Disney's Streaming Success, Tech Eyes More IPOs in '25 | Bloomberg Technology
CAROLINE: LIVE FROM NEW YORK AND SAN FRANCISCO. DISNEY SHARES PROMISES OUT TO 2027. WE SIT DOWN WITH THE C.F.I. E: WE HAVE THE FACEBOOK MARKET SERVICE. CAROLINE: THRIVE SEEKS TO ACQUIRE A STAKE. D: DISNEY IS ON TRACK FOR THE BIGGEST JUMP THIS YEAR BEATING ANALYSTS SPOKE STATIONS APPEAR TOLD US THE NEXT THREE YEARS TELL SEE EARNINGS GROWTH. IT IS MOVIES ARE GETTING BETTER
BUT THERE ARE AREAS OF WEAKNESS. WE EARLIER SPOKE TO THE C.F.O. AND DISCUSSED THOSE PARTS. >> AS YOU HAVE SEEN THROUGH 2024 IT MARKED A PIVOT FOR THE WALT DISNEY COMPANY. THE CREATIVITY IS VERY MUCH BACK, BACK-TO-BACK BILLION DOLLAR MOVIES AND TRICK -- TERRIFIC SLATE FOR 2025 AND THEN 60 EMMYS AND FEEDS THE FLY WHEEL WILL STREAMING OR EXPERIENCES INCLUDING PARKS, CONSUMER PRODUCTS AND CRUISE SHIPS. GIVEN THESE INVESTMENTS WE HAVE BEEN MAKING AND WE HAVE GOOD FINANCIAL VISIBILITY INTO THE RETURNS ON THE INVESTMENTS WE FELT LIKE IT WAS IMPORTANT TO INFORM INVESTORS NOT JUST ON HOW WE WERE INVESTING BUT WHAT THEY SHOULD RESPECT AND AWARE CONFIDENT WE CAN -- WE ARE CONFIDENT WE CAN DELIVER.
>> YOU ARE GETTING BETTER AT BEING PROFITABLE IN STREAMING. IS THIS INDUSTRYWIDE MACRO LEVEL FACTORS SUPPORTING YOU OR SOMETHING YOU HAVE DONE THE LAST YEAR THAT CRACKED THE FORMULA OF STREAMING? >> STREAMING IS VERY MUCH SCALE BUSINESS SO AS EVERYONE GAINS MORE SCALE THAT HELPS THE INDUSTRY OVERALL. FORS IN PARTICULAR, I THINK THE COMBINATION OF THE TERRIFIC I.P. WE ARE PUTTING INTO THE SERVICE THE PRODUCT IMPROVEMENTS WE ARE MAKING AND INTEND IT MAKE WITH THE NEW LEADER WE HAVE ON PRODUCT ADAM SHIFT WHO CAME FROM YOUTUBE, WE SEE A TERRIFIC FUTURE WITH STREAMING. IT IS IMPORTANT TO THINK ABOUT
WHAT TDO ADDITIONAL SUBSCRIBERS MEAN IN TERMS OF A STREAMING BUSINESS. MANY WAYS STREAMING HAS THE CHARACTERISTICS OF A SOFTWARE BUSINESS WHERE THE INCREMENTAL VALUE IS VERY HIGH BECAUSE THE INCREMENTAL COST OF THAT ENMENTAL SUBSCRIBER ARE VERY LOW. SO AS THE INDUSTRY IS COMING TOGETHER WE WILL CONTINUE TO ADD BE SCRUBSCRIBERS BECAUSE OF THE VALUE WE WILL BE ABLE TO TAKE PRICING AS WELL. AND THAT COMBINED WITH GOOD COST MANAGEMENT WE FEEL VERY ON MESS PARTICULAR WHERE STREAMING IS GOING. WE HAVE HAVE GRADUAL AND STRENGTHEN FROM QUARTER TO QUARTER BUT A POSITIVE IMPACT. CAROLINE: I’M INTERESTED IN THE FILM STUDIO AND WHAT BONUS YOU WILL GET FROM THE MOVIES. HOW IMPORTANT HAVE THE E
INVESTMENTS BEEN THERE? >> TO TALK ABOUT THAT WE OUGHT TO DIAL BACK TO WHERE WE WEREMENT IT IS IMPORTANT TO REMEMBER WE HAVE ONLY BEEN IN THE STREAMING BUSINESS FIVE YEARS. THIS IS A RELATIVELY NIASCENT BUSINESS FOR US. BUT AS WE THINK OF WHERE WARP WE WERE VERY MUCH FOCUS -- WHERE WE WERE WE WERE FOCUSED ONLY CREATING QUANTITY.
AS IS OFTEN THE CASE WHEN YOU PUSH HARD ON QUADRANT SOMETIMES QUALITY -- QUANTITY EQUALITY IS NOT WHERE YOU WANT. BOB EIGER TALKED ABOUT RESTORING CREATIVITY AND REDUCING QUANTITY AND FOCUSING ON RAISING THE BAR ON QUALITY. WE HAVE BEEN TALKING ABOUT THAT FOR A YEAR OR YEAR AND A HALF BUT YOU SAW THAT IN 2024 WITH INSIDE OUT 2 AND "DEADPOOL" AND WOLVERINE, BASKECK-TO-BACK BILLION DOLLAR MOVIES AND WE HAD 60 EMMYS. SO THE FOCUS ON QUALITY IS NOT RANDOM BUT IS A SUSTAINING IMPACT. AS WE THINK TO THE SLATE IN 2025 WHETHER MOW ANNA OR LION KING OR CAPTAIN AMERICA WE ARE VERY ON MESS PA MYSTIC -- OPTIMISTIC THEY WILL BE BIG HITS.
>> YOU TALK ABOUT LIVE TV ALMOST LIKE A HEDGE YOU WANT TO KEEP THAT PARTICULARLY THE OLDER DEMOGRAPHIC. BUT I’M INTERESTED IN THE NEED TO SEE THINGS ON ESPN. HOW DO YOU THINK THAT WILL CHANGE YOUR AUDIENCE AND CUSTOMER ATTITUDES HOW AT THE BUY SPORTS.
>> THE IMPORTANT THING ABOUT THE ESPN FLAGSHIP THAT IS WHAT WE USE ON IT, IT IS NOT JUST ANOTHER DISTRIBUTION CHANNEL. IT IS NOT TAKING ESPN ALONE AS IT EXISTS AND PUTTING IT INTO STREAMING. IT WILL HAVE ALL OF THAT CONTENT BUT IT WILL BE A TRUE DIGITAL EXPERIENCE IN SO MANY WAYS. THE ABILITY TO DO E COMMERCE,
TRACK FANTASY AND SHAPE SOME OF THE ESPN BROADCAST PRODUCTS TO YEAR LOOKING. TO DO ONLINE BETTING. IT IS A MORE INTERACTIVE AND DIGITAL PRODUCT. I THINK THAT IS WHERE THE BIGGEST SHAPING WILL COME FROM. CONSUMERS WILL CHOOSE TO GO THROUGH CABLE OR INNER DIGITAL NETWORKS. WE ARE THERE FOR EVERYONE
EVERYWHERE. THAT IS THE GOAL OF ESPN, WE WANT TO BE WHERE THE SPORTS FAN WANTS TO BE BUT WE INTEND TO BRING A LOT OF VALUE IN THAT PRODUCT. CAROLINE: LET’S GET MORE. WHAT IS RAEALLY INTERESTING HE SAYS DON’T JUDGE US BY OUR TV ARM OR CABLE BUT ENTERTAINMENT BROADLY AND HOW THEY PLAY WITH EACH OTHER. IS THAT THE WAY IT SEE IT? >> I THINK SO. THAT IS DISNEY MORE BROADLY
EVERY PART OF THE BUSINESS SO YOU LOOK AT THE STUDIO, THAT IS CONTENT NOT JUST INTO THE STUDIO BUT ACROSS THE INSURANCE AND -- THE NETWORKS AND EVERYTHING. IT IS THE SAME WITH LINEAR AND STRAEPING SO YOU HAVE CONTENT THAT FEEDS BOTH THE LINE IER AND STREAMING AND YOU HAVE SPORTS RIGHTS HERE AND WHEN YOU HAVE SPORTS RIGHTS YOU HAVE TO BE CAREFUL BECAUSE YOU HAVE THE LINE YOUR TV AND DIGITAL RIGHTS. SO IT LOOKS LIKE THEY WANT TO KEEP EVERYTHING TOGETHER UNDER THE SAME UMBRELLA. ED: I HAVE AN ESPN QUESTION FOR YOU BECAUSE WHAT IS SO INTERESTING BEFORE WE CAME ON AIR THE 10K HIT AND SHOWED THE ESPN SUBSCRIBERS DROPPED TO 66 MILLION DOWN FROM 71 MILLION LAST YEAR.
THEN YOU HAVE THE WARPNING THAT THEY WOULD TAPER OFF IN 2025. DO YOU LOOK FOR THE THREE-YEAR HORIZON WERE SHOCKED BY IF JURISDICTION WE ARE DEFINITELY GOING TO SEE COST CUTTING PERSIST. WE ARE SEEING SUBSCRIBER EROSION AROUND 8% TO 9%. THE LAUNCH OF THE FLAGSHIP ESPN WILL BE ANOTHER TRIGGER THAT WILL ACCELERATE COST CUTTING. BUT THE GUIDANCE THEY ISSUED WAS STELLAR. INVESTORS LOVE IT.
THE BIGGEST OVERHANG OVER THIS STOCK HAS BEEN THE LACK OF CLARITY AND VISIBILITY. SO TO GIVE US EARNINGS GROWTH NOT INTO JUST 2025 BUT LAY OUT THE ROAD MAP TO 2026 AND 2027 HELPS WITH THE CONCERNS OF DIFFERENT PARTS. ED: IT IS 2024 AND AWARE STILL TALKING ABOUT -- AND WE ARE STILL TALKING ABOUT CORD CUTTING. WHY MORE TECH FIRMS ARE EYEING A 2025I.P.O. BIG INTERVIEW. THIS IS "BLOOMBERG TECHNOLOGY."
>> THIS YEAR CERTAIN TECH COMPANIES HAVE GONE PUBLIC AND COLLECTIVELY THEY ARE TRADING WELL HIGHER THAN THE ORIGINAL OFFER PRICES. M. AND A. AND TALK ABOUT ALL OF IT WHEN WE THINK OF THE GROWTH FOR 2025. MANY HAVE BEEN WAITING AND THINKING 2025 POST-ELECTION WILL BE THE YEAR I.P.O.’S
SPRING TO LIFE AND M. AND A. >> THANK YOU FOR HAVING ME. THAT’S RIGHT. WE ARE VERY FOCUSED ON IT. AS YOU SAID THERE WAS SEVEN TRUE TECH I.P.O.’S LAST YEAR. AS A CLASS THEY HAVE TRADED VERY WELL. I THINK THAT WE HAVE BEEN
FOCUSED ON WHY ARE SOME COMPANIES WAITING ON THE SIDELINES. BUT WHEN WE LOOK AT THE PIPELINE IN TERMS OF TECHNIQUE TECHNIQUE I.P. -- TECH I.P.O.’S JUST THE FIRST HALF THERE ARE THE A LEAST
SEVEN TECH COMPANIES FOR THAT. AND IF THEY GO PUBLIC AND TERROR SUCCESSFUL WHICH WHEN EXPECT THEY WOULD EXPECT A LOT OF COMPANIES ON THE SIDELINES WILL START TO CAPITALIZE. CAROLINE: BIGGER AND BIGGER PRIVATE COMPANIES ABLE TO RAISE MORE AND MORE MONEY AT EXTRAORDINARY VALUATIONS SO CLEARLY THE MONEY IS COMING IN FROM THE PRIVATE SIDE. WHY GO PUBLIC? >> THAT IS A GREAT QUESTION AND THE EXACT QUESTION COMPANIES ARE ASKING THEMSELVES. GENERALLY WE SEE AT SOME POINT, REGARDLESS OF WHERE THE PRIVATE CAPITAL IS AVAILABLE THEY CHOOSE TO GO PUBLIC FOR A VARIETY OF REASONS. YOU SEE COMPANIES THERE’S A BRANDING IMPACT.
WHETHER THEY ARE AN ENTERPRISE OR CONSUMER COMPANY AT THEITY GOING PUBLIC WILL GIVE THEM HELP IN TERMS OF ACCESSING MORE CLIENTS AND YOU OFTEN SEE IT FOR MY YEAH LIQUIDITY AND SHAREHOLDER LIQUIDITY. AS THEY MATURE IT STARTS TO MAKE SENSE TO TAP THE PUBLIC. THE OTHER THING IT GIVES YOU ACCESS TO CURRENCY FOR M. AND A. SO A THEY THINK OF M&A BEING AN IMPORTANT PAR OF THEIR COMPANY. ED: LET ME JUMP IN ON EMPLOYEE LIQUIDITY. THEY HAVE OPTIONS TO DEALS I
REPORTED ON RECENTLY , IN THE DATA BREAK COMPANY THEY MIGHT BUY BACK SHARES THEMSELVES. HOW BIG A FACTOR IS THAT. IF YOU CAN USE A TENDER AS AN OPTION TO KEEP STOCK AND YOU DON’T FEED CASH WHY -- DON’T NEED CASH WHY GO PUBLIC? >> THAT IS EXACTLY RIGHT. THE WAY WE THINK YOU WANT TO GIVE COMPANIES LOTS OF OBJECTION OBJE OBJECTIONS.
WE HAVE COMPANIES THAT ARE WEIGHING WHAT THEY CAN ACCESS IN THE PRIVATE MARKETS AND THAT IS NOT ALL CREATED EQUALLY. SO THERE IS STRUCTURED EQUITY AND FINANCE AND MORE STRAIGHTFORWARD EQUITY CAPITAL. BUT THEY ARE ALL AVAILABLE TO THEM. I THINK THAT CREATES A HEALTHY DYNAMIC IN WHICH COMPANIES CAN MAKE THE BEST CHOICES FOR THEMSELVES AND OPTIMIZE FOR WHATEVER THE FACTORS ARE MOST IMPORTANT TO TELL WITH SHAREHOLDERS, BRANDING VALUE OR WHETHER THAT IS VALUATION OR OTHER THINGS. SO THE ACCESS OF THOSE MARKETS IS HELPFUL IN TERMS OF HOW COMPANIES CAN MAC DECISIONS FOR THEMSELVES -- CAN MAKE DECISIONS. ED: 2025 WHICH COUNTRY WILL BE THE HOT PLACE TO DO A LISTING FOR TECH? >> WHAT I WOULD SAY IS I THINK THAT THE VAST MAJORITY OF VOLUME OR WHAT I WILL SAY A LOT OF VOLUME COMES TO THE U.S.
I THINK THAT WILL CONTINUE. I THINK IT IS HARD TO IMAGINE THAT IS NOT THE CASE. ALL THAT SAID WE ARE SEEING OTHER COUNTRIES AND EXCHANGES HAVING INCREDIBLY SUCCESSFUL LISTINGS. YOU ARE SEEING VERY LARGE COMPANIES POTENTIALLY CHOOSING TO LIST OUTSIDE THE U.S. SO THERE’S A GLOBAL INVESTOR BASE WITH VARIOUS EXCHANGES SO ALL OF THOSE ARE HEALTHY DYNAMICS SO INGLE CONTINUE TO SEE -- I THINK YOU WILL CONTINUE TO SEE THAT. CAROLINE: INTERESTING WHERE PEOPLE CHOOSE TO LIVE.
WHAT ABOUT THE STORY YOU TELL IN LISTING WHEN IT WAS THE CROP OF COMPANIES AT THE END OF 2023 AND 2024 YOU HAD TO HAVE ARTIFICIAL INTELLIGENCE. IS THAT STILL THE CASE IS IT JURISDICTION I THINK WE HAVE -- >> I THINK WE HAVE SEEN A MASSIVE SHIFT ARSOUND CONSUMER TECH AND THEY HAVE TO BE TALKING ABOUT AI. IT HAS BEEN TRUE FOR THE LAST YEAR AND A HALF. WHAT WILL BE INTERESTING IS THE SHIFT THE WAY COMPANIES ARE TALKING ABOUT AI. ONE THING WE SAW EARLY ON MOST INTERNET COMPANIES WERE TALKING ABOUT AI MOSTLY IN THE FORM OF COST SAVINGS. SO CALL CENTERS AND SERVICE AND
HOW TO CREATE A PBETTER CUSTOMERS ATTRACTION. THEN WE SAW A SHIFT TO TALK ABOUT AI FOR ADVERTISING. YOU SAW WITH THE EARNINGS SEASON THE AD BASE COMPANIES DID EXTRAORDINARILY WELL FOR THE POST PART. A LOT OF WHAT WE’RE HEARING IS THE AI TECHNOLOGY FOR AD PLACEMENT HAS CONTINUED TO IMPROVE.
ONE OF THE INTERESTING SHIFTS WE ARE SEEING IS INTERNET AND CONSUMER TECHNIQUE TECHNIQUE COMPANIES TALK ABOUT AI AS IT RELATES TO REAL REVENUE OR CONSUMER AI CASES SO ONLINE TRAVEL COMPANIES TALK ABOUT DISCOVERY AND PLANNING OF TRIPS. AND AD TECH COMPANIES TALKING ABOUT TUTORING SO COMPANIES ARE SAYING CONSUMERS KNOW TERROR INTERACTING WITH AI AND GLAD ABOUT THAT. >> GREAT TO HAVE YOU HERE. A QUICK NEWS STORY OUT OF EUROPE, A BOOM IS PREDICTED IN POWER HUNGRY DATA CENTERS DRIVING DEMAND FOR TRANSFORMERS AND GRID TECHNOLOGY SEEING ORDERS JUMP WITH THE SEARCH IN AI. THEY TALKED ABOUT THE COMPANY MAKING THEIR OWN INVESTMENTS. >> WE ANNOUNCED AN AI ENGINEERING CHANGING OR SOFTWARE PORTFOLIO. IT IS ABOUT SIMULATION WHERE WE
WERE WEAK AND IT IS ALSO AI AND HIGH PERFORMANCE COMPUTING. CAROLINE: WE WILL TALK ABOUT AI MORE. THE AI DEMAND FROM ASML UP SOME 5% AFTER THE COMPANY THAT MAKES THE EQUIPMENT WE ARE SEEING THEM STILL MANAGING TO PROJECT SALES IN 2030 UP TO $60 BILLION. REMEMBER HOW HARD THEY HI T THE
MARKET WITH A SIGNIFICANT MISS IN THE THIRD QUARTER IS MAYBE A REPRIEVE AND LITTLE ELEMENT OF CONFIDENCE BACK. COME UP A HEFTY FINE FOR A COMPANY. ED: TIME TO TALK IN TECH NETFLIX SQUID GAMES SET TO RETURN. THEY ARE LOOKING TO THE GLOBAL SUCCESS OF THE FIRST SEASON WHICH WAS THE PMOST POPULAR SHOW IN THEIR HISTORY. THE THIRD AND FINAL SEASON IS SLATED FOR 2025. AND ONE OF THE LARGEST SERVERS TAMP DOWN ON DATA SENDING IS DECELERATING.
THEY BEAT EXPECTATIONS SAYING THE BOOM IN DEMAND WILL CONTINUE. AUSTRALIA IS PLANNING TO ENACT LAWS THAT REQUIRE BIG TECH FIRMS TO PROTECT CUSTOMERS. IT WAS UNVEILED LAST NIGHT AND L LATEST EFFORT BY THEM TO CRACK DONE ON SOCIAL MEDIA AND M MISINFORMATION.
THAT WILL IMPACT META. ANOTHER THING IS THE FINE $141 MILLION BY E.U. REGULATORS. THEY SAID THEY HAVE POTENTIALLY BEEN THOUGHT IT BREACH SERVICES. AS A USER I RATHER LIKE THAT I CAN TELL WHAT THE PROFILE IS OF THE PERSON I’M BUYING OR SELLING TO BUT THEY WANT ME CELEBRATED BECAUSE OF COMPETITION. >> IT IS THE SAME THING THAT GOOGLE DOES THEY RUN THE EXCHANGE AND THEY ARE A POSSIBLERMENT -- POSSIBLE. THEY SHOW YOU THE RELEVANT ADS AND ANCILLARY PRODUCTS LIKE MARKETPLACES AND THE REGULAR LATE LATORS DON’T WANT THAT.
-- THE REGULAR L-- REGULATORS. THEY WANT MORE OPTION ALITY. I THINKER PROBABLY GOING TO SEE MORE FINES BECAUSE THAT IS THE FOCUS OF THE DIGITAL MARKET IN THE E.U. I’M NOT SURPRISED THEY HAVE TO PAY THIS FINE BUT CLEARLY THE REMEDY HERE IS TO OFFER MORE CHOICE TO THE USERS. ED: RIGHT.
THE ACCUSATION IS THAT MET CAN’T IS PUTTING UNFAIR TRADING PRACTICES ON RIVALS AND THEY SAY IT WILL APPEAL THIS FINE DECISION. I GUESS FOR YOU AND OTHER ANALYSTS WILL IT MATERIALLY IMPACT THE BUSINESS MODEL OR HAVE ANY IMPACT TO THE BUSINESS? >> IN THE CASE OF THE DIGITAL MARKETS ACT E.U. COULD FINE UP TO 10% OF THE COMPANY’S GLOBAL REVENUE SO WE ARE TALKING ABOUT POTENTIALLY A $10 BILLION FINE IF THIS KEEPS HAPPENING. THE MARKET PLEASE BUSINESS IS
AROUND OR ESTIMATES LESS THAN $10 BILLION TO THE BLUE APP BUT CLEARLY YOU HAVE THAT RISK THAT A LOW TO MID SINGLE DIGIT NUMBER IS A SUBSTANTIAL FINE. SO I THINK THERE IS THAT RISK THAT THESE COMPANIES HAVE TO OFFER AN APP CONVERSION. ED: COMING UP BACK TO THE STOP -- TOP STORY IN DISNEY REPORTING A STREAMING SURGE. CAROLINE: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." I AM CAROLINE HYDE IN NEW YORK.
ED: I AM ED LUDLOW IN SAN FRANCISCO. CAROLINE: YOU ARE LOOKING AT BENCHMARKS OVERALL. WE HAVE BEEN TRADING SIDEWAYS SINCE A RUN-UP POST ELECTION, WHEN PEOPLE WANTED TO DIVE BACK INTO BIG TECH. WE ARE BACK .2%.
BITCOIN COMING OFF OF ITS HIGHS. 93,000 ECLIPSE, NOW BACK TO 88,000. BACK TO THE INDIVIDUAL MOVERS. DISNEY UP 7% ON THE BACK OF ITS EARNINGS, DOING WELL.
NVIDIA, THE LEADER OF THE PACK IF YOU ARE LOOKING AT POINTS, UP 1.7%. MORE EARNINGS OUT OF ASIA SIGNIFYING THE DEMANDS FOR AI IS STILL THERE. NVIDIA RISES AHEAD OF THAT. TESLA PULLING BACK FROM ITS RECENT HIGHS.
THE TRUMP TRAIN HAS BEEN THERE FOR TESLA. ANALYSTS SAYING THEY SHOULD SELL EQUITY, RAISING THE PRICE TARGET TO 300, WHICH IS DOWN FROM WHERE WE ARE. ED: BACK TO DISNEY EARNINGS. THE CFO TOLD US HE IS
OPTIMISTIC ABOUT THE STREAMING LANDSCAPE IN PARTICULAR. >> WE FEEL OPTIMISTIC AS THE INDUSTRY IS COMING TOGETHER THAT WE WILL GET SUBSCRIBERS. IN ADDITION TO THAT BECAUSE OF THE VALUE WE HAVE BECAUSE OF THE GREAT PRODUCT WE ARE PUTTING INTO THE SERVICE, WE WILL BE ABLE TO DEAL WITH PRICING. GOOD DISCIPLINE WITH THE BUSINESS. WE FEEL VERY OPTIMISTIC ABOUT WERE STREAMING IS GOING FOR US. ED: LET'S GET A SHAREHOLDER TAKE
WITH ROSS GERBER. THE STREAMING FOCUS IS INTERESTING. THEY WARNED THAT IN THE FISCAL FIRST QUARTER IT MIGHT TAPER OFF A BIT.
HAVE YOU EVER SEEN DISNEY SAY, FOR THE NEXT THREE YEARS WE WILL SEE EARNINGS GROWTH AND THIS IS HOW WE FEEL ABOUT THE STREAMING SERVICE IN PARTICULAR? ROSS: IT IS A MAJOR INFLECTION POINT FOR DENSITY. IT IS AN INCREDIBLE VALUE FOR TRADERS. HALF THE VALUE OF NETFLIX. WITH ALL THE OTHER BUSINESSES IN SPORTS AND EXPERIENCES. THERE STREAMING BUSINESS GREW LIKE CRAZY DURING THE PANDEMIC BUT THEY WERE SPENDING SO MUCH MONEY THAT IT MADE NO SENSE. NOW THEY HAVE GOTTEN IT RIGHT. AS THEY MOVE FORWARD WITH AGGRESSIVE PRICING AND GOOD CONTENT, PEOPLE ARE NOT CANCELING DISNEY AND NETFLIX.
WHAT WE HAVE SEEN IS WHAT WE HOPED -- DISNEY AND NETFLIX HAVE COME OUT AS THE WINNER IN STREAMING. ED: REALLY INTERESTING QUESTION ABOUT PASSWORD SHARING. WE GOT THAT WRONG WITH NETFLIX. IT DID NOT SEEM TO IMPACT
NETFLIX NEGATIVELY, NECESSARILY. DO YOU SEE DISNEY FOLLOWING THE SAME ARC? HE LEANS ON THE IDEA THEY HAVE NOT BEEN ADDED VERY LONG AND THE STREAMING GAME BUT THEY HAVE GROWN QUICKLY. ROSS: THEY GREW MUCH QUICKER THAN ANYONE WOULD HAVE GUESSED BECAUSE OF THE PANDEMIC.
THEY WERE NOT GOOD AT MANAGING THE COST SIDE OF THE BUSINESS AND THEY WERE MAKING TONS OF CONTENT THEY WERE NOT RELEASING IN THEATERS AND WAS COSTING A FORTUNE. I WAS WATCHING DEADPOOL LAST NIGHT, IT GOES IN THE THEATERS AND MAKES $1 BILLION AND NOW EVERYONE WANTS TO WATCH THE STREAMER. WE HAVE LION KING 2 COMING IN DECEMBER. NOT ONLY KEEPING THE PEOPLE FROM TURNING ON THE STREAMER BUT ADDING NEW SUBSCRIBERS WHO WANT TO WATCH THE MOVIE AND NOT HAVE TO PAY ALL THE CART. CAROLINE: WHAT IS INTERESTING, TRY TO ARTICULATE THE VISION. TV CABLE IS SHOWING WEAKNESS BUT IT BASICALLY FEEDS THE BEAST OF STREAMING. STOP LOOKING AT IT SEPARATELY.
THERE IS THIS ELEMENT GOING FORWARD THAT THEY HAVE TO CHANGE REVENUE OPERATING PROFIT IN A DIFFERENT DIRECTION AND SHOW STABILIZATION OR GROWTH ONCE AGAIN. THAT CAN BE SAID MORE BROADLY WHEN THINKING OF A VENUE BACK ON ICE. THE JOINT VENTURE THEY WERE DOING WITH FOX AND WARNER BROS.. ROSS: PART OF IT IS ESPN HAS THIS LIMITATION BECAUSE IT IS STILL TETHERED TO CABLE FOR ANOTHER YEAR. ONCE THAT IS DONE AND YOU CAN GET ESPN AS A STANDALONE APP WITH REAL ESPN CONTENT WITHOUT A CABLE SUBSCRIPTION, THAT WILL OPEN OPPORTUNITIES FOR ESPN. THE CABLE ISSUE WILL CONTINUE
TO BE ONE FOR SOME TIME. SOME CABLE COMPANIES GET IT, LIKE SPECTRUM, WHERE THEY HAVE PIVOTED AND TRY TO CREATE VALUE FOR CABLE SUBSCRIBERS. MOSTLY YOUNG PEOPLE TODAY DO NOT EVEN KNOW WHAT CABLE IS. FEEDING THE BEAST OF STREAMING
IS THE APPROPRIATE STRATEGY. YOUNG PEOPLE TODAY WILL SIGN UP FOR MULTIPLE STREAMERS AND PAY THE MONEY AND IT IS STILL CHEAPER THAN CABLE FROM THE OLD DAYS. NETFLIX AND CABLE HAVE THE OPPORTUNITY FOR ONE BILLION SUBSCRIBERS TOTAL GLOBALLY THEY CAN GROW TO. CAROLINE:
LET'S LOOK AT THE VALUATION. YOU TALKED ABOUT HOW DISNEY IS HALF OF NETFLIX. THEY ARE NEVER GOING TO TRADE AT VALUATION IF THEY ARE USING A HEDGE OF EXPERIENCES, OLDER CONSUMERS WITH CABLE. ROSS: RIGHT. IT IS A MUCH CLUNKIER CAPITAL-INTENSIVE BUSINESS THE
NETFLIX. I AM ALSO TALKING ABOUT PURE MARKET CAP. THE VALUATION -- THE PREMIUM VALUATION NETFLIX GETS IS DESERVED. WHAT WE ARE SAYING IS DISNEY IS TRADING AT A DISCOUNT ON ALL LEVELS IN THE MARKETPLACE TODAY.
IT IS CHEAPER THAN THE S&P PE. YOU START THINKING THE BUSINESS IS GROWING AT DOUBLE DIGITS, GOING INTO A FAIRLY DECENT MIDTERM. EXPERIENCE IS A WONDERFUL BUSINESS. BECAUSE IT GREW CRAZY IN 2021 AND 2022 AS EVERYONE CAME BACK OUT POST-PANDEMIC AND NOW IT HAS SLOWED THIS NOT MEAN IT WILL NOT CONTINUE TO GAIN STEAM IN 2025 AND 2020 SIX WITH NEW CRUISESHIP LODGES. OVER TIME THESE CRUISES ARE LIKE GOLD MINES. DISNEY IS A CASH COW. THEY ARE RETURNING MONEY TO SHAREHOLDERS.
THEY ARE A SHAREHOLDER FRIENDLY COMPANY. THE BIG QUESTION IS SUCCESSION PLANNING. WHEN THEY CLEAR THAT UP DISNEY HAS A GREAT RUNWAY OVER THE NEXT FIVE YEARS. CAROLINE: ROSS GERBER, WE THANK YOU. PRIVATE MARKETS. A DEAL THAT WOULD BE A WHOPPING $55 BILLION. KATIE JOINS US NOW.
YOU HELP REPORT THIS WITH ED. WAS THIS A SURPRISE? KATIE: WHAT WE HAVE SEEN A LOT LATELY IS A LOT OF THESE TENDER OFFERS FOR THE COMPANY THAT ARE NOT IN A RUSH TO GO PUBLIC AND HAVE PLENTY OF PRIVATE INVESTOR INTEREST. $55 BILLION IS STILL A PRETTY HIGH PRICE. THEY WERE VALUED AT $43 BILLION LAST YEAR.
THRIVE IS INVESTING $1 BILLION. THEY INVESTED A LOT IN OPENAI AND STRIPE. ED: THE BASICS ON A TENDER OR SECONDARY, THIS IS EMPLOYEE, SOME EARLY INVESTORS WHO SELL THEIR SHARES DIRECTLY TO THE FIRM. DATA BRICKS DOES NOT RAISE ANY MONEY AND GIVES THE STAFF A CHANCE TO CASH IN. WE RECOGNIZE THIS IS HAPPENING
MORE OFTEN AT THE MOMENT. KATIE: EXACTLY. IT IS THE INSIDERS, THE EXISTING SHAREHOLDERS THAT ARE GETTING AN OPPORTUNITY TO SELL THEIR SHARES AND BUY THAT HOUSE AND NOT WAIT FOR THE IPO MARKETS TO BE PERFECT. THEY CAN GET THE LIQUIDITY NOW. THIS IS AN OPPORTUNITY TO REWARD THE EARLY EMPLOYEES, SHAREHOLDERS AND GIVES AN OPPORTUNITY FOR PROSPECTIVE INVESTORS TO INVEST. ED:
BLOOMBERG'S KATIE ROOF WITH ANOTHER PIECE OF EXCLUSIVE REPORTING. SAN FRANCISCO'S RIGHT WOULD SHIFT. THE FUTURE OF SILICON VALLEY POLITICS. THIS IS "BLOOMBERG TECHNOLOGY."
DANA WHITE JOINS BLOOMBERG TV THIS AFTERNOON. YOU DO NOT WANT TO MISS IT. GETTING SOME 13F FILINGS FEARED SOFTBANK EXPANDING ITS PORTFOLIO. STORIES ARE BEING CONSUMED NOT JUST IN ASIA, 60% OF OUR AUDIENCE IS OUTSIDE JAPAN AND KOREA.
PEOPLE DO NOT REALIZE IN NORTH AMERICA THAT THEY HAVE SEEN A NUMBER OF FILMS ON NETFLIX AND AMAZON PRIME. WE HAVE POWERED STORIES NOT JUST ON OUR PLATFORM BUT WE HAVE POWERED STORIES THAT TURN INTO GREAT FILMS AND GREAT PIECES OF COLLATERAL AND MERCHANDISE. IT IS SO EARLY FOR US THAT INVESTORS ARE STILL GETTING AN UNDERSTANDING OF HOW EXPLOSIVE OUR GLOBAL GROWTH ALREADY CAN BE. WE WILL HAVE TO FOCUS ON QUARTER BY QUARTER SINCE WE ARE ONLY A QUARTER AND A HALF OUT. CAROLINE: LET'S TALK ABOUT THE FUTURE OF IP. I CAN SEE HOW IT TRANSFERS TO
MOVIES AND STREAMING. A LOT OF THE NAMES OF SOME OF THE CONTENT WOULD BE A GENERATIVE AI CHATBOT. A LOT OF THEM HAVE NAMES AND LIKENESSES. IS THAT SOMETHING YOU HAVE BEEN LOOKING INTO? DAVID: WE ARE VERY FOCUSED ON AI. WE BELIEVE IN HUMAN CREATIVITY. WE ARE STILL THE BEST STORYTELLERS. TAKING OUR AI -- WE HAVE 100 TECHNOLOGISTS HARD AT WORK AND MIGHT HAVE ONE OF THE HIGHEST REPOSITORIES OF DATA -- ENABLING THEM TO TAKE HOURS OUT OF THE PROCESS AND GIVING THEM A CHANCE TO REALLY BE HEARD BY OUR GLOBAL AUDIENCE.
WE HAVE 170 MILLION MONTHLY ACTIVE USERS. THOUSANDS OF STORIES THAT COME TO OUR PLATFORM EVERY DAY MEANS AI CAN HELP FIND THE ONES PEOPLE CARE ABOUT. ED: DAVID, I AM A 2000'S COMIC BOOK KID, I STILL HAVE THE X-MEN EDITION. THE WORLD IS DIFFERENT NOW. CAN YOU DISTILL YOUR STRATEGY, PARTICULARLY FOR THE U.S.? DAVID: OUR CORE CONSUMER IN THE U.S.
LOOKS DIFFERENT THAN YOU AND ME. IT IS A SUB-25-YEAR-OLD FEMALE SKEWING -- ED: NOT SUB-25. [LAUGHTER] DAVID: WE POWER EVERY GENRE. ONE OF THE ASTOUNDING FACTS IS
ON NETFLIX. TWO OF THEIR ALL-TIME TOP 10 PROJECTS CAME FROM US. THEY WERE NOT THE M&A YOU MIGHT EXPECT -- THEY ARE NOT THE ANIME YOU MIGHT EXPECT.
ONE CAME FROM A KINDERGARTEN TEACHER THAT WAS ENABLED BY OUR PLATFORM TO TELL A STORY THAT HAS REACHED THE WORLD AND SHOWS WE MEET OUR CONSUMERS WITH ANY GENRE THEY WANT. JUST LIKE YOU LOVE THE X-MEN. ARE CURRENT CONSUMERS WHO ARE MUCH YOUNGER THAN YOU AND ME ARE FINDING UNEXPECTED STORIES. ED: THOSE CONSUMERS NOT JUST IN AMERICA BUT INTERNATIONAL MARKETS FIND THEMSELVES IN A DIFFERENT WORLD AFTER THE U.S. ELECTION. HOW ARE YOU MODELING FOR ECONOMIC POLICY AND DOING BUSINESS ACROSS JURISDICTIONS? DAVID: ONE OF THE GREAT BENEFITS OF WEBTOON, WE DO NOT HAVE TO FOCUS ON THE LONG FOR SHORT-TERM CHANGES. IN THIS DAY AND AGE WITH ALL
THE NEWS COMING OUT, I THINK CONSUMERS WANT A GOOD STORY AND WE ARE SEEING THAT FOCUS BE OUR GUIDEPOST LONG-TERM. HAVING SAID THAT, THERE WILL BE A LOT OF VOLATILITY AT FX. WE BENEFIT FROM THE FACT WE OFTEN RECEIVE REVENUE IN THE SAME COURTESY -- CURRENCY THAT WE PAY COSTS. WE CAN TALK ABOUT FX VOLATILITY ON HEADLINE NUMBERS AND REVENUE BUT WE ARE RELATIVELY IMMUNE AND CAN FOCUS ON OUR LONG-TERM BUSINESS. ED: WEBTOON'S DAVID, GREAT TO HAVE YOU ON THE SHOW. LET'S BRING IT BACK TO SAN
FRANCISCO. IT HAS BECOME MORE OF A CONSERVATIVE PUNCHING BAG. THE CITY HAS FOUND ITSELF CAUGHT UP IN THE NATION'S RIGHTWARD SHIFT. 15% CAST A BALLOT FOR DONALD TRUMP, COMPARED TO 9.3% IN 2016. IT WAS THE HIGHEST SHARE FOR A REPUBLICAN CANDIDATE IN SAN FRANCISCO IN 20 YEARS. LET'S BRING IN A BLOOMBERG EDITOR TO TALK ABOUT SILICON VALLEY. HISTORICALLY LIBERAL.
WHAT HAS HAPPENED HERE IS PART OF A NATIONWIDE TREND. IF YOU LOOK AT SOCIAL MEDIA, PROMINENT NAMES IN TECHNOLOGY IN THIS CITY THAT LED THAT. >> ABSOLUTELY. ELON MUSK HAD A BIG ROLE. HE CONTINUES TO HAVE A ROLE IN THE ADMINISTRATION. HE HAS A LOT OF PROMINENT PEOPLE AND TIES TO THIS AREA.
DAVID SACHS HELD A FUNDRAISER AND RACED ABOUT 12 MILLION THE SPIRIT AS WE SAY, WHAT IS HAPPENING IN SAN FRANCISCO IS HAPPENING ACROSS THE COUNTRY. 15% IS A SMALL NUMBER ABOUT THE DOOR HAS CRACKED A BIT FOR REPUBLICANS. NOW WE SEE SOME GROUP SAYING IF NOT WIN ELECTOR EARLY OR THE NATIONAL VOTE, HAVE SOME DONORS, MORE TECH PEOPLE SPEAKING OUT IN FAVOR OF REPUBLICAN CANDIDATES. CAROLINE:
IT ECHOED HERE ON THE OTHERS THE COUNTRY IN NEW YORK, AS WELL. I AM INTERESTED IN WHAT HAPPENED IN ADDING THE GOVERNOR AND MAYORAL LEVEL. LONDON BREED, THE MOVEMENT STAYED WITHIN THE DEMOCRATS BUT DANIEL LEARY WAS A WHOLE NEW -- KARA: THE FOUNDER OF A PROMINENT NONPROFIT, WON THE MAYORAL ELECTION.
HE DOES NOT HAVE ANY POLITICAL EXPERIENCE. IT IS DISSATISFACTION SATISFACTION OF THE STATUS QUO. YOU CAN ARGUE THAT IS SOMETHING THAT PLAYED OUT NATIONALLY. IN SAN FRANCISCO, WE HAVE A LOT OF PROBLEMS -- HOMELESSNESS CRISIS, DRUG CRISIS, OFFICE VACANCIES. THERE IS A LOT OF
DISSATISFACTION. I THINK THAT IS REFLECTED WITH SOME OF THESE MOVEMENTS THAT WE HAVE SEEN. CAROLINE: CARA WETZEL, THANK YOU FOR COMING. . ON AND TALKING TO US COMING UP, >> ALL THE BUSINESSES, WHETHER IT BE TKO, ENDEAVOR, ARE GREAT BUSINESSES. WHAT REMAINS OR DOES NOT REMAIN WILL PLAY ITSELF OUT OVER THE NEXT COUPLE YEARS. I DO NOT KNOW THE TIMEFRAME.
WHATEVER IS LEFT, I WILL BE AROUND FOR. WHATEVER DOZENS, I WILL PROMPT -- WHATEVER DOES NOT, I WILL PROBABLY BE REALLY SET. IT IS ABOUT NOT HAVE MANY PUNCHES YOU CAN THROW, IT IS HOW MANY PUNCHES YOU CAN TAKE. EVEN THOUGH YOU LOVE SOMETHING, IT IS TOUGH.
ENDURANCE IS AN IMPORTANT QUALITY FOR ANYONE NOW RUNNING A PUBLIC COMPANY, STARTING A BUSINESS. I HAVE BUILT MY ENDURANCE UP. CAROLINE: ENDEAVOR CEO ARI EMANUEL ON HIS APPROACH TO RUNNING MULTIPLE COMPANIES. WE CAN TALK TO THE PERSON CONDUCTING THE INTERVIEW. EMILY CHANG. CONGRATULATIONS ON THE NEXT SET OF CONTENT.
HE HAS VOICED HIS FRUSTRATION ON BEING A PUBLIC COMPANY. EMILY: HE IS TAKING A PRIVATE. ARI EMANUEL HAS SAID LIVE SPORTS , LIVE ENTERTAINMENT IS THE FUTURE AND KEPT BUYING UP THESE BUSINESSES. WALL STREET DID NOT BUY INTO THE IDEA. HE SAID I WILL TAKE IT PRIVATE AND I WILL SHOW YOU. HE IS SELLING OFF DIFFERENT
PARTS OF THE BUSINESS. SELLING OFF PARTS OF ENDEAVOR TO TKO. HE WILL REMAIN CEO OF TKO. WE HAVE SEEN THE VALUE TRIPLE, WHEREAS THEY HAVE A LOT OF WORK TO DO WITH ENDEAVOR. FULL DISCLOSURE, I AM AN ENDEAVOR CLIENT. ED: YOU ARE SOME OF THE TALENT HE HAS TO HANDLE. WHEN EVERYONE WAS FOCUSED ON UFC 302, WHETHER ZUCK WOULD FIGHT MUSK, EMILY CHANG WAS IN THE RING. YOU WERE TRAINING.
EXPLAIN THE EXPERIENCE. I AM CONSCIOUS THAT DANA WHITE ALONGSIDE TRUMP THE LAST 10 DAYS FOLLOWING THE RESULT OF THE ELECTION. EMILY: IT WAS MY FIRST FIGHT. THE ENERGY WAS ELECTRIC. I COULD SEE WHY THIS WOULD
BECOME MORE OF A MAINSTREAM SPORT. THE TRAINING WAS INTENSE. MAD RESPECT FOR THOSE UFC FIGHTERS. I GOT TO GO BACKSTAGE WITH DANA WHITE AND ARI AND WE TALKED ABOUT THE CEILING, THE POTENTIAL FOR THE UFC. 8 BILLION PEOPLE. THERE ARE A LOT OF FANS OUT THERE THAT DO NOT HAVE AN EASY WAY TO WATCH THIS, THAT COULD BECOME OBSESSED WITH THIS IF THEY HAD THE OPPORTUNITY. IT IS INTERESTING IN RETROSPECT, ESPECIALLY SEEING DANA WHITE AT THE RIGHT HAND OF PRESIDENT-ELECT TRUMP ON THE DAY OF THE ELECTION. HE SAID TRUMP WILL ALWAYS BE
THE UFC'S NUMBER ONE FAN. HE GAVE THE UFC A LIFELINE WHEN NO ONE WANTED TO HOST THEM. HE SAID COME TO MY ATLANTIC CITY CASINO.
IT HELPS THAT THE UFC HAS EIGHT ELECT -- HAS A DIRECT LINE TO THE WHITE HOUSE. CAROLINE: EMILY CHANG, GREAT TO HAVE YOU. THANK YOU FOR BRING YOU THE LATEST. ARI EMANUEL. YOU HAVE TO CHECK OUT ALL OF THE CIRCUIT. INCREDIBLE PEOPLE AND THEMES AROUND TECHNOLOGY. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." ED: A LOT TO RECAP ON THE POD. YOU KNOW WHERE TO FIND IT ONLINE.
THANK YOU, TEAM IN NEW YORK CITY.
2024-11-16 14:55
