area are at a near standstill. police want -- protesters on police to release the video of a black man shot and killed by minneapolis officers last month. the next republican debate could include sus six candidates. pollsiness is using a new criteria. president obama will host a summit early next year with southeast asian leaders. the president extended his -- the imitation while he was visiting -- extended the invitation while he was visiting malaysia. russian cargo ship made it to the international space station just in time for christmas. aboard astronauts living will soon begin unloading three tons of supplies.

the cargo ship will stay docked at the iss for six months. news.s your first emily: i am emily chang. this is "bloomberg west." pirate or freedom fighter? says kim.com can be extradited to the united states. beatles fans finally get their wish, the music debuts on spotify and other services.

most popular drone maker tries to stay ahead of the pack with its first retail dealership. for alegal setback larger-than-life internet entrepreneur. a court ruled that kim dotcom can be extradited to the states to face charges. following the ruling, he spoke to reporters outside the courthouse. >> this is not the last word on the matter. we will file an appeal. i am still on bail. we will go through the whole process until the very end. emily: after his court appearance, he tweeted -- he also put out a twitter poll asking his followers whether he should be extradited to the united states. litigationnow, leave

attorney. -- lead litigation attorney. what were the results of the poll? >> i do not know yet. the judge has said there is overwhelming evidence to support him being extradited to the united states. the evidence in favor of kim is short of undermining the case. what is your reaction? >> we think the court got it wrong. in order to extradite somebody from new zealand, you have to -- dualcriminality criminality. -- it istrying to called secondary copyright infringement.

there is an overt safe harbor in new zealand that protects isps from criminal liability. we look forward to going to the appellant court. this is not only an issue for kim dotcom. already started the process of an appeal. are you going to do anything differently this time around? >> that remains to be seen. i think the record is clear. court, in a long opinion, spent only a few paragraphs on the notion there is a safe harbor and new zealand that protects isps. this is allowed to stand, a prosecutor could use his discretion to heckle policies because they do not like them. they may lose, but the effect of

prosecuting somebody is a victory. that extends the copyright monopoly way too far. emily: kim and i had a conversation when we were in new zealand. inhe scared about 80 years prison? -- 88 years in prison? >> i am not scared of anything. everything that happens to me, i try and make the best out of it. i know this sounds crazy, but i do not know fear. how is he taking this? underis taking it well the circumstances. we have to take a look at what happened to date. there has been a buffet of government abuse. a raid on his home.

>> a military style raid on his home. the united states was found guilty of illegally taking data offshore. it is no surprise that he has taken this situation well. when you have a scenario where a professor is disagreeing with other experts, how could a layperson have the critical -- criminal mindset when the experts themselves disagree? emily: one of the arguments, megaupload is not different than like dropbox.ice, >> they are trying to use optics to go after someone they do not like. line in new zealand .s the ifp -- isp safe harbor you cannot hold clout start

providers criminally responsible for the acts of its users. dig into thisto comparison to dropbox. dropbox says they have several mechanisms in place to limit or prevent privacy, download limits , and such. the other thing is that it is free. if megaupload was charging users for content, how is that not illegal? >> just like dropbox, which charges for storage space, megaupload charged for storage space. dropbox should be worried inause all that happened this case was the prosecution heckling things, heckling to medications, -- heckling communications, ignoring noninfringing uses. the court bought into it.

dotcom is often associated with these extravagant displays of wealth. what is it like working with him? >> it is like working with a combination of the old comedian john candy and probably steve jobs combined into one person. he is an incredible innovator, somebody who can get people together to create great technology. he is extremely funny. it is a wonderful combination. emily: you and i have talked about this a lot. you said, if anything this should be a civil case, not a criminal case. isn't that an admission of some type of liability? case, there is a

calculus that goes on. youtube was sued and if youtube did not have the funds to fight back, they would have lost. it is the same sort of situation. downsidetolerate the being money, but to have someone have to go to jail for 80 years -- he will not have a dime to pay for lawyers. using all of these things that are only available in a criminal case to make an uneven playing field. the theories they are putting forth are the types of theories that civil cases have against napster. case couldthink this go all the way to the new zealand supreme court. >> the policy issues are so important. antibusiness and we

think the supreme court will take a hard look at this and provide a check and balance. emily: thank you so much for being on the show. slow down in china, what slow down? the companies -- the country's biggest phone brand is seeing no signs of it. it won over consumers with its high-end products. hu way is pushing into -- awei is pushing into the u.s. to take on apple and samsung. the music streaming industry is getting a little help from the beatles. break, our consumers showing more interest in the shoes on their feet than the phones in their pockets?

nike shares have been outperforming apple over the last three months. posting second-quarter profits that beat analyst estimates. orders were up 20%. more of bloomberg not -- bloomberg west, next. ♪

it has been a long and

winding road. the beatles musical now be available for streaming. it goes into effect one minute past midnight on december 24, wherever you are in the world. why is this happening only now? isning me now from new york our next guest. there is a comp look at it history between the beatles and streaming services, all the way back to steve jobs. >> it goes way back to the early 1960's when the beatles were just breaking big and they gave away most of their rights to record companies. music rights are some of the most convoluted, confounding rights you can find anywhere and it was not the beatles who were holding it up.

their publishing rights, which are the songwriters rights, mechanical rights, and artist rights. the beatles did not have any of those rights to most of their songs until five years ago when steve jobs was able to put some of their songs on itunes. it has taken from 2010 to now for the record companies and the publishing companies, basically sony, emi controlled the majority of the publishing and music rights, and they shared those with michael jackson. the rights reverted back to the share to paul mccartney -- back at this year to paul mccartney. a lot of history. le, still have ade

taylor swift holding back their music from the streaming services. porter: the artists are doing much better than they did ever since the launch of napster. at that time, the record companies controlled the music industry and the artists were at the behest of the record companies. if they wanted to make a profit, they had to tour and put on live performances. different. lot most of the artists know how to do social media and the internet to market themselves. they still make the majority of the revenue by live performances, but they do much better than the record companies. the streaming companies today, spotify and pandora and all of the others, they are worth

billions of dollars, worth a lot more than any record company ever was 10 years ago. emily: you still have these incredibly high profile artists at odds with the streaming companies. when does spotify get over its taylor swift problem? is there always going to be an artist that is not participating? 10 years ago, the record companies controlled everything. today, if you are a major name like taylor swift or adele, you control the use and distribution of your songs. adele broke every record in history with album sales for "25" and she was very smart not to stream it. she will start to stream it once the sales tail off.

taylor swift got upset at spotify and itunes because she did not think she was getting enough for her songs. the royalties are set by a federal ruling. last week, a three-judge panel came up -- came out with an improved royalty payment of $.17 per 100 plays for the artist. spotify, thee ruling is about 10 days to two weeks away. they will get an improved royalty rate as well. emily: porter bibb, thank you for taking us into the details. we appreciate you breaking it down. thank you so much. i am very happy the beatles have arrived on streaming. insight, alan patrick

off says in the land of unicorns, there is no place to go but ipo's. there is just one brand dominating the consumer drone market. ♪

emily: there is no place to go but ipo. that is the message that alan patricof had since he spoke on bloomberg last month. morehey set the town for -- tone for more or less exits to come in 2016? at the time you said they would determine whether or not we are

in a bubble. what do you think? >> i think it is really encouraging to see what happened with the square ipo. square became public at a discount from what their last private finance round. we do not really know until the time comes. interestingly, it came at a significant discount from the last round. the public markets behaved really well. i did not say anything other than to say the public market will test these valuations. time, we are same foursquare may be going

through a massive down round. they are talking about a significant discount. about -- a comment lot of these companies have been around for several years. high valuations are being tested. you really have to be concerned. that is where the high valuations have taken place because of that institutions , have been buying amounts of capital. this concept of pre-public purchases. the companies you are displaying, airbnb and pinterest

and uber are going to be tested. some of them will do fine. i just think -- once they go public, the public market has a appraising.y of the knowledge of all of the comparable companies and what their metrics are. if the companies perform well, they will do perfectly fine. i am guessing that square must be looking forward to good quarterly results for the december quarter. it affected their timing of when they went public. how are you adapting your own strategy? i know you are an earlier stage investor. what trends are you betting on

and what trends are you betting against? >> we own short companies so we are not betting against anything. typee in the early financing. we are not in that later stage where you are above a $500 million valuation. we are at the earlier stage and we will continue with the same kind of strategy. we see lots of opportunities, companies and the e-commerce area, companies in the video area. mobile has taken over. a lot of companies have found it necessary to be mobile compatible and to have a mobile first strategy and that will be a big trend going forward. emily: a number of the companies we showed in that graphic,

uber, these are companies probably not going public in 2016. do you see a risk of their valuation getting too high? >> it is hard to common sense i do not have access to the numbers. -- it is hard to comment since i do not have access to the numbers. in the end, the investors will apply some strict disciplines to those kinds of valuations. emily: you are sticking with us, t was so much. 2015 has been a memorable year for yahoo!. can it be saved? ♪ bring your family and friends together

to discover the best shows and movies with xfinity's winter watchlist. later on, we'll conspire ♪ ♪ as we dream by the fire ♪ a beautiful sight, we're happy tonight ♪ ♪ watching in a winter watchlist land, ♪

♪ watching in a winter watchlist land! ♪ xfinity's winter watchlist. watch now with xfinity on demand- your home for the best entertainment this holiday season. emily: i am emily chang. wednesday in san francisco, 7:30 a.m. thursday morning in hong kong.

morning. good we are watching oil after opec said demand for crude will continue to fall until the end of the decade. the cartel expects increasing competition from rival suppliers. $95.year, opec predicted china is doubling trading outers -- trading hours. trading will be extended into the late evening until january 4. beijing has provided more channels to the trading after the yuan was awarded reserve currency status by the imf. airbus has ordered from asia's biggest carrier. it will buy 10 widebodied

planes. the carrier agreed to buy 110 aircraft from boeing. china southern is expanding and modernizing. wasag maker takata criticized by its biggest customer. attacked the ceo. graspgineer asked if they the gravity of the situation? honda raised some very serious concerns. what else do we know about efforts to protect their customers? is their biggest customer, a 1.2% stake in the company. these minutes were given to

bloomberg news by a lawyer who is representing a 73-year-old woman. following an accident and her 2001 honda civic last year. the meeting took place in los angeles for months before regulators started their investigation. ,xecutives grilled by honda when asking why these airbags constantly explode. honda has expanded its recall five times. the minutes show the levels of frustration. emily: thank you so much for that update. emily: to say it has been a rough year for yahoo! may be the understatement of the year.

scrappingments from its longtime spinoff of its stake in all obama -- it's taken alibaba to activist investors threatening a proxy fight. there and -- then there is the executive exodus. what can the company offer investors in 2016? you have been very vocal about this. very vocal. also an understatement. do you think yahoo! can be saved? om: they do not really have any relevance to the current user, internet users. the answer is no. be very much like 2015, the growing irrelevance of the company. emily: allen, having invested in

aol, how do you answer that question? alan: i do not want to dig any ditches. we have to think about when marissa mayer came in, the stock was 14. turning a battleship around. there are components of it. position is worth more than the whole company probably. lots of pieces that perhaps can be split apart. yahoo! finance is still strong. they are making a big attempt with yahoo! news in bringing and katie couric. i do not think you want to yet say goodbye to this. there are pieces that can be spun out. it is a very difficult job that marissa has undertaken and there is still an opportunity.

it is a difficult one, no question. om: flickr as a standalone company has a lot of value. from a user standpoint, whether it is yahoo! finance, yahoo! sports, yahoo! news, katie couric or whomever, the attention is on facebook, snapchat, and twitter. the news people get is from buzz feed, not yahoo!. is idea of what yahoo! was somewhat romantic. everybody wants to save it because of what their past was. he and his have shifted their attention -- new audiences have

shifted their attention elsewhere. regardless of whoever the ceo .s, you cannot fight the tide the attention has moved on to other places. that is the biggest challenge for yahoo!. how do you make it relevant to the 25-year-old today? emily: you have been emphatic that the blame does not lie entirely with marissa mayer. what should her top priorities be in 2016 >> mark what --? ? can we make the board of yahoo! more accountable? this board has let it become increasingly irrelevant. to blame this on one specific ceo, what were they hiring the

ceo for? somebody forhiring financial engineering, they should have hired somebody with the skills. emily: do you think marissa should be given more time? alan: i will not go up against om, who is so much closer to the situation than i am. three or four years ago, they changed the whole board. i think it is tough to blame -- it is a difficult problem. i do not blame the board. they are trying very hard to come up with the right strategy. if i were marissa, i would be thinking about how to rationalize the businesses.

to set the size it to a business that can be relevant -- synthesize it to a business that can be relevant in today's world. young people are watching and are looking to different sources to get their content and information. i think yahoo! sports has relevance. the news area is relevant. some of the acquisitions could be spun off again. there are pieces here that i think could add up to significant additional value beyond alibaba component. emily: what about the billions she spent on acquisitions? om: i do not know if tumblr is worth less than when they bought it. the relevance of tumblr has not gone down.

right acquisition. trying to move the company -- they have to do this wholeheartedly. they cannot do it a little bit. there are two options for yahoo!. assets ass much possible, take the pool of money and invest, like a mutual fund a new class of services. this is not my idea. robert wrote about this in his column. it is not such a bad idea for yahoo! to become almost like an investment holding company. they seems -- they seem to have done ok with that type of strategy. investment holding company. we will see how that plays out in 2016.

n, you are sticking with me. more of bloomberg west after this. ♪

emily: the battle for the lead in driverless cars has been battling -- has been dominating the headlines. i sat down in november and asked what he thought about our driverless future. >> if you believe all vehicles will be electric and autonomous, all car companies have to do it or they go out of business. if you do not do this, you will go out of business. you wish them well and you hope a different fleet of all kinds of animals will come out -- vehicles will come out.

emily: do you think apple is working on a self driving car? yes.: by the year 2022, is famous for doing what somebody has already done already, but do it better. steve: the watch is not really grabbing me. no battery life. i have a lot of watches and i actually wear them. i cannot fathom the charging nuisance. emily: do you think tesla should focus more on lower-priced, more mainstream electric cars? the model three is opposed to cost $35,000 -- is supposed to cost 35,000. if you take a current model f, if you factor in the

total cost of ownership over five or seven years, your total cost of ownership is not that different from a high-end for tyrus. -- ford taurus. emily: i know you are super fascinated with machine learning . what is your vision for how ai changes our lives? what we call ai will be specialty. things that are creepy or magical and their ability to do something we thought was somewhat human. manage our schedule and figure out what we want to do today. it will creep into diagnostics in the field of medicine. all of these areas of recognizing a pattern.

they will see things we did not see. i think that will start to acclimate as to what we call ai slowly. how concerned are you about google's ambitions? a little bit. there is a bit of reckless abandon, almost like a tech utopian flair. almost like this is the inevitable trajectory, technology is our future. we will make good pets for these ai's in the future. about are thery

ones we may never know they exist. they are operating in a way that we cannot even fathom. interest ins your ai playing out in your investment philosophy? steve: the way we engineer things is changing. imagine much like a newborn baby that can learn anything, you build a brain in the box. expose it to photos. the same program could have recognized anything on the internet or speech or try to find tumors in mammograms or other radiology slides. you have these generic learning machines that you can apply to many different things and you do not actually know how it works when it is done.

emily: could these computers take over the world? steve: yes, but why? emily: because they become smarter than us. steve: to what end? we would not know we were pets. us and ourap between pets. my cat thinks it is hunting that toy mouse.at way why would a more intelligent being use kindergarten level -- that is my toy. as opposed to much more sophisticated manipulation. emily: turning to check that is

taking off -- tech that is taking off, drowns -- in the skyrocketed.has chin takes a look at the challenges the company faces staying on top. in the last five years, dji and others have made personal drowns more affordable and easier to fly. their proven ability to take pictures sees the world hungry for photos. it makes it simple to capture images like this. being the -- being one of the first, dji has endured the lion shares -- the lion's share of sales. .here is room for growth

the market is forecast to more than triple two $5 billion by 2017. dgi needs to move deeper into industrial products to stay ahead. , are people have a drone they going to need one next year or the year after? it needs to push into new marketplaces as soon as possible . the type of growth they have had , sales tripling each year, that will be very difficult to do with a number of high quality platforms coming out. stabilization, flight control systems, it is something not typical of what we usually do. taking our technology we developed and putting it into another category. industry hasdrone

developed so fast, regulators are struggling to keep up. >> a lot of the companies interested in drones are starting to invest and put the time into it. >> the u.s. is dji's biggest market. the faa plans to issue final regulations in 2016. that should spur innovation and see these flying machines enter into a whole new dimension. ipod, the father of the more from bloomberg west, next. ♪

emily: steve was not the only person i spoke with about driverless cars this year. ceo.o spoke to next

>> i think you will see some dramatic changes the way we think about these cars and the accessibility in terms of the price points. we are 7-10 years away from a massive switchover. if you think about a car, a car has batteries, a computer, and mechanical structure. iphone, it hasan the same things, even has a motor in it. stuff is on conductivity and how cars -- connectivity and how cars could be self driving. when you look at google self driving program or the alleged apple thing, it is looking at it through the lens of software first. emily: did you talk to steve about the car?

>> we had a couple of walks. what would we build? we were just crazy, what would a dashboard be? what would seats be? how would you power it? we are so busy, so constrained. it would be great to do it, but we cannot. emily: when he was alive, was it something like, we are not doing it. tony: there were a lot of things that we said no to. what was the biggest one that had the biggest impact on the world? the cell phones. we will focus all of our energy on that. forget all of the other stuff. let's focus on a really big market. what would steve say about apple?

: i think you would be incredibly pleased. he said the iphone would be his legacy product that would live beyond him. and the iphone is that. that legacy product is going to take apple for another decade or two decades. emily: what was your relationship with steve like? : very professional. there were times it was friendly. it was tough at times. onre were times he called me my crop. -- on my crop. -- xcrcrap. i would never trade that for anything. emily: i read it was kind of like father and son. love-hatee were

moments. if there is not tension, there is not creation. nest ceo. wars" could take an up to 100 $80 million in ticket sales this weekend despite the debut of some new movies. lawrence is back with "joy." thank you for watching. happy new year. i will be back in 2016. cory is in for me next week. ♪

him >> from new york city, this is charlie rose. rose: he's previously served as chief white house correspondent for nbc news. a spiritual journey to understand his own beliefs. it is called house your faith. ho