>> from pier 3 in san francisco, welcome to the best of "bloomberg west," where we focus on innovation, technology and the future of business. i'm cory johnson. every weekend we'll bring you the "best of west," interviews with the power players in global technology and media companies that are reshaping our world. broadcast networks are a huge winner this week. the supreme court ruled that streaming tv startup aereo is violating their copyrights. the decision protects some $4 billion in fees. the court ruled 6-3 in favor of the broadcasters. justice scalia wrote --

but what is the future of pay tv with this decision? i spoke with jon erlichman, who has been following the story from the very start. and joining us is bloomberg contributing editor paul kedrosky and bill gurley. i started by asking bill his take on the ruling. >> i think from the very beginning it was going to end up in the court system. >> it was designed for that. >> it really was. the bottome line, whethere you're looking at big media out of hollyword or any type of telecommunication threat, whatsoever, you have two large institutional masses that know how to litigate and lobby and win those types of battles. if you go headstrong into either one of those trying to disrupt,

you're going to end up in the courts, absolutely. >> you have this big investment in uber. surely you guys have thought about it from the very beginning this is going to run into commission kind of issues. >> there is something very different about municipal regulations and federal regulations. in municipal regulation, it is very easy for a mayor, a city council to stand up and say you know what? those laws may be outdated. maybe we should revisit them and rewrite them. that has happened in d.c., chicago, new york, california and now colorado. that is much harder on a federal level. we tend to have these laws that have existed for 200 years and the supreme court tries to retrofit them to what's going on today and then they make a ruling and that becomes another piece of the puzzle how these things are viewed. it is a really big question whether there is aver moment

where our federal government can stand up and say hey, it has been 200 years. maybe we ought to start from scratch on something. >> the court majority opinion tossed it back to congress and said congress should deal with this and could. paul, let me ask you, aereo said it is not just about them but cloud computing itself. both the majority and the dissenting opinion took issue with that and said that the implications were ominous. the majority opinion saying it shouldn't count with the cloud saying it could be different. this is going to be used against the cloud anyway. what does this mean for broader technology, paul? >> i think it is really important for broader technology. i hate to say this. it burns! it burns! i kind of agree with justice scalia on this one. the majority said this is a limited decision very specific to what's happening here and really shouldn't be seen as having any direct implications for broader innovation with

respect to cloud services. justice scalia quite rightly pointed out this is the majority arguing if looks like cable tv, we have rules like that, it must be cable tv. the result is it doesn't recognize that the core technology has completely changed. in a sense, it is very anti-innovation. if something looks enough like the thing that came before, moves someone from point a to point b, it transmits content, it must be regulated. we look to provide the same thing at lower cost or much faster or something else. it is not like we tried to do a completely different thing. innovation is about doing the same old things in varying new ways. the part of decision that really worried me. >> bill, the notion that this could go not just aereo to the cloud and beyond that, is that a concern? >> it is not something i'm particularly worried about. a lot of cloud applications would be ones that were -- media

and we're vastly moving to a world where no one owns media anyway. they stream it. >> right, so the issue of why capping an itunes song on multiple servers won't be an issue? >> it doesn't seem to be with the cases that are going on today. i do think the aereo team brought that argument to the table to try to increase the weight of the decision rather than that being an issue that people are particularly -- >> what are the issues for enterprise software and things like that where there are copyright issues. on one hand you have technologists who want to put their stuff in the cloud and make it available, but they might want to charge extra in this court decision. it might get closer to that. >> let's just hope that every single start-up doesn't find themselves needing lobbyists. that would be a horrible outcome. >> paul, is this -- i was asked on an earlier show if this was northern california fighting southern california. the entire possibility of san diego existing. silicon valley vs. l.a.

what do you see as the stakeholders here? >> i think it is very much that kind of case. the pirate upstarts trying to take a monolith -- bill talked about the difference between municipal and federal law. i think it is very much the same thing. monolithic providers of service providers say we need three or four provider companies and the rest of us should expect all of this content to add us through licenses providers. as opposed to breaking down and disaggregating the providers of media, the the cashers and streamers and all of these different bits and pieces. i think these are two very different views how the world should look over the next year, five years and 10 years. northern california represents that upstart view. southern california represents the monolithic sort of federal view of copyright holders and license holders, you know, a small group of people providing all the content to everyone else. i think that model is breaking down in the same way that the uber model is breaking down. it is just unfortunate that you have to work through the

monolithic federal system as opposed to dealing with the problem one municipality at a time. >> bill, do you think if a startup were to come to you as a venture capitalist and said i have this great idea on a new way to present television shows, cable tv, new, you know, netflix-like or something, i don't know. does that make a less interesting investment to you? >> i wouldn't call it the ruling today. i would call it the powers that are in effect in that market which paul just referred to. take any of our most regulated industries, finance, healthcare, telecom, media. we're getting to the point where there are four large providers, three large providers. look at dodd-frank which was supposed to help the consumer. checking competition. it has gotten way worse since dodd-frank. the number of -- banks is on the rise. free checking has gone away. innovation and regulation are definitely at odds with one another.

i happen to think this is a bigger topic. that democracy and capitalism kind of corrupt one another if they get to spend enough time together. you know? capitalism corrupts democracy and democracy corrupts capitalism. so these heavily regulated industries are minefields for start-ups because market forces are not at play. >> jon, you have been covering this aereo story quite a bit. what do you make of today's ruling? >> obviously the broadcasters are pleased with this decision. i don't think what is going away, you guys talked about this already. the reality that people want to consume video and content and tv and movies in a whole bunch of new ways. i do think, though, at the end of the day, the broadcasters feel like beyond all the subject surrounding the cloud and cloud technology and what this says about the limits perhaps for cloud technology going forward that this was always a story about stealing a signal, that others are paying for, and

getting paid yourself for it. you know, i still think there is this -- as this continues to potentially play out in a lower court, we'll see obviously what happens, the question of whether or not there could be some kind of compromise between aereo and the broadcasters, certainly that would involve money and the company was always very clear that there was no plan b. that they didn't set up a business whereby they would ultimately be paying these fees that broadcasters get. but it is something to watch, for sure. >> bill, let me ask you, it would seem to me there is actually great opportunity in these places where there is a lot of regulation. that the businesses are in some ways more rife for innovation. they have been protected from it for so long. >> some of them get really good at protecting themselves. imagine, you know, if you looked at your senior team's top talent and say where are our best people?

what are our competitive advantages? take a company like comcast, for example. you look at their policy group, these are some of the leading executers in the company, and i would argue that many of them, their ability to lobby and control regulation is their core. they don't call the marketing department or the product department and say we need to hustle. what features should we lease? they call their policy and legal departments. >> i feel like we were at the same conference and the c.e.o. of verizon was there and he was asked a question about bluetooth and he didn't know what it was. it seemed amazing that someone running a telecommunications didn't know what that was. it occurred to me he probablly knew everyting about the contract that governed the guys who hang the lines and take the power lines. >> absolutely. silicon valley isn't, you know completely faultless in that

everyone here likes to believe that if you can something with technology then you should be able to. >> a libertarian. >> well, if i can build a technology that will steal all the content that people legitimately paid money to create, that should be ok. that is probably not right either. >> that was jon erlichman, paul kedrosky and bill gurley. google makes a major push to put android everywhere. we're going to tell you about google's effort to rule everything from your car to your tv to your wrist. >> welcome back to the best of ♪

>> welcome back to the best of "bloomberg west." i'm cory johnson. google just held its annual developers conference here in san francisco. they unveiled a new version of

its android software, android l. google also showed off plans for android tv, a line of android smart watches and android for the car. jon erlichman caught up with patrick brady and asked him about android auto. >> android auto is a familiar android experience but it has been redesigned for the car. what it allows you to do is control the apps and services running on your android smart phone through the familiar car controls. steering wheel buttons. console dials, touch screens. it allows you to see all of your display information so you can see live turn by turn directions through google maps controlled through the car's controls. >> if we were to boil this down to three things that people need to know about it, what would

with one of them? >> the first one is that it is voice-enabled. which we really think is a safer way to use your smart phone in the car. you don't need to take your hands off the wheel or your eyes off the road to be able to control android auto. you want to play a song on pandora, you can say play whatever the song is on pandora and android will cue that up for you. if you want to send a text message, you can do that all through voice. >> a second feature, you talked a lot about it knows where you are. >> yeah. it is completely context aware. obviously when you connect your android smart phone to the car, it knows you're in the car and probably driving. we will show you things that are applicable for the drive like accidents that happened up ahead. traffic information.

your next turn that is upcoming if you're using navigation. it is context aware and shows you these things. it also knows right when you get in the car what your most likely destinations are going to be or most likely contacts are going to be based on the patterns of you using this device, not only when you're in the car, because you're connected it learns from any searches you may have done, a trip that you're taking on the weekend, it will have the station cued up for you so you just tap it and go. >> the world of apps is a big one. obviously on your smart phone you have a big inventory. how does that factor in? >> i think the big thing that we're trying to do is capture the power of the android ecosystem. and make it as easy as possible for developers to bring their apps into the car. not all the apps make sense.

it doesn't make sense to be playing flappy birds while you're driving. perhaps whether it is audio streaming apps, pod cast or news or live sports or radio, whatever it might be, we really want to allow users to use all of those apps when they are driving. similarly messaging apps. not everyone uses the same messaging services. we want to enable all of those apps to use the completely voice enabled experience in android auto. that is what we're opening up today. >> that was patrick brady, google's engineering director with jon erlichman. just weeks after saying women made up 30% of its workforce, google is pushing for women to code. up next we will talke with megan smith, the vice president of google's secretive lab, google x. ♪

>> welcome back to the best of "bloomberg west." i'm cory johnson. google has been working hard increasing gender diversity in technology. they recently committed $50 million to the made with code initiative trying to encourage girls to get into coding. jon erlichman caught up with megan smith, vice president of google x. jon started by asking megan about the company's push to get girls to code. >> one thing is concerning is that only 1% of high school girls are expressing interest in coding, and yet all the products they love are made with code so we launched a program called the things you love are made with code focusing on bringing high school girls into this industry. these are fun, collaborative, exciting jobs and girls think they are for the boys and they

opt out. we have announced $50 million of marketing and partnerships and other things across the next three years to really help bring the girls in. there is 1.4 million new jobs coming in our industry and we only have 400,000 people to fill them. we need all the young people to know what great, fun careers these are. high impact careers, things that matter that they could be part of. >> when you look at an event like this and still see a lot of men, but the numbers of women who are here have been climbing. have you noticed a difference over the years? >> we're actively doing outreach making sure women feel invited to i.o. last year we were only 8% women attendees. there is a lot of women in our industry. we just need to get them here. this year, we were over 20%. >> beyond getting them into the industry, what about the executive level?

google put out diversity stats recently. i think the numbers roughly 1/5 of the management team being female? >> yes. in general in technology, we actually have slid backwards from the 1980's with technical women going from 40% in the 1980's down to 15% and at the executive ranks. we just really have to do a push to get more women in and there is many bright spots at the college level. a lot of computer science is moving back to 30%. by changing curriculum and making it more impactful. the young women were not seeing coding was impactful. they want to have impact in the world so they were choosing other careers. >> when media focus on female c.e.o. stories like a lot of people talking about marissa myer oversleeping or missing a meeting. what kind of message does that send? >> i'm sure there are many

different c.e.o.s who might have overslept and missed a meeting. marissa is terrific. the main thing is we're working on advancements of women. there is a lot of unconscious bias in the world. when we see it, we need to debug it and work on it. an example would be data training with everybody. for example, if you have 10 characteristics for a job, on average, men will apply if they have three and women will apply if they have seven. there is a group with their hands up and a group with their hands not up. anyone of them might be someone to promote to the job. becoming conscious of that, once you see your bias, work on programs and things that can help you. part of that includes releasing our data. so we can see ourselves and know we want to fix this problem. >> in the world of google x, there is a google x presence

here. tell us about it. >> some of our projects are public. we also launched a product called solve for x. x is what you're passionate about solving in the world. in addition to our projects, we're looking around the world for incredible tech pioneers who have great ideas. we have invited seven of them here. they are presenting quick like ted-style fast proposal talks and then we're reporting. one of my favorite ones is about to land from ethiopia. he has android tablets in a village in ethiopia where no one can read within miles and the kids are teaching themselves how to read. his moon shot is can they learn how to read themselves? can they teach each other? can we add teachers? we get to the kids through technology. >> do these moon shots eventually make their way into google?

no, you just want to see everybody focused? >> it is to use technology to make the world a radically better place. we have these moon shot ideas. what really can help with traffic and medicine monitoring, the contact lenses. all of these ideas. we are on a mission and there has always been tech pioneers, all of these people who solve things in the world. so we stand on their shoulders. solve for x is our passion project. find our colleagues out in the world doing this and try to amplify people doing this kind of work. often when you're doing this kind of work, you don't have a lots of support. some people think you're crazy. sort of like elon musk four or five years ago, people were like the rockets are blowing up. he's spending all of this money. now look at him. we have a lot of problems in world. we love to use technology to solve them.

>> just a final question on google glass. the team that is here, it has a presence here. it wasn't part of the keynote. how come? >> i don't know if i'm the best person to answer that. i think we're really -- we were so excited about glass and my favorites of the glass explorers and the things they are doing, especially some of the enterprise things, you see irvine giving glass to each of the incoming medical students. the things that we're going to see. crisis response, etc. maybe we feel like that is ramping and the team was working on some of the new stuff that is coming like the automobile platforms. cloud platforms, etc. >> that was megan smith, the vice president of google's secretive lab, google x. the 2014 world cup has been a huge hit in the u.s. fueled by social media. will americans newfound love of soccer change the business of the beautiful game? that is next.

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>> welcome back to the best of "bloomberg west." i'm cory johnson. 25 million americans tuned in to espn to watch the world cup between the united states and portugal. it was the most-watched soccer game in u.s. history. will the world cup turn into long-term ratings gold for espn? the former ceo of the san francisco 49ers joins us. i asked why this world cup is capturing america's attention. >> we have never lost a party. there are more butterflies in

our soccer stomachs than ever before. the ratings are great. the u.s. gets out of this group hopefully we will have a record number of people watching in this game against germany. they will build as a move through the world cup. >> one of my mentors works at sports illustrated, he has try to get a big soccer magazine off the ground. it seemed like the numbers were there back with my generation. it never really took. >> i happen to be involved in the old north american soccer league. this was back with the new york cosmos spiked soccer interest. it is an overnight success that has taken 50 years. this is a good business plan that mls has. their business plan is they shrunk the stadiums. they are selling out.

they created pockets of incredible interest. the asset appreciation of the franchises has increased. manchester united and the yankees sold for $100 million. >> that is in the u.k.. >> no, this is in new york. the expansion franchise that will play in new york city as a joint venture of manchester united and the new york yankees. other franchises are moving in the right direction. >> you were involved with the memphis grizzlies. i have been looking at the sacramento kings a lot because of the new ownership group there. they talk about second-tier cities and making the numbers work with sports. what are those?

>> sacramento is not as tiny as people think. there are places like new orleans in minneapolis the struggle. the metrics are to own the region. that is what they want to do. they want to own a northern california and create a rivalry with the warriors. their arena will be a major flashpoint. the new kings arena, which will be built and have fans in seats before golden state finishes its new place right around the corner from here. >> i am talking about portland and san antonio. there are a lot of seats. >> you have to get in the community. for many years that team drew sellout crowds at a very high number and then they just lost their way. with the new kings ownership, having kevin johnson as the mayor, they have everything

moving in the right direction. they have recaptured the dna of sacramento. >> they have a great financial deal with the city. they will get bond ratings. >> the warriors are building a new place. sacramento has got a major deal. >> they have a guy who knows real estate. >> it is a retail development. you can see what is happening with the giants in mission bay. that is wally civic involvement in sports. >> let me ask you about this. does the social media aspect help soccer? >> absolutely. demographics are changing soccer. the investment is coming forth. the bloomberg west lucky charm of having us advance to the next round, that has to be a major

factor in all this. you can take all of credit. let's take it as a unit. this is a good day. the ratings will increase and it is good for soccer. >> that was the former president of the san francisco 48ers. we have a drop cam ward number next. you can watch us streaming on your tablet, phone, or at bloomberg.com. ♪

>> welcome back to the best of "bloomberg west." i'm cory johnson.

google plans to acquire drop cam. this will add the in-home camera maker. how will that work together and how will it operate under google? we spoke to mark siegel. i asked with the deal means for them. >> for google it is an edition of the best-of-breed products in home monitoring and home video. they don't have this. for drop cam, it brings a huge amount of resources to help them expand the footprint of the product. >> nest was the shocker to me for google. they might as well have dropped him. how will nest and drop cam kabul men each other? >> both companies have a similar design philosophy. these incredibly easy to use, think about the smartphone, that

kind of design philosophy of the products that they build. you can imagine these expanding through a whole set of products for the consumer that are different than the kind of old, poor user interface products we are used to. >> what kind of things might we imagine? >> think about movement. you could move from home video to home security. a security system, appliances, i am making this up but what about the washing machine that uses water-based and the size of load you have in their or how dirty your close our. the same for a dishwasher or hot water heater or a furnace to tell you when they need service before they break. those kinds of things. >> or maybe just devices that work and set of having a complicated interface. >> devices that learn your habits. one of the things nest has

innovated is the idea of a thermostat that saves you energy. it understands when you are not home and turns the heat down. >> it can tell when you walk into the room. that is the interesting thing with google. google one after this so they can sell devices into homes so they can get the data. >> there's a great business in selling devices into the home. drop cam is not just at the device, it is a fantastic hd camera. you can connect it with your mobile device. you can use a hand-held zoom. this is a cloud dvr service. there is a recurring revenue stream. you can search and share video. the data can be used for other things. i think you have these devices that only communicate with cloud services, they communicate with each other. when you leave home, drop cam begins recorded and looking for

people it does not recognize who might be breaking into your house. your thermostat might respond when you leave home by turning the temperature down. all of these things might be working in concert with each other. >> drop cam works on low-power bluetooth. there is a bluetooth hub. other products lock from your security system. this is like a height five router. >> there is a bluetooth chip in there. any device in your home that has this could communicate that drop cam as a central point to transfer data. >> google has brought their way into the le bluetooth le. >> the home is going to be the next big platform.

we have seen smartphones be the most disruptive new hardware platform. the home is going to be a super important platform as well. we have these very cheap sensors and we've got ubiquitous wi-fi, it was hard before we had the internet connectivity. there will be more devices in the internet of things than there are people on the planet. we invested right at the end of 2011. we close the investment in early 2012. >> that is a really fast turnaround. i think venture capital is the place to be right now in terms of leverage and fast turnaround and great returns. >> it is a great time to be investing. it is not always this way. we plan on being patient

investors in our companies. we have seen a lot of acquisition activity lately. >> let's do some monday morning quarterbacking. what did you see this deal that represented opportunity? >> and this was my frustration setting up a camera. i found it difficult. there has to be a better way. when i ran into greg duffy, i saw how easy-to-use the camera was i said this is the product. i really believe that with this being a cheap enough and easy enough to use that many people would have the same experience. it was kind of this apple like ease of use that turned me onto it. >> that was drop cam board member mark siegel. could we all have our 3-d printed robots in the near future? intel thinks so. we will have a robotic guest next.

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>> welcome back to the best of "bloomberg west." i'm cory johnson. the technology for building robots has changed dramatically. intel is creating their own robots and printing them on a 3-d printer. brian david johnson brought a special friend named jimmy with him to discuss robots in our future. >> you finally do see jimmy. here he is. this is jimmy. we will walk him around as we talk. it this is a 21st century robot project. he is an open source, three deep rumble robot. >> how big is it? >> he is about two feet tall.

we took him about two weeks to build from scratch. we worked with a company. this is more of a research version. the idea is you can design the look of it. your robot doesn't have to look like jimmy. you can design your own robot. you can make it personal by downloading apps. you don't need to understand artificial intelligence. you don't have the phd. all you need is to download apps like a smartphone. >> what you have programmed into this is the ability to be aware of its environment? >> right now, we have a minimum viable platform. it has the hardware down. we have this version and a version coming out later this year that is powered by the intel edison platform. that will be about $1600. now we will work in the software. we will have an app store later

this year. this is where we will start to build in the autonomy. he will be able to walk and talk and tweet. >> i was playing with your avatar messaging apps. i did this piece and we went for a walk in the bakersfield. he was really jazzed about expanding the places where intel chips are being used. using things like open source. >> that is what impresses me about brian's vision. he understands that his intel moves into the 21st century, we have our traditional business we will continue to do. he is looking out to makers and educators. it as this size of competition gets so small thomas we can start to put computation and everything. we are looking for different places of innovation. we are branching out to students

and other people as well. >> and venting in business is all about getting to a fork in the road and taking the choice. what decisions did you make about jimmy. he looks cute and not threatening. >> that was very purposeful. we work with an illustrator. he designed a jimmy to be non-threatening. you download the apps. we wanted to make jimmy so he was approachable. kids love him. i have been traveling around and talking to first graders and 10-year-olds about jimmy. that is where the innovation comes from. if you tell them this is a platform and software, what do you want your robot to be? you can name it. it doesn't have to be jimmy. a we have had amazing feedback from the kids. >> first-graders, 10-year-olds, me. i am sure they had better

questions. what do they ask you? >> this was my scientific research of traveling around the united states and talking to kids about what a robot should be able to do. you want it to be able to do two things. the first thing he needs to have is a cape. the second thing that needs to do is fart. that is the part that i found interesting. kids understood that robots need to be fun. they don't need to be serious all the time. we had one young lady who said she would her robot to be able to dance with her. we had one who said she lives in a trilingual neighborhood and she wanted her robot to be able to follow her around and be a translator so everybody she talked to could talk to the people. you begin to see these beautiful applications that these kids are coming up with.

>> that was brian david johnson with his robot jimmy, no relation. dreamworks is known for animated characters. they're pushing technology boundaries of behind the scenes. they are bringing dragons to life on the big screen. ♪

>> welcome back to the best of "bloomberg west." i'm cory johnson. dreamworks animation's "how to train your dragon 2," has made $100 million. jon erlichman went to check out what dreamworks ceo jeffrey katzenberg is calling this game

changing technology. >> this is hiccup, the main character in "how to train your dragon." dreamworks used this software. making changes took time. rendering those changes took more time. for the sequel, they have new software. the changes were speedy and rendering happens in real time. >> we have the software so that it is always up to speed. it is always the latest and greatest. >> they are known for their tech savvy approach. while the animators love pushing the limits of technology, the aging software was not keeping up with computing power. the new software was created

with intel over a five-year span. animators are more agile in the studio can reduce reduction cost. >> we can play all those games. in terms of the budgets of the. -- movies, we can reduce them. >> dragons 2 required 398 terabytes of storage. a all that technology shows up and complicated characters like the beasts. >> the size of that creature unscreened, i director says can you change this? >> before that could've taken a couple of days to do. >> the engineers walk away from

the project with a boatload of information. >> we can take it back and understand how in our long-term lands we can make this better. >> dreamworks make the technology to other industries. >> other industries create images for other purposes. all of those processes are sped up by this software. >> jon erlichman and i spoke more with the technology behind the drawings. take a listen. >> that is amazing. that is more. it is a lot. >> it is interesting. i think you mentioned shrek. our expectations of gotten that much more dramatic over the years.

more players of coming to this market. more people have wowed us with cgi technology. they were getting to a point where they can only go so far at what the current system allowed them to do. they couldn't take full advantage of the computing power. this is a story about the cloud. about redesigning your software to take advantage of that so you can draw these things in real time and have them render. you can make the changes you want to make the films look even better. >> that was jon erlichman. that does it for this edition of the best of "bloomberg west." you can catch us monday through friday. we will see you next week. ♪

>> here that pop? see that popstar? when it comes to pop culture you have to think pepsi. the brand has been in the soda game for more than 100 years. that's the story we all know. for more, we take you "inside pepsico." it is all that, and a bag of chips. there is more to pepsico than pepsi. it has 22 brands, each pulling in $1 billion in sales per year. it started with brant street. in 1940, pepsi made history with the first-ever national advertisement to have a jingle.