tv Bloomberg West Bloomberg April 1, 2014 11:00pm-12:01am EDT
jon, what are you expecting amazon to announce tomorrow? is there going to be hardware? is there going to be a streaming component? >> there has been so much talk about hardware. in the lead up to that event, they have had a couple of key content announcements. you highlighted the word about their original series and which ones will continue on. one example being a show that stars john goodman. today, they make this announcement tied to licensing content. people who use it will be able to watch past seasons of "24" and fox is bringing back another version of "24." you can stream that on amazon
later this year. at least on the video content strategy side, there are three parts. they want people to use that service so they will buy movies and buy tv shows the same way they do on itunes. if you really want scale in this business, if you want to make what you got a destination, you have to have original shows. they have cut a lot of licensing deals like this one with fox and pbs or cbs or nickelodeon where they got shows like "dora the explorer." you need to pay money for it and amazon has been doing that. >> speaking of those original shows, not a lot of people can name a single amazon-produced to show. larry, why hasn't amazon been able to make the hits that netflix has with "house of cards?" >> i think amazon has come out incredibly strong with their first wave of shows. netflix has been in the video streaming business for several years. amazon has just really jump into it so i think we are going to see some of the shows really start to pop. it is a strong first showing.
>> wt do we know about what the effect have been on the cost or the value of the kinds of shows you are making? we see netflix say there is rising content cost because of the competition. >> we are seeing netflix and amazon spending not what traditionally we see digital company spend, but what cable companies are spending. they are spending premium cable dollars for their programming. that is one of the reasons why the quality is so high. as a result, another set of competitors on the buyer side and that could drive content costs up. >> jon, what is the hardware side of the business? if amazon does come out with a set top box, they will be competing with apple tv, with google's chromecast. talk about the competitive landscape and where amazon fits in.
>> you have to be frienemies. i watch the amazon videos and use their service through roku so they have to maintain that relationship. a lot of people have wondered if you do see a box, will netflix be available on it? if it wasn't available on it -- netflix is one of the most streamed services out there so i think amazon has to realize that you can have a box and a business tied to that and you could also build out your streaming service which i think they have been doing for a few reasons. it helps their prime offering which obviously allows -- you get the free shipping. another factor is people are buying fewer dvds these days. from amazon's side, if you can get a robust service like the video service they have been building, maybe that is a way to save a business that arguably has been in decline because people don't necessarily go to amazon.com to buy as many dvds. they are more likely to get digital downloads. >> larry, you talked about a
higher for the kind of amazon products or cable-like products. is that about production value and therefore more likely to have an economic impact on the unions in l.a. and whatever it takes to make a show look prettier? >> it is about production value and the talent. "alpha house," which amazon renewed stars john goodman. he is a movie star and people know him. mounting a production of that scale is comparable to any show you would see on hbo or showtime or fx. there is a lot of runaway production from l.a., but there are also a lot of buyers making premium programming. it kind of balances out. >> aside from john goodman, in terms of production talent, who stands out most to you? who do they have on board that makes you confident that their shows can be hits even though they haven't really been hits yet? >> their creative team has come out very strong. they will have, not counting the kids series, they will have five adult series going this year if you include the four new ones and season two of "alpha house."
that is comparable to a reasonably sized cable network. a little over one year, they have mounted five long-form series with the quality of which is strong. don't forget about the kindle. we are talking about a potential streaming device but there is one product that is on the front page of amazon.com every day and that is the kindle. when you put millions of these tablets in people's hands, the ability to give them some original programming in conjunction with a prime subscription is a very powerful tool in amazon's arsenal. i think just the ability to offer exclusive original content on the kindle is a big selling point. >> thank you so much, larry tanz.
jon erlichman, thank you. tomorrow, we have cris carter, the creator of "the x-files." he is also creating an original program for amazon. he will be with us on a special edition of "bloomberg west." we will have a full hour focused on amazon primetime play. that is 1 p.m. eastern, 10 a.m. pacific tomorrow. it is april fools' day, so what tricks do some companies have up their sleeves? try not to get too distracted by all the april fools' day jokes out there. >> you have to read more carefully today than any other day. >> we will show you some of the best coming up. ♪
the help of a footwear company. they say it is the most innovative product yet. the car made of cardboard uses no gas and it also a great workout >> that is great. it is like fred flintstone but lighter. >> wouldn't that be great, if it were true? >> what? >> they are un-inventing the wheel. >> you say that now until facebook buys it for $2 billion. >> this one was pretty awesome. richard branson and tony fadell of virgin and nest announcing that we are all going to have our own personal nest on virgin america. >> you can control your own personal climate at 35,000 feet. >> i would sign up for this. >> you can create a tropical climate which would be great for me. you can create a chicago climate. >> on virgin, if you get over
one million miles, you can go to branson's island but now you can just adjust -- >> it is amazing to me that they spend time doing these things. we are talking about it so i guess that's what they want. speaking of the story that is not a joke -- tomorrow, microsoft is kicking off its annual build conference here in san francisco. you were at the announcement last week. another big conference this week. what should we be watching for? >> last week, satya nadella was here, his first public address. really separating of the announcements which are expected to come tomorrow. i think they will focus on possibly a new phone and a new integration with bing on the phone and a siri competitor. really trying to keep their argument that the microsoft phone will be a center of computing in the future. >> can you only use a siri competitor on the microsoft phone? >> yes.
>> part of the announcement from last week went to show that they're willing to work on other platforms. they're willing to work more closely with apple and not just on microsoft. >> we will see how the announcement works. what we know from the way the siri product works is that most of the computing is happening out on the cloud and not on your phone. theoretically, you could use other vocal search tools. that hasn't happened yet. we will see if microsoft breaks the mold. >> why do you think they're having these two press conferences so close together? why not combine them? were they trying to create some buzz or build-up, if you will? >> i think they wanted to take a little bit of -- it is monday morning quarterbacking. i think they wanted to take some of the notion from satya nadella's first-ever address away from the build conference so it would focus on product and focus on people developing for microsoft's platform. >> we will be all over that tomorrow. you will be at the build conference tomorrow covering it for us. >> i can never get enough.
>> we are looking forward to that. i want to talk a little bit more about the mobile payment startup clinkle. it is a company that has gotten multimillions in funding but it seems to be bleeding talent. the company confirmed to "bloomberg west" that the chief service and operational officer, andy rendich, is leaving after a long list of other executives have left as well. this is a company backed by andreessen horowitz and richard branson. i want to bring in adam satariano who has covered clinkle for us. you wrote a big exposé about the problems at clinkle. there are more executives leaving. what is really going on? >> after they raised a bunch of money from an a-list of investors around silicon valley, they have been tripping around. they have had a lot of staff departures and delays in getting the product out. they even had a security breach. we read a lot about the startups as they go out the door getting a billion acquisition from
facebook or google. this is the other side of the spectrum of a company that is really struggling. >> the failures or difficulties of a small company with a couple $10 million of backing is mildly interesting. i feel like this is emblematic of the era we are in. it is reminiscent of the dot com era, but also a startup with tons of big name funding that just seems so silly on its front. is there more to this than silly? >> there is an element of this easy money moment where this guy, lucas duplan, has an idea and goes around pitching it to people like richard branson and andreessen horowitz and everyone throws money at it. there is a fear of missing out and everyone gives a little money in the hopes it will be
like a whatsapp. >> what was it about duplan? how did he get these meetings? did he have any kind of a track record? i can understand like something like color, the company that was founded by bill wynn, who sold eight companies before that company. he got $40 million and it didn't work out, but i do understand why they had faith in him. what's so great about lucas duplan? >> he came out of stanford and he was -- his advisor was the president of the school, john hennessey. he was in the computer science department. he was attacking a big problem. the idea of being able to make payments with a smartphone is a compelling idea. he got the meetings from -- my understanding is that peter thiel was interested and after he invested -- he had co-founded paypal. i think other investors thought --
>> don't want to miss that one. i would love to see his deck. i would love to see the investor deck to convince these people to write checks. >> we do have a statement from clinkle which i should read about andy rendich leaving. they say, "we are adding users by the week and remain focused on hiring. we wish him the best in his future endeavors." we wonder if this thing is ever actually going to -- >> it is not available to the public so these are beta testers that they have. until they can get a product on the market and maybe a year from now we will see as a big success, but right now they are struggling. >> all right. thank you. we will be right back after this quick break. ♪
>> i saw one headline about your book is less leaning more sleeping. also playing off of cheryl sandberg spoke only man. is that a fair way? >> cheryl has been a wonderful influence. i think leaning is really about me dealing with our own inner doubts. daring to dream big. completely consistent with what i'm saying which is why we need to lean back. we need to recharge ourselves and be more creative. but added premium is creativity. when we are burnt out, we're less creative in we goodyear more subtle things. >> when it comes to continuing
to build the huffington post, what you want to do there and how do you plan to fuse the things you learned in this latest stage of your life? >> definitely making the changes that i started describing in terms of the joe, and meditation and breathing classes. also, we are at now 95 million around the world.
we have thriving coverages in each country. we're looking at this and where the new ways of doing things in each country are. >> going viral does not mean mission accomplished. is that not the ultimate measure of success? >> the value is not just how important it is and how you obtain that. so i think it is very important. to really look at more carefully at everything and why it is going viral. >> we heard her take on steve jobs and sheryl sandberg, but what about her sale to aol and the work usually ship?
>> you're watching bloomberg west where we focus on innovation and the future of business. arianna huffington sold the huffington post to aol for $350 million just three years ago. what is your relationship like now? and what does you think of companies like up worthy? >> it shows how media has changed. when i was young, before you were born, the headlines were
supposed to be the ones that were about blood, gore, and destruction. the tagline which was all bleak. in the huffington post, it is generosity, compassion, ingenuity, and the stories that people want to share. that is a very different environment. competition, are they good or bad for the media business? >> i do not think about the media entities as competition. i like to run my life and my
business. i don't try to dance better than anyone else. i try to do better than myself and >> by 2017 the media business will either double or shrink. and of contents i can come out of nowhere. what do you think of that? >> is a very different environment. it is very hard at the moment to create a destination site. it comes to sharing. the huffington post was the last major destination site's 2005. at least, our homepage is very well trafficked. >> now that aol is evolving to more of an ad services business and not so
much a content site, what does that mean for the huffington post? how much will you will continue to support them? >> the huffington post being acquired as been great for both. we are able to expand internationally, and launch a streaming network, launched many new sections around the issues of how we live our best lives, and we can grow because we have innovative media and the company has been a leader. we keep creating, and in advertising, we're launching
dedicated sections that put the spotlight on good things. >> i am curious, in this stage in which your thriving, how you view selling the huffington post to aol three years later. how do you feel about that decision, and what is the state of your relationship with tim armstrong? >> fantastic. i'm glad that i made that decision. it would not be anywhere where it is now. everything is moving so fast, and you to be able to innovate, to grow, and to be ahead of the pack, and we are able to do that. >> what is the future of arianna and arianna huffington, and huffington post? what is next? >> we will continue growing internationally. we have plans for india, for the middle east. at the same time as the world is looking to redefine success and what a successful life is and how we thrive. our coverage has been amazing
with multiple sections on parenting, divorce, things that our readers and viewers love. and we now get more traffic than our politics and news sections. >> arianna huffington, cofounder of "the huffington post". on her book tour. coming up, how is the country's second largest school district giving each of its students and ipad? take a look at the $1 billion plan next. and you can watch us streaming on your phone, your tablet, or bloomberg.com. ♪
bloomberg.com, and apple tv. how do you take the country's second largest school district and bring it into the digital age? it is all about the tablet. last summer, l.a. started to provide every student with a tablet. but there are some headaches. willow bay goes inside the city's new, high-tech classrooms to find out how the tablets are changing the way kids learn. >> i am excited to be here with you. are you ready to get your ipad? >> yes! >> it is a bold, billion-dollar initiative. every public school student in los angeles gets and ipad. >> we wanted them to have technology that was modern. we want the fundamental right for every student to have that. >> each is designed by pearson
and aligned with common course standards. before the kids got their hands on the tablets, teachers got a look through a series of training sessions. >> any questions? >> in september, the ipad rollout began in 47 schools. >> we are going to learn. >> we are going to learn how to do math. we are going to learn how to write our names. >> can you put the ipad in your backpacks? >> no! >> do they go on your desk? do they go on the floor? can you spit on them? >> no! >> the kindergartners follow the rules. the older students got creative within a week, 300 high schoolers reconfigured the devices. >> they wanted to personalize the device so they can have their youtube and facebook. those are things that we are not currently permitting. >> students can no longer take a tablet home, a quick fix for one of several hurdles plaguing the rollout.
still, the superintendent insists these are manageable bumps in a high-stakes transition. >> we needed an alternative to books and paper. so textbooks, they are static. the notions of students being able to have current content is what they will face when they go to university and college. >> this year, another step forward. ipads for 38 more schools. when the plan is completed, l.a. will be the largest district in the country to equip students with and ipad. >> that was willow bay. interesting to see that plan and how it is rolling out. technology is not just helping schools. it is also taking up adult education. >> we have seen this in a lot of different arenas. all of the different companies trying to find different ways to find targeted education, not just this traditional method. helping people figure out how to navigate the modern careers and the changing economy. >> people who are in high-tech
stuff get paid 17%-20% more than other employees. there is a financial incentive to acquire these skills, coming from the bay area economic institute. i want to bring in the ceo of a company called treehouse, which teaches anyone how to design websites or mobile apps. your nest now via skype. talk to us about your business. you started out focusing more on schools and students. now you are focusing on businesses and adults. >> we have almost 70,000 students right now. most of them are adults, folks that are electricians or plumbers or baristas learning how to code and making good money on the side. >> in terms of the business
model, do you guys get to a point where the financing is better? or is that only for accredited programs? >> we only charge $25 a month. we try to completely go around any government funding at all. we would like this to be less than cable for people every month. >> talk to us about some of the companies you are working with now. you work with twitter, airbnb. what do those companies get? >> a lot people need to cross train. they are hired as a designer or developer and they need to add another skill set to their repertoire. treehouse is a great way to do that. you do not have to go to a physical conference or a workshop. you can learn over lunch or at home and add a completely new skill set to your abilities.
trade. if you can afford university, that is great. i do not think that should be the default status for people in the future. >> talk about some of your success stories. have you seen people change jobs because of the skill that you are helping them learn? >> yes. it is amazing. i feel so honored and proud to be a part of all of this change. we have a student named russell who was an electrician. he started having trouble paying his mortgage and feeding his family during the great recession. he discovered treehouse and it took him about six months to learn the skills. now he makes websites on the side and he can pay his mortgage. that is an amazing example of someone who is retraining and doing it on the side. then we have people who completely changed careers. you have people doing administrative work or even factory work who are now web designers and web developers. it is amazing. i think that is what is so powerful about the times that we
live in. you do not need a very expensive, high level education to do this. anyone who is driven and intelligent can do this. it is very exciting. >> one of the things i love about your service is that for every gold subscriber you get, you donate an account to a public school student. tell us about that. >> i have been a big fan of toms, the shoes. i used to buy them because i knew someone would get a free pair of shoes. it just hit us one day, we can do that for education. why don't we help fund accounts for schools by doing the buy one get one model? it is fun. i am thankful that we can do that. >> i look at the cost that you guys charge for students and the prices that some of the online, for-profit companies charge for an education and we are off by a factor of three decimal points. what is it about those traditionals offering online education that makes it so
expensive? is that a ripoff? >> i think it is a ripoff. they are preying upon people's believe that accreditation really matters. when you are looking at an online degree, it does not cost the university what it costs to deliver that degree in person. it just does not. if you are looking at getting an online computer science degree for about $50,000, it is almost insanity. we can make someone job-ready at treehouse in about 6-8 months for $25 per month. you can do it with kids, with a job. we believe there is a fundamental disruption happening to the educational model. frankly, the traditional universities are scared to death because they know that this is changing.
it is better for all of us on the receiving side of this, that it is possible to get an education now. it is a scary time for traditional universities. >> education does not stop when you leave college. thank you so much for staring -- for sharing your story with us. social, mobile, and crowd funded. we will be uncorking some innovative wine tech next on "bloomberg west". ♪
>> a good way to go. >> you like your wine. this segment was your idea. what are we talking about? >> an interesting business model. making great wine more accessible through crowd funding. kickstarter, they sold 10 million bottles of wine last year. >> is that a lot? >> it is more than one dollar per bottle. talk to us about this business model. >> we are crowd funding winemaking. americans pay about twice as much for their wine as europeans. the winemakers are giving us a tough deal. >> i have always heard winemaking is a hobby for rich people and it is not profitable. >> that is true. the joke is, "the way to make a small fortune is to start with a large one." >> i was going to make that joke. your business has some serious numbers behind it. you have members that pay up. do they subscribe to a particular winery or do they go across --
>> we have 200,000 around the world who put up about $18 per year. the numbers make about 10 million bottles. the business is only five years old. it is growing rapidly. >> for the independent winemaker, how profitable can this be? >> most of them are barely making money at all. they get to make some proper money this way. the flipside is that they can spend 52 weeks of a year making wine. right now, you spend 17 weeks, which is a bum deal. >> talk about the process of getting it to customers. how is it different than a wine club? >> it is exactly the same in that, in the end, fedex comes and drops it off. >> there is also the aspect of marketing. that is a substantial cost in america that is widely understood. when you make a $100 buy on a bottle of wine, the cost to make it is not that great.
>> a $100 bottle has about $10 in the cabinet. it has $90 of stuff you cannot taste. but if you are crowd funding that wine, you do not have to pay that $90. it is a similar principle to education. it does not cost anything like the kind of fees that are being charged. >> when you look at these marketing costs, why is europe so different? we have seen european winemakers come in. that was certainly a marketing effort. why is the cost of yours so great? >> because the laws in america are written to protect the distributor. the two important people, the winemaker and the wine drinker, are being screwed. the people making all the money are the guys in the middle, who could be left out of the loop if not for the law. >> naked wine founder and ceo.
stay with us, because it is time for the byte, where we focus on one number that tells us a whole lot. i am guessing we will talk about wine today. >> 4,230,000 tons. those were the preliminary figures last year. it is up five percent from the previous year. >> so we are drinking more. >> why don't we help that problem right now, since it is happy hour. >> not for you, john. it is not happy hour in l.a. >> john might be fine. have you tried this chardonnay? how is it, john?
>> ok, great. if hoda and kathie lee can do it, so can we. >> through the power of virtual reality technology, i can drink with you. >> tell us about this wine. >> it is made by a guy called scott peterson, which is the one made for kendall jackson. >> it tastes a lot like handle kendall jackson. >> have you discovered new wine that you have not had before? >> absolutely. there are so many talented winemakers. most of them, their product does not get to market. that is why we are here. >> thank you so much for bringing happy hour to us. 11:00 a.m. in the morning. john, cheers. thank you all for watching. we will see you later. we will have amazon, a special show tomorrow.