emily: netflix prepares to do the film industry a run for its money. the company's oscar gamble begins this weekend with the company's first original movie. ♪ emily: i'm emily chang and this is bloomberg west. coming up, tech heavyweights prepare for xi jinping's summit in seattle. and uber's ceo says he knows where to find all the companies making self driving cars, including apple. all of that ahead.

first to our lead. first it was original tv, and now netflix is getting serious about film. on sunday the company's first original movie, "beast of no ," screened before a particularly important audience -- critics at the toronto film festival. it follows an african warlord on his quest to train young recruits. the film's star power includes the emmy-winning true detective director, cary fukunaga. so, what is the endgame for netflix? joining us from l.a. is the senior media analyst at renttrack and our reporter who is in toronto right now. are you hearing oscar buzz about this movie? guest: as you said, it is going to open to the main audience, but it has already screened at two festivals in the past week

or so, venice and telluride. those are much more art type festivals that really -- toronto is one of the biggest festivals of the year, along with cannes. it also plays to a mainstream audience. if you go to this, you will see the film and get the real reaction. so far, the buzz is positive. emily: we're hearing it is on a few short oscar lists. paul, it's interesting because in order to be considered for an oscar, it has to open in theaters, so netflix will be opening this movie in theaters on the same day that it starts streaming on netflix. how valuable would an oscar be for netflix in movies at this point? paul: it would be very important for them. they're going to have to get support from theater chains.

that may be a tough road for them, since a lot of the chains see netflix as an interloper of sorts. a model that is being created that can take away from their business. now, i think what is ultimately going to happen is that out of all this, we are going to see a lot of changes in the way that things are done. however, i think for netflix, this is an important step. but again, they are still going to have to get the theaters on board, because if you cannot show it at a theater, you cannot get an oscar nomination. remember, this will not work for every movie, and you cannot make enough money back on a big budget movie to just go in the on-demand space. but suddenly netflix is taking a claim and trying to get support showing the movie and trying to get oscar consideration. emily: it is interesting because the ceo of regal actually said, why should i show a netflix movie in my theater when people

can just watch it at home? personally, i would watch it at home for free, and i do not think i would want to pay for any theater. >> it depends on the movie. when people see the new star wars, they want to go see it in the theater for sure. a small movie, the small screen might be the way to go. but i understand that regal thinks it might be undercutting their own business. landmark will show the film, but all of this is going to wash out eventually because these are new technologies, netflix is a relatively new player in the side of the business. when you have a lot of resources like netflix does to produce movies and get them out there, they are definitely a major player, but if you're going to get oscar nominations, you have to play in the theater. emily: i think we can agree that

star wars is pretty one-of-a-kind. on one hand, they are walking with the theaters, and on the other hand they are walking a fine line with studios. they are partners and studios, but doing original content makes them rivals, right? >> exactly. as paul was saying, netflix is disruptive to the whole industry. the content producers, the studios, and the exhibitors. the exhibitors have been vocal about the fact that they want to protect their typical 90 day exclusive window where the film only shows in a theater and then goes to home entertainment, which is what they see netflix as. the way that netflix will get around it is that they will show their film in a few independent theaters, rather than your local amc or regal. you will have to go to landmark.

that is how money is to qualify. but the studios are also competitive, because they are creating original content and taking people away from it. netflix itself also has competition from amazon. they are here for the first time, looking for a potential acquisition for their new original film platform. and we have heard about apple wanting to get into original content as well. netflix is changing the industry from the tv perspective, and we are seeing it playing out in film. emily: netflix has to buy global rights to movies. amazon only has to buy rights in north america, so they could be in contention for a lot more, given films that are only sold in certain territories. paul, when it comes to the stock, we have seen a lot of volatility there over the last few weeks. it is up over 100% so far this year. what is going on? paul: netflix is in the midst of a total change of their dynamic. remember back in the day, you

just got a dvd in the mail, and then you would return it. if you had envisioned netflix being where they are right now, producing content, and that film festivals, and trying to get that box office dollar from theaters, nobody would have seen that coming. but again, because of their growth and resources, they are able to try to break into this space. at the end of the day, unless they have the money to build their own theaters, which i don't think they do, they are not going to be able to get a big enough footprint with these movies in a brick-and-mortar theater, which is needed for an oscar. if they just want to get a lot of content out there on their platform and the actual films on that small screen, that is what they are, small screen movies. there is still a prestige level associated with oscars. there is a much smaller stigma attached to direct to video movies now because the content is so ubiquitous and so available. but you still have to go to a movie theater, that is the best

way to go. i understand why netflix is doing this. netflix is going to shake things up. they still need this movie theaters to help them on their way. emily: now you have other studios wanting to make a netflix series, because house of cards was such a big success. we will be watching. thank you both. now, last night, the uber ceo went on "the late show with stephen colbert." he defended uber's plan to use driverless cars and also claims that apple is working on its own driverless vehicle. colbert: i know you talk about how good this is for drivers, but you said you want self driving uber cars. that is not just for the driver. we are employing robots at that point. how is that helping delivery drivers?

>> google is doing the driverless thing, tesla is doing driverless thing, apple is doing the driverless thing. this is going to be the world. the question for a tech company is, do you want to be a part of the future, or do you want to resist the future? we feel that in many ways we want to not be like the taxi industry before us. that is how we think about it. emily: what you did see it last in lastyou didn't see night's episode was that he was apparently heckled by taxi driver supporters in the audience. colbert joked about the incident, but it was all cut from the final broadcast on cbs. taxis in new york city will now be getting reading material. uber will be supplying each car with its first issue of its own magazine, "arriving now." at the same time, some more competition.

still ahead, by china's -- why china's president is adding seattle to his list of cities to visit. we discussed next. also, the shuttle spacex wants to use for a mission. ♪ emily: a story we're watching,

another executive exit from yahoo!. the cfo is joining stx entertainment.

next month she becomes the president of the digital efforts. she joined yahoo! in 2012 and became head of media, heading important properties like yahoo! finance and sports. this is not the only shakeup this year. yahoo! promoted lori mann to chief information officer. another story we're watching, chris sacca taking to twitter to tweet about twitter and its ceo search and voiced support for jack dorsey. it is time for the board to formalize the obvious, he tweeted, making jack the ceo and let everyone get back to focusing on making twitter better than ever. the market knows that jack has such strong teams that he can run both companies. jack dorsey has full support of the key players at twitter. earlier on studio 1.0, i asked sacca if he was becoming an activist investor, which he deflected, but he explained why he wants to fix twitter.

sacca: i have been invested since anyone can be invested. i have been a user sends 2006. there are more than a billion people who have tried it and not stuck around. twitter needs to be easier and more exciting and less intimidating for all those people. emily: turning now to china. president xi jinping's first state visit to the united states is scheduled later this month. the president will be attending a tech summit in seattle, organized by the chinese government. here is what we know. bloomberg has confirmed that alibaba founder jack ma will be there. uber has been invited. the new york times reports tim cook is planning to attend and maybe the ceos of facebook and google as well. they will attend a dinner hosted by microsoft founder bill gates at his home. it is interesting, given president obama's hard-line on china and the chinese president's hard-line on u.s.

tech companies. i am bringing in gordon chang, who works as a lawyer in hong kong. what do you make of the chinese government organizing its own little side trip ahead of the state visit and sort of undermining the white house as the white house is considering sanctions on chinese businesses for hack attacks? guest: i think it is a smart move. i do not know to what extent they are undermining. i am sure the white house has been made well aware of what is going on. xi jinping was coming in the pacific direction, and i know that it is well known known that the chinese have been sort of obsessed by the choreography, not just of the state visit to washington and to new york, but also what would be the other city, the other nongovernmental, non-bilateral venue they would have. seattle is an interesting choice. i am sure we will hear about

others that you will be seeing. nobody on that list is likely to say no to a chinese president. this is a relationship right now, the u.s.-china relationship, that is in need of some win-wins at the summit. i suspect they were looking for something that would be business friendly and friendly generally to the chinese, moreso than the washington visit may be. i think it is a smart move. emily: would you agree that there is no undermining going on here? as i understand it, some folks in washington are not too happy about this. i wonder, facebook is blocked in china, google decided to leave the country, what do they have to gain? guest: they do not want to turn this down. and of course they are undermining the obama administration because it has been very well known, because the obama administration has

leaked that they want to impose sanctions on chinese companies for receiving information that they use for commercial purposes. beijing wants to make sure those sanctions are not put in place, but also i think they want to re-create the chinese business lobby, because that has fallen on hard times. given early events over the last 3 or 4 years. of course it is undermining the obama administration, that is why they are doing it. emily: tom, what would you single out as the most important issues on the agenda between not only president obama and president xi, but president xi and tim cook or mark zuckerberg? tom: when you look at the u.s. china relationship, you are looking at the problem spots, and you are looking at the areas they are to find accommodation. the problem spot is a long list right now and gordon just mentioned some huge issues. by the way, i think the administration shares with a lot of those business people, and i

suspect, although i may be a nice public relations looking thing in seattle on the public face. the chinese are going to get an earful from some of those same businesspeople. it is not just from the high-tech ceos that you mention. he will be meeting a lot of other high-level business people, i think warren buffett is going to be there. there is that. there is cyber, there are all sorts of issues that have been on the table for a while. access to markets, and intellectual property issues. but then, in terms of common ground, i think one to watch, and it may have a place both in seattle and the tech front, and also in washington -- it has to do with climate change. that is one of the few areas where the two governments have some common ground, where there has been some positive and constructive engagement. i think you can look to hear some statements about that issue on the way out. emily: gordon, the journal is reporting that the president

will be having dinner with bill gates at his house. what do you make of his national -- special access? gordon: gates has had special access for a long time, but that is not for the microsoft from having severe problems in china. i think the same thing is going to happen to tim cook. he has said some nice things to jim cramer about the strength of the chinese economy, but it will not help apple that has a tax case against it. they're basically supporting the apple competitor. i do not think this will be an easy ride for any u.s. company, especially apple and microsoft. emily: we should mention that apple has made huge headway in china. the iphone is huge in china. though, certainly, as you mentioned, not without challenges. gordon chang and tom, the executive vice president of the asia society. we'll be watching this visit very closely the week after next.

in today's out of this world, spacex is releasing these images of the inside of the new dragon spacecraft. this is what the company hopes to use to send astronauts to the international space station in 2017 if it beats out boeing. spacex is developing this under a contract of nasa that is potentially $2.6 billion. also out today, stunning new pictures of pluto, captured by the new horizons spacecraft. the latest snaps revealing a more diverse landscape than scientists had imagined. so much data was collected in that flyby that it is going to take until next fall to receive it all here on earth. coming up, matchmaking for mergers and acquisitions. we will talk to a ceo. ♪ emily: it is time now for our

daily byte. today it is 198. that is the average number of minutes americans spend inside mobile apps according to a new report. it's the first time ever that the amount of time spent inside apps exceeds the number of hours spent watching television. the figure does not include time spent inside mobile browsers, even though those are technically apps. while time spent on apps is increasing, the time spent on tv has not changed. a little depressing. you can use linkedin to search for a new job, but if you're looking to grow or sell your company, you might want to meet my next guest. he uses an algorithm to help match companies and investors.

peter, thank you so much for joining us. give me some examples of companies who have used your service and how it has helped them. guest: we're focused on companies in the middle market. these are businesses around $200 million in revenue. they are not part of the start -up economy, and they are not part of the ipo market either. they could be established software company or a kitchenware business. we are focused on the status, revenue companies versus the pre-ipo companies. emily: you say your biggest competitor is the handshake. guest: for sure. we decided to launch the mobile now instead of years ago because we have so many customers that in the early days were on blackberries but are now on the iphone. a lot of our customers are

in private equity and corporate development are constantly on the road. in a market like today's, where the competition for deals is just incredibly fierce, our customers want to be able to respond right away to a seller when they are reaching out about a deal. in fact, being the first to respond to a deal, we have done the homework on it and you actually have a 19% greater chance of closing the deal if you're the first person to respond to the seller. being able to put the deal flow in the palm of your hand when traveling, when you are at a conference or on the road is a big consideration for our customers because the competition has gotten so tight. emily: what is your view on the m&a outlook right now, given the volatility we have seen in the stock market? do you see m&a speeding up or slowing down? guest: in order for m&a to really come down or decelerate, there would have to be a huge , huge correction or really big

deceleration of the economy. the fact is, at least in america, baby boomers are retiring at a really accelerated rate. they're going to be retiring at regardless of interest rates and stock prices. that is going to put a tremendous number of of businesses in the market over the next five years. i think if something really terrible were to happen, it might put a pause on m&a. otherwise, we see just volume continuing to be really strong. august was our strongest month in our history. we had over 1000 digital signatures signed in the month of august, which is the leading indicator for deal flow. emily: peter, thank you so much. we will be watching the market conditions to see if you are indeed correct. that does it for this edition of bloomberg west. it is friday, so have a wonderful weekend. on monday, do not miss my interview with the cofounder of tom-tom.

we will be talking mapping in the age of driverless cars. see you then. ♪

♪ mark: good evening. former texas governor rick perry is dropping out of the presidential race. he made the announcement at any event earlier today in st. louis, missouri. john, not a shock. a lot of financial problems. why do think he decided to get out of before iowa? john: then, there were 16. look, there was no path for him. he came to that conclusion he tried his best to reinvent himself and overcome the legacy of his oops moment and