this is bloomberg technology. coming up, press play. spotify makes too big podcast acquisitions opening a new front in competition with apple area was, game over. shares of big game makers take a plunge is the fortnight phenomenon to blame? president trump and foxconn without to transform wisconsin

into a manufacturing hub. workers tell us it is not happening. first, fresh off announcing it profit, spotify is buying gimlet media. the price tag is $200 million. spotify ceo explained his strategy saying in two years, we have become the second-biggest podcasting platform. we believe it is a safe assumption that over time, more than 20% of all spotify listening will be non-music content. his partner is with us. it is an investment fund. he joins us from santa barbara. this opens a new front in competition with apple.

what do you make of this acquisition? an early investor in spotify, what do you make of this change in strategy? >> i don't think it is a change in strategy. if they have been telling investors for a wild that it is an area of interest. they want to be in a position to take advantage of any time consumers are listening to things and podcasts are being listened to more and more. that is a consumer cultural perspective. there is a strong financial desire as well. will have larger gross margins for spotify due to that you don't have to pay the three big labels. there are good financial reasons to get into podcasting. podcasting is still a niche business.

apple has not paid much attention. what does this mean for apple's jamar >> for apple, this might indicate it apple music is not the only thing they are up against in terms -- competing with spotify. over the past couple of years, they have tried to position themselves at the top of the podcast market which i believe they are areas they renamed their podcast app to apple podcast. they have been heavy on social media. this could give them another opportunity and another reason to invest in the podcasting app. big of an opportunity do you think it is for spotify in particular? when you look at the economics of podcasting, people are listening but it is not a huge slice of the advertising market. >> i agree. it is still early. nobody has made a lot of money

in the u.s.. in china, people have been more successful monetizing podcasts across alibaba and other platforms. it is a big opportunity for them. they have the users. i'm sure they are going to push the podcast to people. it is all about gross margins. the stock is down a little bit today. they gave a little weaker gross margin -- margin guidance. it came back a bit at the end of the day. this is about how do you get less reliance on the three major labels and all of the negotiations are coming up this year as well. >> do you think that spotify taking a step into this market could lead apple to make moves as well? >> absolutely. apple music has become increasingly important to them. services have become an important.

it will be interesting to see how apple begins to monetize podcasting. maybe a subscription related thing to podcast. maybe original content in the podcasting world. there is a lot of opportunity there for apple. shares got punished about revenuerns per user shrinking. i think the stock was down on gross margin guidance. most institutional investors care about gross margins and the said that they could have 35% gross margins. another guiding to 23 or 24 year. they say it's due to podcast investments. there are a lot of investors who believe that they will continue to get a better deal this time

withd with negotiations the labels. management came out today and said that is not the case. i think were going to have the same deals. the reason gross margins are declining is that they are entering new markets. upfrontmes you have big guarantees with a negative gross margin. the stock was down 6% or 7% premarket and ended up down 2% area at there are buyers in their buying the stock. >> give us an update on the competition between spotify and apple and music. spotify is in the lead when it comes to paid users. apple music is number two. lead buty is in the apple has had strong momentum with apple music. the one thing that cannot be forgotten is the user base of iphones.

there are 900 million iphones in use. apple music is built into all those devices. ios 8.4 which was 2015. there are some phones probably still running that. by a good chunk of those 900 million phones. the have a way to tap into those users and an advantage the spotify does not have because they are not a hardware maker. five expertise is the only thing they do is the streaming music service. they have a leg up against they can be all in. >> you are also an investor in uber. it appears it is going to be a big year for tech ipos. what is your outlook for 2019? >> if trump doesn't shut the

government down and the fcc , i think theyown are setting up for a strong ipo year. there are rumors that there are a bunch of big software slack or like sumo or uber.nd over -- there are a bunch of great companies out there. there is clearly demand from institutional investors for growth. you can see it across software names in the public markets. they trade at high multiples. the stock price is a function of supply and demand. people want to own growth. it will be a good year for ipos. uber is losing a lot of

money. do you think that will turn some investors off? >> i think when people -- when the big institutional investors , they will be pleasantly surprised at the economics for the business. ovary -- a business, aer eight which is growing at hundred 80% per year. they are spending a lot of money on that which investors will appreciate. they are still spending money on autonomous. don't have an opinion if they are doing the right thing or the wrong thing. there is also president for companies growing asked. netflix has burned huge amount of money making content.

i think there will be a strong demand for over. if you want to earn a global company that can touch a billion plus users, there aren't that many in the world that are growing 30 plus percent a year. as one of these assets. >> shares of the new york times hit a high. 255,000 newr added digital subscribers last quarter. it ended the quarter with over 3 million digital customers. take two, shares of and electronic arts dropped. after they reported disappointing results. check us out on the radio. this is bloomberg. ♪

>> the deal pushes the company valuation to $22.5 billion area he sees the biggest economic headwinds for global companies coming in 20 years. international expansion will be more difficult. the competition instant tech is getting fierce. outpacedownloads have then mow. square stock hit an all-time

high. we sat down with the ceo of paypal to talk about the popularity of then mow. >> i think it is one of the crown jewels of paypal. already at a $70 billion run rate. they grew less quarter at 70% year-over-year growth. for three quarters in a row, the number of net new actors coming on to then mow has hit a record each and every time areas. what it is is a value proposition oriented to the millennial generation. the reason that it is so successful is that it basically takes every payment and turns it

into an experience. when you do a payment, you tag that payment with an emoji or what it was for. you share it with your friends area you can split transactions with your friends. it ties into this whole social network experience that the millennial generation grew up in. it is magic. it is not so much a payment application as it is an experience. >> every millennial i know uses venmo. they also check it to see what others are doing. every segment of the market has a different way of thinking about what payments are like.

you and i think differently and we are more private about our payments. you probably have less than 600 up, thebut as you grow millennial generation grew up with screens in front of them. they grew up with social networks. their public private lines are much more blurred than other generations are. they are incredibly responsible around money. they grow up in the great recession. they saw parents or friends scarred by that. theirdesire to control finances, create the budgets is quite admirable. >> it is a huge success in terms of its of a reality. as successful financially? how do you make money off of it? >> the best way to think about it is to think about paypal. paypal started off as a free peer-to-peer service. started off as a free

service. we are offering a more venmo to makeo it more user-friendly. user can shop anywhere and it takes it out of their account. venmo debit card into place so they can use their balance at offline merchant. want to take money immediately out of your account your bank account, we charge a small be for that. slowly butcally very very surely building capabilities and benefits to the user base that add more value to them. but also struck to create a financial model for us. basically last quarter, we saw a tipping point on that where the

amount of people doing a monetize will transaction is exploding. >> at what point will you make venmo asr more off of you do on paypal? >> good question. mo is an accelerating part of our business areas it is an exciting part of our model. >> that is the pay via -- ceo of paypal. you can see more of that tonight on bloomberg television. coming up, epic games fortnite is killing the competition. bloomberg technology is live on twitter. this is bloomberg. ♪

>> added take two interactive to the list of game makers being crushed by fortnite. e.a. ae thing happened day earlier. both companies plunged. siegeublishers are under by the success of fortnite. is this all because of fortnite? >> yes and no. fortnite is a game changer. phenomenally successful. sucking up a lot of people's time. more amazing because it is free to play. it gets into the how do you compete with free problem.

there is more than that going on. there was a reevaluation of the industry as these companies were able to extend the life of grand theft auto online and keep selling more versions of the game. reevaluated ass being a lot more valuable because it had a recurring revenue stream. of at turns out it is more hit driven business like it used to be. you can't always count on those customers. >> what are activision and others planning to do to take on fortnite? >> you are seeing some copies of games that are taking on the most compelling elements like the battle royale mode. it creates an exciting and addicting form of play. some games are coming out in that mode. some games are coming out

visually appealing. they are free to play. money throughheir purchases of decorative items in the game like fortnite does. they are we focusing their efforts on creating killer games that stand out like red dead redemption to which was the best-selling video game last year. >> what do the traditional game publishers have going for them? >> they do have existing franchises. ,f you think about call of duty that might not have been the but theyame last year do have lots of fans and people that come back every year to see the latest version. i have the money and networks to distribute these games traditionally in stores and online as well. from done.r

they just have to learn to compete in this new world. >> what is your outlook for the year for 2019? >> we are predicting a flat year. big players like activision did not have the strongest lineup. one asbe a difficult these investments in the new the new gameplay and marquee franchises come around. what are the trends that you will be following? we have talked a lot about gaming addiction. the landscape is changing dramatically when it comes to on games are social media. what are the hot button topics? >> one thing we will be watching. themed shooting game red dead redemption was the top seller in 2018.

they just now started an online version of that. that,y had some bugs in people said the items they were buying were too expensive. extent can they extend the life of these games? through continued online purchases. that will be a big thing. that is what the future of the industry is that on. people will go directly to game makers and buy things online. thank you so much. meantime, for the second time this year, tesla is cutting the price of the model three sedan. all versions will now cost $1100 less. bringing the base price to under $43,000. tesla says the cost cut well mark the end of a customer referral program.

later, president trump boasted foxconn's extension into wisconsin last year but on the ground, things are not turning out as land. we will tell you why. -- thisnumbered areas is bloomberg. ♪

we bring you the latest in global tech news. in sanly chang francisco. let's look at the global tech stories of the day. : spotify's moving into podcast. disclosed but it was reported that spotify is plan to spend more than $200 million on gimlet. it show homecoming was recently adapted into the tv show.

collaboration on an electric fan for daimler. it sold his stake in a company in 2014 for $780 million profit. and one found wants to close a gap between the company's market value in what he thinks it is worth. he is through the largest $5.5 billion of stock. proceeds from the scale of the cap -- celibate companies telecom business will be used for their repurchase. those are the top global tech stories of the day. concerns about china continue to spiral in the u.s. but there is a wider view when you look at the pipeline for chinese companies that want to go public in the u.s.. one of the optimist is through bernstein,- through

-- drew bernstein. he joins us here in new york. what are chinese firm specific elite telling you about how they feel entering the u.s. market in this environment of trade tensions? rew: trade tensions are just sort of an impediment to the ultimate solution. just came back from china about a week ago. i met with about 20 ceos and cfos and they remain optimistic right now. 180 privateere's companies with valuations later than a billion dollars that are considered unicorn companies. the inconsistency there is a unicorn country is supposed to andompany that is special, 180th. his only 300 in the world right now and 180th emaar in china. i think that is what is dictating the excitement right

now. how much of that is the policy, how- 2025 is it impacting the whole ipo pipeline process? very clearnk it's because china has been clear with their policy. our firm right now is working on about 10 ipos, about six of them are in the finn take area. optimistic.ively the chinese companies, in looking at the united dates, they both have something the other desires that doesn't exist any other places. the chinese companies look at the u.s. market and see the ipo market as a disclosure based system, which means you actually compete for who gets the capital. to have ahe ability

second and third round of raising equity and raising debt. and more interesting is, you have the ability for the companies to have this international platform which gives them brand recognition and also gives them the ability to , even ifign currency the renminbi is a restricted currency. emily: you just go back from a tour through asia. what is the sentiment among chinese business leaders and have a compared to u.s. business leaders right now in the middle of a trade war? reallyhere is nothing good about a trade war, but i don't think a trade war is going to actually change the direction. it is more of an obstacle. there is still a lot of good sentiment to being able to go public right now in the chinese

companies also have some choices. hong kong came off one of its best years ever. a lot of the rules right now are changing even for the domestic markets. as recently as friday, they permitted shorting on the a-shares. think the hong kong market and the domestic markets in china are making progress in becoming more mature. and they have become competitors to the u.s. market. trade talks are going to continue next week, but still no to meetr the president again. how optimistic are you about these talks? any of usink for practicing in it emerging markets, we have to have this eternal optimism, but it is always tempered with concerns. the real concerns i have going forward, it's great that you have these 180 companies, and

it's great to see that they will go public one day, but there is still a lot of money on the u.s. sidelines right now, waiting to see if these chinese companies can really do certain things. the challenges for the chinese companies are going to be to produce reliable financial to build goodd management teams, to be able to cope with things like party transactions and navigate regulatory regulations. it's going to be challenging. shery: hong kong has managed to attract the companies ever since alibaba came enlisted in the u.s. are they going to be strong competitors for the chinese companies? drew: they will become better competitors, i believe. again, they don't necessarily

offer the same kind of things that the u.s. market offers. one of the things the u.s. market offers is very deep diversified sources of capital, which is what these chinese companies need. you saw it last year, maybe but 30 companies going public. they raise the little over $9 billion in the united states. so they will have their choices. it will be interesting to see, but one of the things i have seen in china is, i'm coming up on almost 20 years there now and over 20 years, a lot of people have come and gone. a lot of people who have gone are coming back right now, which means they are leveraging off their relationships to try to get into these companies. so i think it is going to be a pretty interesting year for everybody. emily: what choice do you expect them to make? on the company. if you are a chinese company and you don't think you can deal with the transparency issues, the regulation issues, and you

probably should not go public in the u.s.. it really depends on what your strategy is. if you are a chinese company and you have no international ambitions, you cannot cope with transparency or don't want to, then you are probably better off staying on the domestic markets. emily: choices, choices. bernstein, thanks you so much for sharing your views with us. markets across asia remain closed for the lunar new year. between economic downturn and a prolonged trade battle, the year outlook is anything but certain. you have a chart that delves into what it looks like. the pig isyear of meant to be fortuitous, happy-go-lucky, and quite a boost for equity investors. as we can see from this chart,

of can blame it on the start the year when it comes to any data coming out of china is tricky, given the seasonal uncertainty and volatility associated with the lunar new year. people going away on holiday and traders having signs of a losing year. the biggest chinese testing record outflows so far. we know it has been a lackluster market. about whether there is much in terms of a revival of animal spirits when it comes to dealmaking and ipos in china. undercurrent of uncertainty as to what will happen with the trade war, but also what will happen with the structural domestic slowdown and what it means for consumer trends, for the tech sector, and for stock market investing. a lot of investor anxiety and uncertainty going into this year of the pig. traders areime,

spending time with family and eating dumplings. emily: i'm hungry. [laughter] haidi: lots more ahead, do stick with us. this is bloomberg. ♪

pr exec isbook's top leaving the media giant after eight years. the company remains under fire over privacy issues and its role in russian efforts to manipulate the 2016 u.s. presidential election. she will stay with the company until a replacement is found. foxconn says it still plans to build a manufacturing plant in

the state of wisconsin, creating as many as 13,000 well-paying workers.wisconsin many on the ground say it's simply not the case. how to the promises here differ from reality? been talking to a lot of people on the ground at foxconn. so far, the big differences are that they say things are not living up to promises, the pay has been low, workers feel expendable, foxconn is making an aggressive push toward automation, me a lot of their roles -- meaning there roles could be obsolete in coming years. people say training is an issue. in one case a worker had his finger nearly sliced off on the production line. so there has been a disparity between what was promised by the president and some of the jobs that are being doled out to

residents of wisconsin right now. there are some issues that have developed in the last one assistantreby said the company was reconsidering some of its plants. which plans exactly? austin: that has been the constant reflate -- refrain since the deal was decided. first they were going to build a massive factory and then they scale down the operations. a couple of days ago they said we're not going to build a factory and then they flip-flopped again after president trump had a phone call with the chairman. a lot of people don't know what they are actually building in wisconsin. been unfolding since it was signed. a lot of the sources we talked to for the story just say the plans internally at the company in the headquarters and the mount pleasant wisconsin factory

felt a market and ever-changing. had this toenator say. >> the environment keeps changing. there is all kinds and uncertainty. what business is always want is certain and stable is this environment. markets change. apple reported less demand for their products and that obviously affects the equation. in general, all the incentives given by governor walker were perspective. emily: is this because of apple? austin: it is partly because of apple that there has been pressure on the company but they missed their first year hiring targets by about 82%. they ended the year with only 178 full-time workers. that is far short of the 1040 they committed to hiring at the end of that threshold.

the company can certainly afford to hire more workers. it's not just because of softened iphone sales. the senators implying there is no risk for the state because they won't give any subsidies unless he company lives up to its hiring an investment stats. it's partly true, but the truth is they have already invested a lot of money in man-hours and commitments to infrastructure costs. hundreds of millions of dollars have already been spent. emily: the bigger picture, what does it mean for local manufacturing and the supply the larger issue is the romanticized notion that president trump has talked about as a campaign pledge, and he talked about in the state of the union last night, it's more challenging to bring that back to the u.s. than a lot of people anticipated. to createe fantastic

more blue-collar jobs, but the truth is, it's really challenging, not just economically but the larger issue is that it is hard to replicate that supply chain stateside. a lot of that network is set up wherea and mainland china foxconn has most of its manufacturing operations. trying to replicate that here in wisconsin is going to be a huge challenge because there's not just the lack of supply chain but also a lack of talent pool. emily: has the president commented on the situation in particular recently? one administration official did tell me that the president and the white house would be disappointed if foxconn reduces its investments in wisconsin. any reductions they would be disappointed with. emily: thanks, austin. arel ahead, carmakers

shifting gears and spending more money on electric. but is the infrastructure in place to meet growing demand? we will discuss, next. this is bloomberg. ♪

emily: nasa is gearing up for the launch of commercial rockets that will take americans into space. a nasa crew is set to go into space in july. for boeing, a test flight is set for no earlier than april with a manned mission to earlier than august. by 2030, electric car sales are expected to surge to 30 million vehicles worldwide. one company preparing for the

onslaught provides more than 1000 public charging stations for electric cars across 34 states. in the first half of 2018, the company's network charged more than 42 million miles. i sat down with the ceo to electriche future of transportation. >> i feel like we are at an inflection point. there's going to be 160 new models over the next few years. this is going from crazy, boutique small to mainstream. consumers are going to love it. everyone i know who has driven an e.v. loves it. the cost has to be competitive, the range has to be strong, and there has to be charging infrastructure everywhere. tesla is obviously in the

lead. where are you seeing competition from competitors and what companies should tesla be worried about? cathy: every car company and board room in the world said my goodness. but we see in the u.s. is so much progress. general motors is great. nissan has been around for a long time. gm and nissan now have over 200 mile cars that are affordable. that is really big. ford has historically been a laggard and now it is moving forward on making an electric f-150. i don't think there is a car company in the world that is serious that is not investing seriously in electrification. emily: how far are we out from fully accepting electric cars? cars: we have a million already. we expect 6 million or 7 million

in the next five years or so. bloomberg new energy finance says it's going to be 10% of an inflection but point, we're looking at 30%-40% of sales in 2030. emily: what is more needed in terms of infrastructure? --ry: what we are seeing cathy: historically, most people hard to getnd e.v. home. people who live in apartments need to charge away from home quickly. with the rise of these rideshare hailing economy, millennials but they doars ridesharing all the time. those drivers of those cars need to charge quickly and away from home. and they charge a lot. truckswhen will electric to the scene and how does the

charging infrastructure change to support that? cathy: i would say light-duty vehicles are a couple of years ahead of the truck. i just came from your bloomberg coffers and there were a number of truck companies that have talked about it. the experiments are beginning, but i say within a few years you fleets relying increasingly on electrification. emily: how do you compare the u.s. market to china in the next five years? cathy: the chinese are moving really quickly. policyference in settings or what might make china move even faster. some say that right now it is even money. governmentinese putting policies in place to accelerate the market. there are some people who expect e.v.f sales in china to be

by 2030. no one thinks the u.s. market will move that fast. it has to do with creating policy reasons for the manufacturing to go ahead fast. emily: what are the risks you see to tesla, which is in the lead in this market in particular. where are the biggest challenges over the next few years? cathy: the market is growing so quickly, the market for non-luxury vehicles. tesla will have to compete with that on cost. they have beautiful vehicles, nissan area and bringing vehicles to market that will compete with tesla, which is great. with: my interview there

evgo. tomorrow, twitter reports fourth-quarter results and i will sit down with the cfo . we are live streaming on twitter. follow our global breaking news network tictoc on twitter. this is bloomberg. ♪ the latest innovation from xfinity

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simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. shery: i'm shery ahn with first word headlines. despite president trump's determination to bring it down, the deficit jumped by 11% to $38 billion through november, bringing the year to date gap with china to $382 billion. the strong u.s. economy boost demand for imports. steve mnuchin says there are no current plans for president .rump to meet president xi >> i can take you there is nothing planned at this time for it, but the president has talked potential he about meeting and we will see what progress we make next week. the president works very hard wherever he .