Americas Cable Companies. The, a discussion on the changing landscape of television, technology, and the internet. Then new york city mayor bill de blasio unveils what he is calling a Progressive Agenda to combat inequality. After that, former transportation secretary host an event on a longterm infrastructure funding. Then a Senate Hearing on technology aimed at helping to secure u. S. Borders. Sunday night on cspans q a, veteran canadian astronaut produced many videos on his activities on the International Space station and shares scientific and personal aspects of life in space. The only time i felt fear was on the dark side of the earth looking at the one side of australia in the darkness and watching a shooting star come in between me and the europe. And the earth. At first i had the reaction of wishing upon a star and then realized it was a huge rock on the universe going 20 miles a second, that ms. Us missed us. It was big enough that you could see it, if it hit us, we would have been dead. Sunday night at 8 00. Next, a discussion on the changing landscape of television, technology, and the internet. Industry leaders spoke on the latest innovations and gave their insight on what the future may hold for consumers. Held at the internet and tv expo in chicago, this is one hour 20 minutes. You may be wondering what these chairs are doing here. We decided to do Something Different with the association. Michael, i know last year put on a show. This year, he thought he would snatch at the whole thing or perhaps periscope it. I know you do not want another powerpoint, as exciting as those can be. We decided to do an actual interview with a real reporter me, and i play one on tv, on hbo. We will do an interview and later do a bunch of interviews. Peter cost the, who works will be interviewing figures. We wanted to start off by talking to michael. I brought my own chairs, the red chairs of the code conference. Before that many people have sat in these chairs. Including, steve jobs, bill gates, president obama. We thought it appropriate we put michael on the hot seat to begin the show. Michael, come on out. [applause] were you scared . No. We have them clean. Some of those internet billionaires can be messy. We will talk about a range of things today and all kinds of things that have happened in the cable industry. Lets start off with the concepts of what youre trying to change. The industry is changing rapidly and suddenly more than it seems, especially with the digital challenges you are facing. The central reason we branded this show, if i were to put it in a sentence, peripheral vision. I think video has become so much more dimensional, much more textural and there is this vaccinating intersection of television and technology brought about by internet personality, and wireless internet functionality and wireless. It was time to look beyond the industrys traditional bounds and players and invite them and include them and show the attempts to be a seminal place to have a conversation about trends taking place in this exciting time. This internet thing has been a big deal with the kids for a while. People seem to be using these crazy technologies. When you talk about peripheral vision, is that enough . What is happening now has been happening for a while, in the music industry, all kinds of industries have been disrupted. Even in san francisco, the food industry, due to technology. Have they responded quickly enough . The people are talking about millennium millennials cutting cable. It needs to be with more urgency. We are seeing leads and transformation as children who have grown up begin to move into the older generations and they are setting the tone for a new kind of behavior that is nontraditional. When i look at kids today, i think you can get fascinated by the technology but should look at behavior. Teenagers are doing the same things they have always done passionate about community their friends, passionate about watching each other and building a friendship friendship surround that. What is coming into their world is the ability to have real life entertainment, to have the video or moving pictures, people doing things profound and idiotic. They are able, through the creation of new screens and devices, and a connective tissue to the internet to continuously plugged in to their friends and community. What is impeding the Traditional Television is real life. The ability to document, share. What happens to an industry in that situation if people are not linking to cable, not having a relationship with cable, they have bad feelings toward it or do not use it. My kids watch they have a different attitude towards things and my son was 4, we bought a new large television, when he got home he started hitting it. I thought he had mental problems. I said what are you doing . He said, it does not move, it does not do what i wanted to do. My older son, vine is entertainment, now his parents coping all the time. Have you meet that challenge when the behaviors change so rapidly . The first thing you have to be thoughtful about is to go to the physical locations they are going. For the better part of Television History there was one consumer Electronic Device that was central to being able to consume content and it was the television set. And recent studies have shown real declines in people watching on that vehicle. It is been in the last decade that we have had had it kids smartphones, tablets laptops,. What is missed is intimate streams, meaning my kids can come up cuddle up. One of the things cable has tried to do is report their content into those devices. That is the first step that is important. You have to think about how you exist as a companion to the self published selfcreated content. That lives on the internet and if you want to be a part of that experience or companion to that experience, i do not think it is enough to have a completely changed ecosystem. You will see more integration. A lot of people periscopeing game of thrones, and the ceo of twitter talking about what a victory it was, seemingly. Do you look at that as a they drink the ability to live stream anything you want and reach the other day i did with my lunch and got 5000 viewers. A gripping episode of strips out of. Shrimp salad. It does create problems for the industry. A lot more people watched it because of that. The way i think about disruptions is they come with good and an element of bad. Like all things. The good is an amazing experience and what you can have a dynamic spontaneous experience with people from around the world who are document in and cataloging evidence you would never had access to. What comes with that is in the instance youre talking about the opportunity to violate intellectual property and copyrights. Opportunity to frustrate models that have been built. A lot of people have invested in those fighters were paid hundreds of millions of dollars on the Television Rights associated with funding that fight. The second thing that i find to be worrisome is what privacy means in a space like that . I have been playing with periscope and staff chat stuff and im intrigued by, the people being caught. The people who didnt agree to be broadcast, having a drink or doing something else. Society will be working through the meaning of that for a long time. That has a negative side. What companies will be important . You talk about bringing Digital Companies and is it google with the ability to do a lot about things, or amazon, or apple . I do not know if i would say who is the most powerful, i think google, you have to follow, not only because of their dominant position in the search ecosystem, they are how we mostly fine things and always looking for ways to index tax and identified anything in the digital space. Through their algorithms. That is a powerful function. The youtube property is fascinating. The first time i ever saw a youtube with my 12 euros my 12yearold showed it to me and i was amazed. You look at the soaring of video clips and miniseries and shows i think it is something to watch. I think amazon, for a similar reason, what i am intrigued by i both of those companies, the video is not necessarily their primary business. They are using video to drive very profitable businesses. Amazon want you to be a prime consumer and by my shaving cream as well as watch a television show. They can take certain risks burn money in certain ways that would be harder for a traditional company. They are not very profitable. The market lets them take risks, that if you are an incumbent company it would be harder to get market permission to take those risks. You have to watch the real ground up digital destructors you have not seen the discovery functions on snap chat and have never played with vine, you only to yourself to look. There is amazing creativity going on, i do not know how much of a business it is, i know it is meaningfully you would be bullish not to be an observer of. Foolish. Watching people fall down. When you are in this environment, what is the modern Cable Network look like and what does the modern Cable Company look like . At some point it will be the dumb pipes if the connectivity is important and everything thrives on top of that. The first thing cable distribution is about, the countries leader in the broadband infrastructure. As the demands for video disruptive applications soar the nexus of high quality, increasing capacity, heavily invested in, will be easier. The greatest ship the cable industry has as distributors is providing that infrastructure and growing it, currently at a rate of 50 increase of speed per year, 60 billion last year alone in investments 16 billion. That will be an important part of the cable business. I think we should not declare its demise prematurely. There are 102 million cable multichannel subscriber households in the country, that will not drop down to five overnight. There are high quality premium programming and live events that continue to be driven by an interceptor that has a proprietary quality of Service Service commitment that a cable infrastructure does. The internet is wonderful, but you get what you get, as sling discovered. When it had congestion problems, when you get a huge man did it had legal problems as well. Your bits are competing with all kinds of other debts. There is not a lot of permission to manage them in any kind of priority. There will be needs for high quality proprietary networks that can take advantage. Customer Service Issues customers liking the internet. Net neutrality had a lot to do with that, as customers they played that well. Sure they did. I am a Firm Believer that words and messages do not work if they are not like. When i was in the army, patton said, i do not have to be like to lead, that is foolish. You have to be well regarded by your Customer Base and have a trusted relationship. If that is fragrant guest fragrant, you are right for policy i think the good news, the industry is highly conscious of that problem. They are selfaware. They are not delusional. There are very important, committed efforts to change that perception over time, improve the quality of the product and improve the experience. What they have to recognize is that even if you are proving at a rate of three times, the consumer has expectations increasing faster. One thing the internet has done is raise the expectation of consumers in a way they consume digital content, they wanted here, now, on any device, reliable innovate every six months, not every 18 months. If you will be in the game, you have to have goals twice as fast. I was on a plane yelling about the internet and activity. Connectivity. You are not if it is not fast enough. That is what people expect. When you are looking outward, we have a few more minutes. When you look outward at the industry what is there a cable industry i know you you put the x on the end and it is a nice looking better modern. Looking letter. Look at that . We use a slash. Punctuation is everything. Should it be called a cable industry . It is sort of like saying we are a motorized horse . A driverless car . That is an opportunity for you, you can text, drink, and watch television. I turned on the local news in las vegas and the only thing they were talking about is whether the open carry law should be eliminated and a driverless car. Leave it to vegas to be ahead of banks. Is a great question. I hate the name. I think it has a proud history but it needs to be retired. You are past can be part of your glory and a weight around your ankle. With new challenges, and i think it does not fairly capture what they do. This industry has successfully deployed the most sophisticated infrastructure in the history of the world and the fastest amount of time in any technology in the world. It increases the capacity to do that. It should be more centered around the future associated with the internet and less in the minds of consumers with great descriptions it made what it revolutionized tv, and i think that is a cultural change. It matters what you look like, not what you call yourself. It matters that i did not wear my tie. A huge move. That was mark zuckerberg. My last question. What do you think what would you like to see invented . Give me a prediction of the most eyepopping . Holographics. I think there will be a day where it pays are played out in three dimension. Few have to be dismembered . [laughter] you get to play with them. I hope that is after me. Thank you. Thank you for coming. [applause] ladies and gentlemen, please welcome the chairman and ceo of comcast corporation, Brian Roberts. Great to be back and hearing michael talk about how not to wear a tie. Here we are. You are who you are. We had earnings yesterday at comcast, we had a terrific quarter, i want to thank our team, got a lot of momentum. Let me address my friends at time warner cable, and say thank you very much, you are completely gracious, same with charter, a we are moving on. Being here today allows us to show you what we have been cooking up in the labs. I am excited to show you a few things and invite you to come to the floor of the convention and see live firsthand a fabulous booth. The cloud has changed everything. It allows us to keep innovating at a pace that is unprecedented for our industry. We will not call ourselves the cable industry. Here is the x1 operating system, clean, simple, elegant. You have the save features, new enhancements they are. On demand continues to grow and get better and usage is incredible. We have had 38 billion orders since we launched ondemand. Search is what i want is show you today. The key as the constant quantity increases, we are up to Something Like 2. 4 million searches everyday using x1, and we have apps and we will expand that. Today, i am excited to say we are officially launching the Voice Control remote. Let me explain what that means it takes search to a whole new level. There are no extra charge to have a voice remote. We hope we purchased 5 million to 6 million devices alone and if you are a customer at the convention, come by our booth and we will get you a voice remote and you can take it home or we will send it to. There is more than 3 million commands possible, just the beginning. We have shown you changing channels and searching by name, we are now taking voice to a new level. Today, june to any movie, a what if you cannot remember the name of the movie . You can say life is like a box of chocolates, and it will figure that out my mama always said life was like a box of chocolate. Tom hanks looks a lot younger than, so you can say, how old is tom hanks . We built search box and allie into the remote search functionality into the remote. The next thing if you are working on find the forest gump running scene. This would involve working with content companies that could take you right to the section of the movie where the show or sporting event you want to do. Great song, what is this song . I was 17 i dont know where to run to the product continues to come with new ways to allow you to enjoy one show, getting answers. Our people at the lab have been amazing. Show me the comcasttime warner cable merger. It down. Get down. [applause] that pretty much sums it up. We are moving on. Let me switch gears. Lets show something completely different available for parents and their children. If you say, go to kids mode using your Voice Control, you are in a zone completely safe for any child under 12 years old. If you pick a show, i will pick icarly we have a Wonderful Partnership with common sense media, you can have the specifics of that show, see what age is appropriate. From here, i could say create an icarly playlist. This is a new feature we are working on that shows you could send set for your children, a whole set nation of shows and pick a different episode, let it play, and he episode begins to play. If you leave and your kids want to switch out of safe zone, you will need a password. All easy for customers, within their control and using voice. You are happy with that and want to go back and watch a movie. Pull up jurassic park. Continue watching. The movie begins and you get a notification that says, someone is at the door. You click and the camera comes up. You can activate the door lock and someone can come in. We think that is really cool and have been saying, ok, where do we take this as we have integrated it and have more features. Today, we are announcing taking the platform to a new level and working with third parties to try to help integrate it and make it easier for consumers using, using voice or your mobile app. We have a partnership with a company where all of their lighting and home controls will be available on your app. The same with nest, where your thermostat it will revolutionize that. And with other devices. August lock, which is making locks cool. You can use one at an it will control any device, including our devices or the third party devices. We are also focused on Customer Experience. We talked about x1, and others. We want to make the Customer Experience the number one priority and our best product we have taken a lot of the innovation and are putting it over here. Let me tell you some of the things we will announce and we will be doing a precedent later on. The goal is to make it easy for customers to do business with us, easier than ever before. It starts right here with my account app. We have added a feature called text tracker, it lets you know in real time, that james is 15 minutes away, who is coming, youre comfortable, when you are done, the job is complete and let you rate whether you are pleased with the service. If we do not get enough stars, something was not right. We will automatically call the customer. We started this in boston completed a trial, it was a huge success. We will have this across the entire footprint by the end of this year. Another feature we call callback. 42 of our customers manage their accounts either online or via a mobile phone. We wanted to be easy for you to do that could. Instead of you calling us, we will call you, you schedule an appointment in 15 minute increments, we confirm thats whats going to happen in your call is scheduled. We had that rolled out now. One last thing that you cant come to the show and for me to do a bit of a quick demo and not talk about broadband speed. I want to preview our new future home gateway. Let me take a quick look back at what the first generation here is the Second Generation come includes voice and broadband. That is our current modem. We have hired a bunch of fabulous designers inhouse working with third parties designing our own suite of future products. Let me show you what they will look like. They are really sleek and sexy. Please come to the booth. You will be the first ones to see it. This is something we developed in philadelphia and Silicon Valley and in Silicon Valley. They deliver nine gigabits of speed in wifi, 50 lower cost per megabit than todays routers. Its not only in nextgeneration gateway, but it combines incredible speed we will have ip video capability phone wifi and all the extra and the home control all in that device. So that you have perfect reception throughout your house there is manyini me. This will be across the footprint by the end of 2016. We have a lot of exciting things going on. We have been working on how do we make it easier for customers to come and see it and touch it and feel it . Here in chicago, we have piloted something we call studio expedition studio xfinity. Let me show you a quick image. A totally different look, all the products we talked about we have hundreds of Stores Across the country could weve been upgrading them and we are trialing this new concept to see if customers can come and play and have events and experienced incredible breadth of products. We welcome you to play with all of that at the booth. Thank you very much. [applause] and now joining Brian Roberts for our next conversation, please welcome the host, the chairman and ceo michael cason. Also, please welcome the chairman and ceo, peter chernin. Good afternoon. Or good morning. I recalled a classic movie scene. Colonel te lawrence takes the tip of a burning match and slowly grinds them into a flame until the fire goes out. Doesnt it hurt . The trick will become known as lawrence of arabia is not mining that it hurts. Minding that it hurts. With consumer viewing behavior hurtling all over the place, viewing platforms proliferating like mad and technology making a hash of everything we know about the business, you have to take a lot of punishment and give some back. Today, we are fortunate to have two of the most to come pushed executives in the industry to tell us how to take a looking or give one. Take a licking. Peter chernin was one of the most powerful media executives on the planet. Now, hes involved in everything from the planet of the apes to india and china and is one of the most respected entrepreneurs in over the Top Television and other innovative ventures. Brian roberts works in a small family business. Just after watching brian earlier, i realized i cannot call him the cable guy and more. I will call him the pitch man. That was the great that was great. When i saw xfinity inhouse, its like the last inch. Its a new world. I promise not to be painful, but extremely educational as we get a chance to chat with you. So thank you. Brian, the video you showed with the explosion come i think you already addressed the elephant in the room. What i would love to do is switch gears. Yesterday was a good day for comcast. The Earnings Announcement is a good example and a good picture as to how the marketplace is changing. Subscriber versus the broadband i would love to chat about that a little antsy. Brian we have a fabulous company. We have been fortunate enough to be on a wonderful journey that seems to take many twists and turns. I pinch myself every day to work with the team of people and the Nbc Universal folks. Yesterday, all parts of the company seemed to be firing on all s cylinders. We have rolled out more x1. We are putting getting Great Customer responses. The broadband, there are a few more broadband customers and growing fast. Video has leveled off. We have invested in the fastest inhome wifi, we redefine what we think broadband is. In many other things the team never lost its focus and for that come im grateful and proud. Over at Nbc Universal, peter helped us have the confidence to jump at a perfect time to buy the company. The job that stephen the team have done steve and the team have done is one of the best experiences ive had in 30 plus years. There is for big divisions. The one everyone is familiar with, the Cable Network is the biggest cash flow part of the company. Its an incredible brand, usa, nbc, msnbc, robbravo come on and on we had a big day with the Kentucky Derby and the super bowl and olympics and blacklist and the voice. Next week, we launched the ne the new upfront season to we came from last place to first place. The two that just shocked us were the movie business. We have fast and 7, 50 shades of gray, dress world coming up. Fast seven, 50 shades of gray jurassic world. The studio is doing a fantastic job with the team at universal. The parks was the fastestgrowing part of comcast. We really want to even make the investment necessary in theme parks back then and over 50 growth and cash flow in the First Quarter thanks to harry potter and the new minions attraction and hotels and many other things just a great time in the company. We obviously cant look back, we can only look forward and with that kind of activity, its an amazing time. The only postscript i put on that was having worked with you guys back when you were looking at nbc as well the commitment you made back then to make the investment in programming and technology ge was a Wonderful Company but they were not making this investments. The results are great and congratulations on that. Brian if you dont fall in love with nbc, dont do this particular deal. It has paid off. Lets talk about his skinny bundle looks pretty good. I need to work on my. What does all that mean at the end of the day . Some of the stuff weve had the privilege of working on and the things you are leavding in the ott world, how does this all play out . You ran studios. Its an interesting time. Peter if i knew that i would be sitting someplace more fun today than right here. I think its a very complex question. What you are seeing is tremendous distribution explosion. I dont necessarily think im not convinced that you will see the collapse in the bundle. That is wildly overstated. I do think you will see the bundle rationalized in some ways. I think what you will see more than any is this tremendous explosion of new alternatives. Largely ip delivered. You are already seeing it. Netflix is an external or company. Youtube, the amount of viewing on youtube if you are trained to reach younger demographics, Youtube Business. You have these other alternatives. It will force the bundle to justify itself. That is not the worst thing in the world. When you mention youtube having been there at the beginning, you made Real Investments in some of the youtube directive these days, i dont sit with a content creator in the overthetop world or Multi Channel Network world where so much noise is happening where they dont talk about their off youtube strategy. It is now part of the checklist. You have the youtube strategy and you need an off youtube strategy. Peter what you are seeing which is a great opportunity in the overthetop content space for the first time it has largely been a Youtube Business for the last five years. Where almost all advertising video has been viewed. What you are seeing now is enormous competition starting within the last six months. An enormous amount of video viewing on facebook, twitter starting to get video. Snapchat experiments are fascinating. When you are seeing for the first time is enormous distribution competition which historically has always been great for content creators. One of the reasons why the cable channel business is so extraordinarily profitable today is that you had real districts and competition. You have cable satellite and those channels had a lot of leverage in those negotiations. Distribution competition leads to leverage on the part of content creators. For the first time, you are seeing that and its why everyone is talking about it come off youtube strategy. Youtube is a greatest vision partner. Great distribution partner. If you are a content creator the more competition, the better. You talk about the snap chats and the next gen i read something in the wake of the fight to this weekend about the amount of people who watched on periscope and meerkat and different kinds of viewing experiences, yet the numbers works for an area in terms of the paper view revenue. Pay per view revenue. Peter there was no intention on the part of periscope guys to serve as a piracy device. They were moving as quickly as they can to respond to take down things as quickly as they can get them and its something they will perfect. The future of those devices is not to pirate off media and i dont think that is anybodys intention. Some of the other things periscope did come the stuff in the dressing room with manny the ability to live broadcast things which otherwise would not be part of the broadcast event because you are unable in linear feed came into great opportunity for those things you are in a linear feed. Its a great opportunity for those things. Brian piracy still represents the vast minority of how people consume. The fight was off the charts in terms of the high end of everybodys estimates. As we build a legal home theater, there will always be a legaln illegal home theater. Responsible companies are always try to tampa down. The world of Technology Makes it constantly blurring the lines. Thats always try to tampa it down. I dont love the phrase overthetop, visibly because i think this is a combined experience world. Is not either or. Its not going over anything. If we do a great job of building a wonderful broadband, thats what this room is doing and thats what is enabling this. We thought for a long time that video from the net is a great thing for our businesses. Change is uncomfortable but its powering our growth. In terms of all these different services, if you take them all i think the value point you made, so far its demonstrating what a great deal it is to get the bundle. Its not even close when you add up all the individual parts, you can come close. We have to be responsive to the market. Not everybody wants everything. It is a work in progress. This is not news to a savvy audience like this. How many people binge on blacklist . I love every moment of it. I have not watched one episode on nbc. I have watched every episode on the device other than that thing on my wall. My focus is usually on the advertising side of these questions. If im an advertiser come in terms of video consumption there is no question, the numbers are up in terms of advertising. An important part of comcast Nbc Universals Business Today more than it was four years ago. Brian advertising continues to be released on. The upfront has been really hot. The kind of behavior and doing your are talking about is happening all over. Its great that people want to see your content. How do you catch up and monetize is no different than the periscope conversation. Where we think we sit is the Cable Companies able to do certain things come nbc is able to do certain things and we are able to do things together to accelerate advanced and targeted ads to measure on other devices and help the ecosystem recognize the value that all parts are bringing. Im excited that we are in a good position to do that. At the intersection of entertainment, marketing, media, advertising and technology, its a busy intersection. Its one we are all living in or to all those things are converging in creating for menace chaos. Tremendous chaos. At that intersection, as an investor, where are you looking . At all aspects of it . Are you looking more on the Technology Side or more on the entertainment side . They are not discrete, but they are. Peter it shows your portfolio. We wont tell anybody. Its less a question of what we are looking at, what i think are some interesting trends, perhaps. The most interesting trend right now is brands. Go back to what brian talked about five minutes ago with the mini Earnings Report of how well the company is doing, it was largely a litany of rants. Brands. Fast seven or harry potter or the nfl or olympics what you are seeing is brands are driving enormous value. I have enormous respect for what bob eiger has accomplished at disney because he bought some enormously successful brands. When you are seeing is, as things get fragmented and disintegrated, what im real certain about is strong brands will not only survive, but they will thrive. What is under threat a little bit is the notion that the aggregation of the brand in the past look at various cable channels, cable channels which have strong brands will do just fine. Those cable channels which are a bit they are challenged because they are aggregation mechanisms and people dont care about the mechanism. They care about the brands themselves. Brian they can aggregate now. Peter every consumers their own aggregator. They pick something from their broadband service, something from the broadcast network something on the mobile device and they create their own schedules. What will dominate that world is strong brands. Youve mentioned some of the things youve looked at and invested in our also you looked all over the world. One of the things we are copying from your success, what michael is going to do with his own company, is have a chance to look at any situation, not something just write down the center of the plate of the business you are already in. There has never been a more explosive time for value creation. Maybe some value loss or dislocation. That opportunity is not just in the u. S. Peter im sure you see it inside your movie business which is now somewhere in the neighborhood of 75 international. These big brands have enormous residents all over the world. You are beginning to see that with various media outlets. We have a number of investments in india, which will be the Biggest Country in the world. A great place to invest in media. Weve invested in indonesia. 250 million people, all of them young and connected. A big youtube and facebook society. All very aware. Technology has made the world become much closer and has given you ubiquity of district vision distribution. You can distribute any brand anywhere in the world to any device to any home to any person. In the long run, the term bright just used there will be some dislocation. The overall future is incredibly bright. There are a gazillion consumers out there that we now have access to we still have access to them to the degree that they were sitting in front of a tv. Its something you both know well. There was historically this link between marketers messages and content. It was never free. The Exchange Value was if you watch or listen to these commercials, i will give you the content. It was not free, just and feel like you were paying for. You were paying for it with your attention. That has changed. If you are unilever or coke and you need to get that message out, how do you do it now . At the same three clock in the morning that the brands are working of, the content creators are waking up and the distributors. What is the advice . Brian steve took all the parts of the country and put them under one person for the first time in the history of all the various parts and said when we sit down with cocacola, lets have a holistic conversation about digital, global, ondemand, live, every possible part that we can think of, how can we help you do professional shorts on youtube and have it play on our websites . The tonight show is incredible. Yet, the brand is bigger than ever. There are so many clever people weve been looking on the cable side. We brought in Technology Companies to speed this along and give you more data. It all boils down to data. Its a tool, a resource to allow, for the first time, brands to know more about their customers where in the past things happened in the darker it all of us are going to help those customers have that kind of connection. The player you made is the thing everybody points to in the industry as that next generation in terms of advertising it plays a small part in trying to switch to digital from the analog world. We talked about china. For comcast, are opportunities will be different than what most people are thinking. It is such a new world, we should keep our eyes open. I went to china to visit where most of their people are and we have 150 Software Engineers mostly phds and masters coming out of beijing university. We are building a theme park in beijing. Fast seven had over 4 million in china, the biggest movie in history of any movie in china 400 million in china. Im very excited that we will be on that journey there is no quick soundbite answered. France will exist and thrive and need to reach consumers and all of us are chasing how best to do that. Brands will exist and thrive and need to reach consumers. Peter i was at the full screen new front yesterday. If you look at the under 34 demos, we have 1520 creators doing more than 20 million views a month. More than virtually any cable channel. Those creators are ultimately brands to their audience. The five brothers are a brand. Fine brothers are a brand. Its coming back to advertisers closely associating themselves with content brands. If you are an advertiser and you can get jimmy fallon is a good example. He has a reasonably sized audience but a huge audience beyond that. That is really the avenue of where advertisers will have to go. The old business was easy. By 9 00 on this channel or by a block i think that you are going to see brands get much closer to key creative brands on their own. This is a golden age of television, golden age of content. Customers and consumers will want to and thats opportunity for brands to associate themselves with it. The fact that grace held big and jimmy fallon are in the same sentence also, both on comcast. Grace has her new show on e we are out of time, but i appreciate you spending the time ensuring your thinking. And sharing your thinking. [applause] and now, ladies and children, to host this mornings final conversation, once again, please welcome the coexecutive editor of recode, carakara swisher. Kara we will have a talk with Tim Armstrong from and well. From andol. I have written two books about aol, which is a lot. I know the company very well. I thought tim would be a good example of whats been going on the thought behind a lot of creation of original video and where video is going and how we are changing. Tim armstrong. [applause] i have interviewed you thank you for dressing up. I appreciate it. Tim theres a Microsoft Convention across the street. I was debating what to wear. I said to my assistant, everybody is stressed exactly like i am. All these microsoft signs are all over the place. Are they getting back into cable . Kara i was thinking of coming out here and cutting off his tie. It could go either way. Lets talk about where things are going with video. You are famous for having things recorded of you. Tim had a meeting where he fired someone publicly. You said theres not going to be any video or audio of it and within seconds, there was audio of the whole thing. What is wrong with you . Tim one thing that is really important to us is communication. We have 5000 people at aol almost all of them have gone through a handpicked process. Talent and communication are first and foremost on our agenda. We do these Company Meetings which we broadcast out quarterly. We set of videoconferencing. Last time we did it come i said why dont we periscope it out . The reaction inside the company was, what is that . Why would you do that . The linda video is changing so quickly, if we dont get ourselves used to being transparent and having a Company Without walls, how do we use the best infrastructure . I periscope the meeting. We gave people a half hour notice or so and it was amazing to watch. When he 500 people joined the meeting. 2500 people joined the meeting. Hundreds of people outside the company joined it. It basically taught us that day that you can do things really quickly live versus all the infrastructure weve built up. We saved money, it was instantaneous, our engineers i was watching my screen and i had emails coming in from our engineers say next time i will build this, next time later that day, we had things happening at a welcome all of those on pair scope. Periscope. We wouldve had a sixmonth Management Meeting and we would have tested once the fact that we did the Company Meeting that way, instantaneously, the whole company shifted to saying live video can be cheap and effective. Kara thats whats happening elsewhere this has happened before. There has been live streaming. It is a big idea right now in Silicon Valley. You are talking about dropping costs, dropping in for structure. Infrastructure. You spent how much money on content . Tim tens of millions of dollar a year on content. Kara these guys are spending billions. Why are you guys doing that . What is the goal . Tim first of all, and a global perspective theres 900 million paid tv connections the world. Roughly 2 billion people on smartphones. That number will go up to 4 billion in the next few years. Peter was just talking about how big distribution has gotten. We are doing two things, building a media platform. We provide Video Services and content and ads to 40,000 other for our own properties, we are investing in what we think is content that will look like the future of content. You are talking about a show called connected. That show is driven by smartphones, the entire show is shot almost like a periscope from the viewpoint of someones phone. Susan sarandon is on that show and we have had good receptivity. Some of our shows we have invested money in are three highestrated shows have had 50 million users on them. Thats an incredible number when you take a step back. Thats an incredible number in the United States come you take a big step back and you could reach 4 billion people in the next fears, that 15 million probably needs to be 100 million. Thats where we are investing in Huffington Post, putting video behind them will be impactful. Kara youve been pushing this idea for a while. Now, everybody else is it a big threat . Do you want to become the cable industry . Tim the way i look at this is, there will be a set of companies from the cable landscape we Just Announced a big deal with nbc last week. There will be a number of companies that get together and do it together, internet and tv. There will be some companies that get lost on the sidelines because they dont move quickly enough. There will be companies that dont get the proper amount of scale. We are at a Tipping Point ive been doing this now for 20 years. I think this is absolutely a time period almost like the beginning of the web. We are in one of those times right now. Kara if you were running he called Traditional Media Companies that properties to me they imagine them by most companies up wor disrupting them completely. Did you imagine that would happen quickly . Tim i think there is we invested four years ago in video and content brands at a time when nobody wanted to touch content brands because internet was going to destroy everything and nobody thought video would be highquality enough. We were early investors in that. We had a company in peril that needed to be turned around. I knew what the attribute of farewell were and what needed to happen aol were and what needed to happen. Almost everything was down. If you look at the Traditional Media Companies right now, look at their p l, all their major lines of business are red. At a high level stat right now, we have 4m, video on mobile is growing 40 , huge growth rate compared to others, 40 billion by 2020 that will transition from tb to mobile. Tv to mobile. Theres 4 of the population in the United States and 96 out of the net states outside of the net states. Those will end up being a significant shift. When theres 4 billion people on mobile machines kara why do you call that machines . Tim they are not talking on the phone. They are operating machines. I referred to this as a cable box in my pocket. Thats a very important concept because when theres 4 billion of those things floating around its a very powerful way to build a mega brand. Few brands have thought about building in a 4 billion person universe on media on the screen. You will have to. Kara its just a watching machine, really. You say machine and it feels very terminator. Tim approaching it i just replaced my iphone six plus with what is 30 machines at 30 people turn to do a global videoconference for us. How do we build the latest company on the hardest technology we possibly can . When you look forward 10 years you will see a massive raise for talent, massive raise for infrastructure race for infrastructure. Kara lets compare the landscapes. I will go through each of them and tell me where you think they are going. The internet company. Google. Tim i think google is very search focused from a platform standpoint with burgeoning interest in significant markets outside of search. Kara would that be video . Tim video is one. Autos is one. This is true for a lot of big companies. If youre a big company and need to grow, you have to do things that are big to grow. You are seeing things like autos old bunch of companies become a big target in general. Kara do you imagine them buying a Cable Company . The keep talking about delivering their own fibers. Tim i will give you my end of the movie prediction for all of these copies. At the end of every Business Strategy is a human. Human will not have will not sign up for 20 services. A human will not want to have 20 Companies Giving all their data to and will not want to figure out where the channels are on 20 devices. You will see a regulation of all of the companies try to complete in this space down to what Human Capacity is. Almost everything humans can handle and know about is around the rule of seven. You will try to optimize with the fewest amount of partners, devices, places to get content and it will put your menace pressure on the Internet Companies and Cable Companies to become one of the seven places you do things. Theres 200 companies i think there will be 715 Major Companies over time. Video is a hot work right now. When we got into it, very few companies were into it. Now there are hundreds of companies. That is not sustainable. The same thing happened to auto companies. Kara amazon. They put out some great shows. Tim amazon is doing a really good job. Each of the Rowan Companies has a different relationship with their users. Each of the Internet Companies has a different relationship with their users. Amazon has a different relationship. You will see the specialization of these platforms become more important. Kara lets talk about facebook. Much of the video is somewhat ridiculous i watched a snake eating and a 20 times eating an egg. Like 20 times. How do you look at facebook . Tim facebook has done a good job in video. You look at all these Companies Come every one is investing in noncommoditized areas. Value of content will skyrocket. Highquality content will skyrocket, the opposite of what a lot of people think. The second piece is advertising will get really expensive. Trying to convert a customer in digital we have all these companies on these platforms. Our ad prices have gone up. Consumers will end up getting a really big wind out of this because you have the best companies in the world and most Competitive Companies in the world trying to get down to this rule of seven and there will be a lot of Companies Investing a lot of time and energy. Kara china come all of them can you imagine them being big players . Tim definitely. On the boards like, theres three things, the amount of users you need to be able to deal with everyday, the amount of content producers and the amount of ad dollars. That slide plugs in the fact that in five years come all these networks will be globalized. The other companies from other countries are more interested in coming here then we are going there. You look at the skill of the users they have on their services if they come here, and will put your menace pressure on the Companies Like ours and everybody else to compete at a much higher scale. Kara apple. They are trying the watch thing. Tim i have the watch. I like it. I have been testing it. I have the Huffington Post on the watch. Kara it is tiny. Tim i like it. Ive been using it for a week or so. Here is what apple does a great job of. Apple does a good job of thinking of the role of seven. Human beings want kara you were talking