Transcripts For BLOOMBERG Bloomberg West 20140426

Versus the streaming start up aereo. These tiny to send signals to subscribers. Users receive the services privately. Dario has locations all over the united states. Bloombergs anchor betty liu was at the supreme court. If it loses the case, it is finished. Bloombergs anchor betty liu was at the supreme court. I asked her what the feeling was like on the ground as both sides made their case. I saw an interesting dynamic layout. Play out. Paul clement and David Frederick came out and made their closing statements to the press. In that crowd, emily, was a man who backs aereo. I asked barry, how do you think things went in the courtroom . He said, you know what . I think things went well. He didnt want to make any mor statements. He listened in on the broadcasters and walked off. A lot of people thought that there he would perhaps just slid out the side door. Not be seen. He just couldnt help himself, emily. Tell us who the players are. Yet the broadcasters on one side and the Obama Administration has come to their support. The department of justice came down in support of the broadcasters. On the aereo side lots of Silicon Valley. Facebook, google. Dish networks. They have sling technology. They wrote a brief in support of the company saying this is basically what we have, which is we allow people to get broadcast content in whatever way they want. They can record it. It is essentially new technology doing the same old thing that a vcr used to do, emily. You sat down for an exclusive interview ahead of todays arguments. What if the vcr never existed . What did he have to say about today in particular yak go it is interesting that chet did not want to say anything. He did not take questions after the court let out. He did sit down with us yesterday. As expected, he was optimistic that he will win. The law is on his side. This whole thing has been about making sure the consumer gets the signal. Its not about making a coule of guys rich. In we come with a completely Different Technology based in the roots of technology the roots of broadcasting. No one can dispute the facts. Unfortunately, they cant dispute the facts. This is all a concoction and false narratives being created that this is a copyright problem. It is a Business Model problem. The world is changing around these guys and they are reacting with what they know, which is litigate and kill new companies that come in because youre making far too much money and continue to make far too much money and have no incentive to change. Can you understand, though, that they are spending millions of dollars in programming that basically you are charging people eight dollars a month to access. Can you see that what you are talking about is innovation they are saying is theft . Here is the issue. If we dont apply this technology to a cable channel like hbo or whatever, theres a reason theyre called free to air broadcast television. The central bargain with the consumer and congress is the programmer and Public Interest is free to the consumer. They make money, billions and billions, with advertisers. 90 percent. Are people who use an antenna infringing on the copyright . No they are not. Tons of Companies Make money by selling technology. All these Companies Make money but you are more than just an equipment provider, even if that equipment is in the cloud. You do want to be more than that. The question is, what are we on a factual basis . Lets say you get into original programming, lets say you develop your own channel, doesnt that change who you are . No. Tivo is a great example. You can get a retail tivo box. You can plug an antenna into it. Tivo will sell you on demand movies from the internet sidebyside. Where is the Copyright Infringement . It is only Copyright Infringement because it located a box and made it simpler for the consumer . Chet kenojia is not backing down. How does this play out . For aereo, nothing happens. It has been a long journey for both sides. For the court, it is going to be like any other case. Justices will retire to the chambers and discuss the case and vote on it, a tentative vote. At the end of june is when we are likely going to hear a decision on this case. For more on this, i want to bring in rich greenfield from a media and entertainment analyst. He was in the courtroom when all of this was playing out. Rich, great to see you. Tell me how you think things went. The overall case was very hotly decided. The bottom line was there was no clear one direction. This case you could tell there was fear among the justices on how you write this decision. If you were to say aereo was illegal, how you write this decision without impacting Cloud Technology . A lot of conern. Chief Justice Roberts went after the plaintiffs attorney you go to a Public Parking garage and you rent space for next amount of time. Hows that different from when you go home and ill the garage . Build a garage . Youre renting versus buying. That is the key challenge the court is grappling with. Is this simply the same thing as renting versus buying, or is there Something Special about broadcast television . There are a lot of questions. Were there any curveballs, rich . Probably not. There was some concern when you think about what the overall impact could be on why this system is the way it is. Justice ginsburg said the only reason youre creating millions of individual copies to circumvent copyright law, i would not call that a curveball. Theyre pushing on why the system is built that way. It is only built to circumvent copyright law . Certainly a key theme. Eddie lou there with rich greenfield. Just a note, bloomberg tv does have a Distribution Agreement with aereo. A legendary designer is wearing a new hat is a Venture Capitalist. He joins me to talk design and tech next. Im emily chang and this is the best of bloomberg west. Maeda is a legendary designer spent more than a decade as head of research at media lab. He went on to one of the most prominent art schools of the world. The Rhode Island School of design. He is the first design partner to join intervention a Venture Capital firm. Maeda joined us and i started asking him about his recent move into Venture Capital. It is so amazing. The speed is so extraordinary, the people, the energy. It is intoxicating. How did perkins convince you to leave . I kept telling students, kobe like ryan and joe. I felt a little disingenuous that i wasnt going myself. So why not, i thought. What is your role . Youre helping portfolio companies, but youre are also sourcing new investments. Im trying to understand the Strategic Value of design. Company formation, company ignition. Early incubation. How to get design as early as possible into the process is something i have a lucky to get a chance to look at very closely. What are some big established Tech Companies that you think are doing design well . It is important to note that doing design well is not something you get good at suddenly. If youre doing it for a long time, things work out well. People say apple design is great. You have to remember they have been doing it for 30 years. They have always been a design company. Apple is one of the standards that has done very well. I see ibm coming back. Really . They began with design in the 60s and had to revive it. I have gotten a chance to work with ebay closely. Big companies. And Small Companies like ecosystem startups. Any startups you would call out that are doing a good job . Definitely flip toward flipboard. Theyre moving like a rocket. People asked me why they are doing well. They have one of the worlds great interactive designers. He disappeared and went to this company. You need a great designer to do a great company. Were looking at a list of Great Companies now. Nest. Not a surprise. It is interesting when you see like an ebay or an airbnb, you dont think of them as design companies. Arbnb people think designers, i love their website. That is not the point. Joe and brian are industrial designers. They design physical things. They love the physical environment. They get the space and the physical environment. The website is an artifact of that. The website is a scaling mechanism for their sweet understanding of the physical environment. The design is all here, not on the web. What is the wrong way to go about design . Who is doing design poorly . I never like to throw rotten apples at people. I figured you wouldnt. But what is a bad way to go about it . A good way the wrong way to go about it is very common. Make tech and realize you forgot to make it palatable for people to use. So well sprayed on top. I will call it lipstick on the pig. I never liked that. Why does it happen . Because technology was always a game changer. Why would you care about design . Design was something that was maybe pretty frivolous and never had a big impact. Design has been a big problem too, how we talk about it. If you have a significant design, you have Great Technology. You get a great company. Do think design is more important than technology . No. Technology is the most important thing. I went to m. I. T. , too. I have to carry them both. I have schizophrenia. Technology is the Game Changing chassis upon which a great human centric experience can happen. You can have a good idea, it has to be implemented. This area has to happen at scale. You get that from technology. John maeda there. Where do giants like ebay and apple find good designers . That is still ahead. Welcome back to the best of bloomberg west. Tech Companies Need good design, but how do they find and attract good designers . I spoke with a company that helps other Companies Like square, facebook, box find engineers and designers. I started by asking john maeda how he got into design from the beginning. When i was young i went to school one day to a parent, teacher conference. He said i was going to be good at math and art. My dad overheard this. The next day he said to a customer, johns good at math. Years later i went to m. I. T. And art school. You are still focused on the art i want to bring in a man from a recruiting firm. You know very acutely what the demand is for design talent. How competitive is it . Its incredibly competitive. When you think about what a start up team used to be, it was an engineer and the business guy. What is it today . It is the engineer, the business guy, the designer. The thousands of startups all need one new person that they didnt used to think about. The demand has gone way up. What makes a good designer . Are they also a good engineer . Is a good engineer also a good designer . The people who can do both are a unique species. Theyre the ones to find. Also the ones that can do design and leading. Leadership is a big question. Companies that want to scale needed design leader better than a pixel person. What you mean by design leader . Someone who loves people. It is a rare thing. The people thing is kind of a pain. People who can graduate from the making to seeing, wow, i am in the world, design leaders are much more important. What do Companies Like facebook and square want . Ultimately they are designed first companies. That is a big shift. For them, the opportunity to find talent is huge. If you are facebook and square, the question is, how do you create an ecosystem to attract top talent . Same thing with facebook. Different vibe then square, but a place where creative person will want to spend their days. We work so hard to make these environments to bring designers in, but that is assuming you know what the designer wants. What you do to find design leaders, people who can manage the scale of a creative persons life . A lot of it now is about inspiration, whod i want to sign up to work for . At the end of the day, they are a rare breed. That is why you see large Tech Companies put a premium on bringing some to the table. Other designers get inspired by these people. They want to work for these people. It is a fundamental shift in the Way Companies are doing business today. John, what do think about Companies Like apple bringing in the ceo of burberry and people from the fashion industry . People from fashion to big tech. I think that trend is more about the value of technology. You want that take. That is for a very mature company. The startups are looking for something more substantial. You dont want to just be a fashion. You want Great Technology and great design. John, what you think about the fashion trend . When we used to buy watches, we used to buy them based on how well they told time. Today, that is a byproduct, that is an afterthought. You buy it based on design. You buy your jeans based on design. Every company is thinking about design in a new way. I used to say to mit, in a thousand engineers versus designers i can find three that understand engineering. The same in reverse. I find a lot of designers picking up code. Unfortunately, schools own people schools dont teach people with design how to do coding. A lot of focus on print design. Ill be more versatile if i can write some html. How about trends in design . John, what are you explain what the difference is and what is better . The flat versus schemorphic debate when things are complex we get simple. When things are simple we get tired and go complex. We had too much texture. Lets remove it. I guarantee you five years from now we will be back with textures. Is one better than the other . No, but it is better because it makes you feel something. This beautiful dress youre wearing, every day it would be tiring. How you do Something Different . To have a balance of some of one of some of another . Does a company have to commit to just one . It is a balance question. Still ahead, we are asking john maeda about his favorite design. You can watch us streaming on your tablet, your phone, bloomberg. Com, apple tv and fire tv. Welcome back to the best of bloomberg west. As the former president of rhode island design, john maeda has had a long and successful career at the intersection of technology and art. That can sometimes get that can sometimes get complicated. I asked him how his expertise influences his everyday taste. I was in tokyo for while. I was part of the swiss typography mob. It was a double fanaticism. That is making things perfect on a page. I was in that cult. Then i broke out of it. 1994. I went british style. British style is free. So you let go . A lot. What apps are on your phone . Do you focus on the best collection of apps . I like to know the design is not just an aesthetic experience. It can be an offroad experience. Those are all examples of good design. I might like the solar app because of the great way to look at weather, it feels like a rothko painting. I like the junkiness of snapchat. You get the combinations. Its like Fried Chicken and expensive food. We are back to balance. What about clothes . Steve jobs always wore the black turtleneck and jeans. The turtleneck as designed by issey miyake. It wasnt just the black turtleneck. There was something about staples in design. They are very simple. There is a lot of care in the fabric, for instance. It is not just how it looks, but what its made of. What designers do you like . Sometimes comme des garcon, even lands end, the whole combo. I want to talk to about i want to talk to about wearable computing. I just got my own google glass. What do you think of google glass . This is the version with the glass frames. I used to i saw a robert brenner. He would google these headphones to get beyonce. Its kind of like the position in technology matters. It would be much cooler than it is now. Someone told me i was not allowed to wear them in public because i would be a social pirana. Literally used the word. You are saying that it doesnt have to do with how it looks. It is how it is introduced. If beyonce was wearing it, you would be wearing. How do we enculturate technology . What about this . That is another example of you cant tell time with it. It doesnt display anything. It is a trend. That was john maeda. Coming up, can you stop hackers from looking through the devices in your home. An expert gives his take in our next installment of security 101. Welcome back to the best of bloomberg west. I am emily chang. New Technology Means new security threats. Sites push us to share more information more than ever before. Smart coffeemakers and washing machines are constantly collecting data about our habits. How can you be secure . I spoke with brian white for his tips on how to protect yourself when using social media. I started by asking, are we more or less secure . I think we have to be careful. You are putting so much information about yourself available to the public. People look to that information when theyre looking to hire you. Some people post where they are when they go on vacation. You are basically putting a dossier on yourself out to the public. Once a photo is posted, it is always online. It gets cached. It is very difficult to take away. Is it better in private social situations . It is going to be very difficult for you to be confident that something you post online is removed. Never tag locations. Why . Criminals can take advantage of you being away way to steal goods from your house. There are cases where somebody posted that they are in new york and their home in San Francisco is empty. There is an open invitation to steal. Every app asks for a location. They want to give you directed advertising. You have to be careful of where you automatically check in. My personal habit is there are very few apps that need to know where i am. Maps needs to know, but yelp does not need to know where i am. Beware of shortened links links are everywhere in social media. It is easy to put into a hash tag. It is difficult to determine which one is actually real. It is like the basics that we discussed. Put the link back into a browser and see what comes up that way, rather than clicking on it. That may introduced malware into your system. Put it into a router before you click on it. Ok, always log out . The systems like you to stay logged in. Every time you get into a social media site, log out and then log back in. Do they track this more closely . I think they have developed a lot of their information based on targeted individuals. They can determine your password. If they can determine key characteristics that may give them information on how to take advantage of you. What about wristbands and glasses . Everything has a chip in it these days. Does that put us at greater risk . It offers great promise. We have to be careful about what is connected. There are a lot of cases where somebodys refrigerator is connected. If that is connected, it is connected to your home network . If it is, somebody could take advantage of that ip address and jump into your network. How much can people learn from your connected refrigerator . Very little. They could mess with the system and change the cooling and temperature. More importantly, they could escalate privilege and move to your home system. What about nest . Nest has great promise. I am concerned about how much data it is collecting on you in your home. It enables people to get more of a dossier about you. Is that more than is being collected by your phone . Not necessarily, but it tells you about the temperature you like to sleep and when you are away. How do you you protect yourself . It is important to have these conversations. Be prudent. Be cautious in what you do online. Post information and be responsible. Everything about yourself that you post on a social media site is going to be there for quite some time. When it comes to the internet and connected devices, determine what needs to be connected. Do you really need to take advantage of that connection . That was brian white. Disney has hit the Box Office Data pot with frozen making 1 billion. We are asking the man behind the magic, alan horn, about the secret to blockbuster success. Welcome back to the best of bloomberg west. I am emily chang. Since alan horn arrived as chairman of walt disney studios, two disney films of top 1 billion in worldwide ticket sales,iron man 3 and my favorite, frozen. Jon erlichman sat down with alan horn about the secret to this kind of box office success. Jon asked him how frozen has been for disney. I will say that it has been a phenomenal success. It is the highest grossing number six of all time it is the numberone animated picture. The biggest before that was toy story 3. This is a gigantic success. Thereve been millions of albums sold. It is the number one on the charts. Have you guys seen frozen . Can you get that song out of your head . [laughter] are you going to make a sequel . We havent talked about a sequel because we have announced that we are making a broadway show in new york. The next thing will be a musical. We have the music, we just need four or five new songs. Kristen and bobby lopez will write those songs. I do have a title for a sequel that has not been embraced, thaw. [laughter] im glad you picked this form to reveal all of the plot specifics of the star wars film. The internet is going to go crazy. You just told us youre heading to london. To look at production design. I have learned to be very careful about star wars. If i say that there will not be skateboards in star wars, the internet creates a headline. Star wars sans skateboards. Even if it doesnt happen, it is news. I am being very careful. We will be able to talk about it very soon. We have all the confidence in the world in jj abrams our director and Kathleen Kennedy who is producing the film. Good shape. There will be no skateboards in star wars. [laughter] the casting is almost done. Is casting complete . It is almost complete. We are not prepared to announce it yet, but we will be very shortly. You said that shooting had started. Did that mean we are doing second unit work in abu dhabi in other places. We have these locations that we have to film and give it that star wars look. We need to go to different places that give us the right look and feel. We have had second unit work shooting already. We have not commenced principle photography yet. The primary location is Pinewood Studios in the u. K. When you take all of these big movies home of the global audiences that are available to you today, which is a larger number of people than ever should we assume that that strategy helps to offset an industry sore spot like declining dvd revenue . Dvd revenue is down 50 to 60 . That is painful to us. When you rolled out a movie we would get estimates from what it would make from all of these revenue sources. The dvd component of that has been cut in half. That was Jon Erlichman with alan horn. In the music business, cds have also struggled. Interestingly, vinyl has actually been doing well. This has even been with digital downloads and the itunes store dominating. Vinyl has been a hot growth area. Jon went to check out one of the few factories where records are made. Long before there were digital downloads, this is how you made an album. At Rainbow Records, the recipe has not changed. It is a process of heating up the dye, the hot vinyl, and the pressure. It goes under 1800 pounds of pressure. It is like making waffles. We are inside one of only a dozen facilities that still press records. Four years ago, Rainbow Records was down to making 5000 lps a day. Our average day now is about 25,000. Six days a week. 6 million lps were sold last year in the u. S. It is small versus total sold, it is 140 growth. In 4 years. That is compared to a 44 drop in cd sales. Why . Look no further than rapper macklemore. A year and a half after the release of his album the heist, rainbow is making the vinyl version. When you buy the physical copy today, they will give you the digital copy as well. That is very common. Macklemore made the album available to whole foods and urban outfitters. It quickly sold out. They have got a 12 inch by 12 inch picture of themselves in a store that speaks to their brand. Rainbow is scrambling to meet the new demand for vinyl with old equipment. The newest Record Presses 35 years old. Album testing takes place on a vintage turntable. This was converted to vinyl. This was a cd machine that was converted for vinyl. That is where we are going. Jon erlichman. The warriors have struck a deal with a tech giant. We will talk with coowner peter guber next. You can watch us streaming on your phone, your tablet, and at bloomberg. Com. Welcome back. I am emily chang. The Golden State Warriors have abandoned plans to build a new arena on the waterfront in San Francisco. The team struck a deal with a spot for themselves. Further south, though still in the city. They will own the land outright. We talked to peter guber. We asked him why this new site in mission bay. And why now. We control our destiny. We own it. Our relationship with the city is one as an owner and not as a tenant. We feel the site gives us attractive elements. The venue will be for the San Francisco bay area. It is one of the top 25 markets. The area does not have a venue like this. We believe it can be activated successfully. They can be accessible by all four sides. It is right in the city. It has its own location. It defines itself. We think we will have all of that money privately. We wanted something that we actually own. You bought the land up privately outright from salesforce. I am curious how that happened. Did they try to recruit you to that part of the city . Yes, mark benioff called and we met with them. With him. We met with him. Together, we fashioned an arrangement. We looked at all of the variables. It was expensive, obviously. This was the place to make the move. It offered us a certainty, a timeline that was effective, and the accoutrements that we were hardpressed to get other places. When you talk about getting privately funded, how where does the money come from . Have you ever heard of a rotator cuff injury where you get your money out of your own pocket . Hurts . It is all privately financed by the ownership and the partners involved with the enterprise. Without looking at public funds, we are going to be an active participant in the city. We will be a good listener to the marketplace and good for the neighborhood. We will be responsive. We are a private Citizen Building a private venue for the benefit of all citizens of the bay area. It gives us the opportunity to control our destiny. What will be unique about this arena . When you can build one of these things from the ground up, what do you want to be the signature thing tied to this . Everything is going to be unique. We will cast our line over the horizon and not make a copy of something else. It will be an original venue. It is an attraction and a lightning rod. It will attract the best artists. There will be a theater element to this, a Public Performance element to this venue as well. We are going to get it digitally fit. We are very successful at oracle. We are going to have the right kind of visual display. We will have interactive video. We will make the audience not passengers but participants. We have the relationship with the Business Community and Silicon Valley to bring those talents to bear. It will be Madison Square garden out west. It will be the kind of venue that artists and performers and conventions and olympics are going to say i want to perform there. That was mandalay entertainment ceo peter guber and our own Jon Erlichman. That does it for this edition of the best of bloomberg west. You can watch us monday through friday. We will see you next week. The following is a paid program. This company is not this company is not affiliated with the u. S. Government or the u. S. Mint. The markets for coins are unregulated. Buying carries some risks. 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