>> from pier 3 in san francisco, welcome to "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i'm emily chang. every weekend we'll bring you the "best of west," the top interviews with the power players in global technology and media companies that are reshaping our world. well, this week, the two biggest cable operators in the country decided to join forces in a deal analysts say is shocking. comcast swooped, in agreeing to buy time warner cable, for $45.2 billion. both boards have approved the deal but they a face lengthy regulatory scrutiny. if it goes through, however, comcast will have sealed its

dominance over the cable industry. it also potentially ends a battle by charter communications, the fourth largest cable operator, to take over t.w.c. i spoke with our senior west coast correspondent, jon erlichman, chief washington correspondent peter cook, as well as bloomberg news reporter, alex sherman, about the deal and started by asking jon how it all came together. >> charter had this great interest in doing this deal with time warner cable. time warner cable wanted them to pay more money. charter was talking to comcast about the possibility of comcast acquiring some of the assets of time warner cable and along the lines they decided comcast, it's a better move to get bigger than everybody else and have control over marks like new york and los angeles and chicago, philadelphia, the d.c. area. they truly are the biggest player in the cable business in

the united states. >> right. but is this deal going to go through, peter? the regulators made it clear with at&t and t-mobile they wanted four wireless carriers. is it going to be any different with cable companies? >> well, it is because they are different businesses. yes, the government is going to scrutinize this very carefully. you get number one and number two joining together, that automatically raises a lot of flags here in d.c. because there is that full spectrum of competition from the satellite providers and google and the things over the internet, a lot of folks i'm talking to say this is going to be looked at a little differently. but at the same time they are going to ask a lot of comcast. they are going to ask them to divest subscribers that would put them over the 30 million mark that has been the magic number. they are going to ask them to do a range of things with regard to net neutrality. this is going to be a difficult process and it's not a done deal by any means.

comcast is making the case in favor of this from the competitive standpoint, but there are folks in washington who think this will be l get done although the conditions may be very painful for comcast. >> we spoke with the former president of cnn earlier on bloomberg television. i want you to take a listen to what they have to say about this deal. >> these companies have to get as big as possible as fast as possible in order to keep their programming cost down, in order to create even more economies of scale and marketing back office systems, all of that stuff. >> alex, i want to bring you into this. we've been talking about apple talking to time warner cable about a new deal for apple tv. what does this mean for innovation in the cable industry? does that slow this down? >> there is argument it could speed it up because comcast technology is superior to time warner cable. you make them bigger and give them more resources and bigger scale, you can get more customers on the same page as far as expediting the way that people watch television.

comcast has guides the x-1 and x-2 they are called. they are state of the art video guides. they look like netflix or amazon prime than your cable grid you are used to. you add on a lot more customers to that and it's possible that many more people can have a more advanced television viewing experience than they can today. >> however, i want you to take a listen to another thing that jonathan kline had to say about how monopolies impact innovation. take a listen. >> the downfall of monopolies is that they take their audience for granted and that is an enormous opportunity for newcomers to come in. time warner loves to say to time warner customers, don't leave us. we have this cool new apple thing coming down the road. the problem is apple doesn't have content relationships. >> jon, what does this all mean for apple?

>> i found myself thinking today about walter isaacson's book on steve jobs and the comment where steve wasn't that big on paying for cable, decided i'm going to sign up for comcast. and then after signing up, he called the brian roberts, the c.e.o. of comcast and roberts said steve told me it sucks. that's a reminder that yes, comcast does have some cool technology and brian roberts does think about putting out a more innovative service. but most of us view the cable companies as slow and trying to squeeze us for money and have been hoping there might be some new great type of tv-watching experience that is more like the experience you have on your phone. i think that's why a lot of people have been pointing to apple. as bloomberg has reported in apple's talks with time warner cable, the challenge apple faces

is breaking up that cable ecosystem, being able to sign competitively priced deals with all the content players that are similar to the ones that the cable companies already have. >> now jon, you also did a big interview with disney chairman and c.e.o. bob iger. disney owns nbc. i want to talk about the content perspective. first take a listen to what iger had to tell you in that interview. >> whether this consolidation or ownership of the existing multichannel business changes, we're going to be as in demand as we've been. you can't go after the multichannel subscriber without offering them our product so it doesn't really mean that much to us. >> given comcast also owns nbc, peter, that adds another wrinkle into this whole potential deal. how does that play into this?

>> it's a big factor. they are not a straight cable player. they are a content provider as well. it's an important wrinkle and it's one of the factors that will make regulators look at this differently and why the stakes here matter more than cable bar. one thing very important to remember is the consent decree they signed with the government when they took on nbc, they agreed to do certain things in that deal, things to promote more competition in terms of programming and expect they are going to have to follow that same roadmap in this deal. perhaps they might have to exceed that to win regulators approval. does it become too painful so it becomes less attractive to them. right now they are making the case that it is competitive. they have committed to do some of those things but not all of them. >> comcast did overcome hurdles when they did buy nbc, initially. alex, what do you think? how does this actually all play out?

>> one important thing to look at is there is no breakup fee in this deal. you could interpret that several ways. one, you could say that's confidence on both sides something can get done. if regulators did step in and block this, neither side would be paying anything. in a way, though, it also blocks out charter. because i think charter would have seen the breakup fee and said ok if time warner cable has to pay comcast, maybe we can make a case to time warner cable shareholders we're the better option. without the breakup fee it's going to be very difficult for charter to get in here. they can't pay $160 a share. they haven't up to this point. it's better than a 50/50 chance at this point that comcast will proceed and divest some subscribers and move forward with the deal. >> my partner, jon erlichman, our chief washington correspondent, peter cook, and bloomberg news reporter, alex sherman.

up next, protecting critical infrastructure from hack attacks. the white house releases new standards, but will companies follow through? ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. on wednesday, the obama administration released new cyber security guidelines designed to get banks, utilities and other essential services to improve their defenses against hackers. they outlined basic voluntary standards they can use, but this framework doesn't include financial incentives to help companies improve their defenses. our editor at large, cory johnson, and i spoke with whitehouse correspondent, phil mattingly and ken bentsen, president and c.e.o. of securities industry in the financial markets association from new york. we began by asking phil, could this be a game changer? >> i think ken would have the perspective that this is a nice start but it is not anything

that is really going to change the game, at least as it currently stands. it is a group of best practices, also a place where people with communicate and find best way to counter these cyber attacks. missing from this release, incentives to get big companies like the banks that are members of ken's organization to want to come in and participate. they have to pay for infrastructure. they have to be careful about sharing information. none of that is addressed here. until that is, it is going to be difficult for companies to jump all in. >> ken, what is your take on this plan? what kind of incentives are you looking for? >> i think i would be more robust than phil, not to contradict him. there is more that needs to be done including acts that congress needs to take. we have to remember that the financial services industry has spent a tremendous amount of a

money in developing systems and protections. we know there is more to be done. we're only as strong as our weakest link. these standards will begin to spur, not just looking at the financial sector, but across all commercial sectors where we think there is more work that has to be done there. we view this is a positive development. >> the financial services industry sees the least amount of successful hacking against it. what does the financial industry understand that places like, you name it whether it is target, yahoo! or twitter, they have all had issues with hacking? >> we look at it from a markets perspective. there are so many ways to come into the system that again, you're only as strong as your weakest link. what has happened in the case of target and neiman marcus that there are risks. that is why we think this needs to be a top priority for the administration, for the

congress. it is a top priority for our members and our organization. >> so here is my question. is it really the responsibility of the government, the federal government, to give a company like target incentives to make their network more secure? shouldn't they as a company make that a priority? >> you would think they have enough incentive. other companies look at what happened to target and neiman market as well over the holidays, they have plenty of incentives right now but maybe they might need some guidance from the white house. >> how are companies like target different from utilities and financial services companies? >> it is an interesting question, emily. i think in the grand scheme of things, at least how the administration views it right now, they are very similar. ken's point, a key point you hear from administration officials, as long as there is a weak link there are major problems. what happened over the last couple of weeks is a major problem and maybe a leading indicator of not only have these

attacks been bad for a long time, but perhaps they are getting worse. perhaps if people like -- members of congress, if they can't find some type of legislative fix, a key component that is not addressed because the whitehouse can't do anything about it, these problems are going to continue to snowball. what you see with target and neiman marcus, people are pointing to them and saying we have a weak link here. as long as they exist, we have major problems system-wide. >> ken, you have actually run experiments where you're testing out a nightmare scenario. you call it quantum don 2. what is the scenario? >> they are working with our regulators, with the government, with the treasury department across the financial services industry. we looked at what a cyber attack on the equity markets would look like even to the point where you have to close down the markets.

it is not so much about incentives. it is about the need for better coordination between the industry and our regulators. the need for better information sharing between industry participants, market participants, between market participants and the government and the government and the markets as well. some of that is where congress can come in and provide liability protection. when the industry is sharing information about an attack or sharing with the government they don't trip other regulatory rules that are out there. >> white house correspondent phil mattingly as well as ken bentsen, president and c.e.o of the securities industry and financial markets association. coming up, more young people watched "the walking dead's" fourth season premiere than the sochi olympic games on sunday. we talk to amc's president about the hit show next.

>> welcome back to the best of "bloomberg west." i'm emily chang. amc's hit show about zombies, "the walking dead," faced tough competition opposite the winter olympics this week. but in its fourth season debut, it beat out the sochi games among young adults while drawing its second largest overall audience to date. our west coast correspondent, jon erlichman, spoke about the program's success as well as other amc programming with charlie collier, president of amc. >> you mentioned in your description it is a zombie show, but i think it resonated more broadly because of some of the themes that have little to do with the zombies and more to do with the relatable elements, the human drama. if you were the last people on the planet, you would have a lot of decisions to make. would you stay or go? would you lead or follow? would you hunker down and see if your family returns or go out and look for them?

it is quite relatable in the context of survival. >> with all those twists and turns, people like to talk about it. what i find equally impressive, you guys have a show called "the talking dead" which airs after "the walking dead" where you talk about the episodes. i believe on sunday night you got close to 6 million viewers. 5.9 million viewers. that is the kind of number that most people in cable would crave to get. does that speak to the nature of this show? >> i think you nailed it. there is something about live event television despite much press, alive and well. you look it a for what the water cooler aspects are "the talking dead," which really is a promotional program, it brings together all the sentiment about that live event. sure. i think the beauty of that is it is a show that serves fan boys well. we saw so many of them speaking online we thought we would bring the conversation to the television.

>> in other words, even though netflix can have success with their original strategy and saying, here are all the episodes at once. you guys stretch it out, one here, one there, and then talk about it. and both models can work? >> i think there is something to anticipation. i still believe that if you look at "the walking dead" and "the talking dead," it is a week of being a part of something. then you look forward to the next one. obviously, there are many great ways to catch up on "the walking dead" after the live event. it starts literally the next day. we have so many partners who watch on demand. with electronic sell-through and all the other opportunities right through to the binge. we ran against the super bowl. we had a marathon of "the walking dead." that did very well also. there are all sorts of ways -- we talk about it as an

ecosystem. there are all sorts of ways to nurture the ecosystem. i used them all to build anticipation for the live event. >> one of the differences between this show and others that you have, is you guys are the studio behind the show. that makes me wonder, what is the longevity of this show? you guys are talking that having a companion series down the road. what can you tell us about that? >> we look at the show. there is a ton of stories to tell. there is a lot more character. you saw it in the backstory about michonne, one of the characters, this week. the greater appeal these characters could go on for a long time. i have a partner who says that we think the zombie apocalypse could go on forever. i do not know about forever, but there is a lot of stories tell and a lot of character to develop. we have a writing team, starting with robert kirkman who created the comic book. it is well past its 100th edition.

it is about the relatability of the human condition. obviously those stories can go on literally forever. >> a long time. beyond that, before we go, beyond zombies, that are your next big shows? you have a few coming. "the turn" is a revolutionary war drama. do you get butterflies in your stomach when you guys have set the bar so high with some of your other programs? >> i heard you mention your children. i have four. i love them all equally and differently. i would say the same about programming. the beauty with what we have done, whether it be "mad men," "breaking bad," "walking dead," "hell on wheels," we have been eclectic by design so for us to move from "the walking dead" to a story about the first spy ring in the american revolution is pretty natural for us and the creative talent on both sides of the camera for that is as strong as anything we have done. i can't wait to share it with the world.

>> jon erlichman with charlie collier, president of amc. another top story this week, apple is set to introduce another tv set as soon as april. they are also in negotiations with time warner cable and other potential partners to add video content. this is according to people with knowledge in the matter. i spoke with bloomberg's peter burrows. >> we're hearing it could be announced around april and ready in time for christmas. you're right. we're hearing talk of a new interface that would make it easier to use for people, but also the content i think is going to be key. >> would this be vastly different from the apple tv box that we already know? >> we don't know. it is not apple's -- they don't often come out with something radically different on itunes. it is probably -- again, content is really what they have been missing. it is still a hobby relative to the size of apple.

they have referred to it as a hobby-esque product. if they can get it, so they have all time warner cable content on there, suddenly it is a place where it can become kind of a primary viewing vehicle for people rather than just for netflix or just for a few of the different channels they have on there now. >> we're hearing it is going to have a faster processor and will be easier to use. the pressure has been on apple to come out with something new. it doesn't sound like this is really it. >> right. even in the tv world, we have been hearing talks for years that they are going to come out with an actual tv. that is not what this is. they have a lot of big projects in the works. they are currently working on iwatch. we have been hearing talks. they have been hiring sleep experts and fitness experts. clearly that is a major effort for them. we'll see whether this is an

evolutionary improvement of a fairly minor product for them or whether this is when they really start to craft the living room in a big way. >> what are we hearing about a real television set? people have been saying this is coming out any day now. >> they have been saying that for three years. who knows? i'm clearly -- apple has the wherewithal and talent to look at a lot of things. i'm sure there are people working on a television somewhere inside apple, but there is lots of questions. it seems like sometimes the street wants margins. sometimes the street wants growth. clearly a tv would cause a margin problem for them. a profit problem. >> bloomberg's peter burrows talking about apple. we'll be watching to see how a comcast/time warner cable deal would impact time warner cable's relationship with apple. google driverless cars.

we all know they are working on them. who wants to live in a driverless city? we'll take a look at the results of a new intel study coming up. ♪

>> you're watching the best of "bloomberg west," i am emily chang. to the future of american cities look like "the jetsons?" according to an intel study, 44% of people aspire to live in a driverless city. orie johnson and i spoke to steve brown. >> we asked people about the world they want to see. 44% were intersted in a driverless city. they want a city environment they can hop into a car and it takes them to a destination with no human behind the wheel. i doubt it will happen in the

next 10 years. it is a compelling view of the future. there is less congestion. self driving cars tend to be safer. >> the number of people in america who are not young people who are not getting it drivers licenses. is that about the notion that a sharing economy? is there a shift in the wind people look at the desire to drive a car? >> people my age and older have been sold the american dream of a car being a symbol of freedom. if you are a millenial, you arm less likely to see it that way. you have to pay insurance and taxes. sharing this resource, cars spend 22 or 23 hours a day doing nothing. millenial's are more disposed to sharing cars. >> this is happening only in

cities? what are the trends in the suburbs? we get so focused about -- where we live, the rest of the country still needs their cars? >> you will see more and more people coming to cities. that is the global trend. people will want to decide what kind of drive it what to drive. is it when they can drive themselves or one that will drive them there and take away the pressure of driving. there is more pressure in an urban environment. you know how miserable it can be to sit in traffic. it is not the dream the car companies sell you. in an urban environment, people will want this. in a rural environment people will still want to drive themselves. >> the preindustrial cities, san

francisco, new york, boston, the postindustrial cities like phoenix and austin, they are growing like crazy. they require automobiles in a different way. >> cities tend to grow up, cities in the u.s. tend to grow out. this was developed in the era after the motorcar. this may be a way to have public hesitation but in the form of a self driving car. from the research we have done at intel, people are interested in that model and they're open to the idea. they are open to the idea of cars that talk to each other and share information about what might be a hazard ahead.

maybe they can part the ways so that cars can move out of the way so am... can get through. they would like to have instrumentation and tractors in the car to help with that. >> we have talked about that technology preventing car accidents. you also talked to people in the survey about drones. what is public opinion about drones? are they scared of them? >> the surprise to me. we have all heard about death machines in the sky. people are anxious about that. about 60% of people are enthusiastic about drones for public service. drones again helped firefighters go into a building and inspect a building and checked the air for chemicals.

they can understand where people might need help. if an amulet cannot get across town, a drone can take a defibrillator machine or medication that helps to stabilize the patient before nablus could get there. >> intel futurist steve brown. panoramic photos can be beautiful. coming up, we will look at an app that takes hands-free panoramas on your smart phone. ♪

>> i am emily chang and this is the best of "bloomberg west." mobile payments are disliked square are growing in the u.s. and facing higher levels of regulatory scrutiny. could social media hold the key to making mobile payments more secure?

i spoke with paypal vice president who recently joined the board of what we pay. i began by asking why? >> i am passionate about innovation. innovation comes from the small guy. if you think of square, paypal. even the early days of the web. innovation in payments on the internet come from small guys. they push the limits. we pay is looking around the corner. they're looking at the next part of e-commerce. >> they basically use facebook to authorize payments. that sounds interesting. i wonder if you have a hard time convincing customers that this is the best way to verify if someone isn't fraudulent.

>> we are not just focusing on facebook. payment has been about risk and technology. this is usually the secret sauce, even when you go back to when the set started. it was a technology company. building great risk systems for today's problems has always been a recipe that works eared paypal did it. using social signals just makes sense. you can look at your facebook profile and tell a lot more about you than where a transaction happened. >> you made a huge pivot and dropped the consumer product. how do we know that they are on the right track? >> for 15 years, e-commerce has

been about products. use to go to a corner of your house and search online and buy a product and get it shipped to you. price and selection was really good online. as mobile put the internet out-of-pocket, services are being created more efficiently. you have google and air b&b. it brings buyers and sellers together. >> this is a very crowded space. you actually said over a year ago nobody is delivering any solution that will get scale, even me. >> i was speaking specifically about card swiping. that is a long-term thing. >> this is about changing card swiping? >> how do you update to something better?

it is going to take time. in terms of the marketplaces that are reinventing services, think about how you find a babysitter or the way you do your laundry. all of these are services that are coming about in a new environment where consumers are creators of services. a market places, fundraising is another big one. that marketplace has a new set of payment and risk problems that we think we can solve. >> we are seeing companies like square run into big problems. we are behind it. we are still using swipe cards. is we pay going to hit those same international problems? >> we are focused on online marketplaces. they are not going to swipe your card. that is the primary focus. there is room to grow.

there is no card involved, it is focused around the experience of the payment as an afterthought. >> whether it is payments or pictures, you use your phone for almost everything these days. a new app called cyclomatic can take smartphone photography to another level. the app allows the phone to spin itself around in a circle to take a panoramic photo. it shot way up on the rankings. we spoke with the ceo of the company that launched the sap. he began with a demo. >> you set the phone you press start. it will do a 180. >> how does it turn like that? >> it is the vibrator in the phone.

at the end it just puts all the shots together. >> we do it at 40 megapixels, which is really high. how long have you been working on this? >> about a year. the hands-free is just for the iphone 5 s. we have a full-blown suite. >> is this done? can you show us? >> turn it so the camera can see it. >> that is wild. >> i want to understand the programming.

programming the vibration think, what is the science behind that? >> i saw them i nokia phone was moving. i wanted to do an app that was not meant to be used for that purpose. i thought about making the phone move. i did some tests and i wrote an app or i could change the vibration on different surfaces. as soon as i was able to do a 360, i thought it would be fun. >> you have been in your company. >> we are working on other apps. we just launched one called selfie 360. >> how is it working with the app store and get it approved?

>> we were afraid it would be difficult. when lee submitted, it was the day before christmas. they're closed for christmas. we get rejected first. i had to do a video to prove it. you cannot sell magic. i did a video and the video went viral. we had 500,000 views in a few days. that really launched the app. >> we should mention that the back of the phone was signed by somebody. 50 cent. yahoo! is working on a partnership with yelp we will discuss that next on bloomberg west. ♪

>> welcome back to the best of "bloomberg west." we learned that yahoo! will be partnering with yelp on a search deal.

yahoo! will be integrating reviews into its search results. it is similar to one that yelp has with microsoft and apple. for more on how it impacts the companies, cory johnson and i spoke with brian blair. >> i think it is going to be similar what we see when we search yahoo!, we will see yelp listings at the top. it yelp is a strong brand. it is going to bring an added degree of intelligence to yahoo! search. it will drive people to use yahoo! search because it makes it smarter. >> one of the interesting things they did is make it more social. yahoo! is never really had success with that.

>> one of the things it is interesting as it was a apple do this 18 months ago with their mobile map tronic on ios. this order to build an yelp reviews. if you are searching for a variety of services, if that service had been reviewed, you saw two or three reviews. it was great for apple because it added a lot of intelligence to just searching for any kind of business. it was fantastic for yelp as we saw reflected in the stock price. it drew a lot of new users to yelp, which now has 53 million new users a month. that is substantial. >> how has yelp's business been helped? how has that impacted them? >> there was concern early on. there were concerns that this would impact yelp's business.

it is that had any impact on their business. that is largely because so much of the growth that they have seen has come from the mobile side and the last 18 months. that marriage into apple's map system has grown the brand and made them a from earlier name. they have entered a lot of international markets. there has been no impact. this is going to further push the yelp brand. this is a substantial opportunity for yelp. >> they have a partnership with microsoft, why is this necessary? >> able to use bing. it has gotten bigger as a search platform, but yahoo! is still

the mammoth. there are 800 million users. 350 million of those are mobile. until we see the products, we do not know the impact. my feeling is we will see this as a push into mobile where it yelp has been strong and where yahoo! hopes to grow. we will see this high in nicely with the mobile environment which will be great for both companies. >> that was brian blair. cut up, cory takes a trip on the vomit comet. it is pretty cool. they are giving virgin galactic travelers a trial run. ♪

>> welcome back. i am emily chang. if you're heading into space, you may need to propel yourself or weightlessness before the

trip. that is where zero g corporation comes in. they are partnering with richard branson. cory johnson traveled to cape canaveral. >> i'm cory johnson. right now, this is one of the most enjoyable moments of my life. it was not always that way. a few minutes ago, i looked like this. i am going to cape canaveral and experiencing zero gravity. i am exactly the wrong person to be doing this. zero g has partnered with virgin galactic. they're getting acclimated to the experience of weightlessness. they are offering the experienced anybody will pony up $5,000 for the experience.

the plane flies to 24,000 feet and goes into a series of arcs. it climbs at extreme angles and it feels like 1.8 g's. that 34,000 feet, it dives for 30 seconds. passengers experience weightlessness. they do it again and again and again. there is a reason why this plane is known as the "vomit comet." >> it is very rare for people to get six. >> i am going to need some handling. >> these companies are serving to talk about training. they're bringing customers on board to experience microgravity. it is a wide open market being created.

>> that brings us to where we all started. >> this experience comes at a price. a virgin galactic ticket costs $250,000. zero g is costing $5,000 for six minutes of weightlessness. they have their eye on more than just space travel. there's is big money looming from nasa. the space agency is increasingly outsourced. >> it is all going to be private companies now. >> and, liftoff.

>> private space maker says it will charge $90,000 for sub orbital flights. amazon ceo jeff bezos is in the testing phase of his company blue origin. he wants to take three astronauts and a capsule. we are back on the ground. paying $5,000 may seem like a lot of money, but they can be extra perks. you get to keep the flight suit. and you get the 20 pictures to make you the envy of your friends. can you put a price tag on that? one small step for me, one giant leap for bloomberg television. >> better him than me. that is our editor at large cory johnson. he is having way too much fun. that does it for us. you can watch us monday through friday at 1:00 p.m. on the east coast. you can catch this streaming on your phone.

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>> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. >> in today's uncertain economy, bank foreclosures are alarmingly high and record numbers of americans have seen their life savings wiped out.