tv Bloomberg Technology Bloomberg August 4, 2020 5:00pm-6:00pm EDT
♪ emily: welcome to "bloomberg technology." i'm emily chang in san francisco. investors today as gauge the outlook for a new stimulus bill. we are standing by for the president to deliver another news briefing at the bottom of the hour. some more back-and-forth today about the president's push to force tictoc to sell to a u.s. company.
disney shares moving after hours. obviously, it has been a tough quarter for theme parks. many theme parks still not reopened around the world. the ones that are open have limited capacity. missing estimates on new streaming subscribers for the disney plus service but estimates -- but subscribers still coming in huge. abigail doolittle has been following the market overs. disney and activision as well. what are the theme this you are pulling out here? abigail: the bulls are just out. nasdaq 100 for the on tech strength. bonds slightly higher as well. that points to the uncertain d, will a deal get done? down into this quarter
about 20% year on the year. they just reported what some are calling a doomsday quarter. however, it is not as bad as feared. a big piece of it, those subscriber and streaming numbers. a modest miss, but right in the ballpark. million more than 100 streaming subscribers. the fact that it is less bad, you have that stock up. a good quarteron but not quite enough. the engine and team -- the management team was talking about economic uncertainty clouding the near future. emily: we have been waiting for "mulan" to come out in theaters. that has been delayed a couple of times. it will be out in some theaters
but also they will release it streaming for $29.99. abigail: match group and beyondmeat are moving in the opposite direction they are still going in the direction. match group, they missed. tender sales growth down for the fourth quarter. the stocks are up. down 7%.at there was this expectation that they were going to put up a big quarter. to some extent, they did. what investors do like, apple. apple up for a fifth day in a row. up nearly 8% over the last five days, really helping the major averages. the best five days since 2006.
appleors are all in on after they put in that really big june quarter last week. emily: we are continuing to listen into the disney call, which is ongoing. losing $4.7 billion overall for the entire quarter. i want to bring in andre swanson, ceo of true optics. what are the highlights that you would pull out here? obviously, this was going to be a tough quarter. do you see the bright spot? >> i think the bright spot is definitely the streaming subscriber growth. not only espn plus and hulu, but disney plus, i think it is a great number. just to think about how fast they got to 100 million subscribers and how long it took netflix to get to that.
even despite the tens of billions of people who are unemployed, all of the financial uncertainty, they are still getting new subscribers. the direct to consumer relationship is something they will be able to monetize as the s itself.onomy correct it is notable given that nobody has new content right now. so how would you position disney ,is-a-vis netflix, hbo max given that production is largely stalled. some people may have watched a few things over and over again already as we are still sheltering in place. andre: i think, because of the
delays in production of new content, people who have deep libraries and lots of known content, it will help them. i don't think in terms of the caliber of huge blockbuster content, but when you talk about netflix, one of the things i have been saying for a long time -- they knewusly it was nonsustainable to continue to just license from others. when you think about hbo max, theirk, cbs all access, content libraries and their bench is pretty deep as well. one thing that i think has been overstated is that because of , someck of availability of the other solutions, that they would not have the type of growth or be able to be
successful. i think that also is overstated because there is so much fragmentation that i don't think any one operating system or device will control the ability of these companies to have successful direct to consumer relationships. emily: interestingly, disney ceo bob chapek has been speaking on the call, saying "mulan" going to dreaming -- going to streaming is a one-off. i wonder what you think about that. i have been curious about how what we are going through right now will have a long-term impact on viewership patterns. will people want to go back to the theater in a year, two years? andre: i think it will be longer than people anticipated. the u.s. has had pretty much
divorced response over the last 4, 5 months. and the as millions of people feeling comfortable officeng back to the box , i don't see that happening for sure in 2020, and i think it 2021 when thatto is the case. they have been pretty focused on switching their strategy to more release.-demand i understand why disney would not be motivated to make that call immediately, because they have done so well at the box office. but i think it is inevitable, in order to monetize their media, and now that they have this large distribution directly into homes, i think they will have to do more direct to digital
releasing. world isantime, disney the main theme park that they have reopened in the united states and florida. on the call, they said that the way it has played out there was worse than they planned because of the surgeon of -- because of the surge of covid-19 in that state. will it have to change and adapt more rapidly given that there is so much uncertainty ahead, and the one thing that is certain is that people want to watch more content from their couch. one advantage -- i was actually surprised that they opened disney world in florida at the time when they did. in 2020realistic that and 2021 they will have anywhere
near the revenue generated. inability to have the it does putfice -- a lot of pressure on their ability to monetize streaming relationships. also some opportunities in terms of gaming, other areas. backespn be able to get baseball and basketball? all of these major media companies, they really kind of benefit even more than they would have predicted from the investment they have made. it is really the only bright spot that they are going to see for the remainder of 2020 to be sure. when: we still don't know disneyland in california will be reopening. optic,wanson of true
negotiations to buy u.s. tiktok. penny: microsoft put out a detailed statement on this subject, so i refer folks to that. what i can say is that i think microsoft would be a good home for tictoc because microsoft is an incredibly innovative company that cares deeply about privacy, security, transparency, digital safety. but today, i am here to talk about our data comments we have created here in chicago. we are really proud of that. ways really a phenomenal for us to show that our community can come together and with industry collaboration and nonprofit collaboration, we can solutionssitive tech
that have positive effects for our community and around the country. emily: the other concern here is, should the president be able to ban any company, let alone a company that hundreds of millions of americans use, or demandt to sell, and millions of dollars if the deal goes through. penny: i think that the president, is, if i understand correctly, concerned about security, privacy, and digital safety of americans. i think that is a role for the president of the united states. how he and his administration choose to achieve that is something i do not have insight into. emily: you are advising the biden campaign. what are you telling the vice president about what his
priorities should be? penny: one of the things that i think is terrific about joe biden and one of the reasons i think he should be the next president is that he would be a good jobs president. he is very focused on the people who have lost their jobs, the folks in limbo, and that we need to not just get the economy going, but we also need to create good jobs for the american public and create the conditions as a government for that to happen. his build backn better plan i think are really so right on. it is about investing in education, in rnd, in our workforce to make sure they have the capability to be successful in our modern digital world. i think the vice president has a
terrific economic plan that will create the conditions where good jobs can be created and try and address the economic crisis that is being caused by our health crisis. hasy: vice president biden raised concerns about the power of big tex. do you think companies like facebook, amazon, alphabet, are they uncompetitive? should they be broken up? penny: the bottom line as it havees to antitrust, we that goesenforcement with a competitive economy. how we treat different companies should be consistent with that. emily: last question. how concerned are you about biden breaking through in this
environment in the middle of a health and economic crisis, when there is so much noise and the very integrity of the election itself could be under threat? penny: i am not worried about joe biden breaking through. i think that joe biden is demonstrating what strong, consistent, reliable leadership will look like. he surrounded himself with a terrific team of people, he will do that in government, and he will help the american people to be safe in terms of their health and also national security. isi think joe biden absolutely the right person to lead our country going forward. and i think more and more of the american public understand that. emily: more of my conversation with commerce secretary penny pritzker later in the show.
the president saying that if tiktok operations are sold, the white house should get a big cut. larry kudlow told foxbusiness that there is no specific blueprint on the plan. bloomberg'sd by shery ahn. back whatd of walked the president had said earlier. where does this stand? shery: we really don't know. it was really strange when we kept hearing from president trump repeating himself, when it comes to the sale of an american company, that the u.s. should get a fee from its and it would be paid to the treasury. we were pretty confused under what authority he could make this happen. that kudlow acknowledging
he is not quite sure if there is a concept they can really follow through. sources saying that the white house is looking into using compliance costs. conducts the fees when there is a review. but that the highest that could get the government would be around $300,000. so that is well short of what president trump described as a large percentage of the sales price. the white house saying that some sort of action will come on chinese apps including tiktok. emily: you have the founder of tiktok saying that he thinks the united states wants to kill off tiktok and doesn't want a sale to a u.s. company at all. you have the chinese government sort of wading into the fray. state media. shery: we heard from the china
daily that this is officially sanctioned theft. even then, beijing acknowledges that there is maybe not much china can do. this is from the global times, saying that objectively speaking, china has little ability, and they acknowledge that the u.s. enjoys technological superiority. so far, we have seen any u.s. action being followed by counter members from test countermeasures from beijing. , theit comes to bytedance founder, talking about killing off tiktok in his second letter to employees. we know that could happen the u.s. could put it on the entities list that would force companies like google and apple to drop them from their app
store. this is something we are watching very closely. emily: thank you so much for that update. i know you will be covering this more on your show coming up. i want to get back to disney in a moment. we have a huge interview later today on bloomberg television with bill gates, the cochair of the bill and melinda gates foundation. so much to talk about right now including his thoughts on a , and thetherapeutics latest developments there. meantime, back to disney. continuing to follow these headlines rolling in. huge loss in the parks division. lost in the has quarter. i want to bring in kelly, who covers media and entertainment for us. >> thank you.
absolutely brutal time for disney, such a rough especially in in, the locations where these parks are. what executives are saying is withjust reopening, even the social distancing rules, mask requirements, has not quite given them the upside they would have hoped. there has been a lot of cancellations, especially in florida, as these cases continue to rise. part of that is that they get half of their guests from out of state and have to get on a plane to go there. emily: let's talk about the parks -- what they said about the park. obviously, california, disneyland is not open. iny said the situation
florida has been worse than planned because of the high number of cases in the state. what are the details there that they are sharing about how the reopening has gone? kelly: when they thought about reopening it, about six weeks before they did it, all the research was telling them that there would be a really high demand for those restricted spaces. , because of all these headlines, that demand was much lower than they thought. they have had this issue with cancellations, people canceling shortly before they are supposed to be attending. that has been another difficulty. . world isantime, disney hosting the return of the nba. how is that going and how does
that potentially help the bottom line? fory: sports is a big boost advertising. and they wereoday saying revenues are going to be so key to them. it is still very difficult with coronavirus and social distancing rules, but that will hopefully be a bright spot after all of this pain and suffering we have been through this year. watch thisinuing to coming through on the call. they said they are going to spend a billion dollars to restart tv production this year. disney plus is the bright spot here. will streaming offset what is happening in the parks business, given that so many of
disney's operations and franchises are tied into the story of the films. will go direct to streaming a. how do you see the company evolving away from the parks business? kelly: streaming will be important. they did say they crossed that critical 60 million subscriber figure. i want to focus on "mulan." this is a huge movie that could have made a billion dollars at the box office. it is going to premiere on disney plus at $30 in addition to your subscription. what they are saying is that this is not like a all new thing where their blockbusters will skip theaters from now on, it is a one off with coronavirus. however, they are hoping and draws people to disney plus to generate some revenue. emily: continuing to monitor the
welcome back to "bloomberg technology." i'm emily chang. tech's battle against the coronavirus. i spoke to former u.s. commerce secretary penny pritzker about her new initiative, basically essential information hub to fight covid-19 with data from doctors, patients, hospitals, and more that everybody can access. kate gibson to how she sees it impact -- take a listen to how she sees impacting government decisions going forward. penny: it is the first
data original comments in the united states. one of the things that will make it useful is it is interoperable, easy-to-use, membership-driven. it gives you accurate local picture of what is going on. one of the challenges that many localities have is knowing what is the state of play, understanding not just what is happening in their own institution, but the region, because we are all affected from my health care standpoint about the regional situation. emily: is it something that you think could scale to a state level, national level, global level? penny: absolutely. you could scale for sure to a state level and it could be replicated in other places. our aspiration is to do a good job for the greater chicagoland area in the state of illinois. this process and this capability absolutely should be replicated in other places both nationally and globally. the information crisis is
potentially being perpetrated by our own president, who has peddled theories about treatments and cures that don't work, says things are getting better when they are getting worse and has refused to wear our mask for the first several months of the crisis. how big a concern is that? penny: look, i think it is extremely important that we have a fact-based approach to addressing the public health crisis, and that is what the data comes is trying to do. it is trying to be a collaborative effort to recognize situations we are basic to one of the things we are facing that requires attention is the disparity -- communities being hit hardest by covid-19. we see it in our african-american community in the greater chicago area and the latinx community, which are having roughly -- they are bearing three times the burden of this public health isis.
and so to me, what we are trying to do is set an example that we are going to be fact-based and data-based in terms of the decision-making going on. what is necessary for that to happen is to have a community collaboration, hospitals coming together. that is something that we in chicago are doing. be viewedt that can by others and replicated. emily: not only are you the former u.s. commerce secretary, but you are a long-term investor. i'm curious what your biggest concerns about the economy now are, giving rising and massive unemployment, benefits expiring, small to medium businesses getting wiped off the map. i'm concerned about all of the things you just mentioned, and the biggest challenge all of us are facing as it relates to the economy and
business conditions is the uncertainty. by virtue of having a database that you can use to make decisions that are fact-based, that will help decision-makers addressed the public health crisis. if we can address the public health crisis come we can address the economic crisis part country is facing. we have got to get at a public health crisis and that requires our leaders to recognize what is the situation understand that wearing a mask helps us, being social distanced helps us come and if we can keep the amount -- the rise of the virus under control, that is essential, fundamental for us to get our economy out of the challenge we are facing. emily: will there be an economic recovery, and what shape does it look like to you? penny: yes, there will be an economic recovery, but it requires us to have their of these -- it requires both
therapies and ultimately a vaccine to get into a situation that looks like what we had earlier in the first part of the year. and the ups and downs that will happen between here and there are very hard to predict. what is important for my standpoint is being clear and fact-based, telling people in here is what you can do to address the public health crisis in the short run, wear our mask, state social distanced, be prudent in your engagements. but all of us who want to see our economy recovering, particularly the communities hardest hit, our communities of color are bearing a really tough unt of this virus. need to help those communities, and the way to do that is to have the data common, to make
information available to the communities, and help them recover as well. emily: former u.s., secretary penny pritzker there. the european union is launching a lengthy investigation into google's proposed $2.1 billion takeover of fitbit. there are concerned about how information from the trackers could increase google's data advantage in online advertising. we are joined by bloomberg tech's gary. the u.s. government has been looking at this deal as well. what does it mean? the boj.s. government, is looking at. there are other governments including australia also looking at it. it is popular to investigate google. but it is interesting that the line that the eu is drawing is focusing on data, which is that google's argument is that we don't have much of a business, fitness tracker business.
it is a broad open market with device manufacturers, what is the big deal about us buying fitbit? the argument from regulators and not just in europe is that because google has managed to amass the largest data trove of any private corporation in the world, they could use the data to add to that. i think it is likely that google will directly take fitbit with a piece of information and say that you will not get an ad saying you did not sleep well last night, would you like to buy melatonin. there are many other ways to know you are interested in those kinds of things. they want to build a device to help compete with apple and make sure that people are staying in the android family and google family and not saying i want an apple watch, i want an iphone, and ditching them because of that. emily: and that leaves a big question mark over google's hardware strategy. they have been making cheaper phones, the iphone, the fitness
trackers would have been helpful in going after apple watch. is it worth it? gerrit: i think a lot of people are starting to ask that question. google has been asked is it worth it about the hardware for a long time now. google essentially makes billion dollars in profit every year. they can afford to keep pulling it into the hardware business. if you look at the most recent phones, they have given up against competing against apple in the high-end smartphone market. they are designing cheaper md android, a high-e you will be ok with the phones for the most part. the apple watch, sleep tracking which a lot of people were using fitbits for. the longer this drags on, the further out google's hardware strategy has to be pushed and that should give competitors more time to adjust. emily: and google's position on
this -- the vp of hardware says it is about devices, not data. you and i talked about the big investment google is making in adt. is the antitrust scrutiny going to put a big chill on deals? we are not seeing it with tok,ect to microsoft and tik but microsoft was one of the latest companies called before congress. i wonder how this impacts m&a for the foreseeable future. -- they haveis been reporting that google itself is saying we cannot just do anything big right now, and to be fair, google has not done a ton of make acquisitions in the past. it something around fitbit would pass without a real serious look from anyone. now it is the kind of thing where it is getting to the point where maybe this thing is never going to happen at all. google is thinking twice about
acquisitions. the adt investment, 6.6% of the company, it raised some eyebrows. i think that google is going to have to find ways in a few places where they have used acquisitions to beef up their strategy. it might not be a tool we can use the current political climate, which could change any time. emily: all right, gary to thank-- gerrit de vynck, thank you for the update. coming up, we will take you to space. a huge milestone for nasa the past week, launching a robot that will be heading into mars and bringing back bob and doug, the two astronauts, via spacex. this is bloomberg. ♪
astronautsfirst nasa to be launched from u.s. soil by a spacex rocket and capsule are back on her. yesterday i spoke with the nasa deputy administrator about the new space age and the
spacex splashdown. >> it is a huge milestone. you think about just what we have accomplished. we haven't done this in 48 years as far as having a splashdown goes. we did it with a commercial enterprise for the first time in history launched humans into space and safely brought them back. it is a new era in our space age, and that is what we are
looking towards. the president told us to get to the moon in preparation to go to mars, and so it is really -- one campaign, three domains. lowers orbit, -- low-earth orbit, which is where bob and doug have been. the moon, in preparation to
go to mars. and going to mars. it is a precursor mission to astronauts going to mars in the 2030s. emily: as you mentioned, in the last few days nasa has launched the rover perseverance on a rocket. how is that going so far? >> it is going great. we had some telemetry challenges when it first got up there. we have a deep space receiver listening to things -- even our spacecraft that have gone past lugo. it is very sensitive. when how perseverance came around from the eclipse, it was
behind the earth, and its solar panels first got the sun, we turned on the transceiver and it was a little too strong. again, our folks work to that out, and everything is as we call it nominal right now. emily: talk about your goal now. obviously it is getting humans into space and then to the moon and then to mars. how does this play out to you? jim: nasa used to be the folks that designed, built, launched, and operated rockets and spacecraft. we want now to be a customer, one of many customers to the commercial market. we hope -- we are trying to drive innovation, we are trying to increase competition, and reduce costs. and to spacex's credit, elon musk's credit, he has done that. they have been a great harder.
with that, we are using reusable rockets and reasonable capsules. the president said we had to get to the moon by 2024. we created the artemis program and we will send the first woman and next man to the moon. it is in preparation to learn more things so we can go to mars. it is a tough row, but we are going to do it. there is a lot of concerns about radiation, the time it takes to get there, food supplies. and many more things. we are working on all of it. it is one campaign, three domains. going to marsbot is the most advanced robot ever, as i understand it, to be launched into space. what will the robot doing? aboutosh, perseverance is 10 by nine feet and seven feet tall. there are about seven
experiments or demonstration projects on it. we are looking for ancient microbial life. we sent our scientists to the outback in australia to look for signatures of what we ought to be looking for. we have taken all the data and put it the computer on the rover and it is going to be looking for the signatures, and we are going to a place called the joseph crater, about the size of lake tahoe. it will be looking around for the ancient microbial matter. emily: with the advent of the public and private partnership, is this a new kind of space race? out?id it play jim: we want the competition. i don't think there is a space race with china, which folks have suggested, considering we have already landed on mars many times and also landed man on the
moon. but with that, we want to continue to lead in space, because who leads in space leads the world. i want tiffany to by saying -- nasa was set up -- i want to for nato by saying that nasa was set up to help the human condition of all mankind, and that is what we are trying to do. nasa's deputy administrator. we will be back with more of "bloomberg technology." this is bloomberg. ♪
emily: excitement in the world of animal a health today. and animal health your company officially closing a deal to buy bayer animal health. the ceo could not have imagined the global pandemic when the deal was announced most a year ago. he spoke with our deals reporter ed hammond about what it means. >> this is about farmers, veterinarians, pet owners. we have a clear customer base, we have a clear goal. what do we have to get done in the third quarter? let's give the energy on the outside and we will get the necessities on the inside. we have named out leadership of the first couple levels. we had major senior management leading -- meeting through virtual means last week. everybody has the clarity of what we have to deliver capturelly, the value-
goals and synergy distributed to all the top senior leaders. day one readiness. creating two i.d. systems coming together, ensuring the basics are done well. the one thing that covid has is the nextiness milestone matters, everybody clearly defined, nothing not necessary, don't do it. do what is necessary and get it done and move to the next. ed: how is the diversification bring together these companies allow you to whether the next 12 to 18 months as you think about it better than you might otherwise have? jeff: we announced the deal last august, ed, and we said that this expand and strengthens the current strategy, which is that it will give us the size and the scale come it will give us diversity. we were have your livestock, they were heavier pets.
we are now a balanced mix. digital the size of our pet -- it's triple the size of our pet business internationally. billion or at $4.6 so deal, the antitrust the vestagers were destined to s wereer -- divestiture $125 million. we will have over two dozen new products that we are going to launch between now and 2024. it is going to give us 1000 basis points of margin expansion. we will have a much stronger balance sheet as we start to move to a billion dollars of free cash flow in the first year. to me, this is a lot about executing against the rules- based things we need to do. we are not built on one thing has to happen or one pipeline entry. this is about to execution to create the largest transaction in our industry at a time when
our industry has never been more needed. ed: looking at the consumer longer-term, people are going to be feeling the pinch economically. how much our business is going to suffer because of the slow down and a discretionary spending in the pet market? jeff: we have shown in recent really earnings last week the durability of this industry. we have seen a recovery on vet- clinic visits. we have seen a decline of as much as 40% europe and the u.s. we have seen that recover completely. if anything, compliance and usage of pet medicine is as high as it has ever been because the pet is there and they are spending more time together, so use is up. on the livestock side, a couple big markets like the u.s., processing plants slowing down. we see that lagging into the second half of this year. ultimately this is about, hey, this deal is about giving pet owners what they want, more
options at more price points, easier, whether it is at their door or vet clinic, and giving protein consumers how we provide more protein more economically and with less environmental footprint. that is what this deal is about. ed: let's talk about m&a. you are closing a very large transaction today. there are opportunities in the market, financially now for sale where they might not have been before. what are you interested in in terms of opportunities there? jeff: what today highlights crisis we have a global leader in animal health. we have the pipeline from the size, the scale, the cash flows necessary. we don't need anything to grow this business long-term and create a lot of value. we always from an innovation side, different from pharma, will acquire early technology and always had innovation partners. that will always continue. elanco has one of the greatest
histories and track records of collaborating with innovators. right now our focus is delivery, creating one of the best integrations, getting the value capture in the $300 million of synergies we were talking about, quicklyng -- delevering as possible. that is where our focus is. lanco: ceo of e there. i will be interviewing bill gates, cochair of the bill and melinda gates foundation and cofounder of microsoft. so much to talk to him about -- where he is on vaccines, how long are we going to be in this, one will become out of it. don't miss my exclusive interview with bill gates coming up later today on bloomberg television. we will have more of that for you on "bloomberg technology" tomorrow. i'm emily chang. this is bloomberg. ♪
hike! simon pagenaud takes the lead at the indy 500! coming to the green flag, racing at daytona. they're off... in the kentucky derby. rory mcllroy is a two time champion at east lake. he scores! stanley cup champions! touchdown! only mahomes. the big events are back and xfinity is your home for the return of live sports. you say the customer's maklet's talk data.s. only xfinity mobile lets you switch up your wireless data whenever. i accept. 5g, everybody is talking about it. how do i get it? everyone gets 5g with our new data options at no extra cost. that's good. next item, corner offices for everyone. we just have to make more corners in this building. chad? -your wireless, your rules.
only with xfinity mobile. now that's simple, easy, awesome. switch to xfinity mobile and save up to four hundred dollars a year on your wireless bill. plus, get two hundred dollars off when you buy an eligible phone. ♪ >> welcome to daybreak australia. to asia'snting down major market open. are your top stories. the u.s. and china planned new talks on the phase one trade deal. is short of the agreed targets.