tv Bloomberg Technology Bloomberg June 11, 2019 5:00pm-6:00pm EDT
necessarily bad. videogame companies are trying to one up each other at the e3 gaming convention in california. first, to our top story. president trump says he will not finalize a trade deal with china unless beijing returns to terms negotiated earlier in the year. trump spoke to reporters as he left the white house for iowa, a day after he threatened to raise tariffs on china if chinese president xi jinping is not meet with president trump at the g20 summit. pres. trump: china is a major competitor and right now, china wants to make a deal very badly. it is me right now who is holding up the deal. vonnie: apple is coming up with a backup plan. its manufacturing partner says it is able to make all iphones bound for the u.s. outside of
china if necessary. right now, the company makes all of the iphones in china. how did the company decide it was able to do this, to make all of apple's products outside of china so quickly? investor who was anding to people in taiwan our reporter was there to listen. this is more of a plan. they didn't say apple has asked foxconn to do it yet but he was saying basically that they are very capable of doing it. it raises questions. we spoke to an analyst over here who was saying, if you are talking about actual final assembly, which is what a lot of might beonn does, that relatively easy to move. if you are talking about the whole manufacturing process,
that would be a lot harder. vonnie: we know that politically china and taiwan are at odds. is there any danger that china would retaliate against the company if apple would move all of its production to the taiwanese company? alistair: that is a good question. apple has to be careful in general with this kind of thing. some of the activities going on u.s.,uawei in the encouraging companies and consumers to steer clear of huawei. there have been a lot of concerns that there has been an unofficial recommendation that chinese consumers not buy iphon es. that market is really important for apple. vonnie: hon hai, of course also known as foxconn, had a plan for
rate wisconsin plant -- plan for a a wisconsin plant. do those plans change? alistair: the executive who was speaking yesterday seemed kind of bullish about wisconsin plant and he kind of placed it in the same strategic realm has moving the iphone assembly out of china. india is something to consider, too. foxconn has plants in india already and was dealing with similar types of restrictions from the indian government. barr thankstair you,. when it comes to taking an antitrust lens to pick tech, it is not just a federal game. today, nine states and the district of columbia filed suit to block the merger. here's new york attorney general mes.sta james -- leticia ja
>> a multistate lawsuit in the toted states district court block the proposed merger of telecom giants t-mobile and sprint. when it comes to corporate power, bigger isn't always better. bloomberg'sing us, senior antitrust analyst jennifer rei. will this action have any impact on the doj? jennifer: it is possible. it may have been filed when it was filed to put pressure on the doj to join or file their own suit. it is possible. it could also be that this was filed because the state attorneys general seem to think
that the doj was ready to clear it because they want to take charge. vonnie: do we know what the state attorneys general will accept? planshey presented any that are acceptable to them? jennifer: we don't know yet. some of these additional remedies it looks like the doj is seeking might be some satellite sales, tilting out 5g into rural area -- building out 5g into rural areas. the states don't see that as something that could fix the heart of this deal. it could be there are additional concessions that could get them to settle. what is more clear is they have more flexibility than the department of justice. vonnie: if the department of
justice comes out with a attorneysdo the state general then back off? would that be enough? because: it wouldn't they filed this with doj looming. in this situation, they are ready to go it alone if they have to. it is interesting that you should bring that up because if there is this bolstered remedy, one of the things the states would have to do is prove to the judge that not only is there harm from this merger but that that harm can't be fixed by these two remedies that federal regulators have been ready to accept. that is an additional hurdle. vonnie: sprint and t-mobile have
promised that consumer prices won't go up. is that not enough, if that was written in the constitution of the combined company -- would that be enough to satisfy the states attorneys general? jennifer: i think it wouldn't because that promise would only last so long. seven years or three years or 10 years. what happens after that when you only have three competitors instead of four and the two that were the cost cutters and competitive against each other have combined? have also alleged there could be lower quality for certain consumers, particularly prepaid subscribers. when you have three companies instead of four, even with the prices, it doesn't create
incentives to put money into r&d or make sure quality is maintained. vonnie: thank you. coming up, we had to los angeles -- we head to los angeles for coverage of the e3 gaming convention. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg gap, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪
and a revenue projected to reach $1.8 billion by 2022. bloomberg's shelley hagan takes a look. shelley: it is a far leap from the penny arcade. e-sports takes the gaming world with arena sized audiences and big sales. they raked in $865 million in revenue over 2018. the audience is larger in asia, boasting 50% of the world's viewers, compared to 12% in north america. with the e3 conference underway this week in california, all eyes are on the booming business. blizzard and electronic arts have a combined market cap of more than $60 billion. private investment is growing as well.
venture capital investment in 1.8 billionched dollars in 2018. e-sports, north american teen, recently raised -- a north american team, raised 58 million last year. fortnite and league of legends. the winners take home more than the high score. the largest prize pool was more million. with the global market expected to reach 1.8 elgin dollars by dollars bybillion 2022, it is far from game over. vonnie: let's head over to the largest gathering, e3.
microsoft, activision blizzard, electronic arts just a few industry players participating in the events to highlight upcoming releases. this year's conference is different than years past. instead of focusing on hardware and titles, a lot of it has to do with streaming and how these games are played. what can we look forward to in terms of new releases from take ?wo interactive >> we are showing borderland three, the third in the iteration. we are super excited about it. people really excited to be playing the game. vonnie: in terms of the pipeline, what do we expect from
take-two beyond that. a lot of people are talking about red dead online. should we be expecting more? be expectingshould .ore from red dead online another big title five and a half years after the initial release. in terms of upcoming releases, .e have nba 2k coming, wwe vonnie: are you interested in bidding for any other sports licenses? you mentioned nba, w w e. what else are you interested in? isauss: the sports business pretty well spoken for. the nfl property is under exclusive license. one of our biggest competitors controls the fifa title.
we have golf, boxing, hockey. right now, our focus is on golf and of course basketball. vonnie: we are seeing more and more subscription models. what is your plan for subscription and streaming? we want always to distinguish between a technology streaming and a business model subscription. we are interested in both but they are different animals. you can have a subscription business without streaming and streaming without subscription. we are excited about many potential developments in the market. google,upporting microsoft, and i expect we will support others as well. subscription vehicles, many are being developed, some already. we are open-minded. direct tor own small
consumer presence and we are obviously looking at that market as well. when people look to acquire entertainment properties, they want to go where they can get a multiplicity of properties, not just an offering from one company. how concerned are you about the current standoff between the u.s. and china for growth of take-two interactive there? strauss: we are very optimistic about china. is relationship with tencent great. up about 74% year-over-year. we also distribute in china in a myriad of other ways. our nba 2k title was just
approved ps4 in china. we hope that trade talks will be resolved in a way that is an official. vonnie: i have to ask you, your interim chairman of the board, and reportedly there is a meeting friday to discuss a viacom merger. what can you tell us about this? strauss: outta here, i'm talking about -- out here, i'm talking about the videogame business, so not much. my primary focus right now is the excitement around take-two and the upcoming release. vonnie: if there were a board meeting, presumably you would meetingsof your e3 done by friday. strauss: [laughter] as i said, i'm refocused right now in the -- i'm pretty focused
>> for us, everything starts with great games. the way i approach it, if you start out to design a game with a certain strategy, you can paint yourself into a corner. if you set out to make a great game, you can support whatever you do later. we have designed some games that turned out to be fantastic. with streaming, we want to make great games. i think it unlocks some amazing things in terms of how we will approach multiplayer and how we approach the types of gameplay. you will be playing on the go or may be doing things that you will be related to a game. users playingmost on the xbox? how is that allen's going to work -- that balance going to work? >> we see them playing across
all those devices. pc, console, mobile. we have a great selection. 60 games, 14 from our first party studios. it is about putting the player at the center of what we do and providing choice. we announced game pass. it is all about choice, whether you want to be a console gamer or pc gamer. at $10 per month, a lot of people found that surprising. expect the cloud to be competitive pricing-wise? >> we haven't shared pricing yet. >> google today coming out with $15. one of the areas people have been talking about is the involvement of celebrities and games.
on sunday, kiana reeves comes reevesthe stage -- keanu comes out on sunday, revealed as a big character. >> i think he was pleasantly surprised when he saw the enthusiasm from our fans and how someonepeople get when like him shows up. i think people saw that it was authentic and genuine. -- >> it is about choice, putting players at the center. we know people will still want to play games in their living room. it is the social hub of our families, our homes. the best place to play games is still at the center of your living room on the tv.
that is why we made it such a focus. >> china is a big videogames market. how do you view china? >> we have had success in china, particularly around minecraft. we have other games with tencent. i think finding games that understand the chinese player, find out how to navigate the regulations. >> one of the concerns is about game approvals. in april, the regulators kind of changed the requirements? >> again, that is why i thicket is important to have partners that understand the nuance. it is hard to keep track of from seattle. we are happy with the partnerships we have with people like tencent. >> given that china is the biggest market with the revenue and players, are you concerned
that the trade war, that may limit the u.s. developers' access to that market? >> we have strong partnerships with people in china and we will look to them to help navigate that. fromat was matt booty microsoft at e3 in los angeles. fromsales, a 23% increase the previous period. they decided to stop selling flavored packs in stores to mitigate use by underaged users. coming up, dropbox is coming after microsoft and google. how the company is evolving from a file storage system to collaborative workspace. that is next. this is bloomberg. ♪
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this is bloomberg technology. i'm vonnie quinn. dropbox unveiled new integrated workspace tuesday. the biggest overhaul of its software to date. the company has a new desktop workspace with updates that allows customers to combine different files and collaborate across. caroline hyde spoke with the dropbox ceo andrew houston about the new changes. andrew: we are really excited about it. we launched the biggest change we ever made to our product and all new desktop app. it evolves the dropbox experience to a living team workspace where you can have files, any kind of cloud
content. google docs. anything you are using. integrations with tools like slack and zoom. from within dropbox, you can send people messages. it is a much more integrated workspace because we saw so many of our customers and ourselves struggling with these new apps, but how do you stitch them together? we see a big opportunity to make that a seamless opportunity. cannot wait to get it out there. >> do you see this type of integration -- do you think this is something we will see more of not just in your particular space, but with other types of software and software services? drew: absolutely. certainly, most if not all integration, but the opportunity we saw is to organize it. put it into a coherent experience different from some of the messaging tools. what dropbox allows you to do,
you can all your content in one place that works across different ecosystems. instead of the interface being a list of messages, you can see here is what we are working on, the most important piece of the content. we think it is a different approach. caroline: from the perspective to keep everyone coming back to dropbox, as much as you are working with the other apps, you are also competitive. do you think this plethora of new apps we are having can really survive? the fact you have deals with zoom, slack, google, microsoft -- do you think the ecosystem can support all these different players? drew: we certainly do. what we are seeing is that users want choice. they are using all kinds of different apps for communication, content. what is missing is a way to stitch it together. that is the role we think we can play.
it is very similar to the role we played in the beginning, help you get to your stuff from different platforms. now we think about how to organize your working life and stick together these different things. a lot of what we are doing is complemen complement your it. you will not stop using these other tools. we are making it easier for you to get them. we find that a lot of our customers love using these different tools, but they need a more integrated experience and not having that means you are switching back and forth and a lot of friction. caroline: it is interesting within the enterprise software space, we are talking about numerous players. when actually the argument from capitol hill is that too few players when it comes to the technology space, they need to be broken up. how do you take this sudden viewpoint coming from capitol hill, and do you think it has grounds in any way? drew: i think it is an important
conversation to be having. from our perspective, we think competition is a good thing. and we need a level playing field. it is an important conversation. >> what are the other conversations, the idea of responsibility a lot of tech companies, particularly those who traffic in content have. i wonder how you view not only what has happened, what type of response ability you think the companies themselves should be shouldering to make sure their services are being used in a proper way? drew: sure. i mean, trust and safety is the first thing on all of our minds. and, all aspects of that. whether it is the security of service, the content people are putting on services like dropbox. i think we are seeing a broader conversation of a lot of technology companies putting themselves in situations, how do we protect free speech but then what do you do when people put up content that is objectionable
or unsafe or not true? our role is simpler. people don't usually use dropbox as a publishing platform, but we care about the safety and well-being of our users. but, objectionable or unsafe content on dropbox, we take it down. vonnie: drew houston there. meanwhile, line which counts 18 million monthly active users in japan has been investing heavily in thin tech operations. speaking to bloomberg, the co-ceos says they may see new businesses breakout even sooner than now. >> it depends on how fast we secure the users. , i think we can- be profitable in one year or two years. vonnie: coming up, we had to capitol hill to hear one lawmaker's thoughts on big tech's big power versus the
vonnie: the house judiciary committee began his hearings on whether or not big tech has gotten too big. they kick things off by looking at the judgmental effect the internet has had on the state of journalism. for example, according to a december study, more american adults now get their news from social media than they do from print newspapers. joining us now is the top republican on the house judiciary committee, congressman doug collins of georgia's ninth district. he was part of today's hearings. also with us is bloomberg executive, google editor for technology tom giles.
congressman, we know that newspapers, in particular local news has seen tremendous cutbacks. what was your main take away from today's hearing? is there anything that can be done legislatively to combat that? the journalism thatction act is something begins the discussion on how tech and news can work together to provide a better platform so that everyone can be enriched. i think the interesting thing is we don't want to lose out on the local flavor. the big platforms are not going to cover. the big platforms and tech platforms to want to lose out on the content it helps them generate as well. this is an opportunity for everyone to come to the table and have ideas on how we can move forward in a symbiotic relationship instead of one that seems to be at odds at times. tom: representative collins, my question for you is how exactly
will hear legislation help remedy the situation? rep. collins: what it will do is instead of -- take for example my district, which is a relatively rural district with a single county or weekly paper. negotiateno way to with bigger platforms on their advertising rights and respect for the content that is being taken at this point. our bill does is for a four year period is take out the antitrust exemption to allow these newspapers in various areas to come together and negotiate in a better bargaining position. how can we continue to protect the content and get a better rate never ties in, and a cut of that? comeso allows the house to in and say how we can better enhance what we are offering as well? vonnie: would you ever subpoena executives or documents even if they were proprietary? rep. collins: going into
subpoenas is something that has been overblown. this is a time at that what we have agreed to do have a hearing and to say there is a legislative solution as if this is an adversarial solution. i want to tech companies and others to come in and say how are we in the state of technology now? i'm not one that says they need to be broken up because it is big. what we need to say is how do these new technologies work in the environment today and how their competitors work traditionally in antitrust? everyone has a part in the picture to play as we look forward to the privacy and data and commercial space on how tech dominates and how the other industries work with them. we have to have input first and nothing most players be involved. vonnie: there has been an effort to suppress or downplay conservative views on social media? is. collins: i think there valid and legitimate questions.
we have had some of these conversations before with the social media platforms. i spoke to sundar pichai of google about how the algorithms work. we talked with twitter, we talked with facebook. these are conversations that need to happen. especially the youtube issue, we have to make sure at a certain point in time the positions are working as they should and the platforms that have enormous responsibility for what they put out -- it is not simply a billboard where everyone goes by and puts up what they want to put up. there is editing involved. that is a very valid conversation for these tech platforms to answer for. tom: what is your response to the argument that the big tech companies have actually helped media companies stay afloat and indeed thrive by providing them a low-cost distribution platform? rep. collins: i would not disagree there has not been areas in which they have been able to thrive. that came out of the hearing
today, that some of these organizations and along with the big tech platforms have an ability to increase their viewership or increase their presence. at the end of the day, many of the smaller news organizations are having the content taken without being able to access the profitability part which is in the accounting revenue and ad revenue or actually pay for the content being used. it is not a matter -- the question is keeping some of the folks away from accessing what is rightfully theirs from a content perspective. tom: we understand the doj and ftc have had a meeting of the minds that are in a way dividing the tech industry. what is your sense and how effective law enforcement and regulation can be in terms of reining in the technology industry? rep. collins: again, it goes from a simple -- the doj and ftc are looking at this from a perspective, has there been issues that need to investigate from a legal standpoint?
i'm sure they will look into that at the forefront. the question i have is, this is not simply to say we need to step in simply because a company is dominant or a company is big. sometimes you get big because you provide a better mousetrap. that is not something that should be punished. as we look at that, if there are criminal acts that need to be involved, antitrust issues, i am sure that will be looked at. come forward in a position, especially from a congressional standpoint, how does this work in the overall economy and how do we let everything work together? vonnie: congressman collins, elizabeth warren has been advocating the breakup of big tech. is it possible this could be a rare moment of bipartisan agreement? do you see any possibility for you all on the republican side and somebody like elizabeth warren to work together on sunday like this? rep. collins: i don't believe so if she comes that it with saying we need to break it up simply
because we need to break it up. elizabeth warren spouts idea sometimes to get press releases silver presidential campaign might get some press. it is sinfully saying a company needs to be broken up because it is too big -- it's just because we don't like it because it is big. for elizabeth warren to say that is what needs to happen without explaining how that will actually make it better -- the next questions would be, if you broke them up, how would you break them up? how would it affect competition? this is not an at&t where you can be distributed. this is intellectual property. this is algorithms, techniques. these are any times ideas we are talking about. i think sometimes the quick reaction to just break it up will make it better is civilly a very political answer for someone desperately searching for headlines. vonnie: congressman doug collins of georgia. thank you for joining. and tom giles, as always, thank you for joining. ryan goldberg may not be rupert
murdoch, at least not yet, but he has made a big impression in a few years. now he's rebooted a website that once mocked him. we cover him in the latest edition. max joins us now. the big reveal is? max: gawker.com, the gossip tabloid website that famously basically sued into bankruptcy in a complicated litigation that was financed in part by the venture capitalist peter thiel on behalf of the wrestler hulk hogan. incredibly weird story and the ending is even weirder. goldberg is known from bleacher report, which is a very successful sports website owned by turner. they bought it for about $200 million. he started this website which is a collection of online magazines, primarily women's magazine. this is the next piece of that portfolio. vonnie: he proved himself with
bleacher, right? people did not believe it would be successful. he used the model of citizen journalism. he has a bit of a track record. about 90% of bustle's revenue comes from advertising. is this sustainable? max: most online media companies are in trouble because of this -- online advertising has not been a growth business. all the revenue going to two businesses -- google, facebook. most of the big players, including the big media companies like hearst and the new york times, are doubling down on subscription and finding ways to drive additional revenue. goldberg is basically going with clicks. a lot of ways, it looks like a media business circa five or 10 years ago. so far, so good. it is sort of working for him. vonnie: except there are problems associated with that, nothing least of all the writers themselves are not even paid
minimum wage some of the times. max: we saw this model with a lot of companies 10 years ago. demand media which actually went public and actually sputtered in a bad way was what was known as a click farm. that is what critics called it. goldberg has the same charge level against him with writers getting paid very little per article. dollars per post or just a few dollars per hour. it should be said in response to her article -- our article, this book people said number one, we pay new york city minimum wage which is $15 an hour. they also said rates have been going up. their physician is they are trying to build a sustainable model. yes, they may be lower than some people may like but we are doing better. vonnie: we have seen mass layoffs recently. but, goldberg seems to be onto something. could he be the next conde nast?
could he be putting the next hearst out of business? max: goldberg wrote a post that the key to success in media is having no shame, which i believe is true. i believe that quote which is they will be the next conde nast would be an example of shamelessness. that said, big media companies have grown -- have had humble origins. we have definitely seen an evolution with the perception of a brand like bustle which was initially the butt of a lot of jokes and now taken seriously by people. you can see the same trajectory with other brands. vonnie: max chafkin, thank you. hear more from the magazine's editors, reporters every saturday and sunday morning on bloomberg businessweek on bloomberg television. still ahead, bitcoin saw its best month of may in a most two years, but is the crypto winter really over? all things blockchain and crypto next.
vonnie: crypto security startup firebox announced it raised $60 million in series a fund. transferny which helps exchanges has one high-profile customer. genesis trading. digital currency droop is the most active investor in the blockchain and bitcoin industry, backing more than 140 companies in 30 countries around the world. joining us to discuss all things blockchain is digital currency group founder and ceo larry silvers. i have to wonder, almost a cheap bet to put some money into the next crypto or the next blockchain company?
after all, one or two or several will be winners, right? larry: we think so. having invested in 140 companies around the world, we are spreading our bets. vonnie: why is that? are they not very obviously distinct jewel from one another -- distinguishable from one another? 140 companies is not being spread thin. that is being spread wide. barry: our strategy is working on investing in the asset class investing in bitcoin and other digital assets. our investment in the company's is an attempt at building infrastructure that is required to make this asset class as big as it could become. vonnie: it feels like there was a rebound but things got a little bit depressed for bitcoin and related cryptocurrencies. barry: when you have been in bitcoin as long as i have, since 2011, we have been through quite a roller coaster.
the prices have gone down 80% four times. but in the past four times, the price has hit record highs afterwards. if you look at the price for bitcoin, it looks like perhaps we are coming out of the crypto winter and entered the crypto spring. hand,: crypto is on one but on the other hand you have blockchain. blockchain technology is being adopted by mainstream businesses as well as nonmainstream businesses, but it seems to be more acceptable to talk about blockchain than digital coins and digital currencies. what blockchain companies do have your eye on that will make it? barry: we have invested in a couple dozen companies that are building infrastructure using blockchain for nonfinancial use cases. what is interesting is the ones who are getting the most traction are the ones that are building infrastructure for the
asset class. exchanges and compliance software, and companies being solutions -- building solutions. what is happening is this growing awareness and a recognition that bitcoin and other digital assets are here to stay. the question is, ok, if you want to get involved in the asset class, what are the different ways you can do it? you can invest directly in bitcoin. you can invest in one of our companies, bitcoin trust. a lot of infrastructure being built that is making the asset class acceptable to the masses now. vonnie: we began our segment by talking about the crypto security startup fire block. obviouslyace grows, there needs to be more crypto security companies. where should we be looking? barry: we have invested, have invested in companies that are providing that infrastructure. what is exciting is some of the
larger well-known financial services companies like fidelity as an example are soon launching their own custody solutions. you have the new york stock exchange parent company launching in exchange. you compare the infrastructure today relative to where it was right before the last bitcoin bull market in 2017, it is really night and day. moneye question is not if will move into the asset class, but the question is when? silbert, thank you for joining us. that does it for this edition of bloomberg technology. remember, bloomberg technology's livestreaming on twitter. check us out at technology and be sure to follow our global breaking news network, tictoc, on twitter. this is bloomberg. ♪
paul: welcome to daybreak australia. shery: i'm shery ahn in new york. sophie: i am sophie kamaruddin in hong kong. we are counting down to asia's major market open. ♪ paul: here are the top stories we are covering in the next hour. wall street ends its best winning streak in two months as investors weigh fed policy in the trade war. the s&p 500 had risen 5% in the past week. president trump claims total control of the tariffs. he says he is