should be able to buy directv. all of that ahead on "bloomberg west." first though, we are talking about amazon, out with a much better than expected quarterly report, revenue jumping 20% and returned a surprise gain of $.19 per share. analysts were expecting a loss of $.14 per share. they have efforts to lure more customers with amazon video. right now, shares a rub 17%. with us from new york the senior equity strategist for amazon and the vice president of media ventures and from seattle, our guest from a joint venture group and an amazon investor. matt let's talk about what is happening with aws. matt: they are just rocketing. they are one of the most profitable, if not the most profitable section of amazon. you saw them at $23 billion for the quarter and they are just making progress. emily: david, i want to bring you in on some of the things we're seeing with online video. "transparent" was a big hit. are we seeing that replicated? guest: i wish they would "show the numbers" of how many subscribers are subscribing to prime and what they are doing but the free shipping has really enhance the service to consumers and we sell to amazon and we do very well with our products. they are promoted properly and they are doing a really good job. they do not get the attention they deserve. netflix steals the headlines. but amazon, i would be interested to see what their numbers are. netflix at 50 million subscribers. i would not be surprised if amazon was at that number or above that number. emily: let's talk about the surprise profit. house apprised are you? it is not that big considering they are bringing in $23 billion in revenue. still, it is a profit. matt: aws had 17% profit margins last quarter and you take that grows with the heavy profit, and that accounts for your profitability right there. there are other, newer investment areas, like david said like twitch, that has been very successful for them. there a lot of the second quarter engines. i think it will have a big impact. emily: let's talk about that. jeff bezos says the amazon is the first company to use the golden globes to sell toilet paper. what is amazon's ambition here? david: i love the toilet paper analogy. their ambition it is to be everything to every consumer from toilet paper to movies to games. amazon prime amazon fire the tv service that is competing with xbox roku, playstation. crime is giving a real run of the money to netflix. winning that golden globes does not get enough attention. i think amazon is a serious player in this space. emily: let's talk about prime. what do we know and what do we not know? we still do not know just to many prime customers there are besides me. guest: that's right. prime has crossed 50 million members. but i think it is superior. you see them investing aggressively and prime. having the prime day content, etc. that continues. i have to say this quarter is the best quarter we have seen in a while. they outperformed on the top line and the bottom line. it is hard for me to frankly see any negatives in there. the highlight has to be amazon web services. that division is on track to hit $10 billion revenue faster than we thought. the margins crossed 20% for the first time. i think it is remarkable what they've done in this quarter. emily: prime customers are getting cash back from amazon in the form of credit, and at the same time, retailers online and off-line are stepping up their game. i just spoke to jet.com, a new company that is trying to drive down prices as much as possible so they are the lowest price option out there. it certainly seems like amazon versus everyone else. how big a threat is everyone else tuna? tuna: the landscape has gotten more competitive, whether you look at the traditional retail landscapes. when amazon an ounce to their prime day, you look at the content. it is the same side. netflix. they are stepping up their game and i think amazon, to be sure has taken to the next level. i love all of the underlying innovation. i think it is really coming together. emily: ok, tuna amobi david, matt -- shares of 17% in after-hours. we will continue to volume -- follow it. things, guys. google successfully by youtube back in 2006, a deal in retrospect but the founder says he does not regret not holding out for more. and if not for the deal, youtube would have died. take a listen. >> we were lucky. google in my mind, took a chance on us, and really youtube would not be here today or what it is today without there's a war area -- without their support. emily: chad hurley went on to create a video platform that landed him in legal trouble with kanye west in kim kardashian. i asked him to explain his side of the story. chad: i took some video and the next day i noticed but if you people had posted videos to instagram. i did not think it was a big deal. after it got out there and got a little attention kim and kanye wrote me the e-mail. the rest is history. emily: they sued you. what happened? chad: they are still suing me. we will see when this actually airs. emily: video of their engagement, he posted. for more of my discussion with chad hurley, catch studio 1.0 tonight at 7:30 p.m. eastern and pacific. 10 scientists from montana pocket $2 million in the latest x prize challenge. their research is next. ♪ emily: breaking. airbnb is close to hiring blackstone's schwarzman trophy -- lawrence tosi as cfo. he has been the cfo of blackstone's sense 2008. airbnb received another round of financing. representatives for airbnb and laxton declined to comment. i want to get to pandora now also reporting, shrugging off apple music, and investors celebrate. they do not expect much in back from the new competition. joining me with more, amy in new york and the capital founder in l.a. amy, i want to start with you. highlights, raising the forecast -- act of listeners -- listening hours flat. what is the story for you? guest: the rpm's really nice and beat our estimates. so, i think the key story is closing the gap with traditional radio broadcasting. emily: we saw the reveal of apple music. we sat down with the founder of pandora to talk about how big a threat he thinks it is. take a listen. guest: there is a lot of novelty in this space. they do not become habitual products are folks. we tend to shed those in a hurry. ultimately it is about simplicity. people want to hit a button and here stuff they love without too much fuss. emily: the founder of pandora does not think apple music is a big deal. what do you think? is this a threat to pandora? is it a threat to spotify? guest: tim said the word product. the other services have much bigger revenue streams. they did a great job on revenue this quarter, but they went from 11 and a half dollars per average user and maybe it is straining to 14 or 15, where is spotted by gets 120. pandora had a moment if you years ago where there the only one on all of these devices. now you have spotify, all of these other services on deck and now they are in a box because they did this. late settlement that makes them only be -- they did this settlement that makes them only be a radio station. do they go beyond just being a radio station? emily: pandora talks about how its users are loyal users. amy, i wonder. they are spending a lot to get that sales team to build out to increase ad revenue. what about the concerns adam is talking about? amy: i think adam made good points. but the big story for q2 is revenue and monetization of the user group. it is unclear how that is going to trend in 2015 and 2020 ahead of the royalty fee is coming up in the next four years. emily: adam, how do you see this play out? let's say a year or two years from now how does apple music pandora evolve? who are the big three? adam: you can include amazon in there. we just got the amazon echo and they keep talking to alexa. i think the big issue here is what is the tieback apple has two devices, amazon has huge membership. if you look at spotify and pandora spotify, 75 million users, pandora, 85 million users, but spotify has this multiple billion-dollar valuation higher than pandora. i think it goes back to what tim says. i think and/or is a product. music's media. i know we are in this process of unbundling, but music is not -- absent of television, you have spotted by trying to do video streaming and verizon is coming into the market. i think it will be who delivers the music and how easy it is to get it. emily: all right, obviously a lot of things at play in the streaming music space. pandora shares up almost 7% now in after-hours trading. this week, scientists from sunburst sensors one the x prize challenge. we sat down with them and the x prize ceo. >> we look at some of the world's biggest problems that are not being soft and we put out a large cash prize, in this case funded by our -- that are not being solved, and we put out a large cash prize, in this case funded by our founder. >> they were changing a system that we know can be better and we are using data. the problem we are tackling is ocean acidification. we get more than half of our oxygen from the ocean. i invited 25 marine scientists to join us in washington and talk about, what do you mean? what device do you mean to measure this phenomena and that no one can see? >> we had only about a years time to design devices that could affordably measure ocean ph. and also very accurately at deep ocean depths of 10,000 feet down, or at the coastline measuring on. if you cannot measure it, you cannot take action. >> they are headquartered in montana and they love to say, we do not have an ocean there. it is a husband and wife. they have a very small business. the incentive of the prize itself takes it off the drawing table and brings it into reality. >> we are living in a time where entrepreneurs have access to all of this information on google access to ai, robotics, incredible technology. it's about finding the nonexpert who comes up with this novel idea like why can't we do it this way? ms. schmidt: these tools will be in the hands of lots of people, on ocean going tours in the hands of scientists. the door is wide open for all of us to develop product in a growing market. emily: wendi schmidt there. coming up -- the fight for the airwaves. we bring you the latest. plus, nasa may have discovered earth 2.0. we learn about a distant planet that is a lot like our own next. ♪ emily: time now for our daily byte one number that tells us a whole lot. 1400. that is the number of light years between earth and another planet that could be our cousin. the kepler telescope spotted it today. it circles a sun like star for 385 days -- just a little longer than our year. the planet is located in the star's goldilocks zone where water can exist on the surface of a planet. the next task is to determine the mass of the planet to see if it is rocky. this discovery is one of 500 lannett's captured by the telescope. let's get back to earnings. at&t reported a few minutes ago. the second-largest u.s. wireless terrier added -- carrier added 2.1 million net adds. i want to bring in jonathan chaplin and former fcc chairman robert mcdowell to discuss. give me the good, the bad, and the ugly. at&t is a company that has been struggling to drive growth. jonathan: i am fairly impressed by the headline numbers. they beat on eps. they beat on ebitda. they beat on revenue a little bit as well. i think the core of the value lies in the wireless business and they are still losing customers in wireless. they reported ads but most of those are tablets being sold to their existing customer base. emily: about t-mobile -- you know, the ceo has made it his job to ruin at&t. how big a threat is he? is john linder getting it done? jonathan: he has done a phenomenal job of the last few years. they have taken a tremendous amount of share, at&t and verizon have ceded a fair amount of share to him. and at&t has a big disadvantage with a worse network, a damaged brand. over the long term he absolutely is a real threat to at&t and verizon. if he can get his hands on more spectrum. emily: let's talk about spectrum. i want to bring in robert on this, this spectrum issue. the fcc is about to reject a request for more spectrum to be reserved for smaller carriers. robert, how does that affect t-mobile versus at&t? robert: i think the fcc will set aside 30 megahertz of spectrum which is quite a bit. and if sprint does not participate in the upcoming option, that could be good news for t-mobile whether they want to have more spectrum or not. they bought metro. they did a fantastic job of integrating that network. they have some fantastic engineers. they are not to be underestimated. they are a threat to all of the carriers. it is a great time to be a wireless consumer. emily: also potentially good news fcc chairman tom wheeler signaling that the deal with directv should go through. what does that mean for at&t? robert: that is a shot in the arm for at&t. that is good news area that provides a nationwide footprint for a stronger national competitor against comcast, time warner cable. it's good for competition. emily: let's talk about comcast comcast getting a huge boost from new films out. are we going to see the film side of the business getting more attention going forward? jonathan: it was spectacular this quarter. they blew away everyone's expectations. year-over-year. unfortunately the cable side of the business was a little ho-hum , and that is the piece we tend to focus on most. the cable side of the business did fine. the broadband business is continuing to improve, but they did not beat by nearly the magnitude they didn't film entertainment. emily: comcast now has more broadband subscribers in cable viewers. robert mcdowell, jonathan, thank you to both of us, breaking that down for us. that does it for this edition off "bloomberg west." don't forget to catch the latest episode of studio 1.0 tonight my discussion with youtube founder chad hurley. ♪ >> with all due respect to bernie sanders you always have a home here. ♪ >> the monster mash. ♪ mark: on the show tonight, the first book in debate will take place in cleveland ohio along with the smaller minor-league debate for the candidates don't make the foxnews imposed top 10.

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