♪ carol: welcome to "bloomberg businessweek." i am carol massar. jason: and i am jason kelly. we're here at bloomberg's global headquarters in new york. carol: this week, we zero in on the future with conversations from the year ahead summit. jason: some of the world's most respected figures in business and politics spoke at this invitation-only event. carol: we heard from ceo's.

weaver of flint, michigan about the aftermath of the city water crisis. jason: plus, doris kearns goodwin on the past and what that might tell us about what is ahead. carol: -- jason: jim coulter made a dynamic presentation on investment opportunities he sees in 2019. it is a fast run through the biggest themes, something he recently presented privately to tpg's own investors. carol: and we are talking about things like cannabis and the power of influencers. also, big data. >> we have been talking about big data for a while. but it has gone from hype to reality. it is big. it is extraordinary. it is hard to figure out. so let me give you the tagline we are using to solidify our thinking, data is the new oil. we have been saying this for a couple of years. it is now being used more broadly. let me take you through how i am

thinking about the impact of data and where we are in the cycle. oil and data have both been around forever. the first oil well drilled was in 347a.d in china. data is everything all the time. what makes it a new era is our ability to gather and refine it in huge volumes. when you have a new industry that is this important that shows up, what you get is early consolidation. hadhe early days of oil, we mass consolidation. we have this massive consolidation in the world of data. you see titans created. and some interesting things happen. the industry gets shaped by spills and hacks. the exxon valdez changed the regulation for oil. and what we are seeing is hacks changing the regulations for data around the world. testimonies and scandals. when i watched mark zuckerberg in front of the senate, i flashed back to the book about

when rockefeller was in front of the courts. at that point, the senate senate did not have the ability to subpoena people. glove ondid not lay a rockefeller, just like they did not lay a glove on mark zuckerberg. four years later, they broke up standard oil. there were political scandals in the oil industry, the teapot dome, and obviously we are in the middle of one right now in the data world. and both oil and data are going to have a disproportionate effect on history. why did pearl harbor happen? because we cut off the oil supply to japan. why did germany invade russia when they should not have? because they needed oil. we are watching data shape the politics of the world. the last point, and this is the important one for me, we tend to focus on the scale of the data. it is all about the products. so the oil industry basically was not about the oil itself, it was the products it enabled. and what we are seeing today, is

google a search engine company? it really monetizes the data. ?s facebookk no, it is a data company. we are seeing the idea of data products that are going to dominate the years ahead. we are seeing job opportunities. in health care today, you can take your fitbit data and get reductions on your health-care premiums. there are people now who will take your fitbit for a walk. you can pay for things with data. so there are coffee shops. there is one outside of brown where if the students will give their information, they can get free coffee. and the information is sold on to recruiters. jpmorgan uses it in japan. hired 40% of people through these data cafés. and around the world, you are paying for things with data. i would argue facebook and google, these are not free services. you are paying with a currency

that is denominated more differently than you think. you are paying with data. and what is the value of the data. how much are you paying for the services and do we know? around our portfolio, there is data everywhere. spotify now partners with ancestry. so you can figure out your ancestry music and play it. we're doing tax season. we run the metering system here. so across our companies, thousands of data products are popping up. but as we begin to focus on data, the point i would say i am thinking about a lot is there is a note of caution. because society always catches up with new technology. it often takes 50 years before we have an faa. we don't have 50 years now. we are going to see society catch up pretty quickly. jason: so later in the day, carol, i sat down with another important figure in the world of investing, john gray, the president and coo of blackstone.

more than $450 billion in assets under management. this past year was his first year at the helm of the firm, afterf that years of building its real estate group. we talked about volatility in the market, what will happen to asset prices, what they will be buying and selling in the year ahead. >> we are certainly in a world with more volatility. the data would say that. and i don't think we should be shocked by that. we had a great run in asset period of a long time. volatility had been fairly low. the fed has begun to raise rates. we have some trade tensions out there. we have some issues in emerging markets. we have some issues in europe as well. oil prices have come down sharply. i think it is natural you have this kind of volatility at some point during the cycle. i don't think that is necessarily bad. for our business, this is generally a good thing. because if asset prices keep grinding higher, it is hard to

find opportunity. and so if you have a business model like we do, where you have capital tied up for long periods of time, you have discretion, when things drop in price, you can move quickly. and because you are not short-term financed or the capital can't be called away, you are not forced to sell. for us, we say, there are lots of assets around the world that have been repriced. we have got close to $100 billion of dry powder. this could be more of an interesting investment environment going forward. jason: so they have been repriced already? what was the catalyst? >> you look at the global stock markets. u.s. stock markets down 10% plus from where it was. i mentioned oil prices have fallen 30%-plus in a short time. some credit spreads have gone out. so, i just think, and certain asset classes have traded off

more than others the energy sector in particular. there has been more displacement there. and overall, as earnings have grown when you overlay this decline in prices, multiples have come down a fair amount. the stock market on the years numbers is trading at something like 15 times earnings. jason: i want to go deeper into your lines of business, but before we get there, help us understand the investing environment versus the economic environment. obviously they are interrelated, but not necessarily super correlated, it feels like, right now. >> on the economic side, people are nervous given this volatility. i would say if you look down look at the numbers, they are still pretty good. consumer confidence is at an 18 -year high. small business confidence is at all-time high. unemployment is very low. corporate earnings have been strong. and what we are seeing with our companies is generally pretty

good. so that is positive. i think the issue back to my earlier comments is that as the labor market tightens, the fed naturally is going to move toward raising rates. and that is going to put pressure on multiples. and that is really the shift we are facing right now. so it is very possible you could see a decoupling, where economic growth continues to be good but because wages go up, that bottom lines.ies' multiples come under pressure. valuations don't grow at the same rate as the economy. therefore as an investo you hav, less growth in valuations. therefore as an investor, you have to become much more selective in how you deployed capital. jason: what is in store for consumer brands, coming up. carol: weight watchers rebranded. coming up, that transformation

at the company is continuing. jason: more from the year ahead summit. this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: and i'm jason kelly. join us for "bloomberg businessweek" every day on the radio. also find usn online at bloomberg.com and our mobile app. consumer and food brands are continuing a wave of consolidation in the face of competition and a change in consumer tastes. no one knows that better than our next companies, both product and spinoff. jason: the president and ceo of the dutch food retailer and the -- mondo lay eo

sat down with jackie simmons to talk about where they see growth in the year ahead. >> i think that if you look at our sectors, in this moment where the growth is coming from, it is about certain segments to be in. and not everything is the same in food. so if you are at the center of the store and largely north -american focus, that is probably not a good place to be. if you are in snacking, and 75% of our business is outside of north america, you are in a much better place. if you focus on the segments that you really want to be in, and those are well growing segments, you will do well. if you are a little all over the place, that is probably a very difficult place to be in. i am not sure that consolidation is the way to go from a growth perspective, and i believe that we are fine as we are in the snacking space. there is still plenty of opportunity around the world for us to grow, and that is really the direction we are planning to take.

what is going to happen? yes, those north american, center of the store focused companies that are having more difficulty getting growth, they will need to find other ways to create value. and then you can expect that consolidation and cost reduction could be a way to go. my opinion on that is ok, once you have done that, what do you do then? now it is a bigger company that still has the same problem of not growing. where do you go after that? i think there will be a shift coming, that growth in food is going to be recognized as the way to go. blank would it make sense -- >> would it make sense for a big retailer, and i am thinking amazon, as opposed to a brand producer like yourselves to get married? >> i like france, but -- we don't know a lot about retail.

we would not be a natural thought. that is what i wanted to say, when we do it online, we do it largely to people who well know how to do that. so, i personally do not see easily -- maybe if you do some superpremium and our own stores, high-end chocolate, i could see us do that, but for the rest, i do not the us getting into retail. i don't know in france -- for you, it is different i guess. >> for us, a little different because we have those private labels. we run our own brands. in holland and belgium, 50%. we try to make the differentiation there as well. when you talk about who is going to survive in these markets, which are very competitive, it there are not only things about market share and those kinds of things, there are also things about who consumers will trust in the future, how consumers would like to shop. can your technology support and offer a more efficient journey in a store, more time efficient, digitally supported?

inspirations in the store with fresh produce today? this is nice to see. but the transparency in the supply chain -- we had this whole romaine lettuce scare, and i think a lot of customers will be much more conscious about food safety, where is food coming from, how was it produced? and not only in a safe way, but a social compliance way. and i think that transparency will also be supported by technology. and those companies that can invest in technology, who have trusted brands for food safety, but also for example, data privacy, because that is another topic, of course, those companies will also earn the trust of consumers and those companies will grow. jason: so, carol, as those two ceo's continue to adapt to their changing marketplaces, we turn to another ceo managing some massive changes of her own. what was once weight watchers is now ww.

carol: it is all part of a plan around wellness by mindy grossman, who is steering the 55-year-old company through the transition. >> we currently have a health solutions business, but just like we have spent a lot of time relaunching our consumer business, we will be relaunching that business in the first quarter of 2019 to really provide the same ecosystem of support, but with a dashboard that really can help those businesses measure efficacy of , you know, health care costs, absenteeism, productivity, satisfaction. and we think, and when we laid out our goals through the end of that here is what is going to happen in 2018. we will start the relaunch in 2019 of our b2b and health solutions business, provider, etc.

we will also, we have also been doing a lot of work around the emerging markets. so we don't really currently play in latin america and asia, with the exception of a small business in brazil. we think it is an opportunity, but priority one was relaunch the brand in the markets we are in and have that trajectory, and then enter new markets. and those were really the components. and the last component was expand our products. so healthy kitchen, wellness, travel, and hospitality, and wellness check. carol: so, big launch for the company -- it is going to be a big year. you have a marketing campaign coming out with oprah? >> it is actually our most comprehensive global brand campaign that we have ever done in the history of the company. oprah has been a great partner as we have been developing the strategies around the brand relaunch and the campaigns. we have two new influencers that we will be announcing.

carol: you can announce them here. >> no, i want people to be surprised, but they will promote health and wellness out of the u.k. and the u.s. but most importantly, it is also realng real stories, stories of people's lives and how we have been such a partner in transforming people's lives. that is what we aim to do. carol: is that the most effective, brand ambassador? it is hard to beat oprah as a brand ambassador. >> we look at every market as a pyramid of ambassadors. they have the evangelists whose lives have been transformed by what you have provided. then there is micro influencers. so that could be chefs in a particular category. it could be great body positivity bloggers. we are one of the biggest proponents of body positivity. what does healthy mean to you? and then, yeah, what we call celebrities. but like our partners, we put that through our purpose filter.

do they want to inspire people to lead healthier lives through their actions? and it is not just people who need to lose weight. it is people who represent i want to be healthier. this is how i live my life. we just did a body of quantitative work where we asked tens of thousands of people about their perspectives on health and wellness. ask thatu amount of people, would you like to lead a healthier life? they will all pretty much say yes. you ask what the first thing they need to do, over 70% say lose weight or eat better. we know we are not going to give up our science of so many years being the best program on the planet, but we know people need more to have it be sustainable, and we know that people want inspiration and not just information, and that is what we are trying to give to them. carol: mindy came to the company

in 2017, summer of 2017. this past year, 2018, has really been about really getting into the transformation of the company, offering up new services, and now they are really going to put it out in 2019. jason: they have to make it happen now. big moves, bold moves, even renaming the company. >> it is going to be a big year for the company. still ahead, the political action group she should run helped a record number of women to office in 2018. the question, jason, is it a one-off or the beginning of a trend? jason: and the energy industry is grappling with the threat of climate change. the duke energy ceo speaks frankly about the strategy of her company. carol: this is "bloomberg businessweek." ♪

♪ jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: and i'm carol massar. you can also listen to us on the

radio on serious xm channel 119 andew york, and in boston washington, d.c. jason: and in the bay area, and in london on dab digital and on the bloomberg business app. this week, our focus is looking around the corner with insights from the annual bloomberg "the year ahead" summit. carol: among the 80-list ceo's on the program, duke energy's lynn good spoke with joel weber. and the conversation very quickly turning to the urgency of climate change. >> we take this very seriously, and we have a team actually looking at the report that was issued last friday, and it really continues the conversation started with the u.n. report a few weeks ago. and at duke energy, we have been focused on carbon reduction for over a decade. and the industry really focused on carbon reduction over the decade, because we do see climate change is an issue that is going to be important to our customers and communities and investors. and i think the important thing

to recognize is the u.s. has made great progress. our greenhouse gas emission reductions are leading the world. there is always more to do. but we are building on a solid foundation. and at duke, our carbon emissions are down 30%. we are headed to 40%. that is since 2005. and we are on track to meet our commitments around a paris-accord-type standard, and we will continue. we have been able to use natural gas. we have been able to use renewables. we are also investing in our grid so it is more flexible and able to take the technologies that will be important as we continue to transform, but it is front and center. and i think the focus of our industry remains very high on this issue, and certainly at duke as well on carbon energy reduction. joel: let's talk about what that portfolio right now that you have looks like. maybe where it has been, where it is now, and where it might go? and 2030, win you look out to

the future, that is what you are trying to build towards. >> sure. >> talk about the progress you have made, where you are now, and where you want to go. >> if we go back to 2005, 2008, duke would have been primarily coal and nuclear. today, duke is 1/3 coal, 1/3 natural gas, a third nuclear, with increasing renewables, about 10%. we are one of the largest nuclear operators. located in the southeast, 11 reactors located in the southeast. so if you were located in the carolinas, 50% of the power is coming from carbon free nuclear. maintaining those plants as long as we can is an important part of our strategy to keep carbon emissions low. so a portfolio -- joel: nuclear does not get a lot of love. >> it gets a lot of love at duke. joel: why do you think this is such an overlooked asset for your portfolio? >> you know, it is an interesting thing, because for the most part our industry has been a behind-the-scenes industry. you flip the switch, it works.

there has not been a lot of discussion about how does it work, what is making it work, what works all the time? that conversation needs to istinue at a pace with her greater understanding. of the resources that make it one possible to knit together a low carbon future. a nuclear plant runs 95% of the time. it produces carbon free energy and is an incredibly valuable resource when you think about running a power system that runs 24 hours a day. you know, natural gas, also an important resource. half the carbon emissions of coal, very complementary to renewables. and then you bring in solar and wind and battery technology and energy efficiency -- you should be painting a picture of a portfolio. we have never as a country or world been dependent on one form of energy. and i do not see that being the case as we go forward. jason: coming up, i love this conversation. carlyle group's david rubenstein interviews presidential historian doris kearns goodwin. carol: and record numbers of women were inspired to run for office in 2018.

jason we know a record number won in the u.s. congress. the founder of "she should run" says this is just the beginning. jason: more from the year ahead summit. this is "bloomberg businessweek." ♪

jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: and i'm carol massar. still to come, more from bloomberg's annual summit, the year ahead. jason: including to the individuals tasked with solving big problems, including the mayor of flint, michigan, and the person working on saving new york subways. carol: all things digital with joey levin. first up, the subject is politics. the guest is one of the world 's best-known political historians.

jason: david rubenstein hosts his eponymous show on bloomberg television. he set down with the deal is a prize-winning author to talk about her latest book. carol: it explores how presidents have led the nation through crises. as she explained it, it contains lessons for business leaders as well. doris: leadership is about human nature and the way a businessman or a politician builds a team. are you able to build a team of people with diverse opinions who can argue with you and question your assumptions and bring that team together at critical moments? this is what abraham lincoln and franklin delano roosevelt did. eleanor roosevelt was always willing to question his assumptions and argue with him, speaking truth to power. i think any team needs that, in business or not. they said about her that

whenever she wanted something done, she would bring a person he didn't want to speak to because he was tired of that person, right to the dinner table because he brought in an alternative point of view. he built in that dissension through her. f.d.r. built it in in other ways. he loved to have people who were down in the bureaucracy come into his office so he could question them against department heads. he put people against one another and said a little bit of competition does a good thing. he would give the same assignment to two different people. they all had ways of getting new opinions into their heads. carol: just a tease of the conversation. a great conversation between those two. you can get more in an upcoming episode of the david rubenstein show. jason: in early 2019, more than 100 women will be sworn into the u.s. congress. that is following a 2018 election season that saw a

record number of women running for local, state, and national office. carol: you had organizations that sprang up to encourage and support women candidates, an incubator of sorts. the founder of the nonprofit "she should run" says the loss of hillary clinton in 2016, it set the stage for women in 2018. the founder tells me why she was inspired to start the company. erin: i've been working in politics for a number of years, and often with women putting themselves out there to run at that point approving viability to institutional players. we would work our tails off. i looked at all of the resources that go in, the money that goes into politics, the hours spent. and then, you would look after the election and see more often than not, we were going backwards in women's representation. the overall numbers were not changing.

there were incredible individual stories. but the research shows that the number one reason why women don't run is because they are not recruited and encouraged at the same rate as men. it is a natural part of the cycle. if you have a majority of men represented in elected office, when a position opens, it is more likely you will task someone who looks like you and someone you know. it is harder for women to break into that. in 2011, we wanted to figure out a way to provide men and women alike an opportunity to tell us about great women they know who should be thinking about running for office so we could build that bench. we launched the program that was an ask for women to run program. carol: how many did you start with? how many do you have now considering a run? erin: we learned a lot of lessons on how to get someone to tell you about somebody they think should run for office.

we started from the beginning and fast-forward to where we are today, we are just over 21,000 women who have been asked to run for office through our work. 14,000 of them are preparing to run for office. [applause] carol: significant. that is pretty cool. if hillary clinton had won, would you and i be having this conversation about the midterms? erin: we would not. we would not be having the same conversation. we did a big sweep before the 2016 election to look at the landscape and see where we could add programmatic work that could be helpful to the field. nowhere was there that program that was a logical place for women to start. we built out the incubator. women come to us to get a feel what it is like to run for four office and learn about the resources to run.

we launched that program before the 2016 election. we were assuming that hillary clinton was going to be elected president and our work was going to get much harder. we had planned for small numbers. we had planned for how difficult it was going to be to get people into the program. and election day came and went. i went from days of my head on my desk to having to rewrite everything we were doing to the floodgates opening and us getting thousands of women into the program pretty immediately. carol: we ended the conversation talking about what women might be running for president in 2020. some of the usual suspects came out. we talked about elizabeth warren, kamala harris. we will see what happens. jason: it will be quite a field for sure. another of the most prominent women in politics and policy over the year was longtime justice department official sally yates.

she was fired by president trump for refusing to defend that travel ban in 2017 when she was the acting attorney general. carol: that was just a few days into the trump administration and the controversy with the mueller probe and other issues. she says the independence of the d.o.j. is still in peril. she spoke with our bloomberg editor-in-chief john micklethwait. sally: you can debate whether you agree with a particular decision by a judge, but trying to undermine the very legitimacy of that judge or our judicial system is something that is not only new but really dangerous. because we can't expect that at the end of this presidency, that we are elastic enough to where the public confidence bounces back to these institutions. for a lot of the reasons we were

talking about a few minutes ago, these institutions really only function properly if the public has confidence in them. the department of justice can only function if the citizens of this country respect and believe decisions are being made based on the facts and the law. john: do you think the department of justice reputation is at a worse stage? the questions being asked about it, is it really worse or similar to watergate? sally: i don't think the justice department took the same hit in watergate. there you had the department of justice resisting the efforts of the president to use the department of justice. i am not suggesting decisions at the d.o.j. are being made based on political reasons, but it sure is not for lack of trying from the president's part. carol: straight ahead, the mayor who is leading flint, michigan, through the water crisis. she does not just want the problem fixed, she wants people who caused it held accountable all the way to the governor.

jason: the president of the new york city transit authority. can he get the subways in shape in 2019? or beyond? it is a tall order. carol: they both have full plates. this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: and i am jason kelly. join us every day on the radio. carol: you can also find us online at businessweek.com and on our mobile app. jason: when you look ahead at 2019's big global issues, some of them can best be understood by looking at some local examples. carol: exactly. lack of access to clean drinking water is a problem we see around the world. most notably, the emerging world. that is not always the case. flint, michigan, dealing with the aftermath of its water crisis. leading the way is karen weaver.

should took office as mayor of flint and does not mince words. karen: what happened in flint was criminal. when you have kids poisoned, and actually a whole community, but we know that kids under the age of six and pregnant mothers will be impacted for the rest of their lives. when you have people who have died as a result of legionnaires, they are looking now at the high cases of miscarriages and stillbirths that took place during that time. one of the things they are looking at now are some of the numbers of deaths attributed to pneumonia. and they are wondering if that was really legionnaires and what was going on there. and when you look at the mental health implications, i was talking with someone earlier and i was saying it is really easy to put a cost on infrastructure, but when we look at the human cost, we don't know what that will be.

some of it, we are going to have to wait and see what happens. carol: is it a reminder our society values people differently? karen: yes. what happened in the city of flint, even though there were other cities in michigan taken over by emergency managers, they put cost over the public health and well-being of the people. because it could have cost something as small as $100 a day for corrosion control and this would not have happened. carol: shortsighted. one last question. should he be gone after? and charged? karen: yes. that is what we have said for every level of government. we want everybody from top to bottom to be held accountable. if that means the governor, it means the governor as well. carol: do we now know what happened? that one individual? are all the pieces in place? karen: there are still some unknowns. carol: because we don't want another flint to happen. karen: no, we don't. and i hope people are paying

attention to what happened in flint. one thing i have said is don't let us go through a crisis and you don't learn from us. this should never have happened. it should not have. carol: where are we today? we have talked about you are fixing 18,000 pipes. i think you are almost there? karen: we are almost there. we had three years in which to fix these pipes. we said we would do 6000 a year over three years so we have until to we have until the end of next year. we are ahead of schedule. we have less than 150 to go. carol: is that a problem fixed? karen: not quite but we are on the right track. carol: what else needs to be done? karen one of the things we have : talked about is after those are fixed, right now, we are still on bottled and filtered water. the reason is because with the amount of construction going on in the city, the epa has labeled it a public health risk until we get all of those pipes removed and replaced. carol: what guarantees can you give your citizens this won't happen again?

how do we ensure that does not happen again? karen: that is one of the things we have talked about looking at changing the standards in place. we should be able to take water quality standards for granted. but we can't. the standards in place are old and outdated and need to be looked at and raised. we have been working on that in the state of michigan. the other thing is i have told them i am not signing off on this. i have not told anyone to drink water from the tap and will not until we get all the lines replaced and looked at. we want to check the other ones. we want to make sure if we are going to do it, we are going to do it right. we are going to check those. then we have to have the medical immunity sign off. that is when the all clear will be. carol: flint has had troubles for decades. some have been the result of conditions ignored for years.

and you might say the same for the new york city transit system. jason: you certainly could. the new york city transit system is massive, old, and complicated. in january of 2018, andy was hired to fix it. he is a u.k. native. he has turned around railways all over the world. in australia and most recently canada. this looks to be his toughest challenge yet. andy: the biggest problem is reliability of the service. that is what people want. that is the clamor. obviously, that is the big challenge. there have been decades of underinvestment in transit and the fact the service has relentlessly declined in many ways. i would remind people we do move 8 million people a day. most people most days are not delayed. but there has been a slow decline in the reliability of the service. that is what needs to be done. but i think we can use that frustration to build a compelling case for what needs to be done.

i said on day one it is not tinkering, it is all out modernization of transit. jason: your day one was not that long ago. 10 months ago? january 17 was your first day on the job. you knew what you were getting into to some extent. and let's be clear, this is not the oldest system you have worked on. you worked on the tube which is even older. what has been your biggest surprise? andy: the biggest has been the scale of the task. i had a big job in toronto, the third-largest transit in north america. in itself, it had a myriad of problems that needed to be fixed. it has seven bus depots. we have 27 bus depots. tcc has 14,000 employees. new york city transit has 50,000 employees. ccc carries around 2 million people a day. we carry 8 million people a day. i think it is the scale of the job and the challenge.

we are dealing with equipment, signals, some nearly 100 years old, that is ridiculous. jason: so old that the manufacturer does not even make it anymore. may not even exist. andy: we make our own parts. jason: there has to be this moment where you say, are you kidding? andy: what it says to me is we must prevail in this conversation we started on day one to say if we want to rebuild this thing and give new yorkers the transit system they deserve, we need to have a plan. be careful what you wish for, we now have a plan. it was put together within 100 days of my arrival. it is called the fast-forward plan. it says we don't need tinkering. we have got to modernize transit from top to bottom, every aspect. renew the signaling system, rebuild the stations, rebuild the track and critical infrastructure.

get the buses moving again. make the system fully accessible. it comes at a cost, but it can be done. jason: what is that cost? andy: billions of dollars, and i have said publicly, broadly around $40 billion over 10 years. jason: up next, joey levin looks ahead to 2019 in the digital world. this is "bloomberg businessweek." ♪

♪ jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: and i am carol massar. you can also listen to us on the radio in new york, boston, washington, d.c. jason: and in the bay area and london on the bloomberg business app. we can't look ahead to 2019 without checking out two spaces that continue to evolve very

quickly, digital media and luxury. carol: lots of changes. first, we need to talk about the digital space. joey levin dug into the price of data and privacy. >> when we think about data, we think the most important thing is that the price to value exchange is both one that has user consent but also passes the smell test. consent can be a tricky thing. >> even people who are relatively tech savvy do not necessarily understand what they are giving up. >> correct. it is hard to explain what they are giving up. number one, you need to give control to consumers. number it needs to pass the two, smell test. cambridge analytica did not. it was some personality test

thing that had no real value to the consumer. in exchange, their data went a lot of places the consumer would not have imagined. it is a big problem. i think a company can know that. i'm not saying it happened intentionally. i think a lot of those things were accidents. operators of businesses have to be doing a price to value exchange on a valid basis. they have to be able to look themselves in the mirror and say we charged a fair price for that thing. that price was a users' data. that is ok, but people have to understand it. it has to be fair. when it is not, that is a big problem. we generally favor subscription businesses. crystal-clear. you pay $20 a month, and you get access to this. >> let's say cambridge analytica is a rotting fish. where does facebook sit on the spectrum?

>> i think they are figuring that out. i don't think they were doing it with bad intentions. i don't think they said let's see how much we can extract from users. >> there is a responsibility that should come with that. >> i think a lot of people were surprised by the power of that platform. and the extent to which misdeeds would or could be done. and that was a wake-up call for a lot of people. it's perhaps possible that facebook did not even understand fully the price they were charging. when that data can be used in this other weaponized way, it became you gave up much more in ways they did not understand. >> what do you make of the gyrations going on over there? you do a lot of business with facebook. >> we are advertisers on facebook and we have been partners with facebook on

things. i don't envy what they are going through. it is hard. everybody is going after them. it is a tough spot. i think they will come through. i think they have been incredibly smart and innovative as a company that executes unbelievably well and quickly. but this is going to slow them down for sure. i think they will power through. but it is probably an unpleasant time right now because everyone is piling on. carol: last but not least we have to talk about luxury. jason: the perfect person to talk about it, the person who created the concept of a boutique hotel. ian: what has happened in europe, which we usually follow, is that in london, you have the aristocrats. you don't have much of a middle class. you have a big segment of the

population. unfortunately, i think we are heading in the same way which is why i think luxury has to be responsive. we have what they call here the 1% and then you have another big group. what i found in the hotel business is that wealthy people as much as anybody else, wants to get a good bargain. if you can stay in a hotel room and you get the same kind of feeling and experience you get in a much more expensive hotel, wealthy people would also like to get that bargain. if you can stay in a hotel and spend $200 and feel as good and have the same access to entertainment and excitement, rather than staying in a hotel where you pay 10 times more, people will take it. not millennials, not people who don't have a lot of money. anybody.

carol: "bloomberg businessweek" is available on newsstands. jason: and also online at businessweek.com and our mobile app. carol: what were the major themes you took away from the year ahead? jason: i loved getting that sneak peek of talking to john gray, talking about volatility. it is an opportunity for them to make big money. carol: i like hearing once again about the use of data. it is not going away and i think we'll hear more about it in the coming year. we have enjoyed bringing you the highlights from bloomberg's year ahead summit. you can watch the entire year ahead summit on bloomberg live's youtube channel and on bloomberg.com. jason: check out our daily podcast. carol: more bloomberg television starts right now. ♪

♪ nejra: we speak exclusively to the architect of the legislation about it successes and failures. regulating the tech space. what is next for washington dc. will the u.s. get its own version of gdpr. funding squeeze. as we approach the end of the year, the u.s. currency tends to be a hot property. why is this your different? welcome to rules and returns. i am nejra in london. this is the show where we delve into the challenges an