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tv   Lunch Money  Bloomberg  December 27, 2013 12:00pm-1:01pm EST

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." welcome to "lunch money take a look at the menu. in energy, we're going to look at the economics of crude. our movie dish, how to win and oscar. tiny planes popular with the business crowd. no marketing to no managers. we will explain how. and the best of 2013, what better way to finish the show than cars and tanks. 1.3 million americans are
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about to have their only steady income stream disappear completely. the emergency unemployment benefits and tomorrow. >> that's right. day for the d- emergency unemployment compensation program, which has been renewed and renewed again since 2008, trying to cushion the impact of the recession. >> this was extended unemployment benefits the on 26 weeks normally provided by the states. -- beyondn renewed the 26 weeks normally provided by the states. it has been renewed. >> over the course of the next year, more unemployed workers are going to fall out of the program once they hit their 26 week limit. the center on budget and policy priorities estimates nearly 5 million people will eventually lose out on this aid if it is not renewed. that is both a moral outrage
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and another congressionally inflicted blow to our economy. it is unprecedented. the minority whip on the house floor yesterday. he's not the only democrat upset here. act,cause congress did not more than one million of their constituents will lose a vital economic lifeline at christmas time, leaving a lot of job seekers without any source of income at all. are a better country than that. we don't abandon each other when times are tough. so unconscionable, it's practically at the level of a moral. >> -- immoral. >> the first thing is to make sure that those people who are waiting and waiting to find a
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job still get the important check that they deserve. >> this is an intolerable situation to us. we also want to and sequestration. -- end sequestration. we have tgwo no -- two no's. we want to get one guess and fight to get the second yes. >> democrats had to pass a budget. here's the republican rationale. >> when they asked for this unemployment extension, they offered nothing to pay for it, which would have blown a hole in our deficits. of thisxtension emergency unemployment extension we have a008 crisis, lot of evidence showing it will prolong unemployment. our focus is getting people back to work. we want jobs, and progrowth policies that create jobs so you don't have people going on unemployment in the first place. >> if the president has a plan
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for extending unemployment benefits, i would entertain looking at it. the president possible focus ought to be creating a better environment for our economy and creating more jobs for the american people, not more government programs. addepublicans don't want to on the so-called emergency benefits unless there is a way to pay for them. the proposal on the cutting and lawmakers return to --hington onlye economy not the problem for washington. we're going to be talking energy, crude awakening for oil. prices are not quite at an all- time high, but back above 100 bucks here and -- bucks. are you ready? 230 miles above the earth, two russian members of the international space station. installing two high-
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resolution cameras on the exterior of the station. looks like they will get some pretty good shots. us too. that is the earth in the background. ♪ [indiscernible]
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>> this is "lunch money." i'm adam johnson. oil aboveakening, $100 for the first time in two months. what about the impact of the mideast? it's better in iran, but serious is still an issue, -- syria is still an issue, right? >> he was a very big backer of the syrian insurgency, a critical thinker of hezbollah. this is not the first problem we have seen recently in lebanon. you could potentially see it hitting the oil market. the eighth largest producer in the world. its neighbor, iran, the seventh
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largest. any chance of a u.s. or israeli strike? probably not, but not out of the woods here. think we are not going to see a u.s. or israeli strike. the question is, what if congress refuses to move sanctions? is, what if the expectations there don't materialize? a lot of moving parts here. u.s. oil production has risen 50% in the last five years alone. we are second only to saudi arabia. it may be one of the reasons why supply shops -- same amount of distraction as 2011. we had 3 million barrels off the market because of civil unrest in countries like libya, problems in nigeria. we have had since 2011 a massive
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growth in north american production. we did not have a north american story, we would be in a much now.r price range right do we get another big producer to go off-line? --we have problems in iraq north america alone cannot offset problems if we have a situation and iraq. >> how much do prices have to change for it really to be noticeable to american business or even consumers? get to a situation where 2011 where we are in the 120 situation, that is when consumers really start to see it, when the u.s. government starts talking about spr releases. in this range, people still feel fairly comfortable. everyone is going to watch for, did we see something happen in another big key producer. right now north america can seemingly offset these problems.
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we are not in a low-price environment, but we're still trading in a range. if we get a big low out, things get worse in a situation like nigeria, if things get worse in iraq, that is when we see it go higher. the keystone xl pipeline would carry a lot of that oil produced in canada and the northern plains all the way to the gulf coast. >> the keystone xl pipeline is a 2000 mile funnel that would pump oil from the canadian tar sands south to the refineries on the u.s. gulf coast. if the 5.3 billion-dollar pipeline is approved, what does it mean for jobs? create 40 2000 direct and indirect jobs nationwide during a two-year building phase -- 42,000 direct and indirect jobs nationwide during a two- year building phase. as for oil profits, a recent report forecast a razor thin profit for oil companies. why?
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the recent shale boom produced a glut of oil, dragging down prices. if oil from the tar sands can make it to the gulf coast i the pipeline, it competes against the mexican crude benchmark. it stayed in canada, the projected benchmark is $69. that's a $20 difference. not $20 premium this necessarily mean big profits. canada's heavy crude is some of the most expensive to produce. in transport costs, including extra lubricants needed to get it through the pipeline, and the profit margin drops to just $5.50 a barrel in the mexican market in 2015. if the pipeline does not get approved, who are the winners and losers? to lose aa stands lot. the company has sunk 2.3 billion dollars into the keystone project. companies like suncor energy and
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conoco phillips could also face hurdles getting their products to market. the next best option, railroad. 150,000 barrels of oil a day are moved from canada. rail is much pricier than the pipeline. that means rail investors like warren buffet could win big. by the way, over half the respondents to the bloomberg national poll said they believe the keystone pipeline would benefit u.s. energy security. these guys are expert at going for the gold. we will explain how they do it. we're going to take you behind the scenes, one of the biggest private collections of armored vehicles in the world. break, here is something i don't want to drive, an icebreaker for the rescue.
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dozens of tourists, explorers and scientists are stranded at sea. windieste coldest and laces on earth. the icebreaker ships are working their way to the stranded vessel. is not insay the ship danger of sinking. ♪
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>> in movies now, studios are gearing up for what comes next. the academy awards have been kind to the weinstein company.
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this year, "mandela" is a top contender. for us, the awards are a way of giving publicity to movies that deserve it. tomorrow night, movies or going to open. i saw the new "hunger games," it's pretty good. really good. to that.ll flock i understand that. it's a way of putting the light on films that maybe aren't as commercial. i will put this movie against any other movie. actually more than mr. weinstein puts on. >> these film campaigns, these oscar campaign start months and months earlier at film festivals where these movies are screened. they start to compile the
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critical acclaim. hopefully they get more critical of the marketing release of these films before they go into theaters, and then hopefully critics in new york and l.a. reward these films with even more praise, which gets some recognition at the golden globes. it is this huge, long process. it is a marathon of a campaign. the weinstein's are probably the most successful at it in the history of hollywood. that is saying a lot. what they have been able to do is pick movies that have a universal appeal, and take those films and help them find an audience. some of those films were destined to be straight to video, but with the weinstein's they were able to find an audience. like "the artist," a silent movie in black and white. it went on to win a best picture oscar. they're incredibly clever. >> is this all happening behind the scenes? it is the phone calls, calling
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the right guy, getting the right people to show up at parties. >> yes. it's a huge campaign effort. everyone from the director to the screenwriter and then the big stars in the film, there'll involved in a campaign process. it's a whole cast effort. >> ultimately do you think -- not only are these people that really understand the film industry and what is going to resonate, but they sort of had their finger on the pulse of news and what is current and what people are looking for. >> they released "mandela, walk to freedom." they could not have timed it better. they did not know this great man was going to pass. they did know he was ill, sure. the man gave a stunning performance and is in contention for best actor nominations. lee daniels, the butler -- that's another film that is getting a lot of praise, maybe not so much at the golden
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globes, but forest whitaker and oprah winfrey are getting huge rave for their performance. you can see them coming into the oscars picture as well. >> here is a movie getting a lot of awards now. it stars judi dench and steve coogan. it is based on a story of a woman who goes to find a child she put up for adoption 50 years earlier. >> it's a moving story, and i want to tell it as a film. that was about four years ago. did you always want to play the role of the investigating journalist? >> not at first. at first i just wanted to produce it and get the film made. the idea of directing early on, and when judi dench came on board, i got cold feet.
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i said, i don't want to be pushing around a dame. i will leave that to someone who is more seasoned. at that point i thought, the way the character, the way i had been writing his character i was putting a lot of myself into it. it was a hybrid of martin and myself. i thought, if anyone can play this part, i can. poem was nots being produced by me, i would be way down -- film was not being produced by me, i would be down on the casting list. >> you can watch the full interview with mr. coogan at netflix revolutionizing the movie business. not everyone in the film business is happy about this. ken burns is big on the access to content, but he's not so hot on how the company shares revenue with content producers
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like himself. we caught up with mr. burns earlier this year. >> every kid in america when i was growing up had memorized the entire primetime schedule. got hundreds of choices. we can't possibly memorize. i'm thrilled with the access. i'm thrilled with the idea that i want to watch three or four episodes of "house of cards," i want to be able to do that. finally, the consumer is king. it's not the almighty network, the programmer who is saying, you shall watch it now. this is liberating for everyone. we have been convinced, sort of,
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but it works. everything is in flux. there's not really the model that sends us into the future with any real content the way we used to. now we are in a new area in which the middleman reached the lion's share. there are too many middlemen adding too much -- getting too much stuff on the cheap. netflix will make it deal with pbs, and we get a large share of that because we are the most watched of the pbs shows along with "downton abbey." it is not completely offset -- does not completely offset what the card copy -- hard copy dvd sales represent. get those united artists together like they did early on in the old hollywood system and said, this is not working for us, what will happen? this will be an interesting turn of event, when the folks say this is not as good for us as it
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is for the people who are not doing anything except pressing send. time for machines made for a real life action movie. textron making them. have a new deal in the business world. later, the business of doing it differently. no marketing, no managers. ♪ >> it is 26 minutes past the hour, which means bloomberg television is on the markets. i'm alix steel. it is a mixed picture when it comes to stocks. the dow just slipped into negative territory. the s&p is also unchanged. the nasdaq is slightly lower. within the s&p, you have energy and materials putting up a strong showing.
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overall, stocks are still around record territory. portfolio managers making some gear-and moves. we will be on the markets again in 30 minutes. ♪
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onthis is "lunch money" bloomberg television. today's moving pictures, the video is the story. in beirut, a car bomb killed lebanon's former finance minister. the explosion also killed five others and injured 50. the former finance minister was a leading figure opposing the regime of syria's president assad. the corruption scandal in turkey moves closer. a second wave of investigations focuses on a foundation run by his family. a scandal is battling turkey's
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lira, which has fallen to a record low against the dollar. vehicles involved in chain reaction crashes when a quick moving storm dumped snow on the eastern part of the state. we are taking to the air. , one major asset to gain from the purchase, the propeller driven thing air models. that is the rolls-royce of airplanes. i have flown them, and they are gorgeous. textron will sell everything from tiny single engine cessna funseries planes -- they're and effective, but slow -- to the citation business jets. million worth12 of products last year. check it out.
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♪ carts?olf i guess you need a way to ferry yourself back and forth to the golf course after lending your private jet, right? maybe a little vertical integration in the works. companies with no managers, no advertising -- how do they make it? we will talk to a few ceo's doing things differently. and why buy a car when you can buy a tank, or at least drive one for the day? as we had to break, you have got to see this guy walking on the tarmac at the phoenix international airport. he's not supposed to be there. he climbed over a nine foot
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fence that had barbed wire on it . police say the man is homeless and appears to be under the influence of drugs or alcohol. they've recently spent $10 million to upgrade security in recent years after previous incidents. maybe another $10 million will get them to where they need to be. ♪
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are looking at ceo's you're doing things differently. star with johnny cupcakes. nothing to do with cupcakes, everything to do with school. >> johnny cupcakes came out of nowhere back into the someone -- in 2001. i made a shirt when i was getting shirts made for the hard-core metal band i used to be in.
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all these slightly miserable customers that never made eye contact with me, they started looking up and laughing and saying, what is johnny cupcakes? what is that? i made more shirts, and the word-of-mouth cap spreading, and before i knew it i was selling them out of the trunk of my car. poking fun at pop culture, replacing icons with cupcakes on t-shirts. there were the statue of liberty holding a cup cake instead of a torch. a plane dropping cupcakes instead of bombs. bonespcake and cross pokes fun at all the tough guys with the skull and cross bones shirts. >> do you have people coming into your store thinking it is a bakery? >> every day. i set my stores up like a bakery, and we displayed t- shirts and refrigerators. the stores do not sell food. when you walk in you smell frosting. i had vanilla scented car
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fresheners behind picture frames. when you designed these shirts, clearly you want to mass produce them. what is the trick between making a limited edition? >> creating an experience with it here at not only will our shirts be limited. when we sell out, we don't print them again. some people will camp out for days, some people get the tattoo logo and -- tattoo logo on them. >> a portland startup called treehouse -- since getting rid of middle management, the online design school has seen enrollment jump. how sustainable is this model? >> there's a lot of bigger companies. employees.0,000 they don't have managers either. we are hoping if they can do it, hopefully we can. >> can i ask a technical
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question? i know youe point -- talk to one of our producers and said managers communicate messages from top to bottom. i think is a valuable thing to have in an organization. they settle disputes. they help people manage their careers. they keep their teams motivated and happy. it's stuff. -- good stuff. teams fromy shield things that are really superfluous. what do you do in an organization where you don't have that? things. are all good the problem is that most managers end up getting affected upthe power, and they end micromanaging and not really serving their team. great managers are servants. the trouble is it never really works out that way. people are able to communicate, able to stay
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focused, able to stay coordinated without a person. >> is there a financial incentive for them? were you able to change the financial structure so if they brought in a client, they get a greater portion of the revenue? >> no. people are chairman thusly motivated by being given the power to actually do what they think is right -- tremendously motivated by being given the power to actually do it they think is right. goalse them very broad and then we say -- we hired you, you are smart. we believe you can figure this out. they control 100% of their time. >> empowering people, i like that. >> i'm the founder of neighbor goods. when i'm not working, my passion is playing roller derby. derby.essed with roller
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i love my team. working together to win together -- winning is really fun. neighborgoods connects people in local communities to share physical goods. instead of buying a lawn volker, -- mower, you can borrow one from your neighbor. it becomes a repository of people just helping each other. i did not expect it, but roller derby has taught me a lot about being an entrepreneur. you are constantly getting hit and falling down, but you have to get back up and go again. it's the idea perseverance, and it's the same thing with entrepreneurship. we suffer little losses here and there. you have to get up and keep going for the good of the business. female entrepreneurs have a set of unique challenges, whether it is being underestimated by your peers are being outnumbered by them.
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i work and technology, and there are not many of us. if a woman is too aggressive or competitive, she is seen as not lady like. we struggle with this as women. in roller derby you learn that being aggressive and confident and competitive is what makes you win. i think i will play until i cannot play anymore. i'm really proud of what this sport means to women. i don't see any reason to stop. >> if rollerskates are not fast enough, out of the lambeau -- one that is so hot, it's not even for sale. we will show you how i car gets made. it is the best of 2013. ♪ look at this, here's an annual tradition. it is big in peru. trying to settle public disputes.
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men, women, and children getting in on this action. they have got a few whip carrying refs to make sure things don't totally get out of hand. ♪
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>> we are going to ford's michigan assembly plant. a new car rolls off the line every 52 seconds. ♪ we are one of the most flexible assembly plants around.
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are producing 605 cars per 10 hour shift. working 120 plus hours during the week. another 52 seconds, the car comes off the final line. we have five unique buildings here. we have our stamping, where it starts off. that is where we get roles of steel. we ship them over to our body shop, and in the body shop is where we have a lot of automation. we put together the complete body. from there we some the car to our paint shop. from the paint shop it comes to the final assembly building.
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we have a unique operation. we installed the battery in the back compartment of the car. you have the clamps going overhead with the body shell, and the powertrain underneath. when you leave that marriage point, it is almost a completed car. here we are at the finalized flat top. from start to finish, it is approximately 20 hours. from the stamping all the way to the finish, rolling off, final product. >> cool stuff. italian sports cars, maybe there are more your thing -- we have an idea for you, which assumes you have the cash. their only four pups of this in the world. >> this is the new lamborghini.
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it is based off of the platform , our flagshipdoor card. -- car. every once in a while we want to bring out something really unique in terms of styling and performance. we also want to keep it limited in terms of who could have the car. four of a total of them, with three of them being sold before we even unveiled the car. two of those cars are going to long-term lamborghini customers in north america, with one of them going to the middle east. the people who were interested acted quickly, and that was it. >> in terms of the performance of the car, seven hundred 50 horsepower. zero to 60 in less than three seconds. -- 750 horsepower. zero to 60 in less than three seconds. there is a carbon skin that
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covers the elements of the dashboard. it is important that we maintain that halo product like this. >> wow. still not satisfied? you need a tank. ♪ the most unlikely thing you would expect to find in silicon valley is a collection of tanks and military vehicles. it turns out this is the world's largest collection. >> the foundation was formed in 1998. mid-1990's, he was purchasing and collecting more than one take a week from around the world. he said buying tanks is like
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eating popcorn, you cannot just have one. there are roughly 300 pieces in the collection. >> do you have any idea how much he would've spent acquiring all this stuff? >> i probably have an idea. it would have been in the tens of millions. these tanks represent multiple countries, multiple years, multiple wars, and multiple battles. this is the german 222 car. people come from all over the world just to look at this. this one is loaded with technology. this one is an aluminum tank. this tank also floats. m-103, runarge tank, by the u.s. marines. some are bigger than the others. >> is there a massive fluctuation in weight? >> yes. they go from light tanks to
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medium tanks to heavy tanks. very large, heavy tank would be more than 70 metric tons. 150,000 pounds. >> how do you get them up here? getting them up here is a nontrivial task. getting them down the hill -- >> i have lived here for a long time and sort of heard about it through word of mouth. i would not say the average person knows this is here. you drive up a winding dirt road. >> we could be your neighbor. the best ofatch bloomberg 2013 online or on our mobile device, or your mobile device. just go to the bloomberg tv plus app. today's mystery meat takes us to a shrine in tokyo. this is a traditional ceremony called crying sumo, where parents try anything to get
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their infants to cry. parents believe it makes them pure. ♪
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is onomberg television the market's. i'm alix steel. let's get you caught up on where stocks are trading. all of the indices have slipped into the red. you could call it unchanged. we're not seeing a ton of movement.
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nasdaq is down a quarter of a percent. energy still going strong with wti prices over $100. we're taking a look at the treasury market. the yield on the 10-year at one point hit over 3% today. the highest level in more than two years. lower prices being -- bring in buyers. between the 10-year and the highest. the one stock we are watching today is apple. the iphone maker is renewing its patent battle with samsung. ofing the u.s. to ban sales more than 20 samsung products, including galaxy s 4g. smartphone top two makers have spent hundreds of millions of dollars in legal fees to try to dominate the market.
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the issuen was not for apple with beyonce's newest album. "queen b" bypassed the traditional route. scarlet fu joins me for the fallout. you are a celebrity geek as well. >> is close to my heart. >> what retailers are in the mix? >> amazon and target. exclusive distribution rights for the first week. it was one of the most downloaded albums, 600,000 albums don't loaded in the first three years -- downloaded in the first three years. amazon is carrying the digital version, mp3 available for download. it is not devoting prime real estate for this. when you go to the website, you don't see it advertised anywhere.
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it is not being marketed to anyone. "billboard" magazine said amazon may consider further reprisals against sony music entertainment. there are a lot of mixed customers here. target was also miffed because you think of what it had with beyonce before. the last time she released a studio produced album, target played a big hand in heavily marketing it. it did not do very well. this time she bypassed it completely. and how muchorth could retailers be losing by not committing to this album? >> she is one of the biggest selling female recording artists. you wonder if they're leaving money on the table by not having her album available in the store. forbes estimates she and about $92 million between june of 2012 and june of 2013. a lot of the money she makes that she has her own fragrance, her own clothing line.
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she has got her music as well. haveysical music sales been in a structural decline. does that mean a lot of music will be subsidized by big players such as google and amazon? packaged3, physically music sales totaling about $13 billion, it was only half of that six years ago. digital sales are about $10 million annual. you're wondering whether target and amazon can give up those physical cd sales. >> beyonce by beyonce. >> scarlet fu, thank you. we are on the markets again in 30 minutes. "bloomberg west" is up next. ♪
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>> live from pier 3 in san francisco, welcome to "bloomberg west," where we cover the global technology and media companies that are reshaping our world. our focus is on innovation, technology, and the future of business. let's get straight to the rundown. the nsa gets a win in court as a federal judge rules that the own surveillance program is legal.


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