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Speaker 1: Broadcasting live to New York, Bloomberg eleventh Yo to Washington,

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Speaker 1: d C Huongborg n one Mark to Boston, Bloomberg twelve

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Speaker 1: one ins to San Francisco, Bloomberg nine sixty to the

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Speaker 1: country Serious at SAD Channel one nineteen and around the

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Speaker 1: globe the Bloomberg Radio plus Aben Bloomberg dot com. This

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Speaker 1: is Bloomberg Surveillance. Good morning. I'm Karen Moscow along with

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Speaker 1: Tom Keenan Michael McKee. The opening val brought to you

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Speaker 1: by s C I Imaginement. Cognitive computing shapes the experience

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Speaker 1: you create for your investors. See how i Seiant Global

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Speaker 1: Operating Platform can be your catalyst for business intelligence at

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Speaker 1: se i C dot com. Slash imagine. Stocks lower at

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Speaker 1: the open, the S and P five hundred down four

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Speaker 1: tenths per cent or about nine points to twenty fifty

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Speaker 1: four down, Jones Industrial average down three tens per cent

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Speaker 1: or fifty nine points to seventeen thousand, six D ninety one.

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Speaker 1: Then ASTACS down six tenths per cent or twenty seven

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Speaker 1: points to forty seven thirty five ten. Your treasury up

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Speaker 1: one thirty second. The yield one point seven nine per said.

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Speaker 1: Yield done a two year point seven four percent nom X,

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Speaker 1: Scrude oil up one per cent or seventy eight cents

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Speaker 1: to forty four or forty three apparrel coll Max school

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Speaker 1: down three tenths per cent or four dollars to twelve

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Speaker 1: eighty seven eight and ounce the euro a dollar fourteen

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Speaker 1: the N one oh six point five five, Tom and

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Speaker 1: Mike so much. We begin three days of coverage of

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Speaker 1: the American labor economy that challenges of the a DP

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Speaker 1: report earlier. With markets moving a little bit, don't want

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Speaker 1: to over play that, We go onto the jobs report.

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Speaker 1: Jim Glassman and Bill gross will join us on Friday.

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Speaker 1: Right now, we are thrilled to bring you Michael Nathanson.

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Speaker 1: He has just been on the Time Warner call working

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Speaker 1: with Moffatt Nathanson. Uh. Just Michael, what an interesting time

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Speaker 1: to speak to you. Your latest note states the obvious,

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Speaker 1: but there's terrific nuance of the takeover of our world

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Speaker 1: by Google and Facebook. Is it a good thing for

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Speaker 1: the consumers of product that Google and Facebook on the

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Speaker 1: high ground on revenue growth in the media. That's a

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Speaker 1: good question, Tom, good morning. It's it's a good thing

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Speaker 1: in terms of is a product transition and ease of use.

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Speaker 1: I'm not sure IF's a good thing long term for

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Speaker 1: their competitors because the two of them we wrote have

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Speaker 1: formed their different properly. You know, they're just massive share

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Speaker 1: gainer as a digital advertising I'm gonna make some news

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Speaker 1: right here, terrific research. Again, folks who protect the copyright

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Speaker 1: of our analysts, we will not send you out the

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Speaker 1: Maffa Nathanson peace. What I do want to know is

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Speaker 1: Twitter's nowhere? Who buys Twitter? I don't think I buys

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Speaker 1: Twitter and eight times soon. Um. As you've seen in

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Speaker 1: Internet land, when these fallen angels start to fall, they

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Speaker 1: really they really decelerate, right, So look at evaluations you've

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Speaker 1: seen for Yahoo and A O. L. I don't think

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Speaker 1: anyone rushes in right now and buy Twitter. Um. And

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Speaker 1: that's that's part of why this stock is falling, right

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Speaker 1: because you've seen you've seen to others other fallen aagles. Yeah,

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Speaker 1: it takes a long time to hit a bottom. You

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Speaker 1: can't talk about Twitter though, without asking how will that

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Speaker 1: National Football League on Twitter is going to play out?

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Speaker 1: For them? Yeah? It's interesting. You know, we would have

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Speaker 1: thought that that deal could have gone to Google YouTube

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Speaker 1: or Facebook. Um, you know, there's not a lot of

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Speaker 1: economic transaction, know benefit to Twitter. There's not a lot

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Speaker 1: of money trading hands to Twitter. But it probably is

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Speaker 1: good to build awareness trying to get some users on

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Speaker 1: the platform who have never tried it. So it's it's

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Speaker 1: a good way to try to build monthly engagement. And

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Speaker 1: we'll see what happens. But it's a good attempt, i'd say,

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Speaker 1: And you probably would agree because you're you're football fan. Yeah, well,

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Speaker 1: and and I do use Twitter not all that much.

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Speaker 1: But the question is, you know, is is that something

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Speaker 1: that contract something? And when you say people won't buy Twitter, uh,

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Speaker 1: is that contract something people might want? It's you know,

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Speaker 1: longer term. I would say to you, I think that

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Speaker 1: that contract will be negotiated by you know, by all

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Speaker 1: aline players like that. Do what I was offered to

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Speaker 1: Twitter wasn't that attractive financially to anyone, So Google Facebook

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Speaker 1: didn't jump at it. But if there was an open

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Speaker 1: negotiation for a long term set of rights, that's gonna happen.

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Speaker 1: And beyond that's going to be entrying to watch. We

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Speaker 1: have some time there. But I think everyone wants the

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Speaker 1: NFL right so they can actually get the right to

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Speaker 1: monetize Michael Nathanson with this moth at Nathanson as we

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Speaker 1: look at the media, Michael, I I look at page

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Speaker 1: twelve of your report, where you go across the industry's TV, Internet, radio, newspapers,

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Speaker 1: magazine outdoor. Let me ask an embarrassing question. I get

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Speaker 1: the revenue dynamics, I get the market shares. Does anybody

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Speaker 1: look at these ads which on online anywhere? We're drowning

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Speaker 1: in ads? I mean it's like all of our media

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Speaker 1: is like, Mike, what is it that football player? It's

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Speaker 1: got every single advertising on their jersey? Aren't we drowning

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Speaker 1: and imaging and branding and all the other stuff that

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Speaker 1: we're confronted with every day? This question to terrupt you

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Speaker 1: by do you know what? You're starting to see companies

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Speaker 1: reduce their ad loads on televis and so you've heard

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Speaker 1: Time Wonder say at Viacom Saturday Night Live, this new

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Speaker 1: season is going to reduce their commercial loads. So you're

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Speaker 1: oddo something which is we're probably overwhelmed with a number

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Speaker 1: of commercials in a given pot, in a given media,

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Speaker 1: and I think you will start seeing people, you know,

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Speaker 1: turning back on the commercial loads of that at it right,

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Speaker 1: because we've all grown used commercial voidance And it's a

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Speaker 1: great question. And I think where that plays along a

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Speaker 1: term for your investors out there is, you know, we've

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Speaker 1: always liked Disney and Fox and Time Warner because of

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Speaker 1: live sports and live news. Right. The idea is, I'm

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Speaker 1: gonna watch commercials during live live radio. So if you

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Speaker 1: can basically put me into a live environment where I

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Speaker 1: can't fast forward commercial skip, this could be more value

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Speaker 1: in that environment. Right. So that's how we've seen as

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Speaker 1: an investor. But you're right, there's just too much commerce. Okay,

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Speaker 1: So but you're you're predicting three years out, four years out,

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Speaker 1: five years out, we're gonna be confronted by less noise.

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Speaker 1: We're gonna be confirmed by less noise when there's gonna

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Speaker 1: be less channels too, by the way, because people cut

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Speaker 1: the cord and then they don't buy the lesser channels. Right,

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Speaker 1: Because what you're seeing with like the innovation around a

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Speaker 1: Hulu product or Sling, it's just you know, thirty or

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Speaker 1: forty channels, right, So you're gonna have you're gonna have

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Speaker 1: packages with less channels, and that clutter is gonna feel

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Speaker 1: less more enough Today there goes to John Tucker woodworking channel. Never, Michael,

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Speaker 1: I want to bring up this these Mike, excuse do

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Speaker 1: you want to jump in your Michael Well, I just

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Speaker 1: wanted to take that to digital and ask if you

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Speaker 1: know we we're seeing apps now that block ads on digital?

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Speaker 1: How does that How does this clutter affect what happens

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Speaker 1: with alphabet slash Google slash Facebook. Okay, So when it

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Speaker 1: comes to digital, you would say, and the search product

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Speaker 1: is is a solution, right because that's where you, the

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Speaker 1: consumer is choosing to look for something. Right, So search

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Speaker 1: because more valuable because if we're all blocking commercials, the

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Speaker 1: fact that you want to go away to a root

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Speaker 1: of this Christmas you search for a hotel, there's value

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Speaker 1: in that search. So search itself will remain valuable, increasing value.

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Speaker 1: When it comes to Facebook, what they're what they're trying

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Speaker 1: to innovate is, look, can we take Facebook data? Can

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Speaker 1: we understand who you are and deliver you a message

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Speaker 1: that's going to be more suitable, more we're targeted to

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Speaker 1: you because we know through your logging data that edge

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Speaker 1: you versus Tom. So they have an advantage on data

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Speaker 1: and they're gonna use that advantage along a term for

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Speaker 1: the rest of the long tail and digital with ad

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Speaker 1: blocking and bots and all kinds of fraud, that's gonna

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Speaker 1: be a harder business for the long tail. And that's

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Speaker 1: that's why basically Google a winning right, they have a

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Speaker 1: different proposition right now. I want to come back on

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Speaker 1: digital and some of the trends. But first of all,

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Speaker 1: Michael Nathanson, do you have a single best buy now

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Speaker 1: somebody that's executing three, four, five years out for good

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Speaker 1: share over return. Well, you know, we have three in immediately,

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Speaker 1: and we have three. We have Fox, Disney and Time Warner.

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Speaker 1: They're old, diversified conglomerates. They owned studio assets like international

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Speaker 1: footprints where they half cable networks or broadcast networks. They

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Speaker 1: have a lot of sports, a lot of news. So

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Speaker 1: those are the three companies that we think on a

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Speaker 1: long term heap. We didn't note this week Tom at

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Speaker 1: r o I c if you look at the returns

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Speaker 1: on capital for those three company they've done a great

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Speaker 1: job managing portfolio in digital land is Google and Facebook,

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Speaker 1: which is consensus, I get, But consensus is right. So

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Speaker 1: I mean I think you go with scale and media

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Speaker 1: scale and on digital and look at programming assets, and

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Speaker 1: those companies have really good positions. Right now, Let's come

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Speaker 1: back Michael Nathanson. Where this working with Craig Moft Mofett Nathanson,

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Speaker 1: I'm want to come back and talk about what we

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Speaker 1: actually do day to day night tonight is John Tucker

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Speaker 1: Binge watches between the Woodworking Network and the Wooden Sailboat Network.

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Speaker 1: That right, uh, you know what, You're not too far

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Speaker 1: off the mark. Those actuallyam Tucker Digital Consumer. We'll be

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Speaker 1: back all right, Let's check in with Michael Barr and

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Speaker 1: get the latest world in national headlines. Mike time, Thank

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Speaker 1: you very much. President Obama will be in Flint, Michigan today.

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Speaker 1: The city has been under a crisis when lead was

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Speaker 1: founded in drinking water. The President will receive a briefing

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Speaker 1: on Flint's water supply during a visit to a local

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Speaker 1: food bank. The President will also speak to a crowd

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Speaker 1: at a high school. Defense Secretary Ash Carter says the

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Speaker 1: war against the Islamic State is far from over. Carter,

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Speaker 1: speaking at a meeting with coalition partners today and stood

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Speaker 1: guard to Germany, says that the death of a Navy

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Speaker 1: seal in Iraq yesterday at the hands of the Islamic

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Speaker 1: state is evidence that the fight remains. American Service member

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Speaker 1: Petty Officer first Class Charles Keaty and the Navy seal

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Speaker 1: I was killed while providing advice and assistance for the

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Speaker 1: pesh Murger forces north of Mosul, who were directly in

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Speaker 1: the fight. Keating is the grandson of the late financier

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Speaker 1: Charles Keating Jr. Who was involved in the Savings loan

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Speaker 1: scandal in the nineteen eighties. Is looking clearer that it

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Speaker 1: will be Donald Trump against Hillary Clinton in the fall

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Speaker 1: general election. Trump won Indiana's Republican primary and shortly after

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Speaker 1: Ted Cruz dropped out of the race. Bernie Sanders one

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Speaker 1: of the Democratic primary in Indiana, but remains far behind

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Speaker 1: front runner Hillary Clinton. Global News twenty four hours a day,

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Speaker 1: powered by our four hundred journalists and more than a

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Speaker 1: hundred fifty news bureaus from around the world. Michael bar Michael,

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Speaker 1: thanks so much, said down negative SMP negative fourteen, the

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Speaker 1: VIC sixteen point five one coming up. Michael Nathanson, Helmfa Nathanson. No,

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Speaker 1: not winter is coming. All digital is coming. We'll talk

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Speaker 1: about the new ways we will consume media. We'll do

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Speaker 1: that next and stay with Bloomberg Radio. We've got some

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Speaker 1: big economic data coming out at ten o'clock on the

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Speaker 1: Bloomberg Advantage I S M None, manufacturing numbers, factory orders

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Speaker 1: and durable goods. Global business news twenty four hours a

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Speaker 1: SNP five hundred on pace to hold at a three

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Speaker 1: week low amid lingering concerns that tepid global growth will

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Speaker 1: weigh on the US economy. We checked the markets every

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Speaker 1: fifteen minutes throughout the trading day on Bloomberg. The SNP

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Speaker 1: five hundred down seven tenths per center, fourteen points down.

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Speaker 1: Jones Industrial Average down seven tenths per cent or one

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Speaker 1: hundred twenty three points to seventeen thousand, six hundred twenty seven.

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Speaker 1: Then ASDACS down seven tenths percent or thirty two points

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Speaker 1: to forty seven thirty ten year Treasury up one thirty

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Speaker 1: second the yield one point seven nine percent yield on

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Speaker 1: the two year point seven four percent NIMEX screwed oil

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Speaker 1: is up two and a half percent or a dollar

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Speaker 1: nine to forty four. Seventy four of barrel comex golled

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Speaker 1: down to tenths per cent or two dollars forty cents.

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Speaker 1: At twelve eighty nine fifty announced the Euro at dollar

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Speaker 1: fifteen ten a yen one oh six point six two

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Speaker 1: time Warner posting first quarter earnings that far surpassed analysts estimates,

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Speaker 1: proving there's still plenty of life in the old model

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Speaker 1: of using live sports to squeeze more revenue out of

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Speaker 1: cable and satellite distributors. It shares up about three percent

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Speaker 1: this morning. Intercontinental Exchange said it decided against making an

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Speaker 1: offer for London as Stock Exchange Group, clearing the way

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Speaker 1: for George A. Borce to combine with the British Exchange

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Speaker 1: in a deal that would create the biggest operator in

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Speaker 1: Europe and as a Bloomberg business flash, Tom and Mike

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Speaker 1: karen I thanks so much to John negative one twelve

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Speaker 1: vics ex Team point four six. We continue with Michael

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Speaker 1: Nathanson working with Moffatt Nathanson on the media. Michael, what

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Speaker 1: I've noticed is a nuance or migration to all digital.

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Speaker 1: It's an amateur I would suggest HBO is apologizing the

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Speaker 1: least for saying we're gonna be all digital. We're here

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Speaker 1: for you all digital. We don't care what you want.

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Speaker 1: You want all digital, We're gonna give you all digital.

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Speaker 1: When does the rest of the industry catch up with

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Speaker 1: that all digital attitude? Know? Tom, You're right, part of

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Speaker 1: the problem has been getting right to be all digital.

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Speaker 1: So HBO and people like ESPN on all the rights

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Speaker 1: to all their shows, they're able to move digitally with you,

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Speaker 1: the consumer. The process right now is going back and

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Speaker 1: trying to get right. I think the next couple of years,

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Speaker 1: HBO's strategy is going to be replicated CBS to doing

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Speaker 1: its showtime is doing it. That's gonna be the way

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Speaker 1: that we're gonna serve you content. We don't care where

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Speaker 1: you see it as long as it's our branded content

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Speaker 1: across any device. But the blockage has been rights, and

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Speaker 1: the rights are now kind of working their way through

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Speaker 1: through negotiations. Basically, how how much longer do they want

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Speaker 1: to depend on rights and just conf with their own stuff.

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Speaker 1: Well that well even when you make their own stuff.

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Speaker 1: So like you know hbos in advantage shows her time

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Speaker 1: they make their own shows, they own their own rights.

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Speaker 1: Your start to see more and more networks make their

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Speaker 1: own shows. You know, am C is doing it, um

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Speaker 1: Ethics is doing it. Or basically you own the rights

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Speaker 1: and therefore you don't really have to go and get

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Speaker 1: approval from studios. So that's part of what's been happening.

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Speaker 1: You know, Netflix has led the way in that just basically,

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Speaker 1: let me own my own shows. I don't need other

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Speaker 1: people's approvals. So that's part of how the rights those

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Speaker 1: rights issues being worked out, which is I'm gonna make

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Speaker 1: my own shows, ignore ignore the rights. I need the

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Speaker 1: fromong the people at this point, right. But but this

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Speaker 1: is this is a nuance I said, as you guys

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Speaker 1: when I was last on the World's Dynamic. And what

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Speaker 1: you're seeing happening is people realize that consumers are shifting

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Speaker 1: behavior and we need to serve people in those verticals, uh,

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Speaker 1: you know, where they are. We need to give them

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Speaker 1: content where they want to see it. That's because that's

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Speaker 1: just work himself out. Well, here's an interesting question to tell.

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Speaker 1: I'm asked you about who was executing? Well, who's going

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Speaker 1: to be the next to adapt to that? To this world?

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Speaker 1: You're talking about? What might we see from somebody that

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Speaker 1: we're not expecting. Well, it's a great question. You know

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Speaker 1: who you see a Google, Facebook, Apple, rumored last year

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Speaker 1: Amazon being moving into distribution business looking like a virtual

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Speaker 1: you know, Comcast or direct TV over the web. You've

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Speaker 1: can sling do it from dish. But will you start

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Speaker 1: seeing bigger and bigger players gained to this business? Right,

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Speaker 1: that's gonna be interesting and that could really unleash um.

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Speaker 1: You know what Tom is asking about. It's kind of

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Speaker 1: the digitalization of TV content That to me is the

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Speaker 1: story for this year. Possibly you know, well you see

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Speaker 1: more players coming in. We talked earlier about is there

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Speaker 1: too much and product? Is there just too much programming?

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Speaker 1: I've read a few articles on this. Aren't we drowning

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Speaker 1: and drama? Drowning in comedy? What are there like forty

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Speaker 1: seven Game of Thrones clones out there? Now? Yeah? You

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Speaker 1: know it? Fox, The guys that ATFX have this great

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Speaker 1: stat that the number of scripted shows across the ecosystem

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Speaker 1: has has grown from two hundred eleven and oh nine

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Speaker 1: to over four dred nine last year, doubling in five

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Speaker 1: six years. And no one's doubling the number of hours

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Speaker 1: they're watching TV, right, so there has to be some

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Speaker 1: type of consolidation, right, that's I think what you know,

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Speaker 1: what you're seeing a sling is, I don't need a

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Speaker 1: hundred channels. Let me just pick my top twenty of thirty.

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Speaker 1: Those will be sports and news and scripted. But there's

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Speaker 1: too much scripts of content out there and the economics

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Speaker 1: and scripted are going to go down uh in time.

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Speaker 1: And that's his cononsense, right, so there needs to be

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Speaker 1: a solidation of those channels. Well then what kind of

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Speaker 1: where does everybody else go? Do we do they go

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Speaker 1: out of business or do we find some other uh

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Speaker 1: platform to distribute the stuff that is now on cable. Well,

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Speaker 1: I think you will see in this four or five years,

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Speaker 1: you know, the core third or fourty channels including broadcast

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Speaker 1: get stronger, and the fringes will will be forced to

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Speaker 1: go to either you know, to do distribute on their

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Speaker 1: own YouTube partnership. So I think strong gets stronger and

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Speaker 1: then the economics work against the people who are just

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Speaker 1: trying to hold on, you know. And as you guys know,

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Speaker 1: when the news business, some of your competitors like Alex

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Speaker 1: there have left the news business. Right, that's going to happen.

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Speaker 1: People just will say the economics don't work and trying

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Speaker 1: to build a product that compeatch with Blueberg or CNBC.

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Speaker 1: But that's just gonna happen. Do we see people podcast

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Speaker 1: TV shows and I don't mean you know, the podcasts

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Speaker 1: as we think of them now, but dramas things like that,

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Speaker 1: The economics will be really hard, right because you can't

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Speaker 1: Gempete with three or four million dollars show on CBS

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Speaker 1: or HBO. It's because it's gonna be hard. Um, So

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Speaker 1: the economics will work against small scales, content manufacturers and distributors.

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Speaker 1: Do we still do the younger generation want the dramas

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Speaker 1: that everybody talks about. I mean, the millennial is going

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Speaker 1: to be into a Game of Thrones ten years from now.

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Speaker 1: The millials. What we see is a millials are gonna

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Speaker 1: watch television on their own terms the way that Tom's

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Speaker 1: describing it. Yeah, they may not be slaves. The four

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Speaker 1: hours of linear TV anymore. But you look at Netflix

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Speaker 1: success and their penetration is greatest among younger homes. Wealcare

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Speaker 1: homes were educated homes, right, So they've tapped into a

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Speaker 1: product streaming products that gets fits what people's needs are.

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Speaker 1: And so I would argue again, we're gonna we're gonna

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Speaker 1: change the distribution methods. We're gonna lose some of the

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Speaker 1: fringe shows, but I can can people still consume content

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Speaker 1: on their own terms, and it's gonna be streaming if

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Speaker 1: that's what people shoot to do. Very valuable, Michael Nathanson,

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Speaker 1: thank you so much, greatly appreciate it with Mofatt nathan

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Speaker 1: Soon as we look at the media wars as we

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Speaker 1: consume it and some of us uh lived as well.

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Speaker 1: Negative one on the market earlier, non negative eighty. A

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Speaker 1: little bit improvement in the tape at nine fifty four, Michael.

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Speaker 1: The economic data what sticks out to you, I mean

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Speaker 1: ADP was a little saggy, a little bit market moving. Yeah,

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Speaker 1: ADP is what people are talking about today, although some

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Speaker 1: people pointing to the unit labor costs rise and suggesting

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Speaker 1: that just you know, it's a little pressure on the

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Speaker 1: on the inflation concerns um we'll see what happens with

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Speaker 1: factory orders and uh yeah, the non manufacturing I s M. Well,

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Speaker 1: we'll look for at ten o'clock look for the employment

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Speaker 1: part of the I s M Non manufact index, because

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Speaker 1: that will either contribute to or take away from the

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Speaker 1: feelings about a DP. Okay, well, very good. The Tonies yesterday,

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Speaker 1: we had a lot of fun doing that with the

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Speaker 1: head of the Actor's Equity Association. Uh now joining us.

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Speaker 1: She's working with Cynthia Arrivo, Jennifer Hudson, and Danielle Brooks

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Speaker 1: and the Color Radio. Her name is Carol Masster. She's

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Speaker 1: at the Paramount Hotel with the star of the Crucible,

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Speaker 1: Corey Johnson. What are you guys doing besides getting good lunch? Well,

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Speaker 1: let me set this scene. Here. We are at the

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Speaker 1: Paramount tom and you know, everybody was nominated yesterday. They're

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Speaker 1: just walking the red carpet. This is their first opportunity

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Speaker 1: to talk with the press that we were surrounded by,

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Speaker 1: you know, everybody, and anybody who's on Broadway right now,

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Speaker 1: of course, everybody, anybody Lynn Manuel Miranda though has got

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Speaker 1: to be you know, the most cut star of the night.

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Speaker 1: You know, Hamilton's what it was a history sixteen Tony nominations.

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Speaker 1: They want for best shortest line of the bathrooms. They

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Speaker 1: won for the fastest drink orders ticket to get on Broadway.

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Speaker 1: Oh no, they didn't get for that one. Um. So

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Speaker 1: really fascinating and we're hoping to uh and planning to

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Speaker 1: talk to you know, various individuals, Jeff Daniels, Gabriel Byrne, Franklin,

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Speaker 1: Jella Um, all of them. Steve Martin is here as well.

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Speaker 1: So it's just a pretty cool event. And uh, like

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Speaker 1: I said, Hamilton, we're just hoping Corey that we can

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Speaker 1: score a ticket. Maybe. Yes, that's that's I think that's

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Speaker 1: undermined of everyone in New York and beyond is trying

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Speaker 1: to get those tickets. The idea of drama and the

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Speaker 1: musicals as well. Moving forward, as we heard yesterday, an

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Speaker 1: exceptionally strong year for Broadway. Carol Master Corey Johnson. Next

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Speaker 1: giving you the spirit of Midtown Manette, and they do

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Speaker 1: that from s West in the Paramount Hotel, which is

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Speaker 1: which is has become over what twenty plus years iconic.

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Speaker 1: Michael McKee with Midtown and this was anteresting show. I'm

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Speaker 1: gonna go try the Woodworking Channel tonight become the second

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Speaker 1: viewer John Tucker makes. You're going to be surprised at

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Speaker 1: the number of I'm not even gonna try to argue

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Speaker 1: with you. Okay, it's May the fourth. May the fourth

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Speaker 1: be with you. Just Bloomberg