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tv   Bloomberg West  Bloomberg  June 6, 2014 1:00pm-2:01pm EDT

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an >> live from pier three in san francisco, welcome to a vote bloomberg west." ahead, the clash escalates between netflix and verizon over internet speed. remove says it will not messages it shows to users blaming internet service provider verizon for loading videos slowly. this comes after verizon sent netflix a cease and desist letter demanding the company stop. since edwardar snowden released secret documents and governments and 29 countries have asked for access
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to its user data and some governments can do this without asking permission. vodafone is the largest wireless cowher -- carrier outside of china. mayor makes a new push for affordable housing. funnelest proposal is to $94 million in public money over the next two years into affordable housing projects in the city. he has called a lack of affordable housing a genuine crisis and it's not just in san francisco. many communities in silicon valley are dealing with the same issue. fcc ways creating internet fast lane, netflix has no plans to back down and its growing fight with verizon over internet connection speed. netflix will continue to display honest the -- on-screen messages blaming providers for slow loading videos despite the threat of legal action. this comes after verizon sent netflix a cease and desist
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letter demanding the company stop displaying a message blaming verizon's credit network for the videos loading slowly. in its letter, the netflix spokesman treated back -- with us now is todd o'boyle. as well is jon erlichman. is this really verizon's fault? >> clearly. broadband service providers are not upgrading their network to keep up with the demand. they are -- they're paying customers are giving them money to get the content of their chose debt there just their choice and verizon is not doing its job. some blame netflix for
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putting so much traffic out there. >> if you think about it, why do people buy broadband? so they can have access to the best content of their choice. if anything, shouldn't verizon owe netflix a finders fee for all the customers they are bringing to the market? >> netflix already has deals with verizon and comcast yet does not shy away from rattling their chains. is a good strategy? i'm personally not surprise that verizon would go after netflix because they care very much about the random reputation. there have been said -- about their brand and reputation. there were certain language about their network being reliable and fast. in terms of what netflix is doing, i don't know that this is just a netflix versus verizon story. netflix is testing something with some of their consumers to
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see if it helps the consumer experience. there is a handful in the grand scheme of things. getlix customers recommendations on the shows you can watch and you will be alerted when there is isp congestion in your area. netflix is trying to figure out of doing something like this, going behind the curtain and telling you what's happening with the technology, if that is something customers like. >> this is obviously a much broader issue. what is the solution? is it internet fast lanes? not, the solution i think is for the federal communications commission to write strong rules to protect whether they subscribe to verizon or are trying to get to netflix or trying to get to the bloomberg west website or trying to access common cause.org. all the deals we hear about with verizon striking a deal with
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netflix or comcast doing the same, there is a lack of transparency. consumers don't know what is going on so while we welcome netflix shining a light of transparent and what's going on with this website, we would much rather see leadership in washington to protect all consumers. >> more traffic to add to the is the newrange black" is starting a new season so what is the demand?? most-watchedas the original show. is it more popular than "house of cards?" >> if they give us the exact numbers we get answer that but they don't. they tried to say when they it initiallyrange" got more viewership and when they had previously rolled out " house of cards." in terms of all the viewership that has taken place surrounding that show, it exceeds their other originals.
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this is an important second season. this is a company that is clearly trying to use their originals to get more subscribers. i think you're not just seeing them spend millions of dollars per episode for shows like "orange is the new black," there is traditional marketing taking place around this program does they want to truly figure out if going down this road of doing originals like "house of cards" is going to help them with their goal of continuing to get more users. a uniquex is in position because they are not just creating the content, they are delivering the content. what do you think the responsibility of netflix is? >> i think netflix as an innovator should continue and the lack of strong open internet or net neutrality protections is a threat to innovation online. it's a threat to the way entrepreneurs bring new products to market. it's a threat to the way consumers -- what consumers may
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see and say online. we absolutely need to be working hard to make sure the great opportunity generate -- generating mechanism of the internet should be a source of innovation both commercially and in communities. o'boyle, and jon erlichman, thank you. we have breaking news -- uber's valuation source to a record high. it has a valuation of $17 billion, up from 3.5 lien dollars last year. the company hit the market for raising a $1.2 billion led by fidelity investments and sarah friar joins me now. we sort of thought this was coming but now we know it is confirmed. >> there was a lot of competition. reports of other people
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trying to leave this so fidelity seems to have gotten it. talking to a lot of different possibilities of $17 billion seems to be the can census -- the consensus. >> demand was very much there. notbsolutely, they were raising money quietly. they said they wanted to raise at a record-breaking valuation. the ceo said that last week. this was coming. >> he says this is about capitalizing for the opportunities we see at of ourselves. uber is still just driving people around but there has been discussion what else they can hold as far as delivering packages and taking on fedex. how are close are they to browsing to other businesses? >> i think you'll probably see more of that this year. money, one $.2 billion is a lot of capital and they can expand internationally
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which they have done a little bit of. to maybe putable more effort into fighting these battles with governments and to get intoons places where they have not been able to get into. i think we will see uber expand quite a bit this year. >> the bidding was so heated venture capitalists belt out. it seems like there is no limit. week aboutlking last the expectation that these companies are going to be worth more in the public markets down the line or is this a moment in time? saidcofounder of what'sapp earlier this week we should keep in mind the valuations are a point in time and don't reflect necessarily how valuable something as. >is.
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thank you so much. a year after the nsa revelations, what has changed? there is a transparency report released by vodafone next and you can watch us on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and now available on apple tv and amazon fire. ♪
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i am emily chang. it has been one year since edward snowden's nsa revelations and vodafone just released a report exposing the existence of secret wires that love government agencies to listen to conversations on its network in some countries. the report is one of the most comprehensive survey so far of government access to voice calls and other data moving across networks. vodafone is the largest mobile phone company operating outside
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of china with over 400 million customers around the world. we turn to the communications matter -- manager from -- what was your involvement in getting vodafone to release this information how difficult was it? we have been working with vodafone for a few years on this. we have seen telecommunications providers previously have government requests for data. what was needed was a global survey. are putting these on users around the world so it's incredibly important for us to make sure we got that global picture on what are these types of data and what type of data is being requested and what are companies like vodafone doing to
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protect the rest of users. >> this report reveals that government can listen to users conversations without asking permission in certain countries, right? >> that's correct. with theseat happens reports, governments don't ask companies for customer data and companies can either push back against it or they handed over. what we found in this report is that there are some countries the governments have direct access to their networks. that means that governments don't need a warrant in order to access user information. everything is on metadata. also the content of the communication is incredibly intrusive. this is going on without --
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vodafone is aware they have access but they don't know what type of information governments are taking from them and they don't know who they are targeting or if they are just gobbling up all the data. it's incredibly problematic that this is going on. vodafone themselves say they want this access to stop immediately. >> they know which countries have this access but they are not saying. do you have any idea? know necessarily for sure. i think if you read the report, vodafone did an amazing job of detailing all the surveillance laws in the 29 countries they operate within. from there, you can make some assumptions about what countries they may be but it's difficult to tell. we hope that vodafone does make that information public and that
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governments are more transparent about their set of balance activities going on -- about their surveillance activities going on. >> any idea how often this is happening? these are hundreds of thousands of requests. there is an endless appetite for this kind of information that governments want to collect print we suspect this goes on all the time. worknies like vodafone closely with governments in some cases to turn over this data. italy whiche in have the most requests. have 420,000 and that's a small country. and metadata house requests.
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and metadata requests. 600-6000 606,000 metadata requests. >> not much a shocking anymore. thank you so much for being with us. tetris is turning 30. we are looking at the impact it has had on the gaming industry to date and you can watch us on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and now available on apple tv and amazon fire. ♪
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>> welcome back to "bloomberg
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west." google has unveiled a new prototype tablet for developers with 3-d sensing capability. this is the first tablet to come out of google's project tango which is focused on developing mobile devices. the seven inch tablet will be sold to developers in late june for over $1000. google says developers are hard at work on his roger tango smartphone which was unveiled in february. today marks the 30th anniversary , the popular game created in moscow by 1984 by a russian scientist. it was inspired by his favorite puzzle board game was named after the greek word for 4 and tennis, his favorite sport. how to become one of the top-selling video games of all time? does thisof impact have on the games we play today?
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i have memories of fighting over the gameboard with my sister and my mom. that was 30 years ago. this game is still popular today? >> you probably were not even born 30 years ago. game. remarkably simple the challenge never goes away. what they scientist did that was different from what anyone had done before was he came up with something that involved geometric shapes that fit together nicely. tetra and eachom of the shapes as for blocks and seven possible combinations. they come floating down. there is always symmetry because there is for blocks at a time that are fitting into the puzzle. it's going to come out square ultimately. where he really had a breakthrough innovation was once youws disappear
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complete them. that's what kept the game going. you would fill up the screen immediately if you did not have the rows disappear which was a clever innovation. tetris spawned games like be jewled and candy crush. >> do you think a tetris user translates to the wider gaming community? i don't play other games but i might play tetris. gamingou look at the community, the hard-core console gaming community is about 250 million households. the cell phone community is 1.5 billion people. the pc community connected to the internet is about 2.5 billion people. tetris appeal to everybody although it has been on every single console ever made since the game was invented. the thing about games is harcourt guys -- hard-core guys
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like the simple games as well as the hard-core games. every hard-core gamer started out playing games like tetris and pong and casual gamers like them. this game has the broadest possible appeal. tetris haske survived for three decades but theyook at zynga and king, have one great hits but they cannot seem to survive simply on one great hits. is there a difference? >> i think for zynga, you are right. the more popular games that people have heard of are games like farmville and you can accomplish all you can a cop is in the game but poker has an unlimited life. "words with friends" has an unlimited life. i think the same with candy crash. it's the ones they keep innovating on the candy crush game, people will keep playing it like they have played bejeweled for 10 years. these puzzle like games or games like poker were every hand is a brand-new adventure have an
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unlimited shelflife. it's the farmvilles where you can finish building everything that have limited shelf life. >> have you seen evidence that the new ceo of zynga can turn this company around and get it back on top? >> yes, i think the problem with wasa is when marc spink us a ceo is he defined the company as a social games company -- mark pincus. he wanted a social element to everything but he wants -- but the new ceo wants to define the company as a game company where you battle other people which is not for a social. i think they will exploit poker more and make racing games. they will do things that are very antisocial. that's were the money is. it's a moneymaker. eye on them.ep our
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always great to have you. you can play tetris all weekend long. while the bay area is a haven for tech innovation, it's a home for residents of east palo alto. ♪
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you are watching "bloomberg west." the mayor of san francisco calls the lack of affordable housing in this city a genuine crisis but expensive housing is a real problem in silicon valley's death valley as well. to east palo alto for a look at how low income residents are struggling to survive in one of the wealthiest regions of the country. >> silicon valley is famously home to tech giants and billionaires. this woman ae to childcare worker at stanford university. >> did you take a nap today? >> with her husband and kids,
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she has been living happily in east palo alto for six years until an uninspected eviction order arrived. >> for homelessness to be a reality, for your family, i have no choice. her fight was against equity residential, america's largest publicly traded landlord doubted by billionaire sam zell. and late 2011, the company paid $130 million for her apartment complex, woodland park. they twice tried and failed to evict her for late rent payments then settled after she could show the required home repairs had not been completed. equity residential would not make anybody available for an interview. do you think the landlord wants to evict people like yourself? >> because they can make more money. they can have more people move in at market value rates. >> she currently pays around $600 less than the market value thanks to rent stabilization
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laws that have left east palo alto as the last low income refuge between san francisco and san jose. this bridge marks the dividing line between the multimillion dollar mansions of aloe alto and the affordable housing of east palo alto. thanks to the tech boom in silicon valley, that housing may not remain affordable for much longer. the median sales price for homes in the upscale neighboring city of palo alto is jumped over the past five years from around $800,000-$1.9 million meaning that young tech workers are searching out east palo alto and rents there are pushed up. >> california law allows a landlord in a rent-stabilized jurisdiction to raise the rent to market rates for a new tenant. that is the perverse incentive. >> for equity residential, it was illegal incentive to evict. in the first half of 2012, soon after equity residential or just woodland park, eviction notices served against tenets soarded
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from 14 in a single month to 311. they try to evict an attendant who was just $.75 short. >> what's unusual is the aggressive and rapid nature of it. most landlords other than woodland park not going to take -- going to evict a tenant on the second day of the month. >> many tenants are unaware of their rights under californian city law and in this largely hispanic committee, some residents fear retaliation based on their immigration status. >> you are saying mass displacement and seeing the fabric of this community changing overnight. >> the last affordable community in this region? >> yes. one councilman has belonged to the trinity for 30 years. he says rent stabilization was the core principle in which east palo alto was founded. >> as part of our history, part
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of who we are. we basically made a commitment. our city government will look after the most vulnerable people in this community when it comes to housing. >> he told the the city council had recently passed a new housing ordinance. it is designed to prevent landlords like the owners of woodland park from threatening behavior delaying repairs or harassing tenants in the small community that feels under siege to the rest of silicon valley. what can or should tech companies do to help communities like east aloe alto? liotti joins me in the studio. john has lived in east palo alto for 14 years. people don't realize that unless you're coming off the freeway, you literally drive through east
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palo alto to get to facebook. it is right there. it's a separate city. >> the 101 dissects our community. we are right in the middle of it all. >> how would you describe housing prices in east palo alto today? >> during the foreclosure crisis come our housing prices went $650,000ak in 2005 of down to below $100,000 and they are back up to the rate before the crisis. we have seen astronomical inflation in prices in just three years. >> how much pressure is this putting residents? >> it's tremendous. it's the worst i have seen in my 14 years in the community mainly because there has been such an infusion of capital. mostly people are buying up properties with cash. you cannot compete with cash. >> what can be done about this? >these are childcare workers and massage therapists and day care workers. east palo alto is very
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expensivedirt surrounded by great companies who are affluent. there needs to be a multisector approach where government and industry and marketplace come together to look at a combined approach to deal with the issue of affordable housing. >> how much does the tech unity help? business, not a nonprofit. they try to do it they can but truth be told, the best thing the tech economy can do for us is to look at some of the large systemic problems. it is connected to transit and real estate, policy, housing issues. the tech committee can provide the right kind of innovation to address these issues. >> you mentioned that mark zuckerberg has done a lot of work in the community. what kind of work have they done? >> mark's has done a lot of work with a local clinic.
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steve jobs wife has done work with an afterschool company for kids. the issue is we have to look at everything as a macro. >> over the last 30 years, would you say tec has done more harm than good or the reverse? >> a rising tide raises all ships. i don't want to say that the primary driver of the silicon valley economy is negative but i think tech can do more in terms of dealing with the working class. we are not talking about just the poor. it's the working class and middle class. i wonder whether the tech community wants the middle class and the working class to exist in silicon valley and if they do, more needs to be done. crime rate has dropped but there is still regular crime. from the early 1990's to now we have seen quite a drop. >> san franciso is seeing the same problems and the mayor is
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coming up with this new affordable housing mandates. based on your experience, what you think should be done? the challenges of san francisco will be the challenges of silicon valley. what will happen when these young techies get older and start having kids and want to buy a house? they will come down to our area so we need to be in solidarity with some of the actors work in separate cisco. actors who work in san francisco. >> will kind of work specifically are you doing? >> we are in the trenches print we are working with single mothers and students and helping in thisive and flourish economy by getting a foothold in the economy through jobs and any kind of housing opportunities they have. >> it's good to hear that you're doing that kind of work and thank you for sharing with us. thanks for joining us. you navigate your local music scene?
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find out how a new social discovery app can help you next on "humbert west." ♪
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>> this is "bloomberg west," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and now available on apple tv and amazon fire. jon lester one not be out of a job. to run ar is likely combined sprint/t mobile. he says it does not bother him if he does not get to run it. sprint and t-mobile are nearing an on a $32 billion deal that could be announced next month. know when people their favorite sports teams are playing, it's hard to keep track of all your favorite musicians and their touring schedules. it's harder to find new bands
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playing in your area that you might like. ticketb sees a great opportunity with their app. the president joins me that -- the president of the company joins me now. who is playing tonight? >> i don't know. i'm not going out tonight. if you brought up our app, you could find out. >>? how does it work >> it's an iphone app and looks at the music on your iphone and tells you what concerts are coming up for those artists and it recommends other artists based on the artist you like. >> i'm the type of person that y-z ornly go to a ja beyoncé but i don't know when they're coming. get casual potential concertgoers like me onto the app? >> we asked you to download the app. a huge business and concerts, about 30% of our business.
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our existinging to concert uses but most of the advertising we have done over the last few years has been focused on the concert audience. of thek about half people who go out and go to events, are going to concerts. that's 50% of the market, for us 30%. >> how much do you expect us to drive ticket sales? >> with aggie will definitely drive ticket sells that we are using it mostly as a way to drive engagement. we want people to interact with stubhub music. in addition to telling you what events are happening and making it easy to buy tickets, we give you more information on the artists and music samples and information on the venue, biographies and each of the artists including the opening act. it is not just a way to buy tickets, it's a way to get more information about upcoming events. whether they are artist you know or were recommended. >> why focus on music? sports has always been the
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and it'sne of stubhub 75% of our business. when we look at brand awareness, it's huge for season ticket holders and regular sports goers. the sports fanatic knows as well. it's about 90% of regular sports goers. , concerts or about 30% of our business but the knowledge that concertgoers have a stophub is not as high. ourave been able to grow concerts business more rapidly than the rest of our business for the last few years because we have been focusing on that area for growth. >> the nba finals are upon us in the stanley cup is around the corner -- what ticketing trends are you looking at? finals, we are seeing a huge amount of growth and sales.
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the nhl finals are outselling the nba finals 3-1. you have the rangers from new york and a big market and they have not been in the finals in 20 years. when you look at things like average ticket prices, there is a huge difference. the average ticket price sold on subhub for the rangers assisting hundred dollars. in los angeles, it's $800. those prices include all fees. >> what percentage of your ticket fees are bought by scalpers or people who buy tickets and resell them? >> the percentage of tickets bought by scalpers were ticket brokers is really very low on stubhub. we look at the percentage of tickets sold by professional ticket brokers versus individuals prayed the percentage sold by professional ticket brokers is more like 35%. the majority of what we sell are individuals or people making a
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small business of telling -- of selling tickets. >> that makes it easier for people like me, thank you for joining us. he is one of hollywood's biggest stars in front of the camera and behind the scenes. actor and director jon favreau joins us next. ♪
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>> welcome back to "bloomberg west." nameavreau has been a big in hollywood since the 1996 hit "swingers." he has directed "iron man" but his latest film export the ups and downs of social media. jon erlichman spoke with him about everything from drones to his friendship with elon musk brits started by asking about his own expresses with technology. generation is the generation that remembers life
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before twitter. it now sees the world and what's changed after it and we have seen a lot of good things happen and we have seen a lot of people make their lives very complicated. i have been on twitter for about five years. i am very careful every time i get on their. there is often cautionary tales about what happens if you are too emotional or have had too much to drink, think you're being funny or sarcastic. there is a whole different language that her kids generation understands better than we do. >> you sometimes pay the price for a negative tweets. in the case of your film "chef" there has been a lot of positive tweets and momentum especially from celebrity chefs. what does that do for a small town like this? >> this is a bit of an experiment to see if social media really has this much relevance as the marketplace seems to think. traditional marketing where you just dump hundreds of millions of dollars and two commercials
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still seems to rule the day. you see these huge weekends that are dictated by very big marketing machines. .i have been on the other side of this i have been part of a film that has had that kind of push behind it. the question now becomes -- can a word-of-mouth on that as well reviewed and touches a specific audience and touches them and i sincerely without a big marketing way or without a billboard, can the word-of-mouth spread things to social media? this film has bubbled up from 500cities to 70 screens to screens in over 1000 screens thanks to social media. >> you haven't cursed robert --ney to encourage -- did you have encouraged robert downey to join twitter. when it comes to using social media, what's the difference between how it ends up being used for a film like "chef" and how it gets used by big studios? >> with big studios, it's like nuts on top of a sunday.
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it's nice to have it but it would work fine without it. or an arte"chef" gallery or a standup comedian, that size audience in the independent film world, really is impacted by social media. >> we mentioned in elon musk. he is a friend. he was part of the inspiration for tony stark in "iron man." is he an investor in your movie? >> no, but i have become friends with them through the course of working on "ironman". "ironman2" at spacex. if you look at the film, the evil weapons factory was based there. >> tesla is also an example of a company that has benefited from social media. all the positive press has enabled them to avoid doing things like doing their own tv spots. i would love to know if you ever
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have any interest in direct a tv commercial for tesla? >> i am a tesla driver. i put my name on the list because elon musk was a friend and was nice enough to let us film at its factory for free. he did a cameo for us. i thought i would sign up for his little car. i thought i would make them feel good. i was one of the first people to get when it turned out to be car of the year. it's amazing and i sold my other car and i thought it would be a second card. i have not looked back. >> speaking of new technology, we know there is a push in hollywood to get faa approval for the use of drones and productions in films. ? what you think about that to helpse of technology keep a set safe is a good thing. whether it's having a digital double for a very dangerous stunt so you're not putting a human and harm's way or if you could eliminate the use of
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helicopters in precarious situations and replace them with a controlled situation with a remote-controlled vehicle, i think it could be good. it's worth exploring. >> your career progression is in part because of the different things you learned on the different films you have done. but you willhef" move back to a big production with "jungle book." what have you learned on "chef" that you can take with you on your next project? >> i realize how much fun i had at how much the audience seems to enjoy it what my tastes are and the things that make me laugh and make me feel good, i see in the audiences. when you go three studio developer and process, it's are easy to lose track of that. it becomes a big committee and a lot of people. if you speak from the heart and do something wonderful and sincere, i think it is refreshing in the marketplace. if you could come is nice to carry that sensibility into the big movies. the castade "ironman,"
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would put together in the tone of the film was the same tone i would use in an independent home and the same type of comedy and ascents had a casting. ended upof "ironman" being offbeat and successful and now there is a whole marvel universe. >> jon erlichman joins us now. i love it that he bought elon musk's little car. >> [laughter] who knew? note, 50,280 is the price in pounds for the tesla model s in the u k and elon musk will be there this week to deliver the first one. it's a higher base price in the u.s. because of taxes but they also have to ship them there. they are also adding some supercharger stations in the u.k. >> jon erlichman, thank you so much and thank you for watching
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"bloomberg west." have a wonderful weekend. ♪ ..
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>> this is bottom line, the intersection of business and economics with a main street perspective. leaders gather in normandy to mark the 70th anniversary of d-day. u.s. payrolls push pass their prerecession peak. and a look at the race for the triple crown. to our viewers in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines.

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