV for people that are still watching linear TV.
Speaker 12: And yes, it's shrunk a lot, but it's still a
Speaker 12: pretty big business for these companies financially, and so that's
Speaker 12: going to have an impact.
Speaker 1: Plus, if the strike goes on long.
Speaker 12: Enough, meaning the fall September October, then you start to
Speaker 12: actually start to impact how much content is on these
Speaker 12: streaming services, and that could also be a problem for
Speaker 12: these companies in terms of keeping subscribers. You saw people
Speaker 12: were clearly frustrated with Disney losing subscribers. Not a big
Speaker 12: number in the US, but lost a little bit of
Speaker 12: their subscriber base last night. That's something they haven't sort
Speaker 12: of seen from Disney in the past.
Speaker 3: There are more immediate headline gramming lines for us to
Speaker 3: focus on with Disney today. But AI did get its
Speaker 3: way there a bit, and it feeds into the right
Speaker 3: to strike and what they're worried about at the moment.
Speaker 3: Is AI in any way you going to help hendags need?
Speaker 3: Do you think is something to be talking about.
Speaker 12: Look, I think AI is a category, is something that
Speaker 12: can help production. Obviously, there's ways that it can speed production,
Speaker 12: certainly if you think about what you can do with
Speaker 12: it creatively. I actually think for most of the media industry,
Speaker 12: I think AI is certainly a risk in the short term,
Speaker 12: not because of piracy. I actually think about what the
Speaker 12: greatest risk of AI right now is imagine the quality
Speaker 12: of content on YouTube, on TikTok, on Instagram reels.
Speaker 1: The better that content.
Speaker 12: We're in a war for time, if you think about
Speaker 12: everything is a war for time. If all of a sudden,
Speaker 12: the content that some random person can create on their
Speaker 12: own and put up on TikTok, or create their own newscast,
Speaker 12: whatever it may be. Like, all of that creates competition
Speaker 12: for eyeballs. And I think when you're talking about advertising,
Speaker 12: you're already seeing the impact that things like Netflix are
Speaker 12: having on taking ad dollars away from traditional media.
Speaker 1: I mean, next week's the big TV up front.
Speaker 12: Now imagine the quality of sort of user generated content
Speaker 12: getting meaningfully better or rich.
Speaker 4: That's what I do, wor Rich.
Speaker 5: Let's go back then to our question of the day,
Speaker 5: which is is Disney a technology company or is it
Speaker 5: just simply a media and entertainment company.
Speaker 4: Very quickly, I.
Speaker 1: Would say it's neither. Disney's an IP company.
Speaker 12: They're probably the best historically at creating IP and monetizing
Speaker 12: it through the flywheel of all of Disney's engines. The
Speaker 12: challenge is their IP hasn't been as good and the
Speaker 12: reason you're seeing, look what happened with their consumer products
Speaker 12: business last night, down dramatically year over year. I think
Speaker 12: the creative engines of Disney not are bad. Certainly, I
Speaker 12: think a lot of other companies would love to have
Speaker 12: disney struggles, right, because their struggles are still better than
Speaker 12: a lot of other companies, but relative to where Disney's
Speaker 12: been over the last five years, Certainly, if you think
Speaker 12: about Iiger's first run where he sort of went off
Speaker 12: into the sunset with this incredible run in twenty nineteen,
Speaker 12: Disney is certainly not firing.
Speaker 1: At that level creatively that they were back.
Speaker 12: In nineteen, and I think that's what investors are concerned
Speaker 12: about and looking for them to turn around.
Speaker 5: All right, rach Greenfield Likeshed Partners. Thank you very much
Speaker 5: for your time.
Speaker 1: Thanks for having me, Caroline.
Speaker 3: I'm still psyched about seeing Little Mermaid. Meanwhile, coming up
Speaker 3: the impact of China US relations on tech investing in
Speaker 3: the US and abroad. We're going to discuss at all.
Speaker 3: Mitchell green from lead Edge Capital is going to be next.
Speaker 3: Also that we want to keep a close sign what's
Speaker 3: happening in the world of banking.
Speaker 9: Pack West.
Speaker 3: It does indeed, lend areas in SF and deposits falling
Speaker 3: nine point five percent last week after we reported that
Speaker 3: the Lendo was in talks for potential investors. That the
Speaker 3: anxiety around the US banking system is still fresh.
Speaker 1: This is Bloomberg.
Speaker 13: American shine of a lot of common interest climate, nuclear pliferation,
Speaker 13: anti terrorism, global stability, you know, and we have differences.
Speaker 13: You know, we're capitalist, they're not, you know, and it's okay,
Speaker 13: we could short that out, but we need to keep
Speaker 13: the Western alliances together, not just around war and Ukraine,
Speaker 13: but around strategic economic or leaderships including trade.
Speaker 5: That was JP Morgan Chase CEO Jamie Diamond there talking
Speaker 5: about the global landscape and the context of rising tensions
Speaker 5: between China and the US. This comment comes as US
Speaker 5: National Security Advisor Jake Sullivan sat down with China's top
Speaker 5: diplomat Wang Yi in Vienna earlier today, as the White
Speaker 5: House is seeking to keep relations from getting worse that
Speaker 5: according to a US official, I want to go deeper
Speaker 5: on China in today's VC Spotlight with Mitchell Green, CEO
Speaker 5: of lead Edge Capital five billion dollars in assets under management.
Speaker 5: You are a VC who has been bullish on China.
Speaker 5: When you hear Jamie Diamond and the news flow of
Speaker 5: the day, do you remain bullish on China?
Speaker 14: I think long term we are bullish, you know, predicting that.
Speaker 14: Thanks so much for having me on. By the way,
Speaker 14: I think long term. We definitely are bullish. Your term,
Speaker 14: like I think it's going to be, will be bumpy.
Speaker 14: It's continued to be bumpy. But I think we would
Speaker 14: also you know, look, we are not I am not
Speaker 14: going to come out here and pontificate about the macro
Speaker 14: and you foreign relations with you know, countries around the world.
Speaker 15: That's pretty much the last thing we are experts on.
Speaker 14: But I do think an open dialogue between our countries,
Speaker 14: and I think it is important that both countries realize
Speaker 14: that both of us need each other, and you know,
Speaker 14: and you know, a military council would be absolutely horrible
Speaker 14: for both countries.
Speaker 5: You were an investor pre IPO in Ali Baba, and
Speaker 5: there is a debate, at least in the conversations that
Speaker 5: I'm having out here in Silicon Valley in your industry
Speaker 5: about not just whether you should put capital into Chinese
Speaker 5: domicile startups, but if you should take money from Chinese
Speaker 5: China based LPs.
Speaker 4: Where do you sit in that debate?
Speaker 14: We we would definitely be willing to take capital from
Speaker 14: We do not have any actually I take it back,
Speaker 14: we have one Asian LP, but we would take additional
Speaker 14: capital like our companies, you know, which are primarily North
Speaker 14: American Europe based, so that we obviously we're investors in
Speaker 14: Alibab and we have an investment in byte Dance and
Speaker 14: and financial like you know, just like we would we
Speaker 14: want to have in our next fund which are raised
Speaker 14: in a few years, we want to have more Middle
Speaker 14: Eastern LPs. I would see nothing wrong with that. In
Speaker 14: Chinese LPs or Korean LPs and things like that. There
Speaker 14: are there are some challenges in some of these other
Speaker 14: countries in Asia with getting money out of the country,
Speaker 14: so they need to have been like you know, they
Speaker 14: need to have the right structures in place. But like
Speaker 14: I have nothing philosophically against it at all. Probably the opposite,
Speaker 14: I'd love to have.
Speaker 3: Mitchell, what about just the ecosystem which we build here
Speaker 3: in the US or indeed in Asia or Europe, the
Speaker 3: regulatory building blocks being built fast enough enough or with
Speaker 3: indeed enough focus and knowledge behind them. We think about
Speaker 3: cryptos startups being frustrated. We think about AI startups looking
Speaker 3: for leadership when it comes to the guard rails already
Speaker 3: in place. Do you feel that we've got that safely
Speaker 3: in the US to thrive in the startup scene.
Speaker 14: I think what's interesting is that regulation in China happens
Speaker 14: like extremely fast, and it's like, you know, like decisions
Speaker 14: are made by a very small group of people and
Speaker 14: made very quickly. You know, the largest tech companies in
Speaker 14: the United States, you know, sure hold a lot of
Speaker 14: market power and can dictate which companies you know, fail
Speaker 14: and succeed, and you know what companies pay.
Speaker 15: And small companies they can make it. You know, they
Speaker 15: can make distribution.
Speaker 14: Distribution is very tight nowadays in terms of you know,
Speaker 14: there's only a handful of big internet companies that are
Speaker 14: all small save smaller companies need to try to get
Speaker 14: distribution through to grow. The Chinese government just like put
Speaker 14: a kebash on it with with with you know, ten
Speaker 14: Cent and Ali Baba like just decided this wasn't like
Speaker 14: a ten year debate, which is going.
Speaker 15: To happen in the United States. There is a lot
Speaker 15: more regulation that.
Speaker 14: Is needed around all this cryptocurrencies.
Speaker 15: You know, we're pretty bearish on a lot of these things.
Speaker 14: I think they're here to stay, but I think somebod
Speaker 14: these don't have real use cases where I think the
Speaker 14: Chinese have done actually.
Speaker 15: A pretty good job with a lot of the regular
Speaker 15: regulatory things.
Speaker 14: AI is going to AI is going to open up
Speaker 14: a whole new can of worms.
Speaker 15: My guess is they will.
Speaker 14: Figure out how you know, I Joe China has run
Speaker 14: like a corporation the US. I mean, I just invite
Speaker 14: you to watch congressional hearings about Facebook and TikTok.
Speaker 15: And you know it is.
Speaker 14: It is quite amazing, and I think we have a
Speaker 14: lot of but I think it's going to take a
Speaker 14: while for regulatory frameworks to come into place, given the
Speaker 14: lack of knowledge it appears and people you know in Washington.
Speaker 3: So despite that lack of AI regulation as it stands,
Speaker 3: are you backing founders coming to you at the moment
Speaker 3: looking to build in the artificial intelligence space? What you
Speaker 3: make of the rate at which companies are sort of
Speaker 3: dubbing themselves an AI business?
Speaker 14: So all these hype cycles like come and go, right,
Speaker 14: Remember a few years ago everybody said we'd have self
Speaker 14: driving cars and you know, you know, taxis, ubers and
Speaker 14: everything would disappear. Pretty sure, I still drive to the office,
Speaker 14: and I bet you do as well. AI is going
Speaker 14: to change the worlds. You know, like if you call
Speaker 14: a Delta Airlines call center, there's no reason you should
Speaker 14: sit on hold for forty five minutes to just get
Speaker 14: somebody who you know, probably has to get somebody else.
Speaker 15: To help you. Ninety five percent of that can be
Speaker 15: solved to the computers.
Speaker 14: Coding is going to dramatically change, you know, email, all this,
Speaker 14: All these things are going to change.
Speaker 15: It's just going to take longer than people think.
Speaker 14: But absolutely, Like we're in business ward, a lot of
Speaker 14: these companies are still quite small, and we tend to
Speaker 14: invest in companies with like, you know, ten million to
Speaker 14: two hundred million of revenues. But absolutely in bessem are
Speaker 14: just announced they're going to put bestmer Venture Partners just
Speaker 14: announced they want to put a billion dollars in the
Speaker 14: like startups in the space.
Speaker 5: Make sure given the size of your target companies. I
Speaker 5: want to ask you about venture debt. Bloomberg writing about
Speaker 5: the data this morning, the venture debt has gone from
Speaker 5: record levels last year to twenty seventeen levels in the
Speaker 5: first quarter of this year. How closely do you track that?
Speaker 15: You could have said the same thing for venture funding
Speaker 15: financing too.
Speaker 14: Look, we've lost in you know, not long ago, and
Speaker 14: I don't know if it was late late March, early April,
Speaker 14: like Silicon Valley Bank was a major provider of venture debt.
Speaker 14: Obviously the shell exists, but it's been acquired, so we'll
Speaker 14: see v As.
Speaker 15: Venture financing is down, venture debt will also be down.
Speaker 15: These things come in cycles.
Speaker 14: Like I think it's frankly like if you liked investing
Speaker 14: in software, Internet, AI, growth businesses, healthcare businesses and two
Speaker 14: the nineteen in twenty twenty, Yeah, sure, just like if
Speaker 14: you liked.
Speaker 15: Him in two thousand and six, two thousand and seven.
Speaker 14: The way you made a lot of money, he was
Speaker 14: doing it in two thousand and nine and twenty ten.
Speaker 14: Like we think the next couple of years of least
Speaker 14: some of the best vintages in like you know, growth
Speaker 14: equity and venture over the next you know, just because
Speaker 14: the best time of invest is in a recession.
Speaker 3: Keep it on being persistent, Mitchell Green me, thank you
Speaker 3: so much. See lead edge capsule there, I'm now what's
Speaker 3: going Viral shares a peloton falling the MoWest point in
Speaker 3: almost seven months. That's after the fitness company recalled get
Speaker 3: this two point two million bikes due to a safety
Speaker 3: hazard with the seat. Mark German break it down for
Speaker 3: us again, another knock.
Speaker 16: Yeah, thank you was always for having me. This is
Speaker 16: the fourth recall in the history of Peloton, right, this
Speaker 16: is less significant than the treadmill Peloton recall a couple
Speaker 16: of years ago where people actually died because of the device.
Speaker 16: This is an issue with the seat post on the bike,
Speaker 16: so that is the metal part that attaches the seat
Speaker 16: sort of the saddle on the bike that you sit
Speaker 16: on well using it to the actual core frame of
Speaker 16: the bike and in some cases the weld joint that
Speaker 16: area could break off and you could fall off the bike.
Speaker 16: There have been a few dozen cases. There have been
Speaker 16: a few injuries. Some bruises are mentioned. The most significant
Speaker 16: injury that was mentioned is a fractured risk. Obviously, none
Speaker 16: of that is good. Peloton and the US Commission that
Speaker 16: handles Products Safety today announce the recall two point two
Speaker 16: million units in the.
Speaker 4: US and Canada.
Speaker 16: They're offering an ad home fix, a replacement part, and
Speaker 16: a video for you to replace it yourself. But as
Speaker 16: of now, if you have an impacted bike, these are
Speaker 16: the original bikes. They're recommending you stop using it until
Speaker 16: the fix is installed.
Speaker 5: Right, and it doesn't impact owners in the UK, Germany
Speaker 5: or Australia. Our thanks to Bloomberg's Mark German. All right,
Speaker 5: so that does it for this edition of Bloomberg Technology, Caroline, Yeah, you.
Speaker 3: Do not want to forget about our podcast. They catch
Speaker 3: up on all of it on the Terminal, online, on Apple, Spotify.
Speaker 3: iHeart from New York. From San Francisco, this is a
Speaker 3: Breenberg
Speaker 10: H