♪ emily: this is "bloomberg technology" and coming up, more questions swirl around tesla after it was a earnings call and ceo elon musk is putting contractors on notice, starting with warren buffett. and this date of streaming, the industry think brought to life and how that rivalry between spotify and apple will play out into is getting paid. and the u.s. midterm elections kick into high gear as for

states hold primaries and that companies prepare to take that fake news and disinformation, or -- or will of 2016 we see a repeat of 2016? elon musk has locked up email wass, a recent sent out to tesla employees warning outside workers worldwide would be denied access to tesla factories. email wrote me opening nighttion axis to networks on monday morning, supplies worldwide, time to scrub off the barnacles. this is after a bizarre earnings call were mosque could off boring posted analysts asking one of the questions about the company's cash burn, enjoying this with more is bloomberg businessweek's editor covers tesla. >> as elon musk has said,

production has held factory and now scrambling to make model three sedans, and it seems the stress of the moment is beginning to show. emily: he referred to workers as barnacles before, is a goal to produce more calls anars and not less? >> elon musk said tesla is spending much money and they need to find ways to reduce costs that he called a russian nesting doll, a fun metaphor for this. outsides relying on contractors and acting like a normal car company. askaid he is worth to everyone to justify their use of contractors and we have this memo are you saying you have to personally vouch. contractors because or production problems? the fact is that have been

production problems and tesla spending a lot of money. you could read into thought. it is also surprising that you try to make as many cars as possible you try to cut staff, is a had scratcher. still investors are talking about this bizarre earnings call, let's take a listen to his exchanges with analysts. >> we are going to youtube. sorry, these questions are so dry they are killing me. solve --ething will next. boring questions are not cool. if people are concerned about volatility, don't buy our stock. do not like it volatility is scary. mentioned the

kilowatt charger. >> asked questions that aren't boring. emily: he talked about a millennial focused channel called hyper judge television where they got into 23 minutes with musk.a with m questions forrced viewers and subscribers and pitch it to elon at tesla and they let me on the call. is the model being disrupted by what you achieved? lot of time and he was obviously dismissive of the traditional wall street analyst questions. and those questions were valid talking about gross margins,

does it need to raise more money? to think this is a pivotal moment in that analyst call epoque? think the questions before me were reiterating things that were answered in the shareholder letter and was a perfect storm of elon getting straight and not think the transition went as smoothly as it could. i had 10 or 12 questions prepared from shareholders, and i had the floor and decided to keep asking questions. >> i have so much to ask you. you have this youtube channel that is not making money, and i gather you have sold some of your bitcoin investments to fund the channel. how much it going you owned and what price you bought and sold? you have other cryptocurrencies? >> i got into the going and liquidated and averaged all

thousand nine been using those profits to find hyper change all week wrapup revenue for now. currently i own one other crypto asset. can you get back to the tesla call for a moment? on the earnings call, if you talk about shareholders, could you have waited for a shareholder day or annual meeting? which is work shareholders was his are heard. the earnings call is typically for analysts. as anhink of myself analyst, and although shareholders to get the chance to ask questions, the quarterly conference calls are for updates on the business. say i could have got more into the financials, specifically the trajectory of operating expenses is important that going to profitability. place for more

strategic questions on the conference call and analysts were not addressing them. like feedback from the huge energy storage facility in a still yet that elon musk referenced. you feel used by elon musk in the sense he is able to give you five minutes takeaway time that --ce could have asked takeaway time that analysts could have asked questions? >> about the tesla energy debt is alarming a long-term story at about these questions. that is the host of hyper change television, and to be fair, he did ask questions that a lot of people would look to ask elon. this is a company that hasn't turned a profit in its 15 year history some analysts are right to wonder when that might happen. max: part of the concern when he saw the start price fall in the

wake of this call wasn't so much about having a youtube personality and a fan boy analyst on the call, it was more about the reaction and singly erratic demeanor of elon musk. you have a company that is dependent on this one person, and that is why people are eventsattention to his at youm. emily: he was asked about this at a shareholders meeting and let my to things around in some areas but said i don't think he can. tweets aboutveral starting a candy company, and he is super serious about it. max: he couldn't resist that can be thdy bate. putting aoat is

buffer on your business. max: elon musk said they are boring and uncool, and despite the view is innovation rather than building barriers of entries is where they are. on the other hand there is a focus? on here. going on here. emily: is this behavior going to have a long-term impact on his reputation and likeness for investors to back him up? max: yet to take the good with the bed with him because he is good at making news and creating a scene, part of what tesla has been able to successfully is get people to put money down for these cars. part of the way you do that is by making noise and trolling warren buffett or bringing you to press not these on the call.

yet to take it both ways and the stock is recovering today. we will have to see what the numbers show at the end. emily: max chafkin, thank you so much. coming up, estimates success and how to music industry is writing this to make waves of success. and if you like bloomberg news, listen to us on the radio at and on sirius xm. this is bloomberg. ♪

emily: the music industry is experiencing a boom in revenue one not seen in a decade. $8.72 billion and

that number is steadily rising since 2015. less than the music industry was getting numbers like that was 1994 when growth was around 20% to the tune of $12 billion. analysts point the finger at stomach as his habit of the business and goldman sachs for this is to make industry will grow by 2030 and invest majority will be paid from subscribers. joined us to discuss his analyst at the marketer. it was it long ago taylor swift was pulling out of spotify and she is back, what is happening in the last couple of years to make streaming work better for the industry itself? >> with this happened is assuming services have wrapped up and people have latched on to that model. up until a couple of years ago that there was a tension between cd sales and streaming and paid

downloads. on this trimming site you had services like pandora that they played list based streaming and you had on demand streaming like apple and spotify. now on demand model is taking over some people basically choose what they want to listen to and they have access to a lot of these services that are affordable and offer pretty much everything under the sun with very few exceptions. people are good to go. cently spoke tote the ceo of sound cut and take a listen to what he had to say about this explosion and growth. spotify is a fantastic development ultimately for the streaming space. we are at the moment now which many of us may not have envisioned a couple of years ago. we are on path of having hundreds of millions of consumers paid for assuming music.

to thethat return industry overall, i think citing development for all parts of the chain. 1999, atvenue paid in goldman sachs says it will get to $41 billion by 2030. how? the goldman sachs figures is for global business and we're talking but u.s. business. the u.s. being the biggest market and driver for the industry, i think that streaming does have the potential to continue to grow the overall pie. and executive from apple estimated the total potential market for paid streaming customers is about 2 billion people around the world, and only 100 million, or 5% are being served by either apple or spotify. emily: we also have the vice president of amazon music, take

a listen to what he had to say about alexa and how it is compelling the transformation. >> we see exponential growth. we don't discuss numbers publicly what i can say in a short period of time, caps on has become the third biggest streaming service globally and some figures we have seen just this year alone in 2018, listening on alexa in the last two months is more than it was the year before, which is also 2 x what it was before. are really different than any other music service, which is all about mobile. type: how do you see that divided among apple, spotify, and amazon music? paul: i agree with the comments from amazon about alexa and home speaker technology.

wherefore to see that with google because they have a similar technology. apple has syria. iri. the ability for people at home to the other smart speaker's template a playlist or radio station will power a lot of listening at home and the mobile side of it has taken off with services on smart phones and people using spotify and apple and pandora when they are working out or driving. that extends it into the home the same way that connected tv extends video to the home, will also watch on smart phones. paul, thank you for joining. want to look about what company in particular is using technology,: what music is label and digital

platform, and gary trent the power music industry back into the hands of performers. it has been a rough 2000, and adjusted revenues of $21 million while featuring some of the biggest artists today, that ariana grande day, back, sting, and more in its stable. joining us now is they ceo a nd founder. i am curious what the feeling is -- i amartists courteous what the feeling is among artists. how do artists feel now? that the lord moment, people were quite upset come but the artists have a right now are platform -- and all of it came from streaming. kobalt transformed music streaming industry. emily: talk about how you do that? 80%ith a regional system,

is put in a separate organization with a global platform. because straight into spotify or apple and big players into the world and we put it all together platform.bal we see in real-time what is going on in the world with the data, revenue, demographics. emily: you are a musician and play the saxophone, i am curious what that brings to the table? musician that could code, i have experience in the music industry and i realized that when i saw the transformation individual happening, was clear for me i wanted to achieve two things, take the music industry into the digital age. has 10 billion

transactions. number two, i wanted to serve creators. that means we don't take people's rights, we are a music service provider and give you. historically you have to pay for the data. today we are getting hops from ur curators. emily: what could disrupt this increasing growth that is predicted but not short? >> i am excited since i saw spotify open stockholm in 2009. theave 90% of privacy and traditional record labels close down. he supported since they won because we believe in transformation. we were convinced.

the challenge is to continue to support the platforms that like to sell our music and also money feeding back to the artists. that is a challenge. emily: five years from now, what is the pie going to look like? >> it is going to be a dutiful environment. i believe will have a billion people on smart phones. we had 90% privacy in emerging markets as well like china, that with billions of platforms, the artists and curators can see what is going on and you as a we will create 20 times more artists. weincreasing the pie, significantly lower the cost on the global scale. that means so much more when he

comes down to creators and more parents can play music and have a living on it. came tople, a musician our platform, and his first single was worth $30,000 from think about entrepreneurs and creators struggling, and that is data and money and you and i are the beneficiaries. the big tech companies today are supporting us. talk about tech companies, i spoke to tim cook last week and asked about spotify given that while there are other players it is a two horse race between apple music and spotify. he said i don't think about it that way and i think about the potential of getting all the people out there who aren't subscribed yet tasty music service, and that is the opportunity. to support the month the edge being exclusive content.

is that going to be the differentiator? >> first of all, the potential, if you think about it, 2 billion people can afford to pay for music. emily: is a commodity? comparison to tv, i don't leave and exclusive content is differentnsumer things, and you want 30 million songs from your favorite band. all likerence is different interfaces. also believe that wasn't traction will come in. ceo, ask for music stopping by.

coming up, billionaires bash but going into of the richest man in the world speak out about the world's largest cryptocurrency. that is next. this is bloomberg. ♪

emily: to of the richest people in the world are short no love at bitcoin, bill gates it at the coin is an asset class that is not producing anything. gates saidfrom what four years ago when he caught exciting. and warren buffett calls it probably wrapped poison squared and a going words that his business partner in 2014 also compared bitcoin correct poison. coming up, over-the-top programming and what kind it west is heading to the simi service and what it means for gibbous services. and are tech companies prepared

for the spread of misinformation? will discuss. this is bloomberg. ♪

front the new presentation has come to an end on the east coast and that euro plans a second week of presentations later this year in the la. this years event is refined, and one thing that continues to appear this court cutting and programmers are ready for the over-the-top offers. swansons now is andre of a computer about the only audience measurement of from that works across the entire entity echo system including connected tv. and join this is lucas shaw,

multiplended conferences. trends somebody changing in the landscape, what is new and how her audience is reacting and what do they want to watch? what is most interesting over the last four months is the continued occupation of over-the-top connected tv. two or three years ago, roku d the dominant market share and providers like who had the vice chair of audience for as supported them out what you see with the tv everywhere apps from all of that traditional cable and broadcast companies as well as traditional digital players when nursing more competition for the simi audience. emily the streaming audience. emily: how is it presented? >> people are focused more on the show and less on the transparent acceptance that cord

cutting has happened and audiences want to be online. mickeycan we doubt mouse, and the teaser for rapid growth two, stars on its blood from, and twitter announced sunday like 30 or 40 different missions on monday. who can convince advertisers wherever they are selling, there is a phrase of too much tv. it is the golden age of tv, but there are so many shows, i don't know who has time to watch them all. finition of a hit changing? is the audience become more fragmented? andre: more and more advertising is going to audience advertising. traditionally a was that i hope my audience like a certain type of show, and assume based on

some music rating that the audience is life from the cross over the top and connect to be there is expectations of actually knowing the audience and not just only the age and gender but also do they drive a luxury vehicle and are they in market for international travel? becoming a proxy to go out and get audience. if you have a coveted audience you don't have to have a large amount of viewers to be able to monetize that content. you seeing anything given the extra data you have that conflicts with what we see with nielsen? andre: absolutely. there is evidence that what correlates well with when your television often is not the most popular content on connected tv. they that has been do with on-demand nature that people can watch whatever they want whenever they watch it as opposed to the bulk of the near television is watching live. there is more affinity to

episodic and longer-term conditt on tv that even on a linear. strategy has to be focused on the screen that people watch it on because the behavior is not always the same across different platforms. emily: how is this changing the kinds of deals getting done? lucas: the kinds of deals are different and that everyone wants to own all their sure spread is to be that if you are a paper this or makere sell a show and billions of dollars. netflix now twice the rights at the beginning so you get an estimated act and you don't have the crazy upside if you are taking this or that used to. most of our traffic copy that studios what sell to other networks and overtime we have not just online but traditional tv networks cannot move selling to themselves and what did the control from the beginning to end because it allows them to do what they want online are better compete with netflix. emily: what is a need for

advertisers? andre: the opportunity for advertisers is better than it has ever been. there is more stringent opportunity to reach audiences than ever before. advertisersoes mean and to be smart and one of the things the industry needs to be careful of, and i say this in a nice way, not to dumb down to negative tv into the old tv standards. things and isome wonder, who is the ajax? udience? andre: making reasonable to the right people as opposed to assuming because this works 20 years ago, which is keep doing that. ople makingpe more money or less? netflix is making a lot of money, and the prophet, youtube's video a lot of money

and the profit, the revenue model is precarious and still there but they are under pressure. if you are a big-time producer, are still making a lot of money. a mid-level producer there is probably more opportunities wimbledon ever before. -- more's they made shows being made is good for content creators. emily: when it comes to viewing, they have a huge hit and handmaidens tell, are these orworks going to be make break the and it on whether you have a hit or not? i think they have a different strategy has a lot of dhe content, think about "han maiden's tail. ' sometimes it can be a show that doesn't win awards that people haven't heard of there's 3

males out5-year old there. lucas: almost nobody watched madmen, it wasn't one of the most-watched shows, but walking dead is one of the most-watched shows but does it when any awards. andre: the other thing i would say about money being made is that it is not as concentrated as whatever is having the highest nielsen ratings isn't making hundreds of millions of dollars. because there's so much content that revenue is more spread out and is a lot of over-the-top thatorms like people tv people haven't heard of that millions of viewers on a daily basis. is something as want to be interesting to watch. emily: is this sustainable or will there be consolidation and will we see more m&a? lucas: disney is mike fox, comcast, all the judicial guys

collecting the scalp is their turn to compete with the tech companies. was of these digital media companies, yet cycles of media companies that achieved higher valuations, and they either fail or get gobbled up and pushed together. the same will happen with the companies that on the is talking about. emily: earlier with talk about music streaming, but in five years, where the see the content business? 30 or i think in the next 36 months want even called connected tv or part cutting because it will be the majority of television consumption will happen that way. i skimp bloomberg all the time. emily: thank you. andre: it is also live content, sporting news, everything is shifting to a new dissolution platform and will change the way we think of television. lucas: i think it will be fragmented, because think five

years from now, disney will introduce its on disney branded streaming services in two years, it will take over the years of its existence, and will be vulcanized between the direct digital players and the different bundles that are offered online because you have people trying to keep their money growing lots of different ways given the traditional model is under threat. emily: to competing views of the future, it is good for debate. thank you both for joining us. speaking with television and itv havee bbc held discussions about joining forces to create a british streaming service. focus on-stage talks how the uk's made by esther can work together to create a streaming rival to heavyweights, netflix and amazon. netflix has a plan to millions of stars in the u.k. and 4.3

million households are signed up to amazon prime video. coming up, google is wrong about policy about purchasing election ads, but is it enough to prevent interference in meddling that we saw leading up to 2016 elections? we will discuss. this is bloomberg. ♪

emily: this with itself the start of u.s. midterm elections with primers in 40 states and

the major issue going forward will be whether they tech. forms are up to the task of taking down misinformation, affecting meddling from political ads. for a refresher, here's what representatives from google, facebook, and twitter is a fight for congress in october of last year. actors usedfor an fake accounts to place ads on facebook and it's about that reached millions of americans over a two-year period and those ads were used to promote pages people shared these posts, spring that further. many of these ads are inflammatory. some are downright offensive. >> we linked up to a russian-based agency as a result of our review. also determine advertising by russia today and seven small accounts was related to the election and violated policies that existed at the time or has since been implemented. >> we believe the limited

activity without it as a result of safeguards we had in advance of the elections don't lend themselves to the kind of targeting or viral dissemination that these actors seem to prefer. we are committed to continuing to improve our basic and secure the measures to prevent that kind of abuse. emily: since the companies have announced new policies and have hired workers to flight fake news, but for more, i begin bloomberg political reporter sahil kapur, and we began tom giles. speak with lawmakers on a long, what is their level of concern about meddling going into these midterm elections as a primary kickoff? sahil: no election meddling is an just something that happened in 2016 and might happen, we note already is happening to the extent there are shown on's and trolls online were tried to take advantage of divisions in the

political conversation and try to amplify them and excite passions on both sides. the government has been slow to respond to this and is essentially outsourcing. you played clips of executives from companies like google and mark zuckerberg at facebook, talking about their platforms being exploited. to them it is a pr problem and it is not their jobs necessarily work about election meddling. their job is to worry about the bottom light and shareholders and it is the government to root out election meddling and preserve the integrity of this. they have been slow to do it. would argue with that, else say it is google, facebook, twitter struck to make sure the sixth of happen. tom, google today announced it will require election at buyers to come from their residence or a permanent resident, are there things that they are doing too little too late? facebook is going to

incorporate more disclosure so you know when you look at a political ad. some of the things social media companies have never been required to do up until now, there's a bunch of disclosures that tv, radio companies papers, have to incorporate when they are running political ads. social media has not been subject to that and that is something that social media has objected to and tried to keep it at bay. at this point they realize they have no choice. so far, to have done very little, although that is changing. 2018 midterm elections are going to be very much a litmus test of twitter, facebook, google are ready for 2020 elections. andar it has been minimal, up until recent weeks, we have been stories and shown that some of these fake news sites are still very active on facebook. emily: mark zuckerberg was asked

about this several times during his testimony and to reassure lawmakers over and over again there are doing as much as possible to make sure this doesn't happen again. listen to what zuckerberg had to say. >> what take measures to employ new ai tools to take on fake news and grow our security team to more than 20,000 people and making it so we verify every advertiser who is doing political ads and make sure that kind of interference that russians were able to do in 2016 is going to be much harder for anyone to pull up the future. isly: yet, the meddling already happening and have best intelligence chief warning russians could repeat these attempts. the nationalng guard to be on the lookout for cyber threats. are lawmakers doing anything different knowing that these threats are more real than ever? sahil: in addition to what you pointed out, we have debt and

sha saying the president hasn't given a clear directive to cut down on election hacking or meddling to go after who they believe the culprits were in 2016. and his message to congress was to trust us, i think this seriously and i'll take this more seriously than i have in the past. it is not quite clear to me that congress is up to the task of relating facebook. those hearings proved the extent lawmakers the letters that technology and how far behind they are with the dynamics and trends in technology and how far ahead the bad actors and people who want to meddle in the elections are in terms of knowing how to exploit it. there is a mismatch there and is not there to meet at a government, this current government that is run by people who are predisposed against relation, is going to necessarily do something. put it in will be a major test to see what message the united states sense and what types of

the actors for the deductibility probably do and what the consequences will be going forward. emily: is also in issue in europe were presumably has taken a more serious lead. european officials are worried and take a listen to this quote from european commissioner for justice back in march. >> i am not happy at all about this case because in my view, is not only about data protection, this is about the threat of democracy and individual freedoms of people. excess that it was on the ball with some of these elections happening in europe, and things didn't work out there. what are the concerns remaining from the european officials as well? tom: there is a lot more emphasis on privacy there than there is in the united states, all of the culture and society does seem to be coming around

more to that here. is the democratic process go on without hindrance? justare consistent are european concerns, there are concerns that a lot of people here in the u.s. share. you see some results, germany is one that facebook will point to as, we have gotten a better handle on it. and think's is dinner able to suss out every instance of fake news in this information spreading. i do think anybody is under any illusion that in 28 it will get every instance. we will see instances of misinformation getting spread and they ares, being very creative and getting around the safeguards that facebook and twitter create. i don't think you are going to see all of it rooted out but there is some progress been made. about whethertalk

big tex is becoming a lobbying point out the campaign trail. we know trump is critical of amazon and lawmakers are lobbied heavily by the tech community. have they been making tech issues a point of discussion in the campaign? see much evidence that technology is a major issue in 2018 elections. forn't see candidates vying that in their primaries saying this is what my platform is. the top high because there is not a pocketbook issue that affects voters and their wallets and back accounts and likelihood of a day-to-day basis. there is a sense of passion among democrats in particular to do some thing about this because they feel it personally and if elected last election because the government failed to place relation and allowed malicious actors to run amok online october to facebook. the truth about this is facebook

can be criticized has been criticized significantly for not doing enough about this. at the and of the day their responsibility will be to shareholders in the bottom line in the government may have to step in trying to do something about this, whether it does and how it doesn't form takes place always to be seen. emily: sahil kapur in washington and tom giles in san francisco, thank you both. coming up, highlights from the microsoft conference including its partnership with amazon and it was control assistance the markets. this is bloomberg. ♪

emily: microsoft and amazon may compete on the cloud that the court held that the alexa are forging a friendship in the world of voice controlled personal assistance.

in a demonstration at the marks of conference, alexa was used for their milk and have existed pickup cortana to check her email and sent her schedule. this project stems from a collaboration announced last august. a startup providing analytics to transportation energy and utility companies like american fedex, marketand and its rival ericsson look young wireless in response to a logan saloon for such are spending. has hired the former chair of the initial safety board to advise the company and is important investigating the attack becoming arizona collision that killed a woman as she walked across the street in march. shows theaccident driver looking away from the accident and the car colliding with the pedestrian without visibly at that because stop. in the meantime, a report in tech news publication says that

uber's internal investigation determined the sensor's spider woman ever cracking software to avoid unnecessary braking to the car to continue. it for this edition of "bloomberg technology" in the mars show we talk with the founder and ceo of social capital. that is all for now. this is bloomberg. ♪

♪ haidi: president trump announces his decision on tuesday as allies make their final pitches. betty: stocks pakistan's as investors tried to read the president's mind. haidi: trading places, china's top economic advisor visits washington for round two of tariff talks. betty: and budget day in australia with tax cuts,