>>cory: welcome to "bloomberg west " where we focus on the future of business. i'm cory johnson. with a check of your top headlines, soldiers making progress against the islamic state, retaking parts of the city of tikrit. in washington, john kerry says isis'momentum has been managed. he testified along with others in front of the foreign relations committee. they also quizzed the administration's potential

nuclear deal with iran. he blasted republican senators for sending a letter to iran's government. john kerry: i have never heard of nor even heard of it proposed anything comparable to this. if i had, i can guarantee you know matter the issue, i would have rejected it. cory: he said republicans are flat wrong in saying congress can modify any iran agreement. the imf approved to $17.5 billion in aid for ukraine. christine lagarde said the authorities have showed a commitment to reform. the economy has been devastated because of the conflict with pro-russian rebels. there is more money for wall street bonuses, rising 3% according to estimates from the

comptroller. the average bond $172,000. the banking industry added jobs the first time since 2011 even as revenue fell. a major outage hits apple's itunes today, starting about 2:00 a.m. in cupertino, california. users were unable to download apps or log into their accounts. the cause is unknown. apple shut the store down on monday during its smart watch event. now to the lead, can radio thrive in the digital age? or does streaming radio mean the end of terrestrial radio? howard stern rocked the world in 2004 when he bolted from fm to sirius but his contract is up

at the end of the year and he has not committed to renewing. sirius and stern and the future of radio are featured in this week's bloomberg businessweek. felix, let me start with you. your piece is terrific. run to the newsstand. get a copy. check it out online. is he playing games? he said some nasty things about his relationship with sirius. felix: this is classic stern. he lets these decisions go down to the deadline. he likes the drama to play out on his show. he has dropped hints were complemented the current management and also said he has not made up his mind. cory: so there are estimates that he brings $200 million in

revenue to sirius. they are doing $4 billion in revenue. can they survive without howard stern? >> that is the question we ask. a company has 27 million subscribers. we have done a lot of soul-searching to figure out how many subscribers actually would bolt if howard stern were to leave. and frankly i think it is difficult to know. it is safe to say there is a fair amount of subscribers probably in the millions, would be impacted. having said that, i think sirius is in a much better position from a content perspective than it was in 2010 when his contract came up the last time. on the flipside, howard stern has more options where he could take his trade. it remains to be seen. i know there is a price the

company could walk away from. cory: yeah, although in terms of subscriber additions, this business took off, from revenue and subscribers, it took off when howard stern joined. he really made this sirius business viable. no? tuna: yes, but what also happened is when subscribers joined sirius they went on to discover other content the company offers. right now it is very debatable whether they would leave if howard stern. there is no question he is a big pull. i do believe there is a very good chance, frankly, the company may not renew the contract. they spent $300 million per year on programming expenses.

while that parent -- pales in comparison to netflix, it is fairly significant because howard stern accounts for a significant portion of that. cory: felix, howard stern puts it very well in your article when he said on the air the notion that it is not technology. it is a waste of time. forget podcasts. they are for losers. is going to a podcast or apple something he should take seriously? felix: there are so many options for him. apple introduced their car play product last year where you can use your smartphone to take over your car dashboard. i can imagine google making a play for him with the youtube subscription service and also late night television. premium television like hbo. he can do it direct to consumer.

there are so many options for him. in the end, he said he will consider staying with siriusxm. one thing to think about, he has worked really hard to be a part of sirius' growth, and is now in a position to enjoy that. his show is doing well in the sense he is getting the kind of a list celebrities he would never have gotten five or 10 years ago. he has madonna on his show today. he might want to stick around and enjoy what he has built. cory: car play is interesting. it is only a handful of cars. 64 next year. 3 million only , so maybe it is a loss leader for apple. tuna, does he have to go to a

place where the company would make money or could he be a loss leader for the company to drive pandora? tuna: either way it is going to be risky for a company to bring him on close to what he has been paid at sirius. you also have to look at how the business has evolved over this last decade. sirius from an economic analysis, is in a better position. they have been able to manage a price hike without any subscription defection. our mobile growth is back to almost back to normal levels. you can look at the number of metrics and you can calculate that, if there were to save the

month of money they were paying howard they would lose subscribers, but it is easier to justify where the threshold would be for the company to walk away. as an analyst, i have to look at that and be wary of the company overpaying. cory: howard had a great quote that you used where he said never think of me as a disc jockey. talent is what drives this. there is no sirius without talent. it does not matter how many satellites you have in the air. it comes down to that. his talent to driving the show or technology enabling it? felix: part of it is talent. jim meyer, the ceo of sirius says he wants to keep howard and of course at the right price. he is working hard to keep his talent happy. he lowered howard to move the --

allowed howard to move the start of the show back. they had a party for him where everybody paid homage to him. part of it is keeping howard happy. i think he cares less about the technology. they do have mobile apps so you can listen to his show on your smart phone or on demand. you don't have to be in your car and he appreciates that. ultimately from his perspective he feels like he can take his audience and they will follow him. tuna: the used car market we have not talked about. the company is barely scratching the surface. that is one area they will need him. cory: tuna felix check out his article this week. it is a good one. "bloomberg west" will be right

back. ♪

cory: i'm cory johnson. here are some top headlines. greek of fit of -- officials trying to unlock more bailout aid. creditors are expected in athens tomorrow to review their books. mario monti is the former prime minister of italy. mario monti: i'm confident there will be some compromise rather closer to the initial positions of the eurozone than the initial demand. cory: uncertainty keeps pushing the euro down, falling to a routine year low against the dollar. google unveiled a low-cost program that sells source at a penny a gigabyte. response time is slower, but it

is taking aim at amazon's storage product. former executive masters the company plans to use bitcoin technology for record-keeping. investors helped develop the credit default swaps from a few years ago. smart glasses are getting ready to blast off into space. the maker of them struck a partnership with nasa to send the glasses into space and maybe even be used in space. the ceo joins me now. what would you use these classes for? pete: what they are interested in doing is working with our glasses, with ar applications to initially make their ground operations more productive and

efficient and with the ultimate goal to take these into space. cory: fascinating because we have seen google glass get a lot of attention. there is an interesting article talking about these glasses and why nasa has chosen to go with these over google glass. nasa contacted google glass and they said we are going to give them to consumers. pete: this is a combination of a process where nasa went into the marketplace and did a search of all of the technology and platforms they thought were appropriate for what they wanted to accomplish. fortunately we were selected which speaks to the power of the platform. cory: what are you trying to allow users to do they could not do without them? pete: these are the glasses. cory: we usually don't do props. these are interesting. they are heavier. is there a check in here? pete: think of it as a laptop

you wear on your head. it has all the same features and functions you would find in a tablet. onboard gigabytes of memory. wi-fi, bluetooth, gps. it has sensors so we track had physicians. we know where you are, what you are looking at. -- head positions. we know where you are, what you're looking at. it is a totally integrated system. two hd stereoscopic displays. they are see-through so we projected digital content onto the real world and that helps you become safer, more efficient, and more secure. cory: ground operations, what are those? pete: like many of the other government and industrial companies, they want to use this to help be more effective in

maintenance and service in assembly. the user wears the glasses looks at equipment and instructions are projected onto their field of view. they are engaged in their task and hands are free. cory: what is the hardest thing about this in terms of design to make it more seamless for the user? pete: number one you have to have the computing power. cory: you have a qualcomm chip in there. pete: we do. we are the smallest company with a direct relationship with qualcomm. that really helps pin augmented targets to the real world. cory: interesting. thank you very much. "bloomberg west" will be right back. ♪

cory: a jury has decided that pharerell williams and robin thicke have borrowed too much from the late marvin gaye. that tune is great and so is marvin gaye's "give it up" and they will have to pay for copying the classic. jason in new york joins us now. he deals with copyright and song

writing. this is a tough one, i would say. where does inspiration stop and copping start? jason: it is a great question and one that has surrounded the music industry for a long time. cory: every? jason: the copyright statute looks at a couple of things. one of which is a test that looks at everything objectively. it examines the musical piece itself and makes a determination as to whether there is similarity. on the flipside, there is a subjective test that looks as to whether a person would think this is copy. you have those pieces of thought. cory: and therefore this strikes me as not that similar. the songs, there is an influence. what musician is not influenced

i marvin gaye? you can't do r&b without him. jason: absolutely. at the end of the day, there is a train of thought that an award like this is a big win for music companies and publishers own large catalogs and that the value of these pieces of music will go up. in actuality, most in the music business look at this as a stifling of music evolution because as you said, there is not a situation in music where a feeling of an error is incorporated into music and at the end of the day, songwriters harken back to their legends, and that is a big part of how art progresses. cory: as hip-hop became a mainstream, the music publishing

business went from licensing songs to licensing samples. i wonder if the evolution of that business and the codifying of laws around sampling changed the rules of the road in terms of interpretation of music. jason: there is a point to be made that the pattern of music, popular music, over 20 years has used sampling, where the actual musical recording is used in the underlying track and where songwriters utilize pieces of prior work in their new derivative work. that has become a big pattern over the years. you have seen it as far back as george harrison, michael bolton and a very big case matter involving the verve using rolling stones song can "it are

sweet symphony." the rolling stones -- "bitter sweet symphony." in that instance that is correct, there was an original license in that case where there was a license, a sampling license, but they used too much based on what the license said they were allowed to use. to your point, the music business has definitely evolved to a case of using prior art in current art. obviously songwriters and publishers deserve the right to get paid for their prior art. at the same time, the courts have to be careful about stifling creativity. cory: cage match, who you got? robin thicke, marvin gaye. jason: i love them all.

we see the classics won this one. cory: jason, thank you very much. "bloomberg west" will be right back. ♪

cory: you are watchingb" where we focus on the --"bloomberg west" where we focus on the future of business. john kerry says his reaction from to the letter sent by republican centers was one of disbelief. one senator supports the letter. >> the problem is these 47 senators understand he is going to make a bad deal and they just want to make sure the leaders in iran know and understand this

deal, if there is one, may be overturned by the next president. cory: he says it will -- ignores 200 years of foreign policy conduct. u.s. lawmakers are stepping up pressure on the federal reserve demanding information about in internal probe into the leak of fed policy discussions in 2012. orrin hatch says the letter to janet yellen -- nasdaq has established a new energy futures market and plans to launch it this year. tech companies like twitter and alibaba chose the new york stock exchange over nasdaq. here is the ceo on the strategy. >> our desire is to win every ipo.

we strive to improve, but we also will have to recognize how well we have done in tech and in other industries. you see a broadening of nasdaq across multiple industry. cory: yesterday there were plans to list on the nasdaq. verizon will offer 200 hours for tv programming is part of a plan to develop a web-based service. they also have a channel that will have programming. and in france, 15 robbers made away with $9.5 million worth of jules. -- jweewels. they fled in high-speed cars and the vans were found abandoned near a toll booth. turning to apple, the company is

outsourcing medical research with a new app. apple will take the data learned from the health app and share it with doctors to use in research. it targets diabetes breast cancer, and other diseases. with this move the needle for health care research? my next guest think so. he joins us right now from new york. when i saw this announcement, it seemed ridiculous that the limited information of how many steps i take and how many stairs i climb and how much i am awake can make a difference. >> i think the advances we are seeing with these mobile health apps, with the iphone, they can connect to seamless devices. we will be able to have bluetooth enabled inhalers.

how much they are throughout the day. assess the robustness of the respiratory tract. it is not just about the activity. it is all the other activity we can link to two assess wellness. cory: what data do researchers not have now? the ubiquity of iphones in this country seems that it could collect a lot. what pieces of information are you after? eric: one point is the number of people needed to understand complex diseases. something like the iphone enables a broad canvassing of populations beyond what we can get in a local area. just in the day our app was up on the ice store, we had 25 people enrolled in our study. that would take a researcher 1-3

years to accomplish that same enrollment using traditional means. in addition, we collected data in snapshots, single visits. by using the iphone, we can connect -- collect that data longitudinally. we can collect it throughout the course of somebody's life. cory: that is intriguing. i'm interested in the model where the person is giving up loads of genetic data so they can become part of this giant cohorts. you don't have the consistent tracking of said people. are we entering an era where there is more data available for research about these diseases? eric: that is a perfect point. this will enable you to generate sequencing information on your genome. you need to connect that to the

parameters of your system. what we can do through the smart app technology is we can track all different physiological parameters, blood pressure heart rate ekg, the inhaler. you're not collecting it one point at the time, you are collecting its longitudinally. that will give us a wealth of data that is going to create the holistic picture on somebody's health and how best to target their disease, classify it, and make them more well. cory: apple used you this week. how did you come to work with apple? eric: as we started thinking about how are we going to reach out and get more people who have diseases how are we going to engage them in research and collecting this information? the bigger the data is, the more

accurate our mortal -- models become. apple sells the device, used by a billion people, they are masters at the user experience. getting people to engage and contribute the right information so we can build that are models. it was a natural link. cory: there is this dichotomy where there is so much concern about privacy health information, and we are asking people to give up their data. we've got the nsa trying to break into iphones and the cia doing the same thing and we've got people volunteering private information. pete:eric: that is another great point. we have secure communication between the app and servers where the information is stored. it is secure. people are willing to give. if you use gmail, you consent to

give google access to your e-mails and to read those e-mails. you do that because you get a meaningful service back. a free service where you can write e-mail. if we can make these apps well enough and engage with people and provide them with meaningful guidance on improving their health, they will forego some of the concerns they have just like they do with the gmail or yahoo! and someone. -- and so on. cory: thank you very much. "bloomberg west" will be right back. ♪

cory: i'm cory johnson. the apple watch has a lot of health tracking features and will collect a lot of data when it is on your wrist, but had you make sure it does not fall into the wrong hands? joining me right now is a ceo who writes encryption tools to

secure information all over the place. what are the issues raised by this watch? >> it is complex. wearable devices make it possible to collect personal terabytes of information about us. and protecting that information securing it, is critical. cory: how is it different. i'm wearing my job own. i figure out when i'm asleep or how well i'm sleeping. i monitor my step's. i should hit 10,000 today. that is not especially secret information, when i go to bed. is it about privacy, or is there more information? miller: the initial release of the watch is more about a low and front and to your ipad.

as applications become more prevalent and available in the next months with biometrics and health kit the device will be able to track anything connected to the internet. it becomes more critical when it is shared with your physician or with your company. and the only way to really protect that information is to encrypt it at the data level. cory: is that what happens to the apple watch? miller: today, no. the first benefit is most of us use a pin code to access the iphone. with the iwatch, you will be able to have a multi factor authentication. to access the information on your phone or ipad or the watch, the physical presence of the watch, combined with the phrase will be required.

cory: and you can add to that the thumbprint. miller: most of us use single factor authentication. cory: where is a business opportunity in this for you? miller: our company has a platform and we have companies around the world, 30,000 of them encrypt information through our platform at the data level. it is persistent encryption that follows the information, whether on a mobile phone or a wearable device, or wherever it goes in the cloud. cory: presumably you have to work with apple. what are they like to work with? here you are, the keys to the kingdom you are working with them about security issues. miller: one of the things that

makes apple useful and prevalent is the fact theyir tools are prevalent. so we use their development environment to create our apps and they are tested on every single device apple produces. cory: the way apple approaches security, they made a shift after the iphone 3, where they decided they could not keep it safe from the government spies. i'm making this up, sort of. after the prism program happens, apple changed the way they collected data. do you see a connection? miller: that is right. we are seeing that not just from apple, but google and yahoo! and microsoft. the encryption part of protecting information is relatively easy. it is in managing the keys, the decryption key, that is where the complexity is.

if you encrypt it at the device and the user is the only one that has access to that key, the information will be safe and the government can't ask apple or us or anyone for access to that information. that is one of the biggest changes we are seeing. cory: i keep in my thumbprints with me. "bloomberg west" will be right back. before that, mark crumpton joins us with a preview. mark: the bank stress tests are scheduled to be released after the close of trading today. unlike last week, which gauged whether banks had enough capital to withstand a major economic shock, this week's tests examine whether they can withstand losses and still pay dividends or make acquisitions. one analyst and reporter will join me.

cory, back to you in san francisco. cory: we will be back after this. ♪

>> we've got some breaking news, a takeover offer for a pharmaceutical company as it tries to get in the way on the deal according to people familiar with the matter. endo is based in dublin and reportedly is offering to pay $175 a share. they had agreed to play $158 in cash. salix jumped on the news. it has been halted from trading. valiant declined and it is still trading at the moment. a representative could not be reached for comment. this had been reported earlier but we do know that overall in terms of strategy, endo follows

a similar tack trying to buy smaller companies and then cutting r&d expenses once they have the company and products. we will monitor all of these headlines. more "bloomberg west" coming up. cory: i'm cory johnson. what were you doing in high school? if you like me, you were predicting phonons and electrons. i was not really doing that. i cut was. he is 17 years old. he lives in maryland and has won a top prize in the intel science talent search. michael, this is interesting research. the fact you are 17 is a bonus. talk to me about this research. phonons make sound happen yes? michael: i'm 18. it is not that impressive. cory: forget it.

let's move on to the next segment. i could not think sound could be measured like this. why does this matter? michael: a few reasons. the long-term reason why this is important is it creates something called a room temperature superconductor. copper is a very good conductor. it allows us to move electricity well. when we try to solve a city's worth a few feet across, it can be, there are huge losses. a superconductor, there would be no loss at all. you could move power anywhere for free. cory: michael, for decades people have been trying to use optics as a semiconductor because light moves faster than the speed of sound.

it has not worked. is there application for controlling a bombardment of electrons that you could build conductors out of this? michael: i'm more interested in superconductors because they are more super. so i think for things like computers, sound does not move fast enough. for certain things like diodes there might be applications. i could not think of any. better minds than me know more about diodes. cory: i'm told you were inspired to do this work by video games. seriously? michael: not to this work in particular. i did become interested in physics to get good at games where i have to jump from one level to another. eventually i decided getting

good at video games was not really my speed. maybe i should learn about the fundamental nature of reality. cory: you will be somebody in reality, president obama later today. michael: yes, i am. it is going to be really great. cory: interesting stuff. we have a screen that demonstrates what an optical lattice is it i thought you could explain what it is and how electrons will get trapped in certain places. michael: sure, yes, what i did was my model assumed a tight binding lattice. an artificial kind that would be easy to test my theories. what happened is you sort of half a laser beam resonating in a cavity, in a hole, and the results, the laser beam is

generating an electronic field and the trapped electrons have a lot of trouble hopping one place to the next. cory: very interesting. congratulations. have fun meeting president obama today. i'm sure we will hear from you again. thank you very much. the bwest byte tim hagan is here. what were you doing at 18? tim: not that. $178 billion apple's cash pile. that is on the minds of investors asking tim cook, hey, is there a deal in the cards? cory: showing pictures with me and elon musk. so tim cook basically laughed. tim: he said there is no

relationship with tesla. we would like them to use apple's car play, use your car like a radio but at this point, he was trying to sidestep it. cory: the shareholders meeting is interesting. i feel like the former apple employees show a great side. tim: a lot of people there, a lot of fans of the company. it is your friend than it was a year ago. the record profit, the iphone is giving a lot of optimism. a day after the watch details emerged a lot of the investor optimism and consumer optimism. cory: we will talk about what we were doing at 18 when the camera is off. you can get the latest headlines on the time on your phone, tablet, and at bloomberg.com. "bloomberg west" will be back tomorrow.

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mark: from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line" the intersection of business and economics with a main street perspective. to our viewers in the united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this wednesday. a roundtable discussion on the next phase of the banks stress tests with allison williams and michael moore. our chief washington correspondent, peter