>> from the heart of where innovation and -- collide, this is "bloomberg technology" with emily chang. emily: coming up in the neck hour, -- next hour, juul order to pay almost $440 million and eight lawsuit settlement. plus, the rise in the reader economy take a deep dive into the economy and how youtube reigns supreme. tiktok is catching up. and, it is back. and about season starts on thursday, which means more sports betting. what to expect as we kick off

this week's sports tech theories. first, let's get a look at markets bloomberg's ed ludlow is back. >> a few painful weeks in the market. stocks underperforming becoming a familiar story u.s. data on wednesday, stronger than expected about reinforcing the idea that they can withstand higher rates. down 7/10 of 1%. a selloff in the bond market, the highest level. that follows straight weeks of decline on the not feeling that we will continue to see decline, especially when you take into account, earnings revision period simply put, downgrades

earnings, estimates outnumbering ,. of the year when is -- estimates outnumbering a period of the year. apple, 24 hours ahead of the key event where we spec to get the latest details. a french videogame maker surging . tencent will double estate that company. also, juul reaching that

settlement emily: thank you. juul agreeing to pay $439 million. stay state is claiming that it marketed addictive and negative -- nicotine products to its leaders. tell us how significant this settlement is today. >> very significant. suddenly the largest impact building any the state. company had settled a few lawsuits and had this huge investigation over the meantime. they decided to done with this risk. there are a lot of lawsuits pending this does away with a lot of the lawsuits that could

have been filed by these 33 states and recoup emily: -- and puerto rico. emily: how much of their legal troubles go away as a result of this? >> is significantly states have settled. still over 2000 lawsuit and personal lawsuits that have been filed by individuals also, dozens of cases by state governments and school districts. in november, it will show how the jury may react the evidence. see a settlement for its file but there are several states out there york and kelly which have the potential for big settlement, they have lawsuits and being.

-- lawsuits pending. emily: what are the changes from the company we knew before. >> they have said that all of these things that they have agreed not to do they are already not doing they said they voluntarily change their business back a while ago. hammer was coming down on some of these marketing practices. it will not market to use, will not post on social media. it will not use cartoon and add. it has agreed not to do public transportation advertising. it will not use anyone under the age of 35 in any advertising. no sponsored or free products. why a lot in marketing is agreeing not to do. limiting only to fda approved

labors. these have lots of different indian fruit labors. now they have done away with that. emily: thank you for the update. to watch how those civil involved. coming up, we will speak with vice chair and partner at b capital. this is bloomberg. ♪

emily: let's take a look at

market conditions with fears of a hawkish fed and what is the future of venture capital after the growth at all cost mantra for the last couple of years. let's get to the vice chair and partner at b capital group. what is your reaction to a continuing hawkish fed? we are getting mixed economic data, some looks better than others. what does this mean for your world and investing strategy? >> venture capital has had an amazing run for the last decade. it was inevitable that we have come to a more difficult time. looking at the environment and everything you mentioned, i think it is a great time just a has been in the past when you go through cycles that are difficult and private equity and other segments of the market to really look at today and the

technology motivations that are driving your productivity. to my mind, the pullback is necessary. it is a good thing to shake out where we need to be in d.c. -- in vc. emily: where are we in vc? are there valuations to high, something need to come down? sheila: as you are seeing in the latest rounds, some are realizing the need to do larger deals. people need cash. that is to be expected. it is also reasonable to expect an increasing amount of m&a. many of the reports we are seeing suggest that you will see more m&a, especially in areas like the back office.

i think there is room for valuations to move and i think there is some room for incredible innovation to come even in areas that seemed the most difficult. crypto is a great example of that after this latest downturn. emily: the question is, how long will this downturn last? we have some predicting millions of layoffs and it will last 2-3 years, so that drive we were thinking -- does that drive what you were thinking? sheila: i am more optimistic. i see some positive trends in what is going on. a recent survey suggested that they are not pulling back on areas like software spending. a lot of things we focus on our core areas like enterprise.

areas where companies can find efficiencies at the same time they are going through economic circumstances. there may be a recessionary or difficult environment which is not necessarily the worst environment in business. emily: in the meantime you are investing in companies that are taking on a big tech or trying to challenge big tech, do things better. we have been following a big piece of legislation working its way through congress to rein in big tech. there is a chance it won't not make it before midterms. what you think the impact of this legislation could be what is the impact if it doesn't happen before november 8? sheila: around the world, technology has proved itself to be adaptable. this is not the first time or region or country to take things on in big tech.

we have seen for many years the tech industry continue to adapt. many are eager to adopt. technology sometimes moves faster than human capacity to handle it. in my mind, whether the regulation happens before or after, some amount of regulation is coming. everyone has accepted that and is ready. the real issue is making sure it is addressing the right things and solving the right problems that people have concerns with. >> weighs her advice to portfolio companies right now -- what is your advice to portfolio companies right now? there is a lot of uncertainty ahead. we are moving out of an area where there is lots ahead but now investors want to see real numbers. sheila: it is a chance to go back to their nitty.

we are seeing the best in the -- coming forward. founders to have a sense of of cash and rates and maintaining their runway. also, a sense of competition and realizing that if they're in a moment right now, they need to be aggressive and think about ways to push themselves, their products forward as solutions in a difficult environment. i think you're seeing many of the best founders and innovators able to put that hat on. this is when my competition is showing challenges of weakness or the way they manage their business. this is my time to shine. emily: where are you placing your bets in terms of where we will beat this time next year --

where we will be this time next year? sheila: we look at it is more of a stable time. we invest over many quarters. we do not think about it getting to work right away. i think you will still see us slowly and said he investing. i think we will focus on the areas for we see opportunity. my colleagues just wrote a great piece about where crypto will go from here and were crypto and fintech merge. in this moment, most of what is going on in crypto has been driven by speculations. where do the real-world applications come in? bernie seen blockchain's getting money to rule errors and so on.

-- rural areas and so on. emily: ok, sheila patel thank you for sharing your thoughts with us. meantime, elizabeth holmes claims a key witness visited her after the verdict and expressed remorse about his testimony. she alleges a former lab director showed up at her home and says her testimony had been twisted by prosecutors. she is now asking for a new trial. this is just weeks before she is being scheduled to be sentenced.

emily: taking a look at the creator economy which has received a massive boom over the last few years along with platforms like spotify, tiktok. of course, you two. every minute, at least 500 hours of footage is uploaded to youtube. let's break this all down with a content creator who has his own coaching program that helps influencers build their brands and mark, who is out with this new book. inside the chaotic rise to world domination.

right now, thank you for joining us. can you start by giving us a sense by how big the creator economy is and how much it has grown on all these platforms? >> there are estimates it is about 100 billion, 0-60 in the past 50 years. certainly in the past five years. i think the has exploded as they have all gotten involved. another major stat is that there are over 2 million creators. a smaller number of them was before but it has been gradually moving up and they are facing new competition from tiktok. emily: you were a graphic designer and freelancer before becoming a youtube content creator. why did you make this a big job change?

give us a sense of a day in your life. >> for me, a lot comes down to the things that are obvious for people, you or time and freedom. you want to feel a sense of ownership over the things you are doing. when you are marketing for other people, it is great, gratifying and link, very legitimate in the eyes of your relatives read when you get to do something of your own and have ownership of it, you feel it directly supported of cash with a community of like minded people and there is nothing like it. i think that is what attracts a lot of people. emily: why do you focus on youtube in particular and not tiktok or instagram? >> i have been with youtube since almost the very beginning. they are still the most powerful

and has a sense of permanence with its continent. they have the best monetization. i teach content creators 15 different ways they can monetize, primarily using youtube but i also understand and value other platforms have a presence. i feel that even with the rapid rise of tiktok, there is nothing like the permits and longevity that youtube content creation has. if you talk to tiktokers on a regular basis, a lot of them plan on pivoting to youtube at some point. they do want a sense of stability and permanence and also want the potential for ever-growing content to benefit

them and monetize in the future. they know right now that while they getting something, they are underpaid for the attention when compared to traditional content on youtube as well as in the livestream community. within livestream and podcasting, there are more opportunities in terms of direct compensation when it comes to sponsored content and is not even close. for me, that is one of the bigger deals. emily: even close is one way to put it. we have talked so much about the threat of tiktok to youtube. it is a lot of disconnected content and less permanent. how big of a threat is tiktok to youtube and how are they addressing this? >> i think it is a viable threat , even more so than instagram and facebook.

what they need to do is demonstrate -- google has eight remarkable system both for search and for monetization. it is the world's biggest advertising company. it has had this in place for years. tiktok has a lot of political problems and have not proven yet they can be a threat to youtube at a large scale. youtube has shorts and are encouraging a lot of craters to go there. it is unclear how productive that will be and how they will sort that out. youtube has a strong track record of sorting this out. i think, responding to the threat any real significant way. emily: roberto you are the

founder of a coaching program that helps influencers build online. we had some fun watching your videos earlier today. what trends do you see and what advice are you giving, that might not be obvious? >> the thing that is not obvious is there potential. their overall potential when it comes to earnings and the fact that there is a compounding effect from their content over a period of time. what a lot of creators do not do is they rely so much on monetization that they do not explore other monetization opportunities and do not think of what they are doing as content as a service. that is one thing that is not obvious to them. most of us have these wonderful subscription programs that we

are paying for. content creators have an opportunity to use it as a service and leverage, not just with creator funds but they can build their own communities around things like their 100 or 1000 true fans and can have monthly membership programs. they can look at things that give them recurring revenue outside of the platform and telling more craters to look into opportunities to build their own products and merchandise. youtube partnered with shopify and expanded with the program with regards to merchandise and products. emily:

>> welcome back to blumer technology. i am emily chang in palo alto. we will get back to a check of the markets.

meme stocks on the move. ed ludlow, back with an update. ed: when, in particular is bed, bath & beyond. the company in manhattan has appointed an interim cfo. they caught up in the meme stock frenzy where we discussed this on other stocks, on forms online. you see other so-called meme stocks down. the activity around this area has really dropped off. we see the fewest in the space,

particularly for names like gamestop since 2020. nowhere near the frenzy. you can see like the broad equity market, in phase 3 straight weeks of decline. the concern around the fed and higher rates also impacting so-called meme stocks. they were reporting on the bloomberg terminal about this idea that when we return to school, it also means our return to college. a lot of the trades doing this are young. that has not really been the case. you see that sort of negative sentiment around meme stocks with bed, bath & beyond related to that company and it will go to their family as well. >> thank you for that update. i want to move on to the ipo

market now. on pace for one of its worst years and decades after an incredible amount of activity. they left many companies with few options as they wait for the market to calm down. joining us now is phil. the last time you were on the show, i believe you said the ipo window is totally sealed shut and not opening for a very long time. do you still believe that? >> it must've been one heck of a party there. incredibly quiet this morning. we normally see kind of a stampeding of ipo news. companies really eager to get out of there and now something big. we have seen barely anything. i am a big surprised there has been such a little inactivity. maybe a bit more structure.

i think that the thesis remains the same but the ipo is still pretty quiet. >> we are hearing the instacart is still considering going public this year. why would a company do this now when conditions are so unfavorable. >> i think there is a subset that has such a large brand, such a large cachet. the only way to continue elevating awareness and creating a currency to buy smaller companies is to go public. instacart could continue to raise money in the private markets but if they want to have extra prominence, they will have to pull the markets. they created a clean path to do so. they knocked down there valuation publicly. i think it is similar to have a media company like alibaba or facebook would still like to go public. >> how long do you think the ipo

window is going to be? what is the timeframe that a company should be plenty for? >> i keep pushing it out more and more. i think what is happening now is what happens during the start of covid but it is just being stressed over a longer time. ipos were pretty much at zero. we are seeing almost a stretching out of that. now you see basically a game of chicken between investors and ipos and companies that are ready to go public. if you are a company that is profitable. you can wait as long as you need to. i think we will see some more m&a activity. strategic investors and also private equity investors, some decent opportunities for a deal get done with a bit more structure but less public scrutiny. i think we expect that to pick up in absence of an ipo market that is active.

>> i wonder how many more valuation cut downs we will see. i imagine you have a lot of vcs out there. they may have valuations that are just not right for the time. >> absolutely. but i think is happening is more deals with structure. i mean investors are getting much more preferential terms for the money they are putting in the companies. joker is planning to raise money to just above valuations but it also basically gives a guaranteed 40% return to investors. we are also hearing of those deals happening as well. i think those will continue. it is becoming very hard for them when they can return capital to their partners and that is creating some their

intense board meetings. >> what is happening inside these intense board meetings, a lot of these fees -- vc's have raised huge funds and they have nowhere to send their money. >> absolutely. the show must go on as far as companies operating and executing and selling and realizing their vision. it may not proliferate and show up in news articles and updates. people are still buying enterprise software. they are still buying these security solutions, it is just that we are getting fewer and fewer data points on what those companies are really worth. i think we will see some companies that will quietly exit and sell themselves to big tech. big tech has been incredibly quiet on the m&a front. i think it will be a quieter media time. >> all right. great to have you back.

as always, coming up, it has been 180 days since president biden signed an executive order on digital assets. christian joins us next. this is bloomberg. ♪

emily: a slew of new reports stemming from president joe biden's order including one on the future of money. payment systems and the implications of u.s. central

bank digital currency. let's talk about what we can expect with the executive director director of the blockchain association along with our contributor here. thank you for joining us. what do you think we will find in these reports? >> i think it is really interesting. this is the first time that the federal government has looked at crypto regulations from the comprehensive perspective. as you recall, president biden issued this executive order back in march. he gave various federal agencies, both financial regulars and nonfinancial regulators mandates to look at different issues to look at some of the concerns we have in the space but also some of the benefits that the crypto industry and sector could provide and come up with recommendations about what types of regulations are needed going forward. i think that we are going to see a fairly balanced analysis. i think we will see something

around competitiveness and inclusion that the industry is going to be very excited about. i think we will see some concerns about the lack of regulation of dollar back stablecoins. that has been discussed frequent sometime. maybe the need for stock market regulation but this should provide a pretty substantive roadmap for policy makers should they choose to accept it as they consider legislation into fall and 2023. >> blockchain associations has had a seat at the table. how have they been processing all of the drama? >> there is an understanding that crypto is here to stay. that was not always the concern and even in this market downturn, i think policymakers have even more incentive to try to do something in this space. especially if you look at the beginning of the summer. we had to collapse.

we had a couple of bankruptcies. we had two to three hour capital. there were a bunch of events that had big impact on consumers and instead of pushing away from this, policymakers said this is a space where we need to make sure that we can fill regulatory gaps and we need to better understand what regulations already exist. we need to figure out the options going forward. congress has been pursuing several different bills this year. we saw the jell-o brand bill earlier. we saw the digital exchange act in the house. they have been generating their own ideas. i think the executive order process in congress is going to converge right nicely to have an overall more educated policymaking group and one that is looking at this in a thoughtful and comprehensive way and a way that moves forward but not so rusted that we get the policy wrong. i think we are really setting

the stage up to get a new bipartisan compromise that can instill those regulatory gaps. >> what about the agencies and regulators themselves? i, fatigue i get when i am talking to market participants is that it really emboldened each of the agencies separately, there was a lot of conflict among them about how they define several issues. you take the s&p and securities issue and you come to coinbase in particular. you see the agencies consolidating power to one agency or another and how do you believe that congress may enable that or conflict with that? >> the executive order did require cross agency collaboration on different topics. i do think the core issue out there when it comes to regulating the crypto markets like particularly the bitcoin markets, those are true commodities. neither the ftc or the cftc has jurisdiction. what we need is congress to come

in and say we have this commodity spot market. other commodity spot markets, they don't have any regulation -- federal regulators, we need to find a new federal regulator to come and make you like market. i think congress has a choice. what is interesting is the three major puzzles have all noted to the cftc as being the appropriate regulator for the crypto industry. probably because they already have regulatory powers over crypto futures and i'm in a collision in the underlying market. i think this is probably the place it will end up. congress seems to think they want to give this to the cftc. >> what does this mean if more of that moves over? they were looking at nft is. other security influences potentially here. do you think the ftc eventually loses some power over these markets as they already started

on the enforcement path? >> i would argue they don't have any authority through the pure crypto commodity markets. they have authority over things like securities. you can use blockchain based systems to issue equity, to tokenized shares of stock. when you have something that is truly a security, the ftc is obviously going to have a role to play there. i think the problem has been for innovators. this is just a gray area there. it is hard to know. we need a framework that addresses these concerns. the stakes today are pretty high from a regulatory perspective. if you are regulated a commodity, there is no regularity at all. i think by having a regulator, perhaps they could regulate crypto commodities and then there will still be consumer

protection and market surveillance. there will still be disclosures that help give consumers more information and investors more information so it won't be such a high-stakes decision as security or commodities. i think that will help pave the way for a more constructive dialogue. collect the executive director of the blockchain association. we appreciate you joining us and taking us inside these rooms a bit alongside our own correspondent. coming up, getting ready for the kickoff. the 2022 nfl season starts this week. we will get into full gear with jason robbins, the ceo of draftkings to talk about the fourth fund for our new series on the intersection of sports and technology. this is bloomberg. ♪

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>> nfl season kicking off and we are exploring the intersection of sports and technology. all week long, today, we are starting with sports betting. now there are 31 states here they are joining the field. draftkings will maintain their leadership on fantasy sports. a market that has ballooned to $4 million in terms of all of this. this football season will be the biggest moment yet. joining us to discuss is jason robbins himself. great to have you back with us. give us a status update on this for how much you think nfl kickoff will kickstart and already booming industry. >> this is our holiday season to

make an analogy. this is when all the numbers go up. a lot of the work goes to the team for preparing this. >> you are also launching a new blockchain initiative whereby vendors will be able to collect digital player cards. how big do you think blockchain and web three will be for sports? >> rainmakers is one of the most innovative things we have done ever. it takes fantasy sports. the idea is you are a gem and you have players that you get. it demoralizes that ownership in the form of an nft on a blockchain. instead of drafting the player,

you buy that player's nft. it is really exciting because it mixes things that customers are really interested in which is the game and the idea of being able to pick your favorite team. with also a strong interest our customers have shown in blockchain and collectibles. i think it is really a new way of looking at fantasy sports. we think it is the future of fantasy sports and we are really excited by some of the early traction we have seen. >> vandal seems to have pulled ahead of the industry in terms of market share. what is the play to counter that? >> it is definitely seasonal. we typically do better in the nfl season where we have a big boost of customers. if you look at the icam side, we are a little bit ahead of them. we think products that will win the customers over -- we think

the more people we get to show some of the new things we launch this nfl season, the more they will be excited about keeping a player. we will keep focusing on products and customer experience. which entails having the best product and overall experience is what will win the day. >> obviously, bigger business has also met at times bigger losses of competitors. how is your spending strategy changing as the market evolves? >> we looked for payback that meets our threshold. the customer acquisition is a three-year payback or less. we typically look for two to three year path to profitability timeline. i will say that we are able to

achieve great results. we are still being very aggressive at an important time of year. we are making sure to have a presence out there. we get in front of customers and we get good offers that are interesting to them. i think the competitive environment is rationalized here. it is really just night and day. >> we also have a big election coming up. you have some proposals on various pallets. in california, in particular. you backed a proposal that would allow draftkings to offer sports betting anywhere in the state. there are various other proposals that are countering this. what is your polling showing you about the likelihood?

how much are you prepared to spend between now and then? >> we are seeing good things in the polling. everything we are seeing in the data is great. with a more importantly, policy-wise, it makes sense. it is something the californians want. most of them are already doing it anyway in the legal market. our initiative will generate hundreds of millions of dollars a year. we also partner with tribes that are getting a cut of it as well. especially smaller tribes that are not as fortunate as the ones at the biggest casinos that will really help with education programs. we think it is great for the california sports better. we think it is great for those that want to see help on the homelessness and mental health issues.

polling numbers look good. we have to keep getting our message out there. hopefully it will resonate with voters. >> one answer -- who are you putting our money on? >> i am a patriots fan. a lot of great teams this year. i am really excited about the opening game. it is a really good season. a lot of great play. nfl content has never been better. >> great to have you. thank you. ♪

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