♪ taylor: i am taylor riggs in san francisco. this is "bloomberg technology." coming up, lowering expectations. softbank puts together a rescue plan for wework that may value the co-working company below $8 billion. that is a far cry from the $47 million evaluation it had in january. plus, remembering a tech giant. oracle c.e.o. mark hurd dies.

more on his life and story at oracle. and making the rounds a day after telling georgetown students and faculty he won't police political speech, mark zuckerberg talks to political outlets. what he had to say. first, our top story. wework's valuation sinking lower. we have learned that softbank is putting together a financial play for wework. it may value the company below $8 billion. that is a fraction of the valuation it commanded as recently as january. since its initial public offering, they have been considering plans from softbank and j.p. morgan chase. a partner from manhattan vendors, and sarah mcbride, who has been tireless on all things softbank. what did we learn about this new valuation? lower thans even

expected, around $8 billion, and as you said, that compares to around $47 billion at the start of the year. a huge drop in under 12 months. you take a look at $8 billion, are we close to fair value? andrea: i think we are. overall, something i like to consider, being in a late interspace what will carry over , to retail? with an $8 billion valuation, it shows wework has a real business, but there is still time to tell what ends up happening here. taylor: is the $8 billion valuation something retail could be looking at if there would be an ipo? andrea: i think so. in that sense, wework is a strong player, but there is a lot of cleanup that has to be done. operationally, management and otherwise. i think it gets a lot closer to fair value. taylor: sarah, with this deal

with softbank, what we know about terms? does softbank want control or not? sarah: well, everything is still in flux, but part of what is under discussion is preferred shares with non-voting rights. basically at this point anything is possible. they still only have two board seats, so things could go in any direction right now. taylor: you have been nodding your head. what do you make of that? majority-owned shares, seats on the board. and otherk at wework companies, how important is that in terms of getting this company to the finish line? andrea: i think softbank knows where they stand and where they can come in and save the business. but i don't think they are the type of firm to step up and say we have the abundance of experience to take this business

to the next level. i think with softbank's power, they are going to look to identify the right leadership team. taylor: there was a dueling offer. talk to me about that. sarah: jpmorgan chase is putting together a group of investors. they are still shopping that around among potential investors. the advantage for wework in a debt deal is they wouldn't have to give up as much control. it wouldn't be diluted. softbank's terms would be. the thing with the jpmorgan chase package, it would take so much longer to pull together. softbank could come up with the money very quickly. that is the advantage there. taylor: i want to look at a chart that i am showing to our bloomberg terminal audience. we know the story. the bonds are trading down to about 84 cents on the dollar. yet that is a far cry from 30 cents to 40 cents that you

typically see when you're looking at recoveries. when you look at the jpmorgan bonds, 15% coupon, i know we don't know much about price, but is there a sense that there is a general market appetite for a big high-yield deal like that? sarah: yeah, i would say so. they have found potential investors. nothing is firm yet. but just the notion of a possible deal, then wework's existing bonds were higher this week. they had been trading lower. if you price something right, you can always find a market for it. taylor: what are your takes on the jpmorgan competing deal? andrea: i think overall as we have seen in the real estate market, bondholders really do enjoy a strong real estate play. what we have to keep in mind is with bondholders, they are looking for steady income. with wework's business, if they can turn it around in a

long-term strategy play, the bond would actually perform very well. but that is it taking the bullish perspective. a lot has to happen between now and that turnaround. taylor: and sarah mentioneded the jpmorgan deal would take longer and one of the benefits with softbank is they could get it quickly. how quickly does this company need cash, and if they get it, how long can it last them? andrea: if they can minimize a lot of the overhead with sales and marketing, which i think is trailing on the balance sheet right now the business could , sustain a little longer than we were all expecting. however, they do need about $3 billion in cash going into q1 of next year. taylor: looking at the softbank side, how much of their reputation is at stake here? sarah: the thing is, people wonder how much this will affect the vision fund. but people forget of the more than $10 billion that softbank has invested in wework, only about $4 million comes from the vision fund. some people exaggerate the fact

it would have on the vision fund. but overall, softbank has invested $10 billion. that is a lot of cash going into a company that has seemingly careened out of control. i think it is appropriate that they are stepping up with a plan for how to try to turn things around. they have a slate of executives that they think might be able to help run the company. it's a difficult situation for them now, but they still potentially could turn things around. taylor: and what is the significance that it is softbank and not the vision fund that is stepping in here? andrea: well, with that information, it allows the vision fund to prepare for the second fundraise they are ramping up for. i think the plans for that were a little premature. they wanted to see the returns on the portfolio. but with softbank as the organization stepping forward, it alleviates some of that burden and stress on the vision fund in particular. taylor: we were also getting news that the creative chief of

wework is said to be resigned. at what point does it become hard for this company to retain talent if everyone keeps leaving? sarah: well, it is going to be very difficult for them to retain talent. but at the same time it offers , an opportunity for them to reinvent themselves a little bit. say thisa new plan and is our plan for turning things around. they can turn that to an advantage as well. taylor: this is the story that keeps on giving. thank you both. over to mark go hurd, the chief executive officer of three major technology companies including oracle, and he has passed away. oracle announced last month that hurd was taking a leave of absence for unspecified health -related reasons. chairman larry ellison said hurd was "a close and irreplaceable friend and a brilliant and beloved leader." mark hurd was 62.

for more i want to bring in brad stone to talk about hurd's legacy. what is hurd going to be remembered for? brad: well, taylor, mark hurd has really been just an extremely visible, productive ceo in silicon valley really for as long as i can remember, particularly starting in 2005 at hewlett-packard, where he expanded the company through acquisitions. he made it a lot smaller through layoffs and relentless cost-cutting. a tenure that was marked by some controversy. if you remember, the pretexting scandal where they were trying to identify the source of leaks, and he left under a haze of controversy around expense account improprieties. to answer your question, i think the legacy is really one in helping to steer oracle from this traditional business model licensed software to

a cloud-based company that now has to compete with the likes of amazon. taylor: hurd was instrumental in taking the company from the legacy business into the newer cloud model. are they set to be able to do that in his absence? brad: i think so, but he was important. one, he articulated the need to move to the cloud early. in the early 2000s, larry ellison called cloud computing a fad. mark kaman and put a flag in the ground and drove the transition. he has also been the public face of oracle, and that is where they are going to struggle to replace him in the short term. the co-ceo really operates in the background. larry ellison, the chairman and the visionary, we only see him a couple of times a year. mark was the guy talking to customers, talking to us in the media. he was delivering the key notes at oracle world and i think they are going to struggle to find a rereplacement there. taylor: talk to me more about

what oracle does here. -- does from here. in that september earnings statement, they highlighted they have a deep bench of leadership that is qualified to take this company into the next stages. how prepared are they, given stafford katz and larry ellison are there -- how prepared are they and frankly, do we know anymore about oracle's leadership team going forward? brad: i am probably not the person to talk about that. i have heard larry ellison talk about deputies as replacements. they hit a stock high earlier this year. the stock is up 20%. but there are some existential questions. amazon, now a competitor, made a big fuss last week when they announced they moved the consumer business from oracle into their own cloud services. clearly they have some vocal rivals that are creating stir in the marketplace.

where hurd was good was he could give as good as he got. now they need a chief general on this battlefield that has become cloud computing. taylor: bloomberg technology senior executive editor brad stone. thank you for joining me. we will have more when we come back. ♪

taylor: let's get a check on the top analyst tech calls. starting with microsoft, the price was raised to $160 from $153 at rbc capital markets, which called the stock one of the most likely outperformers over a multi-year period. the analysts hailed the company as the king of cloud.

shares of snap fell friday even after analyst at bank of america upgraded the stock to a buy from neutral on strong monetization trends. the company reports quarterly results tuesday. and shares of tesla fell friday after an analyst lowered the price target to 372 from 386, saying it reflected a toning down of the optimism that was reflected in original near term estimates. at in quarterly results in wednesday -- on wednesday, the analysts expect a 2019 loss per share of $2.94. those were your top tech calls. now ant financial, the finance giant controlled by jack ma expects credit demand to remain strong despite a decelerating economy.

we sat down with an exclusive interview and started by asking if dealmaking was in the company's future in competition. >> i think our philosophy is very straight forward. we are only doing strategic enhancement. the portfolio company is in line with our overall strategy. [indiscernible] we are really focusing on strategy management, number one. secondly, we are focusing on management. [indiscernible] we need to finish by closing together. >> one of your key partners is pay tm out of india. are you looking at increasing your investment there? they are looking to raise maybe $2 billion. >> i think ptm is doing well.

i am happy to to be a partner of them. if you remember, back to about five years ago when i first looked at the company, i really liked it. the founder and ceo of the company, the first time i am looking at the company actually , i don't like the business of the company. i liked him because he is so energetic, very passionate with a strong vision. overall i think india, the whole economy also developing very healthy and fast. i think ptm is in a good position to capitalize. tom: when do you plan to i.p.o. ant financial? >> last year we just did a new run of financing. the company is very healthy in terms of cash flows.

we are happy with our overall business momentum. fore don't have any plans capital raising or any plan for an ipo for now. when we have the plan, i will let you know. [laughter] tom: would it be realistic to think that you would be ready to pull the trigger on an ipo in 2020? >> we don't have a plan right now. when the time comes, it comes, you know. we will let you know. tom: ok. add, is that ipo is not the ultimate goal of the company. it is just one stage of the company. ntylor: that was a financial ceo eric jing. videogame stocks traded lower on monday.

on monday, lower software sales for consoles and hand held devices fell 12% in the last year. an analyst said the deadline was partly due to the launch of sony's spider-man a year ago. we was the fastest selling first party playstation title in history. coming up, mark zuckerberg is still out there pushing back against facebook's critics. this time he took to fox news saying there was no anti-social -- anti-conservative bias at the network. and bloomberg technology is live streaming on twitter. check us out. and follow our global breaking news network at tictoc on twitter. this is bloomberg. ♪

taylor: facebook ceo mark zuckerberg was again defending his social network, this time on

fox news. much of that was the same set of talking points he offered at georgetown the day before. he also continued to make the case for why facebook is involved with political advertisements. >> should we be in political ads at all, or is it something we should block completely? from a business perspective, the controversy that all this creates is clearly not worth the very small amount of our business that is based on political ads. it is not anywhere near a big part of what we do. but the reason why i have stood up for this, ads can be an important part of voice. taylor: joining me to discuss, the man who literally wrote the book on facebook. it is david kirkpatrick in new york. give me your thoughts to what you heard there about facebook being in or out of political ads. david: well, you know, one of the things that zuckerberg kept saying both in the fox interview and in his speech at georgetown

yesterday was that in a democracy, the people should decide. in other words the users of , facebook, the people, should decide what they think is true and not true and they should not be sort of treated condescendingly with the company ng for them. but in reality, the way that people, citizens, in a democracy decide what they want is by voting for politicians, who then set the laws. the thing that i feel was most missing from zuckerberg's talk and interview is the recognition that he has to work with government in order to figure out what the best way to handle these things is. he keeps saying "i decided, i believe." it doesn't really matter. one man shouldn't be making these decisions. taylor: i thought it interesting that he also said they shouldn't be in the political ad business. it is a smart portion of revenue and they don't need it for business reasons. then why are they? david: he believes it is

empowering for the community have a logicians at all levels, from the local school board to the president, having the ability to have a voice on facebook. i don't disagree with that. there are many points he makes about how empowering social media and facebook in particular have been for ordinary people and politicians at all level, small business, etc. that are right. it is true that ordinary citizens at all levels have more of a voice today than ever before. but i don't think he is fully owning up to several things. one of them is the degree to which the only way this can properly be resolved even on an ongoing basis where it is continually being refined, is if government is at the table along with the companies. taylor: and you know who else is at the table, and it is china. he talked a lot about china and facebook needing to be able to take on them or else we will all lose out.

i want you to react. take a listen to what he had to say. mark: china is building its own internet focused on very different values, and is now exporting their vision of the internet to other countries. until recently, the internet has been defined by american platforms with strong free expression values. but there is no guarantee that these values will win out. taylor: is that a valid argument or is he just speaking his book? argument and valuid it is also very opportunistic for him to be making it. facebook came this close to launching in china a number of years ago. i think it was in 2011 when the chinese government decided after arab spring that they were not going to allow it. if facebook had launched in china in partnership with a local player as they intended to

do, they would have sacrificed a lot of their supposedly absolute values that he is now defending. he will do what is useful for his business. i also think one of the things he is leaving out of all of these discussions is the extraordinary profits he is taking from the entire ecosystem in the midst of all these controversies. it is one of the reasons why so many people are so suspicious of him and why his reputation is mud both among informed citizens and politicians. taylor: quickly here, about 20 seconds. he continues to say breaking up big tech doesn't solve the problem. thoughts? ofid: i am not a proponent breakups, per se. i am not ruling it out. government has to get more informed and figure out what to do with the platforms by figuring out what to do with them. breaking them up is too easy. taylor: david, you will be sticking with me. coming up, we continue it talk

facebook in our look back at our week could. we will look at plans with cryptocurrency and libra. that is next. this is bloomberg. ♪ everyone uses their phone differently.

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♪ taylor: this is "bloomberg technology." i'm taylor riggs in san francisco. now to our weekly roundup of the top tech stories in tech, starting with wework. as we told you earlier, the office code sharing startup once valued at $47 billion now looks like it is close to about $8 billion or less. this comes as another executive has jumped ship. to discuss in new york, david kirkpatrick, and bloomberg's max chafkin. max, $8 billion -- closer to fair value? max: fair value is whatever the

y end up paying for it. i think the question people should be asking themselves is why anyone was able to talk themselves into thinking it was worth $47 billion. especially when you have a drop like this when not a whole lot changed. what is crazy about this story to me is a lot of the things investors have sort of freaked out about retroactively where -- retroactively were things out in the open, things in the s1. it was all there. you have to wonder was softbank kidding itself in an effort to raise money for its subsequent , and, the vision fund 2 was the rest of wework's kind of cap table going along for the ride? taylor: david, do you think $8 billion is still too much? david: it might be. i honestly think there is a real question whether wework will be a going concern in a year, two years. i know people who have offices in wework, significant companies making contingency plans in case

they come to work one day and find the door locked. that is how bad it could be viewed -- be. i don't see this company having fundamentally good economics. if they don't raise the debt, they are in deep trouble. taylor: max, why does softbank appear to be throwing more money at what was already, some would say, bad money? max: you could say that. there is a question of throwing good money after bad. on the other hand, they are very committed to this. they put a lot of money into wework. it is a big part of the vision fund. i think there is an argument to be made, notwithstanding david's concern there is the possibility if they run out of money, the whole thing falls apart. on the other hand, there is an opportunity here, given the flexible leases to technology companies, creating these open desk environments which people seem to like. people in wework like it. there is a real business.

the question is does wework in its effort to grow really quickly and come up with these weird financial engineering things, bitten off more than they can chew? taylor: david, the last word. why would softbank want control of this company? to control their destiny? david: yeah. they are the ones that have the most at risk so they would prefer to be making the decisions. i can understand that. and i do agree with max. the business is definitely viable here, but their main competitor has more spaces than they do and has been around a long time, public company, it has a valuation of less than $5 billion. taylor: i want to switch over to netflix. another big tech earnings we were taking a look at. low expectations, earnings better than expected. on friday, people got nervous again about competition. in amidst netflix fit the streaming wars?

max: the issue with netflix, they have a huge user base, but they have been spending enormous amount of money acquiring content. there is this concern -- it is a two-part concern. one is has has there been overinvestment in the content bubble? are people overpaying for these original series? and then the risk of viewer fatigue. we are about to see disney launch a service. apple is launching a thing. these are big marketing machines that will inevitably take customers and mind share away from netflix. then, you start asking did we pay too much for some random show season three, whatever? there is this kind of very spendy culture and maybe they went too far. taylor: david, as you take a look at the landscape, is it a zero-sum game? can netflix survive with disney and apple tv coming fast? david: i don't think it is at all zero-sum because people watch so much video.

that is one thing. for those of us like myself, a baby boomer, disney seems like a great brand, but in the general economy, netflix is probably a better brand than disney. everybody knows they make terrific content. they will be out there succeeding -- they probably will have a lot less pricing flexibility as the competition increases. their growth could be hurt. but the main growth is happening outside the developed countries like so many tech companies and , that is a big opportunity. taylor: max, i pivot to libra , which is facebook's cryptocurrency. earlier this week, seven big members of the founding association pulled out, but they got the deal signed with 21 members. what are the biggest hurdles that remain for libra as you look out forward? max: so many hurdles. this thing is pretty much -- they did form the association, so in theory, it is separate from facebook. it is able to design this

cryptocurrency and work with regulators. regulators have serious concerns about this because there is the risk -- and i think it is a really extremely modest risk -- that libra could supplant the u.s. dollar, the euro. basically allow the libra association, which in effect is facebook, to control a huge part of the economy. that is going to be scary for all sorts of powerful people. taylor: david, your thoughts on zuckerberg's testimony next wednesday, which could be centered around libra. any thoughts on what could or could not go right? david: it will not go well. i think he is making a gigantic mistake thinking he could somehow go to the house financial services committee and convince them that libra is a good idea. they do not think that. they are not going to think that after his testimony. he has boxed himself in by saying he will not launch it without the regulatory approval in the u.s. and europe, which

some people think means he might launch it in vietnam or colombia as a test case and to see if it works and eventually bring it here after he irons out the kinks. honestly, i have often thought in recent weeks that libra was completely dead. i don't think that is out of the question. i don't think it has a strong argument on its behalf. i can tell you congresspeople do not like it. taylor: david, the final word. why is facebook going into side projects like libra instead of sticking to their core business? david: somebody made an interesting point to me today. facebook, one of their core beliefs is virtual reality is one of the things they will be doing in the future. it will be global interaction. if they want to do commerce in global systems, they need currencies that someone in the u.s. could pay to somebody in nigeria or vice versa. that is not a bad thing and we should have such currencies. i just don't think the world wants them to provide it. taylor: right. [laughter] bloomberg's max chafkin and a

very smart, insightful david kirkpatrick. thank you both for joining me. coming up, he cofounded facebook. now, he is trying to rein in his co-creation. we hear from chris hughes next. this is bloomberg. ♪

taylor: the cofounder of facebook is once again weighing in on the regulation of big tech. this time, he is bringing a former lawmaker with him. chris hughes and open society u.s. executive director and former congressman of virginia tom perriello are spearheading an anti-monopoly fund. they spoke to alix steel and david westin on friday. chris: what we are seeing is rare bipartisan consensus that corporations have gotten too large, too big and that

concentration is affecting everyday americans. specifically because those corporations bend the rules of how it works. what we are trying to do with this fund is move $10 million over the course of the next year and a half into research, organizing, advocacy, and storytellers who elevate this conversation. anti-monopoly in particular is a broad term. it encompasses antitrust work but it also encompasses regulation. a good example is the problems with big tech. right now everybody talking about it. i'm on the record for thinking that facebook should be broken up and separated. i also don't think that is enough. we need regulation that guarantees interoperability, data portability, basic privacy and security. all of that is about raining and ining in the power of

the big corporations. that is why we call it antimonopoly because the problem is that big. david: is it an economic problem or a social democratic problem, because those are two different issues and they could have two different solutions. the antitrust laws in recent memory have been aimed at economic issues, not social issues. tom: as you know the antitrust , was really cut in half because initially it was both about trying to ensure competition and protect consumers. from the 1980's forward, it focused on the consumer part but not the competition part. that has been a great expense of small businesses and spurred a lot of the geographical consolidation as well into fewer and fewer cities where jobs are concentrated. you do see this remembering of a great bipartisan american tradition of competition but it is -- david: part of the reason that shift was made was because it gave some sort of a mooring to the judges' decisions. if it was economics, you could have numbers to look at. if you get into is it too big or

too small, then it is up to the judge and how they feel on a particular day. tom: i don't think the issue of competition is a non- economic issue. i think allowing the walmarts to emerge has had some positive effect for the consumer in the short-term, but it has real economic considerations in terms of consolidation on a geographic level. i think you are also seeing this bipartisan support for attorneys general and others because there is something about this question about people's sovereignty to determine their future. david: what is the most effective form of regulation if there is to be regulation? you talk about breaking up facebook. i spoke to tom steyer and he thinks there should be regulation that it would not work because they are natural monopolies and you have to regulate it like the utility. this is what he said -- "if you believe breaking them up would result in all the same people going back to the one place where they started, government regulation the way a public utility does." does he have a point?

chris: i don't think that is quite right. because i was there for the founding of facebook, we saw a robust competition between facebook, myspace, twitter, livejournal. the list goes on. this is not like the electrical grid or pipes where there is only so much space and once you invest in the infrastructure, you have to have a natural monopoly that needs to be regulated. this is more akin to what we have seen across other industries in the past. to your question you were getting at before about the harms. i think antitrust law in particular has been completely narrowed into this view of consumers and largely prices. that has been a big barrier to talking about facebook or some of these other companies. the long arc of antitrust law is about all kinds of harms. right now, what are the harms that big tech and other big andanies, agriculture pharmaceuticals, doing to the economy? first, price concerns. second, rates of entrepreneurship in the country are near all-time lows. third, productivity rates are much lower than they should be.

they have effectively stalled. and maybe most importantly is the question of power, political power. we live in a moment right now where large corporations are setting the agenda in washington and completely erasing the voices of everyday people. and americans are tired of it. alix: have you talked to mark zuckerberg about it? chris: i have not talked to him. alix: how would your view be different if you had a seat still on facebook and you were running a big company? what would you think? chris: i think i would be saying many of the same things. after i wrote the piece calling for a breakup, a lot of people asked what do you think mark zuckerberg should do? i said to them and i would say today, the problem is not what mark zuckerberg should do. we have been so accustomed to think about how corporations can solve our problems. the responsibility is on government. it is on the department of justice, ftc, state attorneys general. we now have virtually every branch of government that could

be bringing oversight. the house, doj, state attorneys general stepping up to the plate in a rare bipartisan consensus to take action and say enough is enough. to what extent does it have to be a structural breaking up as opposed to a behavioral one? we have the head of the antitrust division come out and say in the microsoft instance when the justice department brought a lawsuit, the ultimate result was behavioral and he said that that encourage d entrepreneurialship. can behavioral remedies solve this problem? tom: i think this antimonopoly fund is looking at a full range of solutions. we are looking at policymakers -- there is some litigation elements, breakup elements, consumer power. i think right now, you are seeing some of the loudest voices of concern coming from small business owners who are seeing a google or amazon would have an enormous effect on their business and even squash it based on where they appear on an algorithm. they don't think that is fair. they can have built the business

for years and years in terms of relationships with customers. those are the kind of small business owners that call up the representatives, republican or democrat, and say something here is not right in the marketplace. people want fairness. they want fairness of competition. they want transparency. to know what the rules are. and certainly behavior could be part of that. alix: this goes to the broader issue of privacy. mark zuckerberg yesterday gave a speech talking about free speech, standing behind that and why we needed to protect it. mark: i understand the concerns that people have about how tech platforms have centralized power. but i actually believe the much bigger story is how much these platforms have decentralized power by putting it directly into people's hands. i certainly worry about an erosion of truth, i don't think most people want to live in a world where you can only post things that tech companies judged to be 100% true. alix: what is your reaction in that if you are big and have the power and you have free speech,

it is a huge move forward? chris: with power comes responsibility. the speech mark gave yesterday set up a false dichotomy. it is either facebook's policy today or china's authoritarian regime. i'm sorry, there is a lot in the middle and we can do better. there has been a lot of talk about freedom of speech on facebook and other platforms. no one is saying you should not be able to share opinion no matter how off-the-wall it may be, yourself. the question is whether or not facebook or any other platform on the internet should amplify that opinion and give you an audience of hundreds, thousands, or in many cases, tens of thousands. in my view, when a politician says something that has been fact checked as a lie or when folks peddle false information about critical health care things like vaccination, it is the platform's responsibility not to amplify those messages. we have precedent for other

platforms doing a better job. pinterest allows users to express their opinions. it is not the largest platform but they are pioneering the way. you can express opinions. yet, they don't use their algorithmic tools or display it in search results to make sure the false information does not travel across the platform. the idea it has to be one or the other is a false choice. there is a responsibility of the platforms to step up and do a better job. tom: the great orwellian moment from facebook a few months ago in this controversy where they said we are not a media company, and should not therefore be held accountable to that. they want to be essentially a monopoly on all media information in the world, while not being held to the standards of a media company we would hold to this network or any other. i think the problem when you get that monopoly consolidation, particularly across different sectors of the economy, is what should the rules be? whether it is behavioral or ethical codes or legal codes.

this is fairly new territory. again, something that in earlier eras we saw and great leaders stepped up and broke up some of those trusts. that helped produce some of the great economic benefits of the 20th century. taylor: that was chris hughes, facebook co-founder, and tom perriello. still ahead, the chase for hollywood's best binge-worthy series continues with "south park." how the cartoon could be the next $500 million bet for streaming services, next. this is bloomberg. ♪

taylor: count the chief executive officer of the biggest u.s. bank among doubters of facebook's efforts to create a cryptocurrency. jamie dimon had this to say on friday in washington. jamie: it is a neat idea that will never happen. i have nothing else to say about it. [laughter] jamie: we already have stable coin.

they are not the first to do that. taylor: that was jp morgan ceo jamie dimon. " is theth park latest beneficiary of hollywood's rerun mania. the show's creators and media giant viacom expects $450 million to $500 million by selling the streaming rights to the animated comedy. to discuss, i am joined by lucas shaw. $500 million, are you crazy? lucas: we have never seen a market for reruns that i can remember like this. just four years ago, 2015, hulu paid between $150 million and $200 million for the rights to show "south park" for five years. now in 2019, that price has more than doubled to almost $500 million. the simple explanation is back then, you just had hulu, amazon and netflix. a lot of the reruns would air on basic cable. now you have so many streaming services jockeying for position.

hbo max from at&t. apple plus. you add that to the three big streamers we talked about and there is a lot of buyers. only a small pool of shows that are seen as really mattering. "friends," "the office," "seinfeld" -- these shows get $500 million. lots of other shows will not get that same level of commitment. "south park" is a unique title. taylor: the strategy is to build up to a library to compete with netflix, right? lucas: i think the idea is you want something that a lot of people will come and watch. either the reason they sign up in the first place, although that is usually originals. or another show that will keep them watching in between and that is where a lot of the reruns come in. if you have a show like "friends," "the west wing," or "south park" -- they are in their 23rd season, more than 300 episodes. if you include that in the hbo max, maybe you bring it in with the latest hbo hit. in between watching that and

something else, instead of leaving to go to netflix, they can stay there and watch "south park" for hours on end. taylor: what is the biggest payoff for the streaming companies? investing in original content or paying $500 million for a rerun? lucas: they say originals. that is why you see netflix and its strategy switch from doing bulk deals for old library to then funneling that into new product. if you want to sign up customers, you need originals to do that. reruns are not super useful for bringing in new people. you don't walk down the street and say you should sign up for this service, they have "friends." "friends" is available on a lot of places. not just streaming. reruns are useful for the in between moments. what netflix has said is most of its users alternate between a show and a movie and they are trying to essentially replace cable with a couple of streaming services and cable has both new shows and reruns. tv shows and movies. if you want to offer a full experience, you are going to mix

new big hits with the old ones. taylor: remind us quickly, who are the big streaming companies vying for these types of shows? lucas: with "south park," it sounds like the biggest bidders are probably hbo max, peacock, which is comcast. hulu, which currently has the rights. maybe amazon. i am told netflix is not bidding. netflix is the biggest streaming service of them all and did pay for "seinfeld," losing both "friends" and "the office." all of these companies are having to pick and choose. the price is so high, you cannot have everything. taylor: thank you to lucas shaw in los angeles. that does it for this edition of "bloomberg technology." "bloomberg technology" is livestreaming on twitter. check us out @technology. be sure to follow our global breaking news network, @tictoc, on twitter. this is bloomberg. ♪

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