tv Squawk Alley CNBC November 8, 2019 11:00am-12:00pm EST
good morning i am carl quintanilla with morgan brennan and jon fortt at post nine of the new yorkstock exchange we're starting with disney in focus as shares surge post earnings julia boorstin sat down with bob iger after the call, joins us with more of that important conversation hey, julia >> reporter: well, carl, while disney parks and movie studio division continue to outperform, the real focus this quarter is disney's digital future with disney plus, the streaming service launching tuesday. without revealing any early subscription numbers for disney plus, bob iger told me he does expect the service to get off to a strong start. >> it is ready to go i am glad to say we tested it in the netherlands, we'll talk about that on the
call, it was successful. it did not have original content but was well received, not just in terms of number of subscribers but the user reaction to it, very, very and a half -- navigable, great access to our brands and story telling. >> he announced new distribution, a deal with amazon to be accessible on fire stick and deals with samsung and lg, in addition to deals with apple and google he announced that espn plus added over a million new subscribers in the past quarter, and he announced hulu will be bolstered by fx, part of the recently acquired fox acquisition with shows from the cable channel and new fx originals. >> we're going to create a huge fx presence on hulu. fx, a highly regarded channel. this will do a number of things for fx, in particular for hulu
and hulu subscribers, no extra cost to this essentially taking premium content, adding significant more amount of premium content to hulu >> i asked iger about rival hbo max and its focus on content for teens and 20 somethings and for kids, and about launch of apple tv plus. he told me he is not concerned about competition. >> we're not focused that much on the competition we're focused on making sure the product we're bringing out is both successful from a bottom line perspective and successful from a consumer perspective. we've got something that's incredibly unique, i talk about it a lot, because those brands, disney, pixar, marvel, national geographic, 30 seasons of the s simpsons, great content under all those brand banners, there's nothing like it. >> i asked about the netflix ceo saying that he will subscribe to disney plus. iger admitted that he does
subscribe to netflix, and he said he got a free subscription to apple tv plus because he bought an apple device guys, back over to you >> julia, a couple days ago my 11-year-old asked me what's the first thing, dad, you're going to watch on disney plus when it comes out. it was like it was a movie premier. strikes me that that's pretty unusual for a streaming service. has disney articulated how they'll use email addresses, data off the service to bolster things in their portfolio beyond just streaming >> reporter: look, i think disney is unique and it is all about the brands, that's what bob iger talked about. they have a direct relationship with consumers when it comes to theme parks, also have direct relationship when it comes to brands around marvel, pixar, "star wars," et cetera they haven't given many details on data sharing between different platforms, but we know there are millions that visit their parks every year
i expect that to be a real entry point for how they introduce the service, get it off the ground remember, they've already been offering discounted deals. you sign up ahead of time, get a discount on one or three years of service at the fanny vent event in augy got people to sign up. seems to have gotten some traction. >> i'm going for bed knobs and broom sticks, classic disney movie that's impossible to find. one of the things that powered the numbers were the movies, right? people going out to theaters for the successful films on the flip side, you've got this streaming service launching, incentivizing people to stay home, wait longer to see movies on the service. how is he thinking about that? >> you know, i asked him specifically if he thinks that the streaming service is going to cannibalize the tv business we talked in the past about the
movie business there will be a tv show on disney plus about "star wars," making them excited to see it streaming. iger explained yesterday and in the past that he thinks different platforms feed into each other you have a big movie that will make you want to watch the tv show at home, then they're trying to make movies such big events, avengers are part of the water cooler conversation, that people want to see those, if not the first weekend, within the first couple of weeks. they hope they'll feed into each other, and people will see streaming as alternative to tv or to say netflix, as an alternative to going to the movies >> julia, when should we expect the first subscriber numbers out of disney on disney plus, and should investors think of disney as setting the pace for all of the current wave of challengers
and how serious the impact maybe on netflix and others? >> reporter: this is a really important question is disney competing with netflix or is disney doing something different. disney is focused on brands, they're focused on family audience netflix is trying to be more like a tv alternative perhaps. in terms of your question specifically when we get numbers, maybe we'll get some with the next quarterly rumesuls they haven't been specific, and guidance of big picture expectations are so far down the line, they're not giving guidance for the first quarter or two seems like they want to give themselves some time to get the service off the ground before they give us any guidance at least. >> all right julia, one of the most important things from the week back to the markets. tech is coming off a record close. stocks on pace for the best month since june major averages dipping on trade headlines, trying to reverse
that jpmorgan joins us on the opportunities in what's a recent meld up for markets. happy friday, guys >> hello. >>seeing notes about chasing this, citing cyclical recovery, easing global political tensions, synchronized easing, defensive positioning. what about you >> so i think chasing might be a strong word. certain things have improved in the past month or so that are material i think we should pay attention. recession risk has gone down from say 40% odds in the next 12 months which was very concerning, and at the top of the range you would expect, down to something like 25 to 30%. you have signs that the outlook globally is stabilizing, and i think we're coming off a base where you've still got insurance against down side risk in september and october, you're probably adding some of that back all of this is still the
dominant macro theme, there's a symmetry in equities and credit, but the fact that macro is improving is opening space for higher expected returns and less defensive positioning. >> all right someone who's been net cautious, ben, before we get to steve, what do you need to see to solidify your confidence >> yeah, i mean, for us we put a lot of emphasis on earnings and the fact that when you look out into 2020, the expectations for earnings seem unrealistic. we haven't really changed that the contour of earnings is not that much better and we just think we're in a situation where if you have stabilizing growth and lower recession risk, markets will sort of look through the downgrade cycle we expect to come through for 2020. of course, if you actually get a change in that, if there's a material change to outlook, which is for a slow, gradual acceleration in growth in the coming quarters back to trend, if you get up side surprise to
that and earnings expectations themselves change, that's when i think you're opening a new era of up side risk. we're not quite there yet. we're just less defensive. >> steve, it has been a bit of a mixed picture for tech stocks, especially in recent weeks when you look at small and midcap names. do you see buying opportunities now, and if so where >> i think it might be premature, morgan, but you're right it has been a mixed picture. if you own microsoft and apple, you're doing great semis and hardware had good results, internet and software have not, particularly internet and a lot of midcap platform names like etsy and lyft and uber and shopify and so forth, it has been surprising in software space, multiple is still 36 times earnings on average. that can come down a bit more. internet space probably needs to consolidate a bit.
on the positive side, some of the bigger cap software stocks look interesting semiconductors, we're not willing to chase here. we have the economy potentially weakening, that's the debate early cycle names of semis and hardware have been doing better, but we think it is largely in the names. >> are you surprised by how much we've seen some semi names run up it is not like we're talking about full fledged recovery for many names, it is possibility of stabilization. >> i have been surprised, we have been underweight, last couple months did well if you're a semiconductor company with exposure to smart phones, 5g, cloud, like qualcomm, you're doing well. on the other hand, microchip or ti, more gdp type company with automotive and industrial exposure, you're getting hurt. we're seeing a mixed bag there there is a risk there's been pull forward of demand, due to huawei buying a year worth of components
we'll find out if that's true in the next three to six months the place in semis that's rocking is equipment companies, kla, et cetera that makes sense because china is still buying those products huawei can't buy components, but those companies are buying a lot of semiconductor equipment from u.s. names >> ben, is there deeper meaning to be read into xerox's run at hp, given where interest rates are, given the growth or lack thereof that we've seen from some older tech names? >> well, i think from an economist perspective, we grapple with this issue all the time, how real is the perceived pick up in technological innovation and adoption, and is that concentrated in certain pockets of equity space. we did a recent study on e-commerce, we find based on a battery of empirical measures,
e-commerce adoption is very high census shows growing from 1% to 11% of retail sales in the last 20 years, our measures show it could be twice as high as that i think we have broadly speaking more confidence in tech as a macro narrative, more confidence that gdp growth in the long term sort of goes back to historical levels, vis-a-vis productivity demographics are last favorable than they used to be, and that is concentrated in certain pockets of the equity space. in our estimation, 60% of e-commerce intensity globally is in three countries and three sectors. u.s., china, and japan, and consumer discretionary, tech, industrials. >> fascinating step. guys, we'll leave it there wish we had more time. have a good weekend. see you soon >> thank you >> thank you when we return, still more to come on the happiest results
on earth why shares of disney are getting a boost, and what the tie-in with aman anzomes for streaming wars still a lot more to come stay with us and i always had in my mind that one day the family car could compete in rallies and racing when the mini actually came out i said this is the one to do it.
cooperman said he is a big fan of the economic agenda and economic successes under trump, also said if president trump can't change his behavior, he ought to take a victory lap and not run again. i asked president trump for his reaction to the comments here's what he said. >> i don't know leon cooperman, but whoever leon cooperman is, i know of him, he can have his own view meantime, i'm making him rich and making a lot of other people rich, including the working man and woman. tell leon who i've seen but i don't know, tell him congratulations because he did very well with trump >> the president defending himself on economic grounds, saying the economy is doing well, that leon cooperman is getting rich, ordinary men and women are doing better under his economy, saying he doesn't know leon cooperman, sort of contradicts what leon cooperman said previously. said he has been at a private
dinner, discussed issues like amazon and whether or not it is a monopoly with an intimate dinner with just ten people at it cooperman seems to suggest he does know the president, the president saying he doesn't know leon cooperman, whoever that is. asked by reporters about michael bloomberg, former new york city mayor getting into possibly the democratic race for president. here's the president's take. >> he doesn't have the magic to do well. little michael will fail he'll spend a lot of money he's got some really big issues, got some personal problems, and he's got a lot of other problems, but i know michael bloomberg fairly well, not too well, fairly well, well enough, he will not do very well and if he did, i would be happy. there's nobody i would rather run against than little michael, that i can tell you. >> reporter: morgan, another presidential nickname, calling
him little michael, apparently mocking bloomberg's short stature. if keeping track in terms of billionaires, the president saying he does know bloomberg, does not into cooperman. >> looking at cooperman's comments to us, december 7th, 2017, went on half time and said he talked to potus, told him that the u.s. would be in recession now, he thought if clinton had won, but a top priority should be to unify the country. his response was i hear ya, not too likely to happen, too much anger. th that was december 17th. >> reporter: maybe he doesn't remember the conversation that he says he had with the president. he has dinner with a lot of people, talks to people all the time, even people he doesn't know well. maybe it is not a close personal relationship, but ultimately they've had conversations and this president is saying leon cooperman, whoever that is.
>> eamon javers, thank you as we head to break, look at shares of survey monkey getting crushed in today's trade, after earnings that i think a lot of people would argue didn't look bad. the ceo will join us exclusively to figure out what's going on with the stock and strategy next don't go anywhere. it only becomes more entangled. unaware that an exhilarating escape is just within reach. defy the laws of human nature. at the season of audi sales event.
keep an eye on shares of survey monkey, down now just over 8% post earnings. the ceo zander lurie joins us in an exclusive good morning >> good morning. >> so your growth top line looked pretty good, more than 20%. perhaps the guide was tepid. tell me, how are you thinking about the next few months in terms of growth versus profitability. >> thanks for having us on it was a great quarter, up 22%
year over year the enterprise sales revenue up 129% year over year, now comprises 23% of our total business we went public in september of '18 with commitment to grow the enterprise business, and we've shown some nice acceleration, and we deliver 3% operating margin in the quarter. we have been able to balance that top line growth with did he say palin -- with discipline profitability. you have to demonstrate you have product market and do it in a profitable nature. >> how is that effecting the types of decisions you're making, are you shifting gears, pulling different levers by deciding to show profitability versus investing more quickly, could you drive more top line growth if you wanted to, but viewing this as discipline >> i think it is a great question, jon. there's always roi, whether it
is r&d or on the engineering market and sales we are constantly looking at the metrics in terms of productivity we have new features and products to deliver, new marketing campaigns to launch, and building out the sales footprint, and make sure we hold ourselves accountable and have a board of directors that holds us accountable for delivering on roi. growing greater than 20%, delivering free cash flow. that was 29% >> tell me about sales force they were mentioned 22 times, you name check marked benioff and the op-ed. sales force did invest in your ipo last year. is this a case wherefore crm, sales force is your platform of choice versus sap which is playing with a competitor versus
adobe, is this a battle of platforms and you picked your horse? >> sales force i think wrote the book and they have hundreds of thousands of consumers i would argue hundreds of thousands need survey software if you have products or services you sell, sales force is committed to delivering right by consumers, that means you need feedback we made a strategic acquisition with get feedback, founded by ex-sales force execs and we wanted to deliver the best software and integration we can for the sales force ecosystem. sales force, microsoft, adobe, biggest efforts are sales force and microsoft now, and to say we're betting on those platforms, you bet we feel like we will pick sales force and microsoft all day, feel like there's a massive consumer base to sell survey monkey into. >> i want to shift gears three years ago today, donald
trump won the election to become president of the united states, stunned the world in part because so many of the polls and surveys out there didn't indicate that was what was going to happen. as we go into another election cycle, what's changed from a technology standpoint regarding accuracy and how polling is going for 2020 >> sure. it is a hot question, morgan, and an important one about 25 million questions are answered on the platform every day. we use data signs and machine learning to infuse as much methodology so customers can ask better questions when you ask about health care, you want to get good response rate and make sure it informs the decision you make, launch a product or election media campaign we learned a lot in the election about representation of where people were answering questions and used a lot of the things to make our products better, but nothing is perfect
elections are very volatile and difficult to predict i am sure the 2020 election will be more volatile than the 2016 election i think the message for everybody in the business world is really you've got to be asking questions of stakeholders, your customers, shareholders, voters, to make sure whatever call you try to make is the right one, needs to be informed by people's opinions >> asking the right questions. harder than it sounds. take it from me. thank you. >> thank you, jon. thanks, morgan >> cnbc partners with survey monkey for small business surveys. >> we love that. market will close in europe in a moment. let's get seema mody with a breakdown of today's action. >> hi, carl. a five day winning streak for european stocks, the 600 in jeopardy, technology and autos under pressure the last hour following comments from president trump on trade i want to pivot your attention
to daimler, taking a fresh leg lower after cutting a thousand leadership jobs worldwide, that's 10% of management, and follows several quarters of profit warnings. the stock down a half of 1%. luxury stocks in focus after weaker than expected results from cartier richemont the latest company hit by the hong kong protests. that's one of the lowest margins in the european luxury sector there. let's take a step back, put the date into perspective. on top of earnings, germany saw the biggest rise in exports in two years in september economists writing with today's data, technical recession in germany is not yet a done deal and we get a slew of reports next week, including eurozone inflation, industrial production as investors try to tease out whether the eurozone economy is
close to bottoming out jon, back to you >> seema, thanks. time for a news update sue herera has that at hq. >> i do indeed, jon. thanks so much here's what's happening at this hour secretary of state mike pompeo says nato is running the risk of becoming obsolete. he was speaking in berlin during a visit marking the anniversary of the fall of the berlin wall >> doesn't do the things it needs to do to confront challenges of today in a way that's effective if nations believe they can get the security benefit without providing nato the resources it needs, if they don't live up to commitments, there's a risk nato can become ineffective or obsolete a magnitude 5.9 earthquake struck northwestern iran, killing at least five people, injuring more than 300 others. many of those injuries happened when people fled in panic. iran's air defense force said it shot down an unknown drone in the country's
southwest. the news agency ran a short video, purporting to show a missile launched early this morning it said brought down the drone. tehran said it violated iran's air space. you're up to date. that's the news update this hour back downtown to you guys on "squawk alley. morgan, back to you. >> sue herera, thank you. two earnings movers on the gaming side to mention beat on top and bottom lines for activision blizzard are lower. take-two going the other way a lot more "squawk alley" straight ahead back in two. big day. by the way, she's the next mozart. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places.
let's get back to disney shares up almost 4%. iger saying the streaming service disney plus is, quote, ready to go, and coming to an agreement with streaming rival amazon to have it on the fire tv platform as well nice to have you here. >> i'm excited >> did you think this news was significant? >> i think every streaming service has to make the same play, every platform, every screen apple is doing it as well. they're already on roku. the best app on any roku device is apple app, says a lot about the roku platform. every streaming service has to make the play, cannot be restricted to one or two platforms, they have to be everywhere you see interesting concessions
around those moves and around content that disney has on the app. disney will run ads for starz to get rights back for disney properties like "star wars" and marvel i think you'll see these moves as they try to get broad scale and content. >> ads are becoming a chit in terms of leverage, you see that in netflix, too. what's the calculus that allows you to run ads or i am going to or vice versa? >> comes down to how the companies see the primary monetization model disney it is not just the streaming service. they can get subscription revenue, then go to a theme park, go to a marvel movie you're not going to understand what's happening in a marvel movie unless you watched the disney plus series, which i think he also said netflix has one revenue base they have to expand that and diversifying streams over time >> interesting how differently the platforms are treating
content streaming versus apps. we saw apple and amazon and amazon and google fighting over who got to have a native youtube app, who can sell content on the platform without paying a toll why do you think content is so different than software? >> i don't i think this is one of the most underemphasized pieces of the puzzle we have been talking the lead up of content deals how much is netflix or disney spending, what famous person signs a deal with apple. great. that's content now, the apps are coming, the user experience is coming, where is stuff going to be delivered about a quarter ago disney was saying we have to be ready at launch, worried the service will crash. iger says they're ready to go, that means they improved, did the work on back end tech. the apple app is not good, they have great shows, the app
doesn't remember your state across devices or what you have been watching. you skip in tretros there's a level of performance for liability user experience when the services launch, customers will start to expect i think you'll see differentiation there. >> you talk about streaming wars, especially some services start to launch, i wonder if the first battle is waged a year from now because to your point you can get the apple service with your new apple device, you can get disney with your verizon wireless subscription. the fact that you have different partnerships, and for many consumers, it feels like they're not noticing, they're not paying out of pocket. but a year from now, that will change. >> absolutely. reed hayesings said we're going to do things with neilson, the real battle is not subscriber numbers, they're all fake for now, everything is free, everything is rolled out with a streaming service or wireless carrier or something we're going to do nielsen numbers because the real battle
is intention what are you actually watching big change for netflix they're betting on being the default. you come home, there's still stuff to watch hyper drive starts playing, it will be fine, that's how i feel. diving into some of the other shows with bigger market are a bigger commitment, that's a tough ask. might be on the phone, might be a subscriber, are you paying attention. it will be a big battle, it will pay off in a year. >> speaking of big changes at netflix and others, the new move to password sharing. does it bother them? >> cable guys haven't been bothered by it at all. i don't understand why it is an alliance why do you need an alliance with biggest companies to fight for college students for sharing a password that seems asymmetrical. i think they're going to make a lot of noise i think it will be like the music industry curbing piracy. they'll do it or find something
easier. >> it feels like the bigger issue is churn my cable subscription, they locked me into a contract. if i cancel it early, i have to pay out of pocket to cut the cord you don't have that with a streaming service. i wonder if that will change. >> i think you look at the apple product in particular, the reason they made shows is not to get you to pay five bucks for apple tv plus, it is to get you in the door of the app and pay for hbo or starz or whatever channel is in there. i think it is confused the app doesn't seem to push you into that as much as apple might want it to but it is also easy to quit. the idea you're inside an interface you can allocate your dollars, i think you'll see more spend overall, people are able to make the purchase easily. >> 15 years ago, tech hated content, running away from it, microsoft and nbc and they're like no, don't want to do that any more
this shift toward engagement and attention seems to be the core thing that has changed the game, change tech's thinking of this for many, it is about data, but not for all. how are we going to be able to tell whether they made the right decision this time in making multi, multi billion dollar bets on content in getting attention. >> i think you have to separate the classic tech players from disney disney is a content company, making a big tech investment, tech bet they have to be on all your screens. you look at amazon, they want in the door, make prime more enticing, sell you more stuff. great. that kind of makes sense are they as successful as netflix? up and down. the one that's confusing to me is apple this entire project for apple started with we're building a tv, going to solve the interface of the tv, get rid of the cable box, couldn't do it, never built the tv, now made -- like i don't
understand how they started at we're going to re-invent this hopeless device that you hate and landed at the morning show i think that question for them in particular is going to have to break over time in terms of clear thesis why this is happening. >> maybe some hills are too steep to climb like a car, right? >> yeah. i mean, tvs are once easy to make i talk to tv vendors, they say it is a low margin business. we have to put software on the tv, track what you're watching, make recommendations, sell ads on home screens to increase revenue, otherwise it is a 6% margin on panels apple doesn't want to be in a 6% margin business. don't want to track you, sell ads, they can't come at it directly, i think they're coming in the side door. >> maybe if a car is too hard, they'll come out with apple gas stations >> i would love to see him get into big oil
that would be an amazing left turn >> great to have you see you soon we have more earnings to get to drop box shares getting crushed. that stock is down just over 5%. a lot more "squawk alley" after the break. stay with us have purchased our democracy. here's the difference between me and the other candidates. i don't think we can fix our democracy from the inside. i don't believe washington politicians and big corporations will let that happen. the only way we can make change happen is from the outside. for me, this comes down to whether you trust the politicians or the people. and if you say you trust the people, are you willing to stand up to the insiders and the big corporations, and give the people the tools they need to fix our democracy. a national referendum. term limits.
arlington national cemetery, our annual veteran's day show. today, we're going to be joined by some of the highest ranking female officers in the military, an incredible collection of ladies we're also talking to some helping those in the military make the transition from the service to wall street our studio audience is here ready to go, traders are here. we'll see you in about 15 minutes, guys. >> looking forward to that, scott. thank you. first twitter, now linkedin. eamon javers has more on spies on social media. >> reporter: this one got attention, saw the story of two former twitter employees charged with allegedly spying on behalf of the saudi government inside twitter. i talked to a couple of current and federal law enforcemen officials about this this week, they said social media is under attack by foreign intelligence services all the time. but one service you might not
expect is under attack is the most targeted, linkedin, because of the sensitive nature of the business and professional information that people put on there, foreign intelligence service i'm told can use it to target individual companies and government officials, find out who they know, setting up fake accounts in order to target those individual people. look at some of the numbers from linkedin i talked to the company about this they say they have been aware of the problem a long time now, have taken down quite a few fake accounts just this year, say they've taken down 21.6 fake accounts from january to june of 2019 they say most accounts they were able to stop before they were created as they were registered. ultimately they took down 2 million fake accounts before members reported them as fake, and 67,000 fake accounts after members reported that they were fake
2018, they restricted 24 fake profiles created by russian nation state actors. comment from linkedin, saying we actively seek out signs of state sponsored activity on the platform and quickly take action against bad actors in order to protect our members. i talked to a department of justice official about this this week as well who said that linkedin was cooperative with the u.s. government, feel they have a good relationship with the firm surprising you may not think of linked in as a hot bed of intelligence activity. nonetheless, officials inside the u.s. government and at linkedin are concerned about that >> makes a lot of sense, eamon, particularly with a lot of the networks, you have bad incentives as a user to accept connection requests from people you don't actually know. i try to be strict with that, but you don't know who the people are, if they're real people or trying to get a sense of what's happening in your
network, who you're connected to i wonder if they said anything about whether networks are looking to clean it up and encouraging people not to p engage with strangers. >> they're saying put what the security level is on linkedin, he said people are doing that, they want employment opportunities, they have financial incentive for a new higher paying job, and part of what your qualification is as a government official, what your security level is, he wishes people would knock that off for one thing, but yeah, there's financial incentive to linkedin. you put stuff out there for a better paying, more influential job. that's a lure for intelligence services they know you want money, might be disgruntled with the current job and can reel you in on that basis. >> eamon, after a week where airbnb said they're going to go back and start policing, the
notion of policing platforms that are supposed to be about scale where you don't police at all is completely going in reverse. >> reporter: ties into the broader question facebook is facing, what do social media companies owe to society at large. should they police truth and accuracy do they have incentive to defend national security or is it simply a profit motive all of that is swirling around silicon valley one of the former u.s. law enforcement officials said there were moresecrets in silicon valley than washington, d.c. that's why supervipies are targg silicon valley i am going to connect with jon on linkedin, see if he accepts me >> eamon is waiting for your invite >> all right mirror mirror, on the wall, whose the fittest of them all. a partnership with lululemon for
fitness startup mirror the ceo reflects on that, get it with us next on post nine. stay with us (vo) the moth without hope, struggles in the spider's web. with every attempt to free itself, it only becomes more entangled. unaware that an exhilarating escape is just within reach. defy the laws of human nature. at the season of audi sales event.
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of at home fitness brands. before i start getting to questions about the broader fitness market right now, you launched this mirror product just over a year ago. how many have you sold and how many subscriptions have you sold >> we have told tens of thousands of mirrors in our first year since launch. we are excited that we have mirrors in every state with users as young as young children. the diversity is exciting. >> how much of this is about fitness versus other opportunities? >> for me the broader vision is for it to be the third screen in the home. we believe you will have your phone, your television for passive entertainment and mirror for interactive immersive experiences starting with fitness and moving to fashion, beauty, telemedicine. >> you have a background in ballet. you went to harvard. where did the idea come from
and where did the backing come from >> i spent my whole life in health and wellness solving the problem which is how to make you feel better about yourself through health and wellness. i started here in new york as a dancer with ballet. i went to harvard. a few years ago i found myself like many clients really struggling to work out, a gym owner who didn't go to the gym. to me it was the wait list, travel to the studio, trying to get a baby sitter and not enjoying working out in a sweaty dark room. i started to think about at home. you were putting a large bike or treadmill into a small apartment or looking at a little screen. and i put a bunch of regular mirrors into my studio and my members said it was the best thing they had done and working in front of a mirror was integral to the experience.
from there i raised my first round of funding. >> the origin story sounds like how peloton began, frustration with scheduling and getting booked in class. is the competition other services like peloton or are you trying to bust the traditional gym membership model >> we think of it in two pieces. one are folks like peloton and others who are creating fitness equipment, bikes, treadmills, rowers. we put mirror in a new category. so for us fitness really is the first way to reach our audience. we view the opportunity as really to be the next iphone. >> so really in five, ten years fitness is 10% of the business, half >> i think under five years likely. >> how are you assessing the competitive landscape? we're talking about peloton. not all of them require expensive hardware to be purchased to sign on
subscriptions. >> absolutely. think within the near future you'll be able to access mirror content potentially without the mirror device. for now, we think mirror provides an incredible way of viewing content that's really unparalleled. >> quickly, if you can, is this anti-social? some people go to the gym to be seen. the mirror you're looking at yourself. >> certainly. i think our members are able to connect with our trainers and with each other through a wider range of social networks. so it's not uncommon for members to send emojis to each other, give each other a virtual high five or to chat with each other about their life outside of their workout. i think it's an incredible way to correct. for many people, that means working out at home. >> ceo of mirror, thanks for joining us. >> thanks for having me. markets have been in a tight
range. s&p basically unchanged. next week is going to be busy. we have powell on the hill. we have singles day to kick around, i think wal-mart earnings, as well. let's get to the judge. very special "halftime report" coming up next. serving america, protecting a nation, standing guard over the free world. on veteran's day, our nation is one, undivided in support of our troops at home and abroad, those who have retired, and those who are no longer with us. these brave men and now more than ever women stand at attention as today we honor their sacrifice. today live from th