Transcripts For BLOOMBERG Bloomberg West 20160507

Nations ban kimoon has created a trust fund to combat the zika virus. Since 61 countries and january 2015, territories have reported local transmission of the virus, and some have seen an unprecedented rise in cases. The body of the u. S. Navy seal killed during combat in iraq is returning to the United States. The remains of Navy Petty Officer first class Charles Keating iv will be transferred to the san diego area. He is the third u. S. Service member to be killed in combat in iraq since forces returned there in 2014. Global news powered by our 2400 journalists. From the Bloomberg News room, i am ramy inocencio. Bloomberg west is next. Ramy this is bloomberg west. Coming up, we tell you why the latest funding for the chinese Ride Hailing Service could mean bad news for uber. And, it is official, fireeye promotes a familiar face from within. We catch up with the new ceo on a day when shares plunge 19 . And, does donald trump have any friends in Silicon Valley . We find out whether the gop frontrunner has built a wall between himself and potential bay area supporters. The biggest competitor to cooper in china is close to raising 2 billion in its recent round of funding. They close the round in the next few weeks, with a valuation of about 25 billion. That would make it the fourth most valuable start up in the world after uber, xiaomi, and airbnb. Here to discuss this is David Kirkpatrick. Guys, welcome. First off, i want to ask you, david. Is didi actually worth 25 billion . David if uber is worth 60 billion, i think ultimately it is their biggest global competitor. Those Companies Might ultimately consolidate. The Chinese Market is so important. I think if you do it right, you can lift off from there and go global, and im sure thats what they want to do. Ramy when we talk about didi, we have to talk about uber, with both of them brawling in the worlds most populous country. Didistalk with president about whether they could both coexist. I would like to more focus on myself, rather than looking at others. I think the industry is in a more infancy stage. Theres a lot of room for everyone to grow in the market. But for us, it is more to focus on what we have to achieve. Ramy can they both exist . Can this duopoly exist . Here in the u. S. We have uber and lyft and a couple other ones. David in china, the Chinese Company will always have a huge advantage so i would not bet on uber. The Chinese Government can intervene on the side of the local player. They are very willing to do that. Ramy lets talk with keith. I want to ask you about valuation, the 25 billion valuation. Does this concern you . Keith i would have to look at their Financial Performance to decide what they are worth. They are a valuable company, but i cannot opine on that without inside information. Ramy two of the top four Tech Companies in the world are right hailing services. Who knew . This doesnt mean people will want to necessarily program more ridehailing services. What does it mean for you . Keith the key take away is this one of the a winner take all this will not be a a winner take all market. I think uber had hopes to or three years ago that this would be a quasimonopoly business. Lyft is thriving in the u. S. , and others are thriving outside the u. S. , so the idea of a winner take all globally is fiction, and that has Significant Impact on uber valuation. Ramy also, to talk about the general ipo environment in the United States right now you are talking about in your latest gadfly piece, that there is a tech ipo desert. It has been startling. One tech ipo this year, this dell spinoff secure works, so you are having a situation now where there are 150plus richly valued startups, socalled unicorns valued at 1 billion or more, including uber, making a blockade of private companies waiting to go public. It really seems like an untenable situation, where you have all these privately valued startups, these richly valued private startups, and there is no exit, or at least no public exit for these companies. I dont really know where it ends. Ramy david, you are not in your you are nodding at a lot. David i dont know there has to be a nearterm exit. A lot of these companies have enormous resources because they have these valuations and have been able to raise a lot of money. Many of them have a multiyear view before they are looking for their exit. The atmosphere right now globally, politically, economically is so uncertain. Im sure theres a lot of good reasons, even aside from what we might think about valuations, why ipos are happening less right now, and a lot of his factors could change. Ramy we have an interesting graphic, initial public disappointment. I want to bring that up. Its a chart that is an etf of recent Public Companies that have fallen 18 in the past year. Shira, what is to blame for this . Bad Market Conditions . Or should they have never gone ipo in the firstlace . Shira it is a mix. I was really surprised when i ran the data for this column you mention, more than half of the Tech Companies going public since 2010, fiveplus years, more than half of them are trading below the price at which they first sold stock to the public, and that is not much of an incentive to investors buying shares or the executives and other insiders of those Tech Companies to go public, because we have seen the Market Conditions have not been hospitable to young companies, especially ones that cannot make their numbers. Ramy keith, what is your take on all of this . Is it about Market Conditions, or if the company should never have gone in the first place . Keith many of these copies are great companies, great opportunities. However and they have the option to go public whenever they want. However, there is a disconnect between the prior round of financing and the valuations they achieve in the liquid Public Markets, so they have to swallow that disconnect if they want to go public. So some of them may not be burning a lot of cash, and might have a lot resources, as david points out, so they can just wait and hope the market multiple changes. If they are burning a lot of cash, running out of resources, they might not have an option and might have to accept what the current Public Market will give them. There is a set of the 150 the dont have the metrics, transparency, dont have the predictability that you want to see the scale you want to see on , revenue or profits, and those companies have real problems in todays environment. They have significant pressure on them, and theres not a lot of Great Solutions for them. Ramy we will leave it there. Shira ovide, thank you so much for joining us. Keith, David Kirkpatrick, you are both staying with us. A story we have been following. Dell is planning to market a portion of the debt needed to fund its acquisition of emc. 67 billion investors have been on the lookout for a host of debt offerings from dell ever since they got banks to commit 49. 5 billion in financing for the takeover. They will sell an 8 billion term loan offering to institutional investors. Dell needs to get regulatory clearance and the approval of emc shareholders before they can close the deal. Up next, kevin mandia wants sold his security startup for more than and now he is the ceo of 1 billion, the company that bought it. The new chief of fireeye joins us. Plus a repeat success for , spacex. Why this rocket landing marks more than one small step for elon musk. We will explain next. Ramy in this edition of out of this world, spacex has done a for the second time in a month elon musks commercial space venture has landed a rocket on an ocean platform. The booster touched down after launching a japanese can indication satellite. Musk put the chances of a successful landing maybe even because the rocker the rocket will be coming in faster than last time. This was a key test for spacex, which hopes to begin reusing unmanned rockets as early as this summer to lower the cost of each launch. Spacex remains the only company to recover a rocket from launch. Jeff bezoss blue origin also landed a booster rocket but it , never reached orbit. Fireeye shares took a big hit on friday, plunging 20 off the back of the companys latest earnings report. The Cyber Security Company Posted an adjusted loss per share better than estimates, but it was the guidance investors zeroed in on. Fireeye said its secondquarter loss would be larger than years to date sales are down from 815 million previously. Despite the numbers, they announced a changing of the guard. President kevin mandia will take over for ceo dave dewalt next month. Dewalt led the Company Since 2012. The new ceo joins us from mountain view, california for an exclusive bloomberg conversation. Thanks so much for joining us. Kevin thanks for having me, ramy. Ramy lets start with your new role. Congratulations. Second, why you, and what do you want to bring to reignite the fire under fireeye . Kevin why me . I worked with dave dewalt. He was my chairman when i was at mandiant, so i have known dave for a long time. We have always aligned in our Strategic Imperatives and our vision, our intensity, our desire to win, so this was just a logical progression. When he bought mandiant at the end of 2013, we were on a mission that aligned with fireeyes mission. And as this Company Transforms, we have always had alignment. We can make this a seamless transition. At the same time, every Company Transforms and evolves, especially when you need to innovate at the speed we are trying to innovate at. Why now . It was just great timing to lock in a management team. We have our independent director, and we still have dave dewalt as my mentor and executive chairman. We have travis reese, who i worked with for 20 years, in the president ial role. We can lock in our mike berry, cfo. Thats why we did it. Lets strengthen the company and continue to evolve. Ramy in terms of strengthening the company, a lot of companies are transitioning to the cloud and to Subscription Service models. How will that help fireeye . Kevin you are looking at trends in cyberspace, attack trends and defense trends. Everyone is starting to go to infrastructure service. We have to be where the attacks will be, and where the data will be. Other trends, right now if you are hacked and you know it liabilities have never been higher and you want a trusted partner. You dont just want technology in place, but technology and people and expertise behind you. One thing we saw was a huge shift between people buying our products and running it themselves versus what we call fireeye as a service, buying our products and capabilities and we run them for them. The advantage to that, you have a trusted partner, somebody in the trenches with you hunting on your network, looking for problems, making sure you dont have challenges, and should something bad happened we are standing beside our customer saying, we are there, trying to defend the net. So we are seeing that shift from the capex product buy to opex, security as a service. I was reading about fireeye as a service before i read about any other Cyber Security company talking about technology provided as a service. The market will continue to swing that way, and we will catch it as it keeps winning that way. Ramy fireeyes sales have been falling over the past several years. We just had a graphic showing our viewers that. Security sales are slowing for you guys. Do you think it will keep slowing . What will turn this around . Kevin one of the things, and by the way, we still exceeded our Sales Numbers in q1 when you look at billings, and we always pushed the street to look at billing numbers. Sometime last year, one thing that did change the Threat Landscape and theres a lot of reasons why people by security. It could be a compliance driver, or a threat or an incident, we saw an abatement in Cyber Espionage attacks from china against the United States. Now we respond to more breaches today than we did a year ago, so it is not a decline in breaches, but the type and scale of Security Breaches we are responding to are smaller. So without that omnipresent Threat Landscape, we felt at least last year a little bit of a delay in some of that pressure buying. Hey, we have a problem, we need something. But i dont see an abatement in the buyer. People want a Cyber Security solution. The liabilities if you are compromised and know it has never been higher. Ramy there is talk about consolidation in the industry by some analysts. Would you agree with that . Kevin i dont know when its coming, but there are a lot of Cyber Security startups out there. Someone told me a number of 1200 of them. When i went to the conference this year in san francisco, looking at all the attendees, i felt like there was 15 ideas, maybe 20 ideas, but 1200 companies. So i think you will see compression. Its hard to know how Many Companies the market can bear, but 1200 felt a little high to me for 15 to 20 ideas. You will see compression. We are at the early onset of it. With that, you will see some m a activity. Ramy i want to look at the stock price for fireeye. At its high, about 95 a share. Now it is around 12 or so. Some people brought up the possibility that fireeye could be an acquisition target. Do you think the conditions are ripe for that . Kevin i can tell you this. I want to build the best Security Company, period, and execute on the vision we have. Were going to pull it together. It is my job to build the best company. If there is outside interest in us, thats on them if they want to have interest in us, but we will still build the best Security Company in the world. Thats the path we are on. Im not going to deviate from that. Ramy time for just one more question. Looking ahead, what Cyber Threats do you think will to find the next few years or so . Geographically, by governments, by terror groups . Kevin governments, you will see governments coming up with rules of engagement. You may have some war and peace, depending on geophysical conditions. The trend we see now, if you are in a safe harbor and you can compromise folks, extortion is on the rise. The payment card industry in the United States is getting more secure. Retailers are more secure. It is harder to break in and get credit data and monetize it. But the folks who used to monetize the credit card breaches have turned to things like extortion. Break in, and use things like an anonymous currency like that going to get paid. Thats a challenge for any organization to deal with. You have read about ransomware, probably. Someone who can break in and they encrypt your drives and have to pay them to decrypt the data. Those attacks are on the rise. They have greater impact as people depend on their systems to run the businesses. We will have to deal with that short term. I will leave you with this thought. You watch the criminality internationally. For the most part, it is intolerable to most nations. So i am hopeful we will figure out a way over time to reduce the amount of safe harbors there are for these criminal actors. They will always exist, we will have to safeguard from them, but we will be there. Ramy congratulations on your new role. Newly named fireeye ceo kevin mandia. Next week, bloomberg west goes east, in a series focusing on Tech Innovation and entrepreneurial spirit in boston. Emily chang sits down with the president of zip car. Join us on monday from boston. More bloomberg west continues next. Ramy our tech week in review. Still with me, David Kirkpatrick in new york. Lets start with you. What stood out among the tech headlines this week . David there were a lot of things, but i continue to be amazed by amazon. They got investment in an air transport Company Called atlas, and took leases on more planes from another transport company. So now they have 40 of their own 767s, a company that was one of upss best customers. As a company this just goes to show amazon wants to be a vertically integrated colossus. Everything from how Companies Work in aws, to the products we use in our homes with amazon echo, and getting to us in between. What an amazing company. You have to be amazed at this companys ambition and ability to power forward. Ramy you bring up a good point, talking about fedex and ups. I wonder what they are thinking right now. David they cant be happy. At a minimum, it gives amazon much better negotiating power with them, because they will still be a big customer of ups. I also have to reiterate the word echo. I think the amazon echo is one of the hottest products that has come along in recent years. It has enormous implications. It is what i call ambient interface for computing. I continue to say on the air here and elsewhere if you dont own amazon echo, you should get one simply to see the future of computing. And this company has a million irons in the fire, and they are all burning really hot. Ramy i want to talk to what keith has been looking at. What has been on your radar . Keith nothing specifically new. A lot of people are focused on kind of the collapse, changes in the environment, what it means for their company. Its not yet clear, but some companies are clearly going to be spectacular successes financially, disruptive or transformative, and theres a lot of companies struggling. Its because the price of capital has gone up. Think of it like oil. Capital is a commodity. Oil is a commodity. When the price of oil goes up, some businesses lose money and some become massively profitable like an airline. Thats happening in the Technology World right now. Some businesses are massively affected. Some companies with a very high burn rate are massively affected. Theyll have to change their strategies to conform to this new reality, so im focused on how we best counsel our entrepreneurs how to thrive in the new world order. Ramy David Kirkpatrick and keith for boy, you are both staying with us. Coming up, in the 2012 president ial election the Tech Industry donated 20 million to barack obama. Who gets the money this time . We will break it down next. And, you can now listen to Bloomberg Radio on the Bloomberg Radio app, bloomberg. Com, and sirius xm. More of bloomberg west continues next. Ramy i am ramy inocencio, and this is bloomberg west. President obama said donald trump a long record that needs to be examined, and suggested the Presumptive Republican nominee has not offered serious proposals dealing with the economy and national security. President obama i want to emphasize to everyone, we are in serious times and this is a really serious job. This is not entertainment. This is not a reality show. This is a contest for the presidency of the United States, and what that means is that every candidate, every nominee, needs to be subject to exacting standards and genuine scrutiny. Ramy as for the democrats, mr. Obama said he will not make an endorsement until the primary process plays itself out, and he expects both candidates to unify the Democratic Party for the general election. Add senator Lindsey Graham to the list of lawmakers who say they will not support Donald Graham for president. The onetime candidate for the gop nomination says he does not think trump is a reliable conservative, nor has he displayed the judgment and temperament to serve as commanderinchief. House Speaker Paul Ryan will meet with trump on thursday morning with other house leaders. The Brazil Senate Impeachment Commission voted 155 there is enough evidence to try president dilma rousseff, accused of using illegal financing to manage the federal budget. The impeachment motion goes to the full senate, scheduled to vote on wednesday. North korea began its first full meeting of the Ruling Workers Party in 36 years. The meeting gives kim jongun a further chance to solidify his grip on the country. Kim came to power five years ago after the death of his father, kim jongil. Little is known what he will do at the congress, but he may focus on Economic Growth and military strength. Police in montgomery county, maryland arrested a suspect linked to a series of shootings over the last 24 hours. The 62yearold man was captured in the aston hill area after a shooting at a high school. The second was at a mall parking lot this morning that wounded two others. The third incident was a Fatal Shooting at a nearby shopping center. The city of london is reportedly on the cusp of electing its first muslim mayor. The labour party candidate, the son other pakistani bus driver, is said to be well ahead after an initial tally. He took accusations by his opponent linking him to extremism in stride. He succeeds former mayor boris johnson. From bloomberg world headquarters, i am ramy inocencio. Ramy donald trump may be republican front runner, but seems he has work to do to win over the tech vote. A new article on bloomberg. Com explores the donalds popularity in Silicon Valley and uncovers a serious lack of supporters. The article interviewed many top names in the industry, and found none who are voting for trump. Even known republicans are refusing to vote for him. Y combinators sam altman says trump seems to be the end of the Republican Party and maybe the end of the republic. He plans to vote for Hillary Clinton. Here to break down the tech vote, tim higgins. David, first to you. I want to boil this down. Trumps immigration policy. That has basically pissed off Silicon Valley. David its one of semithings that have pissed off Silicon Valley. He spoke specifically against amazon, apple, facebook. He is considered an antitech person by the head of the Consumer Electronics association, gary shapiro. This is a guy who is fundamentally irrational on many of his views, especially about oddly, business, since he is a business guy. Ramy what are you hearing on the ground as far as the politics side of things, in terms of the san francisco, santa clara Republican Party . Tim 18 months ago, they thought maybe this was the cycle where they could crack Silicon Valley and tap into the money being generated there. There was some hope that candidates like jeb bush or marco rubio would really connect with the upcoming leaders. But comments by trump, especially around building a wall, other issues regarding global trade, really have not been playing well within the valley and the tech community. Ramy keith, you have taken a stance on twitter all about this. I will quote you. Nixon feels like a flawless politician by comparison, you said. Thats you on the record. [laughter] i want to hear more about your thoughts. Keith the fundamental issue with trump is more that he is a megalomaniac and borderline psychotic. The views are separate. I just think the character issues are more troubling, and thats why the nixon comparison. Nixon was in many ways was an excellent politician, but had fundamental flaws. Trump is taking that to a new level. Ramy should donald trump actually care about what Silicon Valley thinks . Does he need to care . Tim on the one hand, his base of support really has not been that part of the country. In the Old Industrial area, turning out in droves for him. California traditionally doesnt go in the red category for the general election, so in some ways he doesnt need any of that support. But what he does need is money. He is far behind in setting up a fundraising apparatus to raise the hundreds of millions of dollars he will need in a general election. The estimate is that each side will need 1 billion. That takes a lot of people, a lot of pockets of wealth around country to fund. Ramy lets bring up one of the charts we have in terms of how much money the Technology Industry funds to political campaigns. I believe its about 7. 8 million this year, just from tech alone. Taking a look right now, tim, do you think there needs to be more from technology . 55 million towards the president ial race in finance and insurance, will that ante up for trump . Tim the money out of tech has been increasing over the past few cycles, and a lot that has been going to the Democratic Party. Hillary and bernie are fighting it out for support in the valley. Bernie sanders has been raising more from the valley than Hillary Clinton according to the numbers. So trump has not really even begun raising money. Time will tell if there are hidden pockets of interest in Silicon Valley. Ramy david, some tech firms, at least in terms of donation, have leaned republican. In a bloomberg. Com article, intel, oracle, cisco give the most money to republicans before trump being the present of nominee. David i dont think the past will at all help us understand the future of american politics over the next six months. That doesnt mean anything about whether they will support trump. I know a lot of republicans i spoke to who say they will support hillary. Many of them were hoping that somehow kasich would come out a brokered convention, but nobody seems to think that is even a possibility anymore. My own opinion, though, about trump is that, as a typical new york, manhattan liberal, there is something kind of endearing to see all these republicans saying, i cant support this guy. There is a weird way in which trump may bring the country together and maybe break a logjam we had in washington. If hillary draws a lot of republicans in the general election, maybe she will have to govern in a slightly different way and we will not have this very huge partisanship we have had. Ramy out of three candidates we still have, bernie, hillary, donald, which one has the best here on the ground to the Tech Industry . David i dont think any of them do. Of the three i would say hillary, but i dont think she has nearly enough of an ear to the ground. Ramy tim higgins, keith, thank you very much for your time. David kirkpatrick, you are staying with me. According to an sec filing, amazon founder jeff bezos collected 671 million after selling one million shares of the ecommerce retailer. The last time he sold a block of shares was august 2015. This is 135 million more than his proceeds were then. He still owns 82 million shares of the internet company. Coming up, will these helium balloons replace the satellites we use today . We will hear from one chinese entrepreneur about his latest moonshot. This weekend, we will bring you our best interviews from the week. Ellen pao speaks out for the First Time Since losing a gender bias case against vc firm kleiner perkins. Vision for her new diversity the best of bloomberg west, this weekend on bluebird television. Ramy apple shares tumbling to 2014 lows, with the stock falling on 14 of the last 16 sessions, down 18 in the past three weeks. The iphone maker has been on a downhill slide among worries that smartphone demand is shrinking. Apple has seen 75 alien dollars in value wiped out. Etsy shares down more than 9 on concerns of the companys longterm outlook, a turnaround from earlier this week. Shares had been up after etsy reported earnings on tuesday, announcing the First Quarter the profits since becoming a public company. Next up, the chinese entrepreneur building an alternative to satellites use today, helium balloons sent to the edge of space. He wants these unmanned devices to provide services coming from processing telecoms, meteorological data, satellite tv, traffic surveillance, and tourism. He is launching another venture. This time it is a 300 Million Investment firm based in israel. Elliott gotkine caught up with him. Elliott why israel . Why of all the countries in the world you could have chosen . We know that israel is the most innovative country in the world. A lot of science and technology was developed in israel, and the most important thing is that we is that those are the essential blocks. We use that to create the new future, the next future for everyone. Elliott you already made your First Investment out of this fund 20 million going into , eyesight technologies. What is the reason behind that . Our first big investment was eyesight, and that is a company with technology that can make machines understand environments, and make machines understand the users activities, motions, and even tiny gestures motions. , so the big picture behind the investment is to create machines for human beings. Elliott you are involved in other projects, including replacing satellites in very technologically advanced ways. Tell me more about the other projects and what you hope to achieve. To use space in a more efficient way is one of the most important goals of our innovation. The idea is that we use this new type of materials to bring a lot of different platforms, including human beings themselves, into space. The new type of satellite, which is not actually a satellite, really allows people to put hundreds of kilograms payloads into the sky to do surveillance or the internet of things. Also, to allow people to fly freely, like a jet pack, so everyone can do whatever you want with these new machines. When you look at these innovations, there are two parts. You have to design the future, and then you have to realize with the technology those futures to share them with people. The first part is the hollywood part, and the second part is the Silicon Valley part. With this, we are thinking hollywood plus Silicon Valley. Elliott of all the things we know you are doing, what is the most outrageous, crazy idea that you have you see happening at some point in the future . So actually, we do have some designs for the future. For more freedom, more environmentally friendly environments, and also more safety, more green energy stuff. So if you are really looking at the future, we see that innovation has to be global. It has to be a whole picture. That is why we created gci, to build up this feature for people. Thats why we are building a new area called future valley. Ramy very cool stuff. That was elliott gotkine. You may soon hear what was once known as muzak in your local mcdonalds. A startup has reached a deal to pipe the background music into as many as 36,000 Mcdonalds Restaurants around the world. It is the first foothold for the Company Called soundtrack your brand outside of the nordic region, and they hope the endorsement of the worlds biggest restaurant chain could influence other companies considering soundtracks service. Coming up, lots of news in recent days. We will break it all down for you, from youtube to hulu, next. Ramy it is a trial made for hollywood, and it began friday in los angeles. The issue whether 92yearold Sumner Redstone was mentally competent when he threw his girlfriend out and dropped her from overseeing his medical care. Hold majority of voting rights. Staying with media, bloomberg market anchors alix steel and scarlet fu caught up with methuselah advisories partner and asked him if the window is closing for media m a. These are high cash generating businesses. They have access to debt markets when the markets are open. Financing forebt media will be just fine. The question is, how many large transactions are left that can really be done . Is a concentrated business. We have a whole host of interesting new names in the Digital World that will be the fodder of the m a. Buzz feed, refinery 29, Smaller Companies in the scheme of things compared to the giant bloombergs of the world, but they are fastgrowing, and they will be the core of m a going into 2017. It will be Digital Companies looking for a new home, aligning themselves with traditional legacy media companies. Thats happening more and more. We are going to see more of it. Scarlet we just had the Digital Worlds answer to the upfronts. What did you learn about how the tie up between Digital Media companies and Old Companies may progress in the years to come . The fact you have some thing called the newfronts tells you something, as though this huge collection of companies now need to come to madison avenue and show what they have got, to see if they can drag advertising dollars along with the eyeballs. We know the eyeballs have moved massively, and there is a tremendous amount of consumer attention to these kinds of digital assets. The issue is traditional legacy video, and television in particular, still has huge amounts of advertising dollars compared to the total of everything in the Digital World. So as these Digital Businesses grow, what we think is happening at my firm is they are increasingly moving towards legacy media because they need those dollars, and they are finding the Advertising Community is still very much wedded to the vehicles they knew about. Vice, for example, a fantastic digital company, now has a cable network. It will have alliances with traditional media. Ramy meanwhile, we have seen a lot of news this week pointing to the rapidly shifting media landscape. Hulu announced it would Start Licensing full lineups from major networks, and youtube is rumored to be doing the same. Here to talk about that is David Kirkpatrick. Joining me from our princeton student is gita roth and onto. Gita first, i want to ask you , about some of these streaming services we have been talking about this week. Talk to me about the winners and losers. Gita there has been such an explosion of these skinny bundles, these streaming services, in the whole media landscape. The winners are i think the Tech Companies, like google with youtube, Companies Like amazon, which want to become a bigger part of the ecosystem, want to those eyeballs and those at dollars. And then of course the consumers, because so much more choices are available to the average consumer these days. In addition, the large media companies, disney, viacom, time warner, they will get this additional revenue stream from being able to monetize their content on digital platforms. So those are obviously the winners. The problem with the losers, the Smaller Cable Networks which may not be able to get a place on a skinny bundle. They might ultimately lose out a little bit. It is intensifying pressure for the paytv competitors. Ramy we talk about skinny bundles here. David, what does a skinny bundle need to have . David the key thing for success, and there was a piece this week about this exact point, content that people really want to watch, which is probably going to increasingly be exclusive content you cannot get anywhere else. So if you just take a bunch of stuff other people have also taken and put it in the bundle, you will not get some kind of gigantic market share. The key is, just like amazon and netflix have shown so brilliantly that they can do, create content that is truly unique and competes with the best stuff anybody has ever seen, and thats what we are seeing happening with the socalled Tech Companies. Ramy house of cards, orange is the new black. When the Game Show Network from the 1980s comes in, i might have to stay. But that said, im an outlier. [laughter] there is some good news with the tv companies out there. Some have said there has been a death knell for tv companies. Has that been overrated . David i think so, but the problem is that targeting which , we have all become used to on the internet, has to come to television as well, and the technology, which does exist, is still in its infancy. Television advertising is great, but the idea of just throwing one message in front of tens of millions of people is going to be increasingly less appealing to marketers, i think. So the idea is to find new ways to interpolate the cable channels, cable networks, the, the Cable Systems in various regions. Some Companies Like simulmedia, run by my friend dave morgan in new york, are doing that. Tv advertising will continue to be gigantic, but Digital Advertising generally will take over. Some of it will be video. I want to ask you, there is a song that says video killed the radio star. Will video kill the tv star . Geetha just from the results of the traditional tv companies, this quarter we are seeing there is real strength in the tv business. You spoke about tv advertising. That is a 70 billion business. The numbers reported this quarter were absolutely mind blowing. Cbs reported 12 growth, a number we have not seen now for many, many years. It looks like the momentum is there. Tv ads are able to hold ground, and the really interesting point you mentioned from les moonves, they are seeing a shift back to tv from digital with all the problems of ad fraud and ad blocking. The ad content is secure. The other content is affiliate fees, and it looks like that is fairly stable. I think they are in good shape. Ramy thanks very much. We have to leave it there. Thanks so much for joining us. Next week, bloomberg west goes east, with a special series focusing on Tech Innovation and entrepreneurial spirit in the city of boston. Join us, 6 00 p. M. New york time. Announcer the following is a paid advertisement for time lifes music collection. These are songs that can relax and soothe you. 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