live from pier three in san francisco, welcome to "bloomberg west." i am emily chang. we've got a special show today we are calling the way you watch, focusing on the future of media and the evolution of where, what, and how you watch it. to the rise and rising challenges of streaming companies like hulu, netflix, and videogame network to which -- twitch tv.

a platform with 55 million viewers every month watching expert gamers play titles like league of legends and doda 2. otherviewers are watching people play games. it is one of the top 15 most trafficked sites in the world than the average viewer is spending 4.5 hours every month on the network. those are numbers cable networks can only dream of. did amazon have acquired the next espn? joining me now is cory johnson brad stone, and ethan kurzweil, who led the early investment in twitch. is it the next espn? >> it could be. this is not some fringe activity people do in their basement, removed from society. this is something we all do. think of growing up, your teenage years, watching your friends play video games or watching people play together.

it is something that is universal. they have taken that experience we were doing and brought it to the internet. it is not so out of the mainstream. it is real and it is happening. >> why is amazon buying this? >> they are making a bet on video. with amazon studios, they are making a dozen dramas and newdies, kids shows, five pilots. they are hundreds of millions on content like hbo shows. twitch becomes another channel in the amazon online lineup. i we've seen some numbers, have also read a lot of the spends 20 hours a week. are those numbers right? >> there are a lot of addicted users that spend a lot of time watching video game content,

watching their friends, the best in the world play. it is not so different than what we do when we watch the world cup. we can all be united through that content. >> game players learn tricks, and there is an entrainment value. there is entertainment and a learning value and marketing value for the game publishers themselves to show this is what these games do and how you play them. twitch has tapped into that. it did not exist a four they came along. >> who are the -- before they came along. >> who are the people posting the content? >> everybody from the best in to just somebody that wants to -- has a funding show around a particular type of content. they have a million different broadcasters broadcasting. >> right now a lot of the revenues come through the dedicated players to belong to a

certain stream. i wonder, when you look at amazon's plan to monetize on content, a lot of their work is about selling stuff and using amazon prime to sell stuff. where does this fit? a we know amazon is building huge ad business right now. it is going to be a $1 billion business in 2014. so potentially it can run its own ads on the network. ist amazon is trying to do put the tablets in the fire phone in peoples hands. the problem you notice when you have one of them is what is not there. amazon does not use google services. there is no youtube. speed brings that up to in the user generated content space. tablet, it fire gives people another reason to pick up an amazon. original shows have

not done well, but the other shows they are buying, if i want to watch it, i will find it on amazon. who has the power? the content creators, these upstarts? twitch has been around three years. >> it shows you how fast things can change. if you can harness this passion in the fan community, you very quickly have the power. something jeff bezos said in his quote around why they were making this acquisitions was we want to learn how to do that. i think that is what they want to do. they want to understand how twitch was able to harness this energy so quickly. broadcasting and watching gameplay is a global phenomenon and twitch brings together tens of millions of people who watch billions of minutes of games every month. they acquire a company really just to get the engineering

talent behind it. has amazon done that? not as much. they have a build it here philosophy. they have been parsimonious since they made a lot of mistakes in the late 1990's. google is hamstrung. it lost out on whatsapp because they are under the microscope. >> did they try to buy twitch? >> i can't comment on any rumors. >> what about yahoo!? built something special. a lot of people took notice on that. >> do you think google, right now, is more hamstrung because of antitrust concerns that a year ago? >> that is hard to say. they have made a lot of acquisitions. corporate priorities are more hamstrung than any regulatory concern. where do they want to spend their energy? >> how is twitch reacting to this acquisition?

a lot of people are passionate about the network. >> it has been positive. i do something they took care in how it was gone about. if you saw in the town hall, he said we are keeping twitch independent. twitch, same office, same policies. receivedage has been well. >> interesting to see them complaining about google. they have had broadcasting on twitch and certain elements on youtube. you wonder if that is going to decline. as anks like twitch alternative to youtube. >> amazon gaming studios, what is happening in the rest of amazon gaming studios? >> they are trying to build a gaming function, a game called civ zero. they are hiring. i don't get the idea it is a big

corporate priority. anotherv gives them asset in the gaming space. >> brad stone and ethan kurzweil, congratulations to you. thank you for joining us today on "bloomberg west." netflix is shut out of the major emmy categories. topicstill the hottest and a rising threat to networks like hbo. how hbo is fighting back when the special edition of "bloomberg west" the way you watch returns. ♪

>> i am emily chang. today we have a special show we are calling the way you watch, focusing on the future of media and the evolution of television. the ratings numbers are in from the emmy awards and nbc says the

show scored a 10.9 rating, the second-best in eight years. the good numbers came even though the emmys were booted to a monday night due to nbc's nfl commitments. out of majorhut categories, though it did pick up seven creative arts emmys. orange is the new black was the contender for best comedy and "modern family" won for a fifth straight years. bad" takingking five awards in its final season including aston drama and best actor. including anmys award for "veep" which features this may cap session -- this make out session. they appeared together on an episode of "seinfeld." the pay-tv network was shut

out of some of the bigger prizes and it comes weeks after hbo fell behind netflix in subscriber numbers. what is time warner doing to make hbo more accessible to its viewers and doesn't need to? scarlet fu is checking it out now. what do you make of how the awards broke down? there was a lot of talk about netflix, even though they did not take home a lot of the awards. criticalid not get the acclaim, but remember, it is an honor to be nominated. netflix is in that category as well. when it comes to hbo, it is time warner's crown jewel and why millionsrdoch bid of dollars for the company. it has been losing momentum in the near-term. netflix top hbo in subscription revenue after topping it in your subscription numbers a few quarters prior.

netflix $1.15 billion in streaming revenue, hbo 1.14 alien dollars. hbo is seven times in profit, $550 million. if the goal is to get your growth rate back up, hbo needs to adjust with the times, especially since time warner made it clear he does not want to be acquired by fox. >> the big question for hbo, what does it do about the cord cutters, the people who want to see the latest episodes of hbo shows, but they can't because they are not available on streaming services like apple tv, netflix? we are talking about legal options were they do not pay $200 a month. require youoptions to link up with a cable-tv private -- provider. couple of the

options, there are a lot of caveats and a lot of conditions. at&t charges and $99 installation fee. a one-year contract for time warner cable that is only good for one year. prices could go up anytime after that. all of this is tied to cable tv operators. the challenge for each bl is that it needs to attract new customers -- for hbo is that it needs to attract new customers, it has to do that in a way where he does not anger or drive away its existing subscribers and push them toward adopting these cheaper options. it is a delicate dance. is the mostthrones" pirated show in the world. what about hbo, they have some stand-alone offerings, what can you tell us? sweden andries like denmark, what is interesting is hbo began to offer this a la car te option when netflix expanded. it was a competitive move. it cost $12 a month and they

have also said it has led to an increase in subscriptions to hbo as a result. the threat of cannibalization has not played out in those countries. know that hboe has teamed up with amazon to make some shows like "the amazons" available to prime customers. that may be a model in the coming weeks and years. mucharlet fu, thanks so for the round up. so how bad and night wasn't for netflix -- was it for netflix? we will answer those questions when "bloomberg west" returns. ♪

>> welcome back to "bloomberg west." i am emily chang. show,o our special focusing the future on media and the rapid evolution of how, where, and what we watch. the emmys were last night and while they aired on nbc, seth myers had this ironic take -- >> that is like network tv holding an award show and giving all of the trophies to cable and netflix. >> netflix was nominated in several categories last night, his dreams were dashed in part by "breaking bad." cory johnson is with us and joining us, the ceo of an independent multiplatform studio to develop scripted series for tv and digital. does it matter netflix did not win any of the most prestigious awards? >> i think they were very

present. awards out of 31 nominations, which this is a show about the numbers. that is as well as hbo did. they were called out, they were featured and don't forget to a lot of people are going to go to netflix to watch the back episodes of "breaking bad." think it was comedy not showaid it does music videos anymore and cable-tv is getting all of the awards. then i looked at this twitch acquisition on the same day and i wonder what is the future of content if not about different kinds of content and if hollywood might be left holding the bag. emmys focused the on broadcast for comity with "--

for comity with "modern family," drama dominated by premium cable and subscription. amazon spenttch, almost a billion dollars, is going to be the place for this new type of programming, which is sports for video games. interesting, shows on broadcast networks did well, but there is such a set formula. actress, it reminded us there are 22 episodes every year . what kind of freedom does developing original content for networks like netflix provide to content providers? what can they do the broadcast networks can't to make the shows better? and theirted with hbo ability to have certain language and violence and other types of elements you could not have on

broadcast. >> are you saying it is about sex and violence? >> and language. and also serialized programming. one of the benefits of netflix is there straight to series models enables them to think about the show in its entirety and in some cases they are able to produce the entire show almost like a movie and think about it as one. rate. that benefits them and this notion of the show was not going to be canceled. >> i wonder also with netflix is going to learn, and amazon, how difficult the business is. they had success with their first two with -- >> they had some shows that were not hits. cards," when you don't see the awards show up, we don't know they get the rewards

they get. could a couple of failures by netflix imperiled the business? i think you are seeing them expand the types of shows they are doing. the chelsea handler show is moving to a new type of comedy. you will start to see netflix appearing in more categories, just like hbo. ,bo has movies, minis, dramas comedies. they are in all of the categories which leads to a strong representation of hbo in the emmys. you will see that with netflix. and amazon. if netflix canr sustain these hits. we are into the third season of "house of cards." laters have said the seasons have lost a little bit of momentum. "game of thrones" is gaining more momentum as the series progresses. is that just my perception? will continueix

to be incredibly strong in their programming. if you look at the types of shows they have in development, they have their first animated series. that has been well received. the firstally not inning, maybe that was last year. is just getting into the game. i can tell you from the creative community, people really want to work with netflix. that drives a lot of great product and development. people want to be there and work with netflix and they will have access to the best shows out there along with hbo and the other premium networks. is netflix, hbo, cbs, amazon, what does the impact of ball of the spending on content right now? great time to be a studio and an owner of content because there has never been more buyers of programming. scarcity is actually

now in the writing talent and in the show runners to captain these ships. the environment in hollywood right now is very positive because there are lots of places to sell shows and the budgets are going up. >> a lot of shine out to writers last night. we can write, so that is good news for us. of vuguru.nzz thank you very much. what can go wrong, we will ask her what happened. ♪ bloomberg tvs on the market. i'm julie hyman. let's take a look at where stocks are trading right now. we have been about 2000, which would be the first time ever we close down that level. stocks rally on better than estimated economic data.

in terms of individual stocks, shares of the biotech firm are surging on results from his stride cancer study. eight patients with nonaggressive lymphoma were treated with a drug and were in remission and four others in partial remission. more on the markets later. ♪

you are watching "bloomberg west," where we focus on the future of business. i am emily chang. toterest is taking steps justify its $5 billion valuation . the online scrap booking site is unveiling a set of tools that marketers can use to determine which of their post's are most effective. this will help them measure how many people saw a post and how many people shared it. it down for us. what does this mean? not everyone is able to

advertise don pinterest yet. they just started their program a select number of people have been allowed on it. and so with this tool is going to do, this free tool to anyone who has a business account, is going to teach them what works and what doesn't on the platform. pinterest tells me the number one criteria for deciding who gets to be the next advertiser on pinterest is that they understand how to use it. user -- i amerest a pinterest user. some of the things they have been adding to make search better to make analytics better on the backend is actually kind of clunky for a user. sometimes i just want to pin a picture. i don't want to have to describe it. i think the site is adding a lot of new features and they have a lot of money in the bank right now. they are trying to spend -- to

expand internationally. advertising, they are going to be rolling out these things very quickly. and also very deliberately and overtime they will realize what works and what doesn't. i have used graph search. it works well. i have not run into the issues you have, perhaps. >> it is better for searchers. my question is, how are advertisers feeling about pinterest? how does it compare to facebook or twitter or google? ceo of zulu to the lee and he wishes he could spend more money on pinterest here at a lot of advertisers -- it is in the experimental stage. they want to see it turn into a real thing. pinterest is a place where people talk about the things they want to buy. they want to see. they want to do.

it is useful for an advertiser to have a connection on pinterest because people are saying what they desire. it being effective, but they still have not even allowed people for spend as much money as they are willing to spend you. right, sarah frier on pinterest. thanks so much. i want to turn now to airbnb. what do you do when a rental goes wrong? a rehabilitation therapist found out when she rented out her condo. the tenants refuse to leave after 30 days claiming california law allowed them to stay. she turned to airbnb for help, but had to hire an attorney who evicted them. beenb told us our team has working to do everything we can to provide support, we regret how long it initially took us to get in touch. the guest in this situation have

been banned from our site. i'm joined by cory johnson. sounds like ahis nightmare. what happened? >> i can laugh now because there is a happy ending. it started out as a nightmare. i have a small condo i use as a vacation rental. when i am not using it, i let families or friends use it out on airbnb. came through.als they wanted a longer type of stay. they wanted six weeks. they said they were going to be working on a work project. they are videogame developers. i thought, ok, six weeks. short, theyg story ended up paying for the first 30 then we were not able to prospects -- process payment. rights claimed squatters

. they were legally allowed to be there as tenants and if you wanted to get rid of them, you had to evict them. >> that is right. they came from austin, texas. they were taking advantage of a local jurisdiction which states that once a tenant is in a property, whether a short-term vacation rental, once they are there 30 days, they have tenants rights. >> did you know about that in the first place? corrects a lot of my critics who are landlords or have properties say how did you not know this? this is how it is. and they doothers vacationhis temporary rental, they were surprised. they said that could happen to me. i had no idea.

predatory, only are they also apparently are accused of taking some money from kick starter and not starting the project. i assume they are looking for the next scam. do when you look at the people you might rent to and how might you do it? >> that is a good question. i feel like this is a cautionary tale. i have learned a lot. if someonened that is going to be a long-term rental, definitely 30 days, to do more vetting, the same way you would when you are renting to somebody for 12 months. >> so this got ugly. goingld them their powers to be shut off. i hope you will check out peacefully today. they write back saying they have spoken with their attorney and they're going to press charges for blackmail and damages caused by your negligence and misconduct. what did airbnb do about this?

>> they responded pretty quickly. the timeline was out of my hands once the tenants were there 30 days. we had to go through this legal process of unlawful detainer, which is the eviction process. >> you're not mad at airbnb? >> not at all. i love the service. have you think they should given you more information about this 30 day issue? it is an emerging company. they are figuring it out. i know they have tightened up their customer service, their policies. going forward, maybe the next host that does a 30 day rental will get a pop-up warning. >> what did they do to help you? they hired a private investigation service to camp outside the condo and somehow

catch these guys. >> in the beginning, when we had not going to were leave, their intention was to and have frees rent during the eviction process. airbnb was trying to contact them through cell phone, e-mail, and they made whatever offer they could to draw them out. like i said, once the 30 days were up -- >> they were not staking out the house? yeah.h, i'm unsure. it is a combination of things. my dad is my property manager. he was on the neighbors, a were staking out. just trying to monitor, have they gone? airbnb did not hire professional investigators to monitor the property. >> i'm not sure. for wonder what this means

this business model. they have attracted a huge valuation. rivaling some of the biggest hotel chains. there is a presumption they can do this without trouble. what we see in new york city where there are buildings that the government might get involved, there are renters' laws in california, these are big issues. what did you think it means for the future of airbnb? it is an emerging industry. it will continue to grow. while airbnb might see this media explosion as a bad thing, it is probably good. for example, i have relatives who live in smaller markets or our baby boomer generation. what is airbnb? really, you can stay in apartment in paris? that is cool. we take for granted we live in a

big city. everybody knows about airbnb. >> ultimately these guys left. they did not pay after 30 days. have you been compensated at all by airbnb? >> they did. really stepped up to take care of my out-of-pocket expenses. >> did they pay you for missed rent? comfortable speaking about the details. i did have to hire an attorney to take care of unlawful detainer. that is the way the law works. what are you going to do with this condo? how do you feel about renting it out again? or even keeping it after this creepy experience? >> that is a great question. i was there a few days ago to do the reclaiming of the condo. when i had friends or family around, i felt fine. as soon as they left, i did feel that creepy sensation come over emotionally unsettled.

i wanted to get out as soon as possible. my advice, i have been given, wait one month. and calmthing settle down. you are feeling better about things now than you were four weeks ago and then make a decision. do you want to put it on the market. say in palmwill springs, like you mentioned, airbnb in new york or here, in palm springs and make it easy for people to pay taxes. you apply for a permit. it is totally legit to have a vacation condo. every month you write them a check. you fortschogl, thank sharing your experience with us. i'm glad you're safe. interesting to see what you will end up doing with the condo. apple gets a new patent for a

display. could it change the look of iphones and ipads? that is next. ♪

>> i am emily chang. this is "bloomberg west." school angeles unified district has suspended his contact with apple after several problems, including students andssing security controls, allegations of close ties between school officials and executives at apple. apple, the u.s. patent and trademark office has awarded a new patent for electronic devices with flexible displays. the filing details technology that could hide buttons below a flexible display on mobile phones and tablets. this is ahead of the anticipated iphone event next month. joining me in the studio, how

might this work? i know we don't know anything for sure. >> you have to take some skepticism with this. a lot of them lead to nothing. this is for more of a give on the screen. giving it the capability to get rid of the home button. a lot of these things are filed and give you a glimpse of some of the thinks apple is thinking about. the big thing is getting more screen real estate, the bottom of the phone right now is taken up by this button, which is quite useful. button is important. it is not the button going away, the button could come out of nowhere and this green could rise up like a bump when you need it. -- the screen could rise up like a bump when you need it. >> some of the more futuristic stuff they are cooking up.

apple files a lot of patents to protect themselves. these lawsuits with samsung over the years have shown they like to protect their intellectual property. if they have an idea somebody else might want to do as well, they will take time to it. >> i would imagine this would be useful with the iwatch where the is so small, every little bit counts. >> i think you are right. there is a lot of ways the screen technology is going to evolve. particularly when you are wearing these things, having something glass where you can have multiple purposes where it can be a button and something to display an image, that sort of stuff we will see more and more of. >> this is not going to be on the new iphone. >> no. >> adam satariano, thanks so much. i want to take a look what is coming up at the top of the hour. let's bring in mark crumpton from new york.

what do you have today? held talks putin today in belarus. our correspondent hans nichols is reporting. he will tell us if the leaders made any gains to resolve the violence that has been taking place in eastern ukraine since the spring, emily. earthquake in the bay area over the weekend. you guys are going to be looking at the economics of it. aside from people losing a lot of wine. in thet of businesses wine country suffered major damage is. look at what will economic losses could mean for reporter willr look at what economic losses could mean for business. >> all of those wine bottles on the floor, so sad. "bottom line" coming up at the top of the hour. more on "bloomberg west" after

this break. we will be right back. ♪

welcome back to "bloomberg west." i am emily chang. rahm emanuel has vowed to double down on the tech sector by recruiting talent and companies. how is he fulfilling that promise and can the second city really compete with the likes of silicon valley? with rahmt sat down emanuel for an interview covering everything from immigration to stem education

and even the new controversial data collection program. first, they had a fun talk. take a listen. "veep"?e of cards" or >> "house of cards." or "orange is the new black." date night for me and my wife. >> the cubs or white sox? >> don't do that. chicago. >> deep dish? >> deep dish. i was going to ask you iphone or android. i feel like the answer is neither. >> no. we have a motorola device. >> of course you do. good answer. >> sam grobart with chicago mayor rahm emanuel. we'll have full coverage of the

new big data collection the city of chicago is installing. and now it is time for the "bwest byte" where we focus on one number that tells a lot. what do you got? >> 21.95. a united airlines passenger from new york to denver acquired the very latest in innovation for longer leg at passengers, it is called the knee defender. and that passenger installed the device to keep the woman in front of him from reclining her seat. there were arguments and incidents and then the woman through her drink at the passenger. he did not buy a drink defender and the pilots were forced to kick them both off the plane because of the knee defender. >> that is ridiculous. come on. when you get on a plane, you know you're going to be crunched. >> i'm 6'5".

throw their seat back quickly and they take the armrest. men do this more to women. >> yes, bigger people. everyone steals my armrest. >> that's not right. and the reclining of the seat. >> the knee defender is whatever. of a drinko the need defender. he got tossed off the plane, as did the woman. most are planning this divide. the faa says you can't use it during takeoff and landing. it shows united airlines is trying to cram too many people on flight. >> you know, some travelers need extra pampering. my cory johnson. -- like cory johnson. class.e fancy first you don't need to worry about these things.

-- you are in fancy first class. you don't need to worry about these things. the airlines always are going bankrupt eventually. passengers is the way to go. cory johnson, advocate of the knee defender, thank you. and thank you for watching this edition of "bloomberg west." you can get all of the headlines on your phone, tablet, and bloomberg radio. we will see you tomorrow. ♪

>> from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line" with a mainstream perspective. putin meet boudin -- across the border. earthquake in california wine country. then, a tour of america's his last great watchmen. ♪ to our viewers here in the united states and those of you joining us around the world, welcome. we have full coverage of the