tv Bloomberg Business Week Bloomberg February 18, 2018 10:00pm-11:00pm EST
>> it is not about them in singapore. i'm haslinda with the first word news. this group or percent. export and tourism climbed. a full year, they spansion came in at 3.9%, right in line with the economist forecast. they said 11% against the dollar in the past year, posing a risk for the economies that rely on experts -- exports for 70% of gdp. minister delivers his budget speech later on monday. bloomberg predicted some kind of tech increase, most expected an
adjustment with them think it happens as soon as this year. that could open the door for this bank to type in april. potentially flattening the yield curve. it is betting big on one market. japan. billion manages the signs of inflation, a good news for japanese stocks unlike in the u.s. where shares are tumbling into correction. the inflationary trends will continue even if the doj -- boj best to reach its 2% price target anytime soon. the u.k. promises theresa may may finally have found some inmon ground with the eu calling for european data sharing to continue after brexit. that would allow both businesses and intelligence agencies to keep sharing information across borders. there was a minute defense conference and it must be
maintained. believee say that i since we are not at war with the u.k. and we do not want to take revenge on the u.k. for what the --tish people have decided the security bridge between the u.k. anti-e.u. will be maintained. we still needed. the uco bank says it has exposure of about $412 million to afford against the national bank in a case plaintiff. the reviewable have been arrested over the $2 billion gap including two employees of pmb. they are accused of fraudulently paying loans. state bank and union bank are said to be at risk. a quick check of the markets in asia. thailand trading, they are hired by about 1%, and into gains on
thursday. the as easy up by half a percent and looking elsewhere in the region, australia and new zealand looking at, the nikkei up by 1.3%. this is bloomberg. >> welcome to bloomberg businessweek. we are here inside the headquarters in new york. in this week's issue, can jeff bezos, jamie dimon create a new model for the american health care system. >> marble unleashes the black panther at the box office. >> all that is ahead on bloomberg businessweek. ♪ >> we are here with the editor in chief of bloomberg
businessweek. i start in the business section. this is about a trifecta of well-known individuals, warren buffett, jeff is us and also jamie dimon talking about fixing the health care system. >> the biggest guys around. remain kind ofll hazy, what will actually be the solution in health care. how they're going to try and fix this. they are trying to find a ceo who can spearhead this initiative between the three companies. amazon.com, berkshire hathaway and j.p. morgan. what is interesting and where we have tried to pick up the narrative is the reaction within that industry. the health care industry said amazon is at the door? this is a big dip. >> this is not what we were asked -- expecting. we should make a point that they are tackling the situation with their individual companies. what does this mean ultimately
for all the individual players here? the insurance, the pharmacy benefit -- the middlemen? all of this is this massive cocktail of what is happening in health care, why prices keep getting so much higher and consumers feel like they're getting the short straw. the decoration is there is the middlemen, pharmacy benefit managers. that is where it seems to be a focus that this could bring to bear. isnks they pharmas says it not our problem, we are not miss placing the drugs. a lot of the money gets creamed by the guys in the middle, the insurers, the benefit managers. >> when it comes to drug pricing it is hard to make this makes sense. you talk about refunds that come into play and the relationships between big pharma, pbm and health insurance, -- >> is very opec.
-- opaque. causing somet is turbulence in the market. but they could bring to bear on it was what if they negotiated directly with pharmaceuticals? >> big hypotheticals. but if you could do that, you'll put a lot of downward pressure on a bunch of this opec market that is proving to the a little too lucrative. >> euros to u.s. administration assad about repealing and revising obamacare. of course, the president is talking about tackling drug pricing as well. >> this will be an ongoing story that all of us should be watching and this is the appetizer that we want to give you because we are just tried to inform you, this story will be one that we are going to be watching throughout the year. think of this as the appetizer, understand the players and we will get you to an entree soon enough.
to the u.s. cover and the asia cover and we're honing in on boeing, the huge industrial. >> it is an amazing story in part because of what boeing has been able to do as a business and if you look at the doubt, boeing has been the top-performing stock in the doubt over the past year. happy.lders are >> investors are ecstatic about this. how did they do it? that is with the story is about. there is a lot of nuance to that. basically everyone else in the world, investors and employees are saying that boeing is hurting us. flexing some muscle, muscle is an understatement. >> let's go to the story because it is about the boeing ceo driving everybody crazy except investors. we have more from julie johnson. >> we think we know boeing, they have been around for years. but they have overtaken ge to
become the largest and most powerful u.s. industrial company and they have really started to shake up the marketplace. this is in ways that we are just now exploring whose effects we ultimately don't know. >> the old slogan used to be working together. applyr does that slogan to them today? -- ining today is really every speech you hear a senior executive give, the phrase comes up -- compete to win. this is a company that seems unafraid to play hardball, not catch together and if people don't like the consequences -- they don't seem to care. >>, said that has to do with the new ceo? >> i call him knew, he has been around since 2015. you described him as turning unapologetically hard-nosed
under his reign. boeing has always been a tough competitor. dennis is a very -- very driven personally. using family charming in person. he is charismatic. again, he has this goal of making boeing a glowing to theial champion 1980's era ge. this what is on the gas, this is a company right now that seems determined not to let up. i think in some regard, companies reflect their leaders. that might be true of what we are seeing at boeing today. >> the share prices doubled since january of last year. it is the best performance in the doubt. investors are rewarding them at this stage. they are happy. >> absolutely. is kindhe things that
of fascinating is that ge has imploded for shareholders that want to have large industrial stocks in their portfolio. boeing has become the only game and i think that boeing has benefited tremendously from the turmoil at ge. reflectsme time, it the underlying strength of the business, they are very focused right now on profitability -- really shaking up the supplier community with some of the ways that got about getting that profitability in their contracting. but that is a very high-level picture with a thousand little details that have made it come together. >> the cost initiative they are running right now, partnering for success, critics have called suppliers,ing from
give us a sense of what they are doing here and what they are achieving, it is getting a fundamental reshaping of boeing's business. >> it is absolutely true. >> this started in 2012. under the previous ceo, i think boeing was going through some tremendous soul-searching after the 787 dreamliner. that was enormously draining on the company, the early issues with that plane and the manufacturing problems that led to it being three years late. i think boeing took a look --und and said why are we like other large industrials plodding along with single-digit operating margins when our suppliers are earning double or triple that? sensek there was this
we have to put our needs and our profitability first. >> they put boeing on the cover of bloomberg businessweek. >> we had his excellency with the ceo and he has this beaming smile on. we couple that with this chunky typeface to show you they are launching. >> the sky is the limit. it is a wonderful picture of him. goodoks like he is in a spot. how many pictures do you take of a ceo when you're doing something like this? are a lot of photos, as much time as a ceo will give us. >> do you change the background? >> yes, we shot throughout this factory. we have these planes and it is really beautiful. likes that is the big story initiative.st
you have been quite cute with that with this in the background. this is a fundamental part of the story here. >> and replaces it in the environment that it is pushing for. >> up next, why moscow is not talking about hundreds of russian mercenaries killed in syria this month. >> and the global ambition of wwe. >> this is bloomberg businessweek. ♪
♪ >> welcome back to bloomberg businessweek. >> you can find us online at businessweek.com and on our mobile app. forces killed hundreds of russian missionaries in syria. the incident is raising the possibility of greater conflict between washington and moscow. here's editor matthew philips. matthew: it has been an active
start a month of february. we have seen and has collision intentions, we are seeing a real shooting going on. we have seen aircrafts being down from iran to turkey and russia and israel. they have all seen -- aircrafts get shot down on the first part of february. the most interesting and seismic event happened on the night of february 7 where it seems that a of russian mercenaries in the realm of two or 300 or killed by a u.s. backed force a u.s. backed force led by u.s. forces and backed by the kurds in a failed attempt to take some real fields that the kurds had been holding for the past few months. >> who was behind the russian mercenaries? >> it is pretty murky. the kremlin would not address this.
as we know, given some of the encouragement that russia had in the ukraine, they often are not wearing official russian military gear. it seems that these few hundred mercenaries were under the control of a firm known as blogger. to put it in blunt terms, that is the russian equivalent to the u.s. based blackwater, is a private mercenaries that -- not unlike their people we send it to the ground on iraq -- they were not part of the official u.s. military but they were there to fight. that isan organization controlled by this man known as putin's cook. he has a catering company and he also seems to have control over these military units that are controlled by them.
they have been operating in syria, hoping sod shore up his game. think you just added there for me, what is so surprising and puzzling to use a word that you used here as well. this is for all intents and purposes a u.s. base. responsesk at the from both the russians, perhaps not surprising that they deny any knowledge or involvement. the united states response seems fairly weak in this case despite what you say was action on the ground. what is going on here? mattis saidecretary and ihis is perplexing think that is an accurate assessment. they were very confused by what happened. we had the united states forces
in communication with the russian forces that are there. this is like a jigsaw puzzle of with proxies of big powers, the u.s., turkey, russia, iran, israel are waging wars. when it comes to this part of , the u.s. is with the kurds and on the other side that arerussian forces with us on. -- assad. was fantastic reporting by our moscow-based reporters. she indicated this was a rogue operation. we are not sure who gave the go-ahead on this but there was communication throughout, during, before and after about whether you are moving, why are
you moving? stop moving, we are going to attack. there is still a lot of mystery about the incentives and the impetus and who called this in. but you are seeing hospitals in filledersburg and moscow with hundreds wounded here in the past few days. >> up next, the problem children of traded funds. >> how 100 north he prods his payment company into the mobile era. this is bloomberg businessweek. ♪
♪ >> welcome back to bloomberg businessweek. can listen to us on radio on sears xm channel 119. and on aim 11 30 in new york. boston, 90 one fm in washington dc and a and 960 in the bay area. and in asia on the bloomberg radio plus at. >> in this section, investors are funny reasons to worry about certain exchange traded products . over 400 of these use derivatives to bring outside returns. that is raising some flags were market watchers. >> past week we had to blow up an siv was -- which was an exchange against car markets.
that brought into focus how they have a lot of complexity at their heart. they're not as risky as a etn but there are products that include derivatives at their heart. people are questioning a little bit of what they own. there is lots of technical terms in their. explain exactly what investors were doing when they got involved with these products? >> versus talk about volatility. >> volatility is a way that we can measure exactly how active the markets are in terms of price. when markets are calm, volatility is low. low forarkets have been a low time. let complacency in the markets. >> we saw that all changed. they cause of problems against volatility. there are betting on the fact that volatility would remain very low as it has been for a long time. >> the trade was very popular.
we saw that stuff get washed out on monday afternoon. where we saw that most definitively was in the exchange rate of fund or product world. we saw lots more jargon. egm versus etf versus etp. this is technically a debt obligation from its issuer. it started to run into trouble because the index and was tracking most so much over a short. of time that credit suisse decided it was going to wind up the product. winding up the product and go down to zero? >> this is what we saw. anybody that have come into over the previous few weeks. this is a record week for the product. all of those people were
suddenly faced with credit suisse. >> does that mean they lost money? >> actually, this product what about 90% in the space of a day. that will be liquidated later this month and people get that whatever the price was at that point. >> who is actually invested in this product russian mark was a sophisticated investors or mom and pop as we talk about? a retail investor. >> it is difficult to know one's these things. if you look at the bloomberg terminal, you would be left with the -- that is what it is for. number ofg to a retail investors, it seems like that was not necessarily the case. the reforms about this, talking about how excited he was making people use percentage every year. people were piling into this and putting all their savings. lostspoken to people well
thousands of dollars. >> you're done great reporting on all of this. people were making crazy amount of money. >> i think on monday when volatility started to spy, that was something the people thought that markets have been come for a very long time. we will see that spike disappear. now it is a great time to go short. instead, they got washed out. >> this week's game changer if steve streets. >> he emitted prepaid debit cards. we have more from reporter jenny's reign. a is the founder and ceo of couple he called green.. but provide repaired cards they are a bank and they have been making a lot of interesting deals in silicon valley. that networked with apple and over and there tried to build out their platform. >> he's kind of a visionary.
he saw the shift to mobile banking. he said i am not going to be quick enough to take advantage of it. he made some very bold moves. seize --n 2012, he can see that the banking experience was moving to the mobile phone. he thought his company was not going to get there in time. he went out and did and i position of a company called. they were a dating app that had failed. they had a lot of geolocation services and some interesting technology. careank basically said what technology you have, i want your talent. they brought the team in and shook things up with it and now, they are making all these important partnerships. >> as you say, not a lot of but they are
fundamental, these are some pretty huge businesses out there. exactly, they have apple pay cash. it is an interesting business, you don't see green. anywhere in the app or in that card. but they are the ones powering it. they are the bank behind it. that a lot ofing people are using them and have no idea. >> working with uber now as well. they had fingers in many pies. >> the looped acquisition game the mobile development team they big to work with these companies that have lofty dreams for how they can use financial services in their business. so green. says they are a platform, not just a prepaid card. you can use this banking platform to plug into these interesting technology companies. >> it is one of the most disturbing banks in the country. the growth we are seeing is
pretty phenomenal. >> not to knock on the prepaid business, that is really great partnerships they started with uber, they are the want to pay other uber drivers at the end of the week are help pay them. so they are facilitating all these payments for silicon valley. steve, he said the reason we are able to do this, we have this great, incredible platform and his team that can do it all but we really able to speak tech to these companies. especially as more and more of these tech giants want to make their way into banking, it is interesting to see them partner with some of the longer term players. >> a tech from that understands banking. >> that is a good question. they are definitely a bank first and foremost, prepaid was steve's brainchild back in the 90's when he saw that more and
more people were buying things online, especially teenagers and they didn't have a bank account to do it. that is what he created the hidden prepaid card. flashforward 20 years and now is a company that prepaid is a big as part of the business. they can see that platform that they have to prepaid cards running on being used in different and unique ways. lawyers targets the that it claims are conspiring against the company. >> what is behind the republicans change of heart regarding spending. this is bloomberg businessweek. ♪ retail.
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haslinda: boj watchers say the risk of a strong yen is pushing policy normalization further away. most economists say more stimulus on the back of -- from the bank of japan after shinzo kuroda for a second term. spoke to a former advisor to the government who says kuroda will have to wait and see. >> structural reform is very important and fiscal stance is very important. all bankers can do is continue
until theand wait inflation rate goes toward 2%, which may take another six much to a year. haslinda: confidence in rebuilding its business in asia despite flagging fourth-quarter net loss of up to $1.93 billion. says restructuring talks have been productive. indonesia has issued a red alert after the latest irruption of mountain about an so much a -- in sumatra. ashes to reach seven kilometers in height. it was dormant for 400 years before rumbling back to life in 2010.
singapore, malaysia and thailand trading today. here is how it is looking for those indexes. gains across the board. minutes.0 this is bloomberg. ♪ julia: welcome back to "bloomberg businessweek." i'm julia chatterley. carol: and i'm carol massar. still ahead in this week's issue, -- still ahead, how the wwe came to dominate streaming. julia: all ahead on "bloomberg businessweek." ♪ julia: we are back with "bloomberg businessweek" editor in chief joel webber, and in the must-read section, we are honing in on exxon mobil, sick
to death of all the climate change lawsuits. it is fighting fire with fire. joel: yeah, it is an interesting take. i would call this one a need to know read. what exxon has really done here is change the narrative by going after lawyers. the very lawyers that are suing them, they have turned the narrative and they are going after them. so we are talking environmental activists, but we're also talking attorney generals. carol: they talk about the la jolla playbook. joel: the la jolla playbook, that is a term. so what happened is, six years ago, the rockefellers, which have a fund -- the irony here is the rockefellers were standard oil. standard oil is basically exxon today. so the rockefellers invited a group of people to la jolla, and exxon has pointed a finger at that and said they were conspiring against us. and that is the whole essence of
this story. carol: so they were plotting against exxon? joel: and so some of the legal experts that we consulted on this say it is a moonshot, but a bold one. and it is designed to almost be a fear tactic. julia: so they are trying to spread fear amongst the likes of the attorney generals of new york, massachusetts? joel: seeing if they can get them to back down. it is an amazing legal maneuver that a lot of people have their eyes on this to see if they can pull it off. carol: it is amazing, a fear tactic against the rockefellers. i'm curious in this environment -- joel: and it is bigger than that, because the rockefellers, it is the rockefeller brothers' fund. who are -- this is all about has exxon known something about climate change and doing nothing about it? so there are multiple people who would be interested in being on that side of the conversation. and that rockefeller brother fund was inviting people to have that conversation. attorney generals among them,
environmental activists among them. and that is where exxon is trying to seize on it and say that is a conspiracy against us. julia: i mean, this is a whole industry that has come under fierce criticism. so surely, if a precedent were able to be set here, it would have far larger implications than just one company. joel: that is why it is such a need to know. carol: exxon saying they have a right to free speech, this plays into that as well. joel: so much stuff plays into this, because at the same time, while you could call that a strategic meeting, right, well, isn't exxon having strategic meetings about the other side of this? so it is really such an interesting dynamic, and we will have to see what happens. right now it is just so many depositions. even that is being contested. julia: time is being bought. carol: exactly, right? we will see how this one works out. talk about interesting dynamics between republicans right now. this is in the remarks section this week. and anybody who has been covering politics or business news for a while, in government,
especially here in the united states it has been about reducing the deficit, not adding to spending. peter cory writes about it this week. joel: so this narrative around the deficit has been a republican priority since about 2010. right? the deficit hawks, that was a thing in congress. and the artwork that we came up with for this story is amazing, because that deficit hawk is an extinct species now. it lasted from about 2010 to 2018, and you are not hearing about it anymore. and the change here is that they realized voters don't care. julia: the deficit hawk is going the way of the dodo. but the last man standing -- we all watched this, senator rand paul saying, you can't be against obama's deficit and now be voting -- joel: such irony here. julia: he said it it is the definition of hypocrisy. and that is where we picked it up with economics editor peter cory.
peter: he got up there and delivered a jeremiad for the generations, condemning republicans for being hypocritical for opposing deficits when obama was in the white house, but seeming to embrace them now a republican is in the white house. julia: to be clear, he is a republican himself. but he was condemning his own party, saying it is fiscally irresponsible. peter: right. and he was just shrugged off by his own party. which, after he set down, went ahead and voted for a $300 billion increase on spending over two years, this on the heels of a $1.5 trillion tax cut as recently as december. julia: put some flesh on that, what are some of his colleagues saying? the senator from south dakota -- peter: he called it a colossal waste of time. julia: a colossal waste of time. peter: right. so the thinking of the republicans is, we want to cut taxes because we want to help the supply side of the economy. julia: right.
peter: you know, encourage companies to invest and so on, which will create a greater gdp. so all the deficits might go up, but they will fall as a share of gdp. that, of course, is the laffer curve resurrected. the laffer curve is the idea that the u.s. economy is so overtaxed, that actually reducing taxation will stimulate growth so much that it will actually cut the deficit problem. julia: or at least be deficit neutral. because that was the initial promise as far as this tax overhaul was concerned. peter: so of course, the institute for global markets at the university of chicago's booth school of business, as recently as last may, interviewed 42 prominent economists from the left and the right, and asked them, will trump's tax cut -- this was before it passed, of course -- pay for itself? and one of the 42 said yes, only one. and then it turned out that person had made a mistake and he meant to say no. so basically no one supports that idea, which is unfortunately the last thing that people like mick mulvaney,
who had been a deficit hawk as a south carolina republican congressman, is now the head of office of management of the budget, that is the thin reed that mick mulvaney is clinging to. julia: what intrigues me is, do voters care? peter: and that is kind of the heart of my story and why i brought it up, because you would think that after rand paul got up there and delivered his speech, the republicans would be kind of cowed. they would be a little embarrassed, they'd be worried about going back to their voters and having to admit to them that after having cared about deficits for years they were now supporting massive deficits. the answer is they can afford to shrug off rand paul because they have come to the very logical conclusion that they can get away with it. in fact, it will actually be good for them to do this thing, to cut taxes and raise spending, because that is ultimately what the voters want.
julia: and on our mobile app. in the economic section, the baby boom -- or bump -- that china experienced following the relaxation of its one child policy seems to have been pretty short-lived. carol: and it is proving to be challenging to convince couples to have more children. julia: here is editor cristina lindblad. cristina: there was a mini-baby bump, not quite a baby boom. so births went up about 8% in 2016, which was the first full year, but then they went back down last year. carol: wait, wait, wait. allow me to take a step back here. for decades, it was a one child policy to control population growth. they wanted to put the brakes on it. that was in place for a long time. so when they made this change, it was kind of startling. we were surprised. but they were doing it to help the population and economic demographics. cristina: yes, this was a concern that china is going to start graying too fast and it would have economic implications. carol: like japan. cristina: right. yes, but i think that's why everybody was looking not too far and is saying, oh no. with the workforce shrinking really fast, the fact that the dependency ratio, the number of young
people it takes to support every aging person is going to start tipping to a point where it is really unsustainable. julia: it is really bad. you put figures on it. population is expected to peak in 2030, and then decline. cristina: which is not that far from now. the workforce has already started shrinking. so, i think about five million last year. so yes, so this was supposed to be a baby boom and launch a different trajectory. but we see the rate going back down. carol: why is it difficult to have more than one child in china? cristina: basically the short answer is that life in the city is now so expensive. so, at one of the -- a government official came out this year and said they did a survey and four fifths of couples said -- they cited financial worries about not having a second child. in places like shanghai, the cost of a 1000 square foot apartment is like, something like 90 times the median salary.
julia: compare that to new york. cristina: in new york it is about 25%. carol: that's a big difference. cristina: yeah. and also, education costs are quite high in the cities. so. julia: you have people focusing on the couple, and they were excited at the possibility of having a second child, and then they looked at it and said, actually, we would have to move house, we are struggling even now with education costs. it is simply not feasible. cristina: that's right. they ran the numbers and they said no. it is not going to work for us. julia: what is china doing about it? can they change this? we all know that the welfare state there, while there is one, is not great. can they subsidize? cristina: that is the big issue. they have been trying to bolster, make it easier for mothers, adding and expanding maternity wards, adding seats to kindergarten. because that is a big issue, there is not a universal public kindergartens.
and maternity leaves now average five months, paid, nationwide. carol: wow. supportive of families. cristina: right. but the people we talked to said china is too far along its development trajectory for these policies to make a real difference. julia: what do you mean by that? cristina: it means that it is on its way to becoming sort of a first world country, and what we see in countries at that point in development is that their opportunity costs of having children is factored in. but, you know, the woman has a career. so financially it just does not become as attractive. carol: in the technology section, robert a stem cell pioneer who hopes his next breakthrough comes from placentas. julia: here is editor jeff moscas with the story. jeff: he is a jet certified pilot and a stem cell pioneer who suggests that we will live longer if
we treat our bodies more like we treat planes now, which is to say with a more regular maintenance schedule. the primary factor, most people will tell you that planes are more long-lived than they were a few decades ago. julia: don't wait for things to go wrong. make sure you are tinkering with the body, making sure it is working on a continual basis? jeff: that is right. he is a cofounder of human longevity. julia: which we have heard about before, yes. jeff: and until recently, was the chief scientific officer of biotech giant cellgenes, a cell therapy subsidiary. he has just stepped down to become ceo of cellularity, which is a $100 million spinoff with funding from its former parent and others, and that starts february 15. julia: he is a specialist in stem cell therapy, but what cellularity is going to do is quite specific. just explain what they are focused on.
jeff: that's right. cellularity are focused largely on therapies derived from stem cells from discarded placentas. placentas discarded after pregnancies. the theory goes that these cells, which are similar to some degree to the stem cells that a lot of scientists have been pitching as regenerative medicine for years, from discarded umbilical cords, are a better way to apply therapies to a much wider swath of the population. julia: so the placenta, of course, the organ women grow in the first trimester of pregnancy, how does he think that differs from what you say, and what we have seen talked about for many years, which is actually taking cells and blood from the umbilical cord and using that as a medical tool? jeff: right, as you say, scientists and doctors even, at the retail level, have been telling parents for about 20 years, if you freeze your umbilical cord blood, that will
help your baby live longer later in life, as more therapies are derived from these. so far, the umbilical cord cells have only proven useful in a few very rare conditions, like some rare forms of leukemia. and what cellularity aims to do in the next four years is develop therapies that can be used to treat all kinds of immune disorders, from crohn's disease to ms, and eventually the sort of hope is it will be more generalized longevity for everybody. not just the millions of americans suffering from those diseases, but for everybody. julia: and it is not just about the family members, or those who are connected to the people that the cells have been taken from, this is actually a broader cure they are talking about for multiple sclerosis or diseases like this. this would be so groundbreaking if successful. and as you say, they are talking about doing it in a few years. jeff: yes, by the end of 2022, supposedly. julia: so talk to me about how it helps the regenerative function of the body.
jeff: in this case, the idea that because stem cells in placentas are so purpose built for regenerative functions, that they are then better suited then stem cells from other places in the other places of the body to then mimic regenerative cells that are at risk, or the death of which is a primary symptom of these kinds of immune diseases taht we're talking about. carol: up next, we go inside the very lucrative halls of world wrestling entertainment. julia: and how careful planning and perfect timing may land "black panther" at the top of the box office. carol: this is "bloomberg businessweek." ♪
in new york, 106.1 in boston, washington, d.c., and a.m. 960 in the bay area. carol: and in london, and in asia on the bloomberg radio plus app. in the feature section, world wrestling entertainment, or wwe, it is on a roll. julia: shares are trading at near an all-time high. they are making more profits than at any other time in their history, and they are taking some pretty big risks. carol: they have indeed. our reporter felix took a trip to the company to hear about its plans about world domination. felix: right now a lot of entertainment companies are struggling. wwe is doing really well. and that was interesting to us. we looked into why that was. a lot of it has to do with a decision the company made in 2014, which was, at the time they were looking into what they want to do in the future with digital products, and they noticed a lot of their fans were subscribing to netflix and hulu. they thought, hmm, maybe we
should try launching our own video streaming app product. julia: risky call, cannibalizing their own viewership. felix: yes, at the time everyone watched it, if you are a big wwe fan, you would turn on cable and watch these weekly shows, and then a couple times a year you would subscribe to a pay-per-view event like wrestlemania or royal rumble and pay your cable or satellite tv provider $40 or $50 to watch the big matches. and wwe said, hmm, maybe what we will do is we will take those big matches and make those available on this video streaming app. and you just pay a monthly fee, and we will give you those big events and we will also give you some interview shows, documentaries, additional archival wrestling matches. and they put this together at a time when all those video streaming apps were like netflix, they were aggregators.
they were not individual brands. and there was a lot of skepticism about the company, because people thought, is that really a good idea? because, not too surprisingly, it really irritated their partners in cable tv, who got a cut every time you signed up for wrestlemania. so they were not too thrilled. carol: as you, julia, have said, this was a risky move, but it paid off. felix: it did. they have 1.5 million monthly subscribers for the service. carol: is that good? give us a comparison to the other streamers. felix: it is the 11th most popular video streaming app in the country, of about 220 of these things that exist now. and it is the second most in sports-related categories. so only major league baseball has a more popular streaming. julia: costs on a monthly basis? because this is critically important relative to signing up to another ordinary way of viewership. felix: you pay $9.99 a month for it, and there is a huge amount of material on there now. they have their cruiserweight division, they have a weekly show. the developmental league has a weekly show that is exclusively on this app.
but it has proven to them, one thing that has made the company really exciting to investors is that it has proven they can move their audience from place to place. the audience will follow them, and they are willing to pay. julia: the numbers are quite interesting in terms of what percentage of their overall viewership is coming from international versus the amount of money they draw from these places. there is a disconnect there. felix: definitely. a lot of the viewership takes place overseas, and yet most of the revenue still comes from the united states. so they think, oh, what we need to do is a better job monetizing that. and i think having the wwe network helps. so right now, most wwe networks, the streaming video product is -- the content is in english. but part of what they are thinking is like, ok, now we have all of the big events like wrestlemania that broadcast in eight different languages.
and i think part of what they are doing is figuring out, ok, we can sell essentially one product around the world, we just need to tweak it. we need to make sure all the matches are available in different languages, we have wrestlers from all these different regions, some good guys and some bad guys. and they are really in the midst of figuring that out. julia: in the pursuit section, marvel's new superhero movie "black panther." carol: it sold more advanced tickets than any other superhero movie ever. julia: it basically is having a perfect moment. here's our editor. chris: it the movie of the year. maybe one of the movies of the decade. it is really a big deal and they have done a great job with it. julia: we talk about it being unapologetically afrocentric. the timing actually couldn't be more pertinent. chris: yeah, it is really interesting. what we write about in our piece is, it feels of the moment with black lives matter, and africa and what donald trump has said about africa. so it takes its african heritage and really wraps itself in it.
and the designs are afrocentric, like the clothes and architecture, and it is just a really powerful statement at this moment. but they have been planning this movie for years. they -- d.c. comics, several years ago they said, we need to diversify with -- the amount of superheroes we have and what they look like. they have been planning this a long time, and have been smart about having women characters, characters of color. characters that people have not necessarily heard of. black panther is not one of the huge d.c. superheroes. and going down this path was a great decision. julia: it wasn't one of the big superheroes. watch this space. it is set in wakanda, which is a secret technologically advanced nation. chadwick boseman takes the main role, and there is speculation, and we make it here as well, that he could be a contender for a future black james bond. idris elba, step aside. chris: it is one of those -- it is a parlor game that people like to play, who will be the next james
bond? people are wondering when are we going to get a bond of color. people talk about idris elba because he has been mentioned, maybe even approached, but chadwick bozeman is so good. and he is so amazing at the action sequences, you can't believe it. people are like, if there is going to be -- he is going to be the new action hero. julia: you mentioned women as well. his bodyguards are all women, and they kick bottom better than anything we saw in "wonder woman" last year. chris: yeah, there are incredible women in this film. they are very powerful. angela bassett, lupita nyong'o, everybody in it is really good. it is empowering on a lot of levels. carol: "bloomberg businessweek" is available on newsstands right now. julia: carol, what is your favorite story? carol: the one child policy. the rollback of that policy, you would have thought that would create an incredible baby boom in china. not exactly. julia: there was so much excitement in 2016. carol: there was, and they got a
little bit of a baby bump. now they are worried about population growth and maintaining that, aging population, having a future workforce for china, specifically. they talk about a demographic time bomb. love this story. julia: the problem is having more children is expensive. implications for housing, for education. families are realizing they cannot afford to do it. now china needs to have a rethink, how do you adapt this policy? carol: right. some of the policies have not created the effects they wanted. julia: one of my favorite stories, "black panther," we just heard about it, so exciting. beating all records at the box of this for a marvel movie, a superhero movie. are we going? carol: i will think about it. julia: bloomberg television is up next. ♪