Transcripts For BLOOMBERG Bloomberg West 20160914

Office. Prosecutors will interview Julian Assange on october 17. He is wanted for questioning over an alleged rape. He has been holed up for four years. Bloomberg west is next. Emily this is bloomberg west. Selfs site droving driving cars are officially on the street. And twitch has made gaming a activity. Why social eating, yes eating to be the next big thing. First, to our lead. Uber Driverless Cars officially hitting city streets. Selfmers can help a driving car in pittsburgh complete with a human driver just in case. One day go away without those drivers. The first like driverless fleet on the road. Max spent the day testing out the service. Here is his report. Pittsburgh. Re in i am opening the app. Here we go. There is this pinwheel thing. That is the most important sensor mapping the road. In all there are dozens of these sensors. Seven lasers. Radar. We have these lovely safety drivers joining us. The idea is to get people to understand what it is like. Im going to press this green button that says lets ride. There is a weird psychedelic map showing all of the stuff going on around us. The driver is hovering with his hands over the wheel. Here we are. There are cars going by. See them on the screen. Im going to take the drivers seat and experience what it is like to be a safety driver. This is area. It feels like the car has a mind of its own. You are fighting the tendency to grab the wheel. I have done literally nothing. I am just sitting here enjoying the ride. Max recording there. He is with us to tell us more about his experience. Was it mostly a smooth ride . Barry smith. Almost boring. There was one instance where a car pulled out a little bit and it expertly just edged around it. That was the most exciting thing. What neighborhoods will be in and when they win expand to other cities. Here is what we know. Dozens, maybe two dozen cars in pittsburgh. 14 when i was at the office on monday. A handful of neighborhoods. Mostly downtown pittsburgh though they are expanding. I do think we are going to see Driverless Cars and other cities. I dont think it would be a huge leap to imagine that. Emily are these drivers your typical freelance contractor drivers . Or are they experts behind the wheel . In large part experts. Uber has 500 engineers. It is called the atc. Many of them from carnegie mellon. These are people with a great deal of training. I was allowed to sit in the safety drivers seat. It was relatively in controlled conditions. There was an uber employee sitting next to me with his hand on this red button. You can present to get rid of the computer control if something were to happen. Do they own these cars right now . Do they intend to own all the cars in the fleet in the future russian mark they bought them from a ford dealership. These are hacked ford fusions. They went to a confused ford dealer and purchased them. Longterm it is not entirely clear. Uber is being tightlipped. They dont entirely know. Was they seeold me themselves as providing a driver. A human driver or a computer driver. That is the core of it. My sense is they would rather not own giant fleets of cars but they would be willing to if it comes to that. Providingwant to be rides at the lowest costs possible and they will figure it out from there. We did speak to the father of self driving cars. Selfnt on to run google driving car unit. Take a listen. I am excited about this. It is wise to have a safety guard behind the wheel but im longing to get rid of the safety driver. Who is it . When do those safety drivers go away . It is a series of questions. One of which is the regulatory russian, when did we decide we are ok with it . Technological. What uber has said to me, it is not there yet. Thesewe were operating in city streets, they were ready to take over. In the shorter term we may start seeing true Driverless Cars in narrow circumstances. Maybe on a specific piece of the highway. Very carefully mapped, there really very cordoned off. They are not there yet. They are very hard for Driverless Cars. So much happens in the city. Its very hard to predict. Computers just arent able to calculate what it is in real time, reacting quickly enough. Emily we will be closely following this. You will as well. Thank you so much for braving that first car on the road. We will have more later in the hour. That is next, a head. The chief who put facebook on watch. Accusations that she is unfairly targeting u. S. Companies. Apple shares soaring wednesday. We will dig into what is driving the move and whether the iphone seven is off to a better than usual start. This is bloomberg. Emily an update on iphone seven preorders. Betterthanexpected demand for the latest smartphone ball verizon sees normal range. While verizon sees a normal range. Tmobile and sprint said they were seeing record interest in the new phone. Shares rose wednesday, this is the first time they did not release Opening Weekend sales. And it is 14. 5 billion tax problem is back in the spotlight. Apple Sales International had no employees, no premises and no real economic activity. It existed only on paper. Factuale there was no or economic justification to allocate almost all of the profits to the head office. She sat down for a oneonone after those remarks and asked her to explain while the problem is specific to apples relationship with ireland and not irelands tax rate in general. In ireland they have decided 12 at 5 . Others say 20, 22. That is completely on their own. What they cannot do is give selective advantages to specific companies. And tilt the Playing Field makes it unfair competition. Emily joining us now is alex webb. Why are they debating this again and what happens now russian mark she is presenting it to the world. She then goes in front of european parliamentarians and says its going to be something for parliament to opposed to. What happens next . The appeals process which could be a couple of years. They both plan to appeal against the decision. That will decide how much will be paid to the tax authorities. Emily folks in ireland are saying it is fair to be looking at unfair practices but not there to retroactively be changing tax practices. This is the thing that has a lot of tax lawyers wary about the whole thing now. All of a sudden they are not high and dry. They are going back a decade. It is raising questions about the willingness to invest in the region. Emily the apple case is just one of the commissioners many investigations. Amazon could face a similar ruling on its tax arrangement with luxembourg. They are under scrutiny for their dominance in search, consumer data. Google is fighting three antitrust rope. Take a listen. We have a number of google cases, three by now. You are welcome to be successful, we will applaud you all the way. If you start to miss use your dominant position to prevent others from having the same fight for success, then we get concerns. That is the example of the google place. Google case. They are promoting itself to stay where they are and not to allow for others to compete with them in a fair way. What about luber . Uber. Looking at it with my colleague, transportation, on the one hand side it is great. On the other hand, there are issues comparing with traditional transportation, taxes. And if taxes are being paid. You are looking at the facebook merger. Our social platforms a concern . Our concern is only if competition is being closed. That is the important point. One of the things that the German Authority is looking at is in the gray zone between competition and privacy. Because they are so dominant, and a lot of places you dont know when your team is having their training sessions. That is a dominant position. Minimizebeen used to your rights when it comes to privacy. I think it will be interesting for everyone to follow and get the results of this inquiry because it is a gray zone. It will be valuable for everyone. You are expecting more cases. 4 i think data is one of the more important things. That is the new line of business. More traditional business going into data heavy ways of working. It goes into the car industry. It will be more data prone in the years to come. We will launch a public concentration. Experts andask peoples opinions if we got the right merger on board. That knowledge and data is another currency. It is another asset than just a turnover. One of the criticisms is you are targeting u. S. Companies. Will you target European Companies . We do our best to find those selective advantages where they are. If you look at the bellevue scheme that we saw to be illegal, half of those have the benefits were actually european multinationals. You find those because we target no one. Equale an obligation for treatment. Your size and ownership. Was margaret speaking to bloomberg, still , they didlex webb cover a lot of ground from apple to google. I want to focus on google specifically. They have multiple challenges facing them in europe and they are not particularly happy. Googles business is aggregating content. You look up a news story. It shows news results. You find a video or a song and it will give you those results. , a lot of songy sneak into Google Youtube ults and there arent any there is no Commission Paid to the artist. That as far as the European Commission is concerned is not fair. I am sure there are things where it says you cant find a song initially. Thelook deeper and it is on second page. For the European Commission they are proposing a law which the problem would have to vote on. Whether there is content. They are saying this is unfeasible. Multipleogle has sent executives to negotiate area eric schmidt has said it is difficult to work in europe. Explain the response to these accusations. They ramp up lobbying efforts. It is essentially part of the European Union which is part of being mandarins. Who,vises to politicians with their regulatory proposals. Approveds have to be by parliament. They can vote against it. That is their goal now. Emily thank you for giving us that update and breaking down what margaret had to say. We will continue to follow all of these stories. The spotify ceo tweets out growth. Subscriber details next on bloomberg. Emily a story we are watching, spotify has topped 40 million paying customers. That is up from 30 million in march and double the rival of apple. Double the number of rival apple. Most are using the free ad supported service. Salesforce says his company wild supported service. Hire its first chief diversity officer announcing he will redouble his fight against the laws he considers unfair to gay employees after lobbying against hundreds of laws considered hostile to lgbt residence. Take a listen to him explaining while he is pushing for equality. It is important to our employees. Believe equality is stretching across the planet. For chile that law was not signed. As you can see, how the world reacts, basketball teams will not wait in north carolina. Businesses will not set up shop. Indication ford the Lgbt Community if you make these laws and create them, you will pay a price and you will get less investment. Youre going to get less basketball. Will we see any coordinated action against these discriminatory . You are seeing that. Mike pence sign that law into place. Company came in and said we will not stand for this dissemination. Then it almost happened in georgia. Back when hepushed saw how Many Companies stood against it. We are now seeing you again in north carolina. I have been heartened to see how the world has had this is not all right. These laws are not going to be supported by the world. Emily salesforce ceo marc benioff. Coming up, Autonomous Cars disrupting the roadways in pittsburgh thanks to uber. I sat down with an Industry Leader whose company is looking to revolutionize the future of driving. This is bloomberg. Mark i am mark crumpton. You are watching bloomberg west. Lets check with first word news. A new poll shows the challenges Hillary Clinton faces. It shows donald trump meeting in ohio 4843 . One of clintons problems, the nafta trade bill passed when her husband was president. Brazilian prosecutors have accused former president Lula Da Silva of orchestrating the worst graft scandal in the countrys history. A federal prosecutor charged the former president with money laundering. The Associated Press reports nigerias former first lady is claiming ownership of frozen accounts for its 31. 5 million. Asking that filed the funds be released. Best president b president buhari was swept into rid theromising to country of corruption. The gathering of the International Serious support group, which includes regional and world powers and syrias neighbors, could take place september 21. I am mark crumpton. It is just after 6 30 p. M. In new york. My colleague paul allen has a look at the market. Paul, good morning. Paul good morning, mark. Currently looking pretty flat. Of just over six points up just over six points so far. We are waiting for second corner gdp Growth Numbers in new zealand. After be a little weaker the blowout we saw in yesterdays current account balance. Elsewhere, talking a bit flatter. Nikkei futures are a bit off. Futures down after percent as well. We are waiting on fouryear results. This is due to cross the terminal now. Samsung electronics making the news. Another stock to watch. It is not due to better issues with the note 7. Has soldthat nikkei all of its shares in sharp. This follows on foxconns investment in sharp. Here in australia we will be looking at unemployment data later on. I am paul allen for bloomberg tv in sydney, australia. Emily this is bloomberg west. I am emily chang. Turning to the Automotive Industry, uber has begun showcasing to the world its driverless fleet in pittsburgh. The right healing giant beat google and tesla to the punch. We caught up with another Industry Leader whose company is working on the forefront of electric car technology, nextev. Ior shared what she thought of the unveiling. I think it is the next big thing in mobility. I do feel in technology there is going to be a huge wave of innovation that is going to transform mobility. Self driving cars are in the sector of this. Im a big believer in that model. It is still early to see how ride sharing involves. What will the Business Model be . Who is going to actually own them . It is not clear to me. Ive been watching this space to secret but from the technology perspective, great move, very exciting. Emily so you drive a tesla for now come which is good for research purposes. What is your take on the autopilot . Padmasree im a big believer that autopilot is needed. It is safer than human driving. Unfortunate that we have had a couple incidents with the tesla autopilot. The reason it is a bad thing it is creating a fear in consumer about the technology and that is not good. If they get used to it and see that it is better when it guides you, it actually augments your own skills from that perspective. Im a big believer in the leaving as the way to go. Emily elon musk they have released an update to the autopilot and elon musk said this would have saved one drivers life. There is a growing divide between people like google who believe in fully economist cars now consent fully Autonomous Cars now, and semiautonomous, which google says could be confusing. Padmasree we are big believers in full autonomy and we are targeting full economy for the one we will launch. It is a matter of getting consumers over the chasm, if you will, getting them used to what it is like to have a fully Autonomous Car when the robot is driving you. It will take a while for all of us as users to get used to cars without steering and pedals. That is a ways away. Getting increasingly more comfortable with the car taking over the driving function. The one thing we believe in which has been our focus is you have to be very clear when the car is driving vs. When you are expected to drive. There cannot be confusion. There is a lot to be said about when youdesigned are taking over as a driver, there cannot be confusion that you are relying on the machine. Hand on the steering, eyes on the road. When the machine is driving, it has to be where you are comfortable it is seeing what you see. Theres a lot more work, i feel, that needs to be done in the user interface and the human machine interface, in how people and machines can work together. Emily will the cars you put on the road be fully autonomous already or a step towards that . Padmasree i would say. On a missed, fully autonomous , the car we are targeting for the u. S. Market. Not ready to do away with all of that. We have to get human beings more comfortable, but that is what we are targeting. Emily you have been very generous giving tesla credit for the advances being made in electric car technology. Your copresident claims you are ready to set the bar even higher than what tesla has done, saying tesla is 2. 0 and nextev is trying to be 3. 0. What does that mean . Padmasree if you look at the Automotive Industry evolution, i think of it in three phases. In the first, 120yearold industry, the first phase was about mechanical systems and hydraulic systems. The second phase was the movement to electronics and electrification. Second phase of the innovation. Tech leading in that shift. The third phase is about Digital Systems and mobilization, connected vehicle, how the car becomes a robot in a computer. Going to be about the software, virtualization, data. That is what we mean by car 3. 0. Emily well all the manufacturing be in china . Padmasree market entry will be in china initially. Those vehicles will be manufactured in china. For us, the market entry would be the u. S. We are evaluating manufacturing options right now. Padma that was nextev ceo warrior. Amazon is ready to find out how well alexa understands a british accent. The system will be available in the u k and germany starting in the fall. It marks the first time the gadget will be available outside the u. S. The, has given the femalesounding digital voice a slight british sounding or german accent and made adjustments for local preferences. Twitch isd a expanding its focus beyond gaming come everything from politics to eating. My conversation with ceo emmett shear, next. Tonight, a sixpart series launching on bloomberg tv, big problems, big thinkers. We will hear thinkers from Warren Buffett Madeleine Albright discussed the future of humanity, 8 00 p. M. Eastern tonight. Emily one story we are looking ahead to come oracle releasing orderly earnings thursday. Scarlet fu takes a look at the Companies Key metrics, starting with a breakdown in this edition of numbers dont lie. Scarlet oracle is essentially buying market share with one of the first cloud companies. Revenue forecasts reach more than 140 billion in 2019. Oracle is competing against the likes of salesforce, microsoft, and sap, and paying a pretty penny for it, too. Look at the deal on a revenue basis. It ranks among the most Expensive Software takeovers of the past few years. The transaction has a multiple of 11, which is much higher than the industry. This trend is apparent in recent purchases made by salesforce and sap as well. All three companies, including oracle, have value to their deal with revenue multiples near 11. Oracle is positioned to capitalize on the growing cloud market. The service and platform as a service, the top white line, posted Revenue Growth of more than 60 in currency terms. By contrast, Software Licenses updates increased just 4 and new Software Licenses, 10 . As oracle continues to shift to the cloud committed it is seeing overall sales growth decline, which isnt a huge surprise. Up front licensees typically defined as revenue rises. What this can lead to his volatile financial results. Emily that was bloombergs scarlet fu. Oracle releases earnings after the u. S. Closing bell on thursday. Twitch, the videogame string service that amazon bought for nearly 1 billion, is branching out. Over the summer, twitch broadcast livestreams of the republican and democratic conventions, and amazon original tv shows on the service. We caught up with ceo emmett shear and began by asking him how the Pilot Testing is going. Emmett we found that the viewing new video on did youi debuting new video on which is a great way to not only get engagement and activity but bursts of attention, viewers you would not otherwise reach. The twitch audience is always interested in picking up new stuff. I think it worked really well. It was a great pilot. Emily this is something that netflix, for example, cap do you see more cant do. Do you see working closely with Amazon Studios in the future . Emmett we worked closely with Amazon Studios promoting their videos and getting twitch users into amazon content. We will deftly do more in the future. We are in the testing and experimentation phase. Emily you are just onstage at nch and said that there is a big immigration between amazon and twitch coming integration between amazon and twitch coming. Emmett we have been trying to figure out with amazon how we create something that drives value for twitch streamers, that drives value for creators to that is who we focus on. While being a great thing for amazon, i think we finally figured out an amazing Integration Point that is going to let us do that. I look forward speculation on what that might be. Emily here i go. You have been streaming political conventions, art classes, for example. We talked about the pilots. Are you going in any of these directions . Emmett we discovered as we did more nongaming content even though twitch is clearly a community for gamers, gamers dont just like a games. Gamers like all kinds of stuff. We have seen great response to content, thenc Creative Content we are putting out there. We are launching today a programming channel that is going to have live people doing programming computers, doing new computer programming. That is going to be exciting as well. We have gotten a great response from the community, a lot of growth there. Emily why not integration that is more retail focused . You could connect gamers with games and hardware and consul hardwareconsole hardware on amazon . Emmett it is clear that the twitch audience buys a lot of games and they use it as a place to discover what games to buy. Our struggle is we dont want to go build something that feels like me too. It would be easy enough to go links allon amazon over twitch but that is not useful for our community and that would not drive much activity in the end. We are looking for ways to sell more stuff come obviously, we would love to do that, but we are looking for a place to do that that feels native to the community. Emily i know you have been working hard to grow the twitch audience, been very firm about values at the company. Harassment has been an issue and in the Gaming Community that can be relentless. What sort of progress have you made on changing that . Emmett its a really hard problem. Anytime you open up a chat room to let anybody talk, you open it to let people talk who would maybe not be part of your community. I was really proud of the work our team did around the dnc and rnc in particular because obviously, if you have a political convention, that is a toder keg waiting explode in terms of taxes the people having a negative experience. We did a few new things we have never done before. The one im most excited about, the first time running and an automated moderation system using machine learning. We found that while he couldnt block everything, it could gather the worst stuff and enable the human moderators to have less to do with. Deal with. That was very effective there and were looking at rolling that out widely after we test it. Emily one last question. Social eating seems to be the hot new thing. It is big in south korea where people are broadcasting themselves eating. How big do you think this phenomenon could become . Emmett social eating, as you said, huge in south korea. It is one of those trends w here i frankly dont understand it. I am not a social eating viewer. But i remember starting twitch and me being really, really interested in watching gaming, and a lot of people saying who wants to do that . Im just cautious at writing anything off. Just because i dont like it is a mean there is some group of people for whom this is exciting. I think it could be huge. Emily who knew . That was twitch ceo emmett shear. Coming up, we speak ceo of a new sport that could go skyhigh. Democratico not miss senator elizabeth warren, 12 30 p. M. New york time. This is bloomberg. Emily drones are off to the races after getting a following on youtube here the Drone Racing League, or drl, is expanding its shift to mainstream tv. The league has partnered with espn and sky with new investors jumping aboard. Joining us now, Drone Racing League founder and ceo Nick Horbaczewski from new york. You are raising drones at 120 miles an hour through malls and stadiums and subway tunnels. Tell us exactly how a race works. Nick drone racing is this new sport and the drones have a camera on them and they feed the video back to goggles you wear. Elaborate,ese large, threedimensional courses and the drumsraced through them an incredibly drones raced through them and incredibly high speeds. Emily you founded this last year. How big could it become . Nick huge. It brings in the new, exciting element of drones and videogamelike dynamics on threedimensional courses. Emily is there a league out there that is a model for you . Nick we look at a lot of different leagues. Ase like formula one leagues like formula one, which has attracted a huge audience, looked come obviously, at e sports and what they have done building an audience for a new technologyenabled sport. Emily we were talking about twitch and a lot of people thought people watching other people play video games wouldnt go anywhere, but obviously, it is a huge business. With sports like football under the microscope, do you think viewers and network are transitioning away from Contact Sports . Nick i dont know whether drone racing defines whether people are moving away from contact sport. It is incredibly exciting. This is not an alternative to other sports. You are talking about loud, fast drums racing around, spectacular crashes. When you bring those things together, hugely entertaining. Emily you have a Distribution Deal with espn, a deal with sky, and others that go beyond distribution where they are investing in you. Where is this going . Nick we are very excited about broadcaster deals. We have partners like espn broadcasting in the u. S. , Sky Broadcasting in the u. K. , and in germany. They are as excited as we are about drone racing. As you said, they are also investing in the league. They are committing to longterm partnerships to help us grow a global audience for this news. I mean, it is a new sport. Emily you are also partnering toh mgm and mark burnett develop a reality show focused on drone pilots. What is a day in the life of a drone pilot like . Who are these people . Nick they come from all different walks of life. It is a global sport and they are all ages and dont have a really typical day. The one thing they have in common is they fly a lot of drones, they practice for hours and hours. Emily how about the folks who are watching . What is the demographic of reviewers . Viewers . Nick 18 to 35yearold males who love technology, esports, video games, but there is a huge chunk of reviewers who just love traditional motor racing sports, who see it as a new form of racing. A highspeed form of racing, and they love that kind of action. Emily you have a strategy to expand viewership across demographics . Nick absolutely. We are initially exposing people but we have the partnership with mgm and mark burnett, which gives us an opportunity to create content that can run in different places that might reach a different demographic than a traditional sports channel and could also broaden the appeal of the sport by helping people really understand who the pilots are and what their lives are like. We are confident that will bring us to an even broader audience, people who would not just people who would naturally gravitate to the fastpaced video you should. Emily Drone Racing League founder and ceo Nick Horbaczewski. We will keep our eye on you. Nick thank you. Emily time to find out who is having the best day ever. Turner broadcasting. Tnt and tbsorks will be the exclusive basic cable home for all of the star wars feature films. It includes Network Premieres of awakenss the force and the upcoming rogue one. That does it for this edition of bloomberg west. Join us tomorrow for a conversation on the future of solar energy. This is bloomberg. Announcer from our studios in new york city, this is charlie rose. Foreign policy. You have been to north korea. They now have our increasingly look like they will have the capacity to deliver Nuclear Warheads on internet intercontinental warheads that can meet the united states. Can we allow that to happen, or can secretary clinton allow that to happen . Bill clinton i want her to speak for herself. I worked very hard to avert this when i was president. And my former defense