matt: welcome to bloomberg markets. let's start with a check of the markets at this hour. we are seeing no movement on the s&p. it has been up, down, and right now it is unchanged at 43.78. you do see yields rising a little bit on the 10 year, 4.6 616. investors are selling those bonds. you see the dollar index rising a little bit at 12.71 and crude coming down off about .5% at $83. let's bring in chief u.s. economist animal long -- and along because we had inflation data this morning once again hotter than the forecast had

anticipated so today was cpi, consumer price index, and we got 3.7% year-over-year, 0.4 percent month over month. anna, what do you think about the numbers we got? it does look like the fed could -- it does have cover to raise rates again if they want to. >> i think this is not the type of report that could convince the majority of fed officials that rates are sufficiently restrictive. we saw from the fomc minutes yesterday that many think rates are near or at but i think this report shows it is more likely to be near rather than at sufficiently restrictive. matt: so we did see in the dot plot, 12 at a 19 say one more hike for the year, at least that was their expectation for where we would be. they did not know obviously about the situation in the middle east the way that would unfold or the moves having nothing to do with geopolitical events in long term rates p release all them sore last week.

the tenure hit -- 10 year 488. to those two things change the outlook? >> i think the reason for why the 10 year yield surged since september is important in terms of its implication on whether the fed will have to do more. my explanation it is likely due to the smooth affective of qt and also due to concerns about the fiscal trajectory of the u.s.. what that means is it would tighten financial conditions and substitute for some rate hike. you can think of the long-term treasury yields was -- increases were driven by better economic growth, the fed would actually have to do more but what i think happened is it does substitute for rate hike. however, the hamas and israel conflict does increase a possibility we will see another wave of supply shocks. in bloomberg economics we have a model that decomposed drivers of

inflation and we saw the pandemic supply drivers have returned to about roughly zero. the remaining inflation is due to demand, so if you have a surge in oil price, i think that would re-accelerate, definitely, the headline cpi and that will cause the fed to either hike more, multiple rates, or higher for longer for sure. matt: michael scholl on bloomberg surveillance was saying the fiscal situation, of which the fed has no control and up either does anyone else is problematic in that we are running massive deficits, $1.5 trillion are on -- on track for more than that this year and we have a huge debt, $33 trillion almost federally. that was going to eventually necessitate yield curve control from the fed. what do you think about the possibility the bond vigilantes have been awakened and are going

to punish the u.s. government? >> i think the bond vigilantes have awakened. we examine the driver of the premium in the last couple months because that is driving the 10 year yields increase. my observation that over a period of 40 to 50 years, history is either the fed's qt or the u.s. government fiscal situation that drives premium off and i think persistent upward movement we have seen the last two months fits with this historical pattern of what drives term premium. looking at the u.s. fiscal deficit this year, it is likely to be 6% of gdp if there is a mild recession as we foresee around the end of this year, i think at the first half of next year, you may even see the fiscal trajectory widening some because in a typical recession,

the fiscal deficit increase by five percentage point of gdp, so i think the problem with the outlook is if we do have a mild recession, fiscal picture will deteriorate some more and while the bond market might want to rally if there is a recession, the fiscal picture will keep that lid on the rally and continue to put upward pressure on 10 year yields. matt: i want to get back to the inflation picture, specifically because i want to show our viewers this tool. i think it is so cool on the bloomberg terminal when you type ecan you get a good picture of the drivers of inflation and you can dig into it on other economic variables. in this case we see services coming down, we see commodities inflation coming down, we see food inflation coming down, energy inflation coming down. even though it was worse than expected, are we on the right

trajectory to get back to the feds's 2% target? >> i think it is important to be looking at the month on month inflation changes rather than year-over-year. if you look at the month on month, it shows indeed goods inflation is coming down. that is the key driver of disinflation right now. on a month-to-month basis, rent has accelerated and also many of the sticky categories in services sector accelerated such as recreational services, sporting events, apparently in september a lot of people wanted to go watch sporting events and that has pushed ticketing prices up and hotel prices. keep in mind that beyonce was still running on her full tour in september but that has come to an end. we do see the longer run trend is for goods disinflation to continue due to used cars and services to gum debt -- come

down since we have seen the wage growth has definitely been tapering so far this year. matt: you mentioned beyonce. obviously everybody wanted to see messy and taylor swift as well. but it seems like may be, even though barbenheimer phenomenon did not bring too many people back into theaters. target stock released if figure about movie theater visits, they have been declining. how do you feel about the consumer right now with moore purchases put on plastic, delinquencies there, and auto loans, student loan repayments coming back online, how does the u.s. consumer look to you? >> i think the u.s. consumer is feeling increasingly stretched financially. i do not -- personally i disagree with the findings out there that says excess savings is over $1 trillion.

i think from the revealed behavior of the poor -- poorer half of the american consumers, you see they are increasingly delinquent on loans, putting a lot more spending on credit cards as you said. that tells you that they are running out of excess savings and the bottom half of the american consumers drive most of the consumption in they arm a multiplier for consumption, much higher than wealthy people. most of the wealthier people who still have some of the excess savings are also the people who hold stocks and, with stocks currently adjusting, now, once again, i even see that the wealthier people increasingly feel less well-off than they did the last three months. matt: great talking to you as always. and along, our favorite freshwater economist. she was a prison block on a mist at the federal reserve and then we hired her for us area did we

want to pivot now into the bloomberg screen time event where bloomberg's lucas shaw is with netflix co-ceo ted sarandos. let's listen in. >> stop and texted his wife that there was a shooting and that is the last i heard from him because he was a victim of the terrorist attack. horrific things happened in the world and our hearts are out of the family and anyone else who may have lost anyone's saturday. >> thank you for sharing i. >> he worked on various things that apple. >> this is your first israeli original? >> that we produced, yeah. >> interesting. i'm just curious, i assume then production has shut down on that? >> yeah. yeah. >> thank you for indulging that. >> as with yesterday, there is

no seamless way to transition out of that. i will do my best. one of the themes of this event, one of the big things in the industry obviously is we are in a ceaseless moment of change. a lot of that comes from companies like you -- youtube and it is clear streaming has won, or it is slowly replacing television as the dominant way people watch. >> ultimately consumers decide with -- what wins and they say loud and clear that they like the control and choice of streaming. >> but there remains a skepticism as streaming as a business. now you guys are profitable, some people would say and we can debate this, that you are less profitable than the most profitable tv networks were, pretty much every other media company trying to compete with

you is losing money trying to do that. give me the case for why you think streaming is already a good business and will only get better going forward. >> i think it is a great business and it is in its infancy. we have been streaming in some form for about 16 years. our original content initiative, we passed our 10th anniversary of our first original show, so if you think about it in that way, you think about the network business added for 75 plus years, before that most of those were radio networks so they have been at this for a long time, and i think ultimately these consumer-driven things because business to react and reshuffle. i would say consumer driven because we did not just put something on there and say this is how you have to watch, and we started doing this, streaming i would say saved this industry. because where we were heading at that time, we started this business as streaming, we started licensing content from

the networks, and at the time we were licensing, we can only get what was available, which was nothing. so we were licensing from the bottom of the barrel, things with no revenue for anybody. shows that did not get into syndication, things that were not otherwise sold. kind of like what to be another services did when they came around and started. >> we gave it away with the dvd business. you got what you paid for back then. that created a revenue stream for the networks and studios, created a new residual revenue stream for actors and performers who performed in those projects sitting on the shelf, and really got the ball rolling in a way that obviously these things could take decades to build. but with meaningful businesses, that is a good investment. good business for us, 32 billion dollars of revenue, $6 billion of profit, and we have been going -- growing business dramatically. not growing as fast as we want to but we are growing the business. >> i'm curious on that point,

you guys in your remarks i think your last earnings report talked about how you are still not growing as quickly as you would like to. as a point in time where every year like clockwork netflix would add 25 million to 30 million customers. post-pandemic that has come way down. what are you doing about that and do you think you can get back to the level of growth you are at 30 to 40 -- three to four years ago? >> i think the key is growing revenue. for us that is a combination of putting a great product on the board, when you talk about streaming, is it a good business, it is if you do it well. the team at netflix in terms of the programming, her team are phenomenal at focusing on what people love. and their creative team is great at delivering from what people love. the team that delivers the ui experience, something that happens in netflix that is almost impossible anywhere else and because of our distribution footprint and recommendations you have the ability, if you are

telling a story from korea, to be the biggest television show in the world. that can only happen on netflix. it is not just taking obscurity and making it big, imagine someone as big as david beckham who releases his documentary on netflix and in days grossest social media following by half a million people. i think this happens over and over again with the combination of distribution footprint and recommendation. in which i think what destroying ash to stingless is the business. the way you grow that is doing better and better and the opportunity to grow is enormous. we are 10% of screen time when people are watching on their tv at home, about 10% in our most penetrative markets like the u.s.. around the world, significantly smaller. we are about 5% of consumer spending in businesses we are in, which is pay television, advertising supportive television, games. as you look at that, and we are in our infancy, 5% in consumer

spending. a ton of integral revenue and i would say we are pretty underpriced based on 10% of screen time in 5% of revenue. so this play room to grow, as long as we have a high level of satisfaction. consumers, it is a one-button easy cancel service so if you are the new season of the crown when it comes on november, you jump. so we know we have a constant feedback circle of whether our feedback loop with members that if we are not pleasing them that they jump. >> you say underpriced, when's the next netflix price increasing coming? [laughter] >> nothing to announce, our pricing philosophy has not changed. we had to add more value to consumer and then pay little blower -- pass them to pay more forward if they agree. it has been a successful formula. >> on that point, what does your research tell you about the upper limit of what people would pay before they start to

question the value of netflix? >> we really don't spend that much time on trying to figure out how much we will get you to pay because i think it is a fluid thing. if you are delivering, you have to to continue to deliver so it is all a hypothetical. i don't want to come in and someone say i will pay anything because i'm in the middle of the new season of stranger things and we have to come back but we do it every week. a lot of services out there, they get a couple hours of engagement a month. we get a couple hours a day. that to me is all this mystery around what is success in streaming, it is engagement, it is how much people time spent on the service because that tells you how much they will pay and how long they stick around. >> you mentioned success which is in a subject of a lot of discussion over the years with regard to streaming more broadly as it feels people have less visibility to what works and are not sure what you guys think matter.

what are the metrics for netflix most important when evaluating a show? or movie? >> you take us to task on this transparency issue. it is relative to peers, we are in incredibly transparent and completely transparent with producers so they know the viewing data. then we are going through things like the top 10 and things like republish the viewing hours of the top shows and we are definitely heading towards a more transparent time in business. the streaming itself is not exotic anymore and every other segment of the business does have nielsen ratings or box office reports and neo times bestseller list. we are heading towards that for sure. to a time where we are fully transparent on data. >> so that will demystify this for a lot of people, which is what they care about the most, relative to what it costs on the air, are people watching? and when they push play, do they stay? if they push play and dropout on

the second or third episode, that is completion right. so these things matter but they add up to the same thing, engagement. all of the data is there. you might have to triangulate a little bit to get to it but the data is there. >> what was the toughest cancellation decision you had recently? >> they are all tough because i think people have got a real fandom, they really love these. some people really love all of these shows. even if the rest of the world does not agree with them. for them, that is why you see sometimes these obscure shows and loud campaigns about stopped cancellations because they have such an intense relationship with her. that is why i love this business. i relate to it a lot of times my personal taste is far outside of the norm and what i have been decent at over the years and pick people who do this but when i look at it i say some of it was programmed to my taste we would be small. we're trying to program to the world's taste but they are all

difficult decisions to make because people love the shows so much. some things are just scratch your head but relative to what it costs to put on the air, did we pick a good show, execute on it well, and they the right price to make it? >> you talked about the world's taste and that has i think as neff licks expanded, your approach to programming has evolved as well. you also mentioned you started programming about 10 years. would you say since -- when you started, that is when people talked about the golden age of tv, coming out of mad men, breaking bad, some other shows. then we got ushered into the area of peak tv where there was more and more made. do you think the film and tv made now is better or worse than when you started? >> better because there's more of it at a high quality. there is more to choose from.

i think there is something really romantic about prestige tv, that is why we do a lot of it too. this year you see the new season of the grounds, probably the most ambitious you've seen on television and maybe in the history of television. i think there is part of that that is important. i love to take shows that are incredibly well executed, critically acclaimed, award-winning, and popular. i think things like beef, i'm really excited about beef because one of their critics wrote it is the most popular piece of art of the decade. that is a great place to be. it is something people really love and admire and i think about critics and a constituency, a group of influencers, and what they like is important and so is what the audience likes and that is what drives us. but i do think every once in a while you think what is going on with tv and something fantastic lands every time. i think the more times, more shots on goal you get at it, the more likely you will get something that breaks through. sometimes it is unintuitive.

squid game did nothing to be a global show, it is made for korea, it is pure korean cinema in the form of a tv series and it is the most-watched show on netflix history and likely the history of television. >> you still program more than anyone else basically to your point, you put on multiple new piece of content every week, others do not, but you have leveled that off. i think we showed the chart earlier where you hit like 17 billion to 18 billion and said that is a good amount. >> it's a good amount for now. we continue to accelerate revenue. if its growth, we will continue to add that too. >> as you see some peers pull back a little bit, especially overseas, do you think that is a mistake? >> it is hard for people to remember we are a global company so two thirds of subscribers are outside of the u.s. and i think

one thing we first started doing is i thought it was an unusual figure that about 80% of television viewing around the world was u.s. content and we are 5% of the population. i figured a -- probably isn't the taste thing, it is a distribution thing, people didn't have access or certain markets may not have had the scale to produce the way japan did or korea did which had local audiences and big local tastes so they did not care that much for international including u.s. content. mostly because they did not have access the same way we did not have access to korean shows before people fell in love with good game or spanish television before they fell in love with those shows or french tv. i think that keeps happening over and over again because you can produce -- as long as you focus on local audience, you can produce at a slightly larger scale because if you really kill it, you can get out locally. we brought that to the table and i do think, for me, when i look at that, i'm glad we are not

pulling back, we are growing our production outside of the u.s. and multiple languages and produce in almost every language now. i feel like there is a lot of room to grow there. when i watch them pull out, i think it is that streaming, though it is a good business, you have to do it well and at scale. it is hard on legacy business is trying to navigate that. >> one of the question i mentioned i was going to ask, that i'm happy to throw, is what you think is going to be -- this one is about in the last you your favorite series have -- has come from one place or it i would love to hear your answer. south korea has had such a moment culturally the last few years. do you have a country you think is the next south korea? >> i think a lot of people ask that because they think it was some path we were on to make south korea into this thing. >> it was the country that really put the resources.

>> i think what is fascinating, mexico, i see it on the screen so it is a bit of a cheat, the production ecosystem and storytelling culture is when nominal. i think most american audiences think mexican tv as novellas and most people think of mexican movies like western's -- westerns and some of the most credible storytellers and film makers in the world are in mexico right now and the ecosystem for it is getting bigger and bigger so i would keep an eye on mexico. >> we made it far enough that i have asked about the strike. the studio issued a statement saying the gap between the guild and actors are too great and talks are no longer productive. a lot of people thought this would end quickly once you guys got the writers deal. >> me too. [laughter] >> so why isn't it? >> i will let the statement speak for itself if you don't mind. there is a lot of detail around the offers and current state of it. i will stay -- i will say that

donna lange who was here yesterday, donna and i and bob iger and david says love have been at the table with sag and we had productive talks going, they kind of work would happen last night is they introduce this basic levy on subscribers on top of the steel which in each of the areas of the deal which is in the statement, you see historic highs in terms of increases across the board and we had offered a success-based bonus meaning we completely wrap our arms around the idea similar to what you had for the right -- -- >> select what you had for the writers? >> very similar. it would cost four to five times more to implement at sag because the number of people. that was rejected in the counter was this levy on every subscriber and prior to that was a levy on revenue. >> basically the union will take a certain amount of money for every subscriber to a service?

>> correct. it was originally to every penny of revenue. we said we agree we could entertain a success-based bonus which led to this transparency issue we were able to get to where we would share the viewing data with the guild and that issue -- that resolved with the writers was not only accepted in the deal but ratified by 99% vote of the writers guild. i know all these guilds are not created equal and they have different needs but that is one that worked, that rewarded success which we agreed with but a levy on top of our revenue for subscriber with no insight into the revenue per subscriber anything, it felt like a bridge too far this deep into the negotiation. >> there were a couple people telling -- >> this has been a difficult time doing this and the goal here is to get people back to

work. goal is to get the town opened up. this is not just hurting our industry, it is hurting every other business that supports our industry and not just in california but it has been extremely painful in california. so we are desperately trying to get folks back to work and we have been at the table to do this. we pulled the group of ceos together to sit at the table and all the ceos have been involved in this every day. the four of us have been at the table but everyone has been deeply engaged in this every day. treating it with the same urgency we did try to get production opened during covid. we understand a deal has to get made and the one thing about it, the way the deals can take a long time is this is the one deal we will make. this is the deal that sag will make with us and this is the deal we will make with them, it is a matter of how we get there. as long as we can have steady, progressive talks, it makes sense. happened last night was steady -- not steady or progressive. >> when you resolve this, what

do you think will be the impact on the business? >> prices escalate, the cost of content escalates on a per performer or title bases all the time so this is -- so i won't work into the academic so that and some of this is when you get a new contract. i don't know what will happen because i think it will happen company by company. we are not changing our spend forecast or any of those things so we think it will change incrementally the cost of content over time for sure. >> that's potentially where the price increase comes in? >> yeah, it would not be because of that because obviously we have added in noncontract years we have had price increases too. so remember, the reason this is particularly troubling on the ask and levy is that, on top of the deal and the improvements in the deal, this is still a competitive business. so you are paying top of market clearing price for all of the talent involved in every show, above and below the line.

so that is still intact. i just think like i said it is part of the economics of the town is that -- and i think it is important to pay people what they are worth and the performance bonus adds enhancement to that because sometimes that success does drive a business. >> i'm curious, one of the things -- over the last will taking months, you said two things you would not do which was appear at bloomberg. [laughter] i will go with advertising and crackdown and password sharing. let's do the easy one first, password sharing. any time previously you have talked about this, there has been online uproar, when you started raising prices you lost a bunch of customers. you seem to have instituted this with minimal disruption. it is worked well. how did that happen? [laughter] >> i hope it is a testimony to

how much people love the product. so i think the path on the page sharing basically what we ran into was in the u.s. we became nearly ubiquitous with users and about one third of them were not paying, they were barring someone's account. so we went back to them and said we think you are seeing a lot of value for this, you want to have your own account and we gave options, advertising was a part which gave them a lower price point option. but also gave them different options to spinoff an account for a relative or get your own account. a lot of folks have chosen one or the other and we continue to grow in a market where we otherwise were pretty much fully penetrated. it ted: --lucas: is that likely more of a short-term bump or does that benefit? ted: it is a short-term bump.

in that way, it was a helpful thing for us and i think it was a testimony to the relationship consumers have with netflix and the programming and netflix. they entered the pole -- they answered the poll the same way you did. ted: the criticism --lucas: the criticism netflix has gotten, people feel like the programming has gotten worse. ted: there is more of it and it is not offer you. -- all for you. in 10 years we have been doing this, 188 emmy awards and almost 1000 nominations. 122 oscar nominations, 22 wins including eight bet -- best picture nominees. i think what people do see is that we have expanded the offering. we have beef, and diplomat and

we have great action shows like night agent. it gives us a brand-new action star or a relentless action movie like extraction and extraction two or mother with j. lo. they make these real prestige so -- shows like amc and that wasn't true and we had a show called hemlock grove that people forgot quickly and those were the earliest days. i feel like we were always trying to get to the variety and breadth. if you love love is blind, you would not say the programming is worse because you love that show. we weren't even doing reality programming four years ago so i feel like a lot of people pick their personal taste and say, if

i see other things i am not watching, the service has changed. it has not changed but grown. lucas: one of the other criticisms you get is when the show -- i know you have talked about why you think this is bs, when shows come out, they don't land or create the same cultural impact and one of the things you have been doing to push against this is you started to create toys and live experiences, you have the bridgerton all --ball and the stranger things store. what is next for you in this area buildings or marketing campaigns around your products. ted: like other consumer-products groups, we don't focus that much on revenue and profit. it is about building fandom. it is a combination of consumer product sales and marketing,

publicity come together and facilitate incredible fandom so we do these experiences that are widely popular. the one that people took notice of was the stranger things drive-thru that we did during covid and these were decently priced tickets that people show up for and have incredibly immersive experience is what their favorite show and it was in drive-thru form and we have other stranger things experiences that traveled the world now and we have the bridgerton ball. people show up in costume and go to the bridgerton ball and people love it so much, they propose marriage there. it is elaborate and when people go there, they say where did you have that caution? we preempted -- this is where the next generation of this is,

all the traveling experiences we have been doing. we will put them together and build out more permanent experiences. this is a concept one. this is called netflix house that are filled with permanent traveling experiences and there will be food expenses that are taking what we blurred -- what we have learned from these and put them under one roof. here is the bridgerton ball. all the people in questions, those are their own questions and that is that escape room for casa de papel. and this is the one piece of and. -- peace event. this is doing fast where this came together as a live event we did in brazil a few months ago where it took 25,000 people who

came out -- who came out to be the stars of the new netflix shows. lucas: what is the timetable of when the first netflix house will open? ted: no time to announce yet. lucas: you have a preference of where the first one opens? ted: know, we are looking at major cities or smaller markets where we can build up the fandom. we think it is one -- don't think of it like disneyland, it is like closely -- closer to citywalk. lucas: are you going to have a movie theater? ted: somewhere -- some will? lucas: really. ted: showing netflix movies. --lucas: showing netflix movies. this is when i will ask your favorite question. [laughter] ted: you can go to the ejection theater we restored. lucas: apple is about to put a

martin scorsese movie for 45 days. you negotiated possibly putting it on movie screens and it did not work out. as you see amazon and apple move in on theaters more, or that competition change -- will that competition change her strategy because as you work with more filmmakers, they will demand it? lucas: i try not to be cynical with the question --ted: i try not to be cynical with the question. i look at the financial results and they say -- i say this is maybe not what people want. i have seen the b ethical run takes the most passionate fans -- the theatrical one takes the most -- the theatrical run -- we meet that demand we generate on netflix and that is our core business.

you put movies on theaters and irishmen was on an hundred screens and fire move was on 3000. 10 oscar nominations for the irishmen. --irishman. we have a lot of pay one movies that come on in the second run. they don't necessarily perform bigger than our original films do so the theory that you have to put movies in the theaters to -- for some long stretch of time before you give it to your subscribers who paid to make the movie with the subscription be, i don't think the payoff is with the consumer. if you want to see the movie and you love it and don't live in a major city, you have access to see it on opening day and that is novel. it opens the distribution footprint around the globe. i will say, i was joking i

understand the romance -- the romantic connecting -- connection people have with the music. -- the movie theater. we supported in the paris theater in new york state was the last single movie theater in manhattan. we put a -- in a incredible at most --atmos sound system. lucas: i will say to your point about the demand for movies that are shown in theaters first, it seems like a lot of the stream movies are in theaters first but i will not debate this. ted: not on netflix. you're talking about other services that don't have meaningful day on day movies. lucas: you do advertising.

you are ahead of advertising -- the head of advertising left after a year of the company and that is usually not a great time. there seems to be mixed -- [laughter] wall street was positive on your advertising business when you gave it up front and had numbers and they thought that was good. there has been sick -- reporting best adjusts you are way below. where are you with that? ted: they should be excited and we are one year into it and jeremy did a great job getting us to where we are today. what we have to do, all the platforms that have added an ad option, they do the same thing, getting the tear at scale and going to scare with fans and viewers so building the team and the infrastructure which jeremy did was great for us and we appreciate it and we are super excited about amy reinhardt coming in.

she understand the complexities of growing a new business and netflix so you should look at it as a doubling down, not a failing and moving on. it is new. it is not at the scare we want it to be at. the somerset to choose between it and i say when you say we would never do advertising, when we started the business, we were classically counter positioned against advertising so for us to say he would never do it, it was part of this -- the thing we would say, when we go to the dvd business, we did no late fees. and we started getting into fearing, we saw streaming would be the new television and what the people not like about tv? waiting in ads. our classic tonic position was watch it all at once and no ads. when we got bigger and deeply penetrate into the world, he said we don't have a option for

people who do not care about advertising and want a lower price and it is a generational thing. you saw youtube and us on the chart and a lot of people have been watching stuff with ads on youtube for a long time and people like my son, they say i will take half price on no ads. we were touting that we were about choice and not giving a choice to those folks who want a lower-priced and did not want advertising. we have to deliver for advertisers and we have to deliver for the audience, a product that is innovative and doesn't interrupt their viewing experience in a way that makes the viewing experience worse. we have to work on and get better and better at. these are also areas of the business with games, we are looking to deepen the value with consumers and drive revenue and we have to do both of those things, we have to drive value first and then you can drive

revenue. lucas:, i would ask you about games but we have to going. -- to have to get going. ted: thank you. >> very cool interview, that was bloomberg's lucy -- lucas shaw speaking with the netflix co-ceo ted sarandos at our bloomberg team -- bloomberg screentime in los angeles. i was watching network -- netflix shares and they were steadily falling. i thought to myself what did test a that discouraged investors but i looked at the s&p and over 8 -- and over 80 -- and overlaid it and it was falling to so the drop in netflix probably has to do with broader stocks and it is more significant, the s&p is now down 8/10 of a percent. why did the s&p fall and drag

netflix along with it? there was a $20 billion 30 year treasury option and it was overloaded at 4.837. you can see there, that we are seeing a little bit of vigilante action in the auction, maybe there was too much supply, maybe there are concerns about runaway deficits that are driving those yields higher in here you see the 530s intraday rising higher. there is one curve that you could watch and draw from it what conclusions you will. the two year yield, which is where my buddy paul sweeney watched it. he is our media mogul at bloomberg but he is obsessed

with the two year yield over 5%, 5.0581. it has been holding at that level and rising again and we see the two year and 30 europe. -- 30 year up. let's turn to the bloomberg screentime event in los angeles where lucas shaw is sitting down with you to see you. -- with the youtube ceo. >> all the things like that that users of youtube tv have known and loved on sunday. really focusing on that and that would really -- that has gone well from the feedback we have seen so i feel great about the product. lucas: do you like the multiview? >> i use it every week myself and i like the multiview and especially the one with red zone and a one of the windows for me and that is -- as a huge sportsman -- sports fan, that is

the perfect nirvana experience. lucas: how many people are paying for this? >> we don't break out that number and i am happy with the adoption of the product. there are a lot of fans that are diehard nfl fans but the whole point of this in addition to this but we hope to be an incredible product experience is consumer choice. with a couple of taps on your phone, you can now sign up for this incredible premium service from the nfl on youtube tv and also on youtube through primetime channel so the consumer choice has been an important part of the springs and within seconds, you can be up and running and you don't have to wait for a guide to install an addition in your house. lucas: when you deal with the nfl was first announced, i was

surprised because i what about you funding original programming and not funding original programming and it seemed like the google and apple and youtube dna, you seem like the platform that didn't want to pay and pick for winners and you seemed neutral. you are a company that makes almost all of its money from advertising. what was this strategy on where this fits in with the broader youtube and google strategy? neal: there are two premises to your question and the first is we are ultimately about what we are as viewers one from youtube so in terms of whether the content is paid for, it does not change what the user experience is in terms of what is recommended with the algorithms and what shows up when you open up the app, what is recommended to you after you watch your video. that takes account of your

preferences and that is the north star. from a strategic sense, it was simple of the fact that we are under the largest sports platforms everywhere. everything from are youtube creators focused on sports. to the consumption of highlights from all of theseleagues -- these leagues for many years and to live sports. the soccer league in brazil, various live soccer events through europe so we have had that as part of our dna overall. sunday ticket fits into that story and the second premise to your question, i would argue that we are an ad supported business that is our primary means of monetization on behalf of our creators and orders on our platform but we are also a subscription business and youtube tv.

it is a meaningful part of our business and youtube premium is a meaningful part of our business and sunday fit into that category. it is two engines of rent revenue growth. we want to continue to invest in both because my belief is those two things reinforce each other. lucas: you talk about being a platform in sports. you are a big mba fan and those rights are coming up, are you interested? >> we are taking it one step at a time and the nfl sunday ticket is a big area of focus for us in getting the viewer experience right and -- and getting the viewer experience right and making the game day experience flawless and seamless and you should expect innovation there in terms of products and creative invasions and

especially all our friends, this is what they expect and you should see more of that through the season and many seasons to come. regarding the nba, they are longtime partners and they operate one of the largest channels on our platform. my 15-year-old is a huge sports fan and he watches up -- in -- nba highlights and he watches them on youtube through the lens and analysis through a lot of his favorite creators so we have a long ownership with them but in terms of our focus, it is about the nfl experience. lucas: so not know but not yes. [laughter] when i talk to people before about asking what i should ask you, the number one question was please ask about shorts. we hate shorts. [laughter] you have put a lot of resources into youtube shorts and you have released numbers about how well this is doing but a lot of

longer-term creators are upset because they feel like it is -- the platform is forcing them into something they want -- do not want to do. i know you have been asked this me -- one million times, what do you say to creators who say why you care so much about shorts and white it is a good fit for you to? neal: what i would say to the creators, that choice is up to our creators. we have been clear from the early days from the launch of shorts that ultimately, that is a creator driven decision. no one knows our audience is better than our creators and the means which they want to engage in the audience. having said that, there are two things that are important here. one is viewer expectations, viewers and recently, especially when they come to you too, have the expectation of all forms of video, julie multi format and it

is not just what we would call traditional vod or longform youtube but it is everything from 50 minute vo -- 15 minute vods to live streams. all of this our viewers and they show it on our feedback, they expect it on youtube and shorts is 70 billion views a day and that number is up from 50 billion from january. the way our recommendation algorithms work that it it is sensitive to that viewer input in terms of what is recommended in the feed. the second thing i would say is creation is changing. creation is much more mobile first. it is participatory in nature.

and because of those things, it is important for you to play a meaningful role there and what i have seen is that in general, it is incremental to the experience both on the viewer side and creator site. we have many creators that do longform and short form and we have lots of creators that will continue to only focus on longform and we have lots of creators that have a presence on youtube in terms of building an audience but also importantly, monetization, and the longform, through the doorway of shorts and that would not have existed without are invested -- investment. lucas: is monetization for you guys in short, still very new, is there a existing company or platform, anything that has effectively unattached short form video and we are talking what you do on shorts, tiktok and not traditionally youtube

and that blows my mind because i used to think of youtube as a short form video platform. neal: perspectives change for sure. [laughter] the feedback that i get and i spend a lot of time not just meeting the talking -- meeting and talking with our creators but also with advertisers. i think there is a lot of excitement about being able to connect with their consumers -- perspective consumers on a feed like product like shorts and that is not just classic feed formats like direct response formats, it is for brand building and awareness formats. we see interest and demand on both. for us, lucas, we are in a the very early days. first or second inning. there is a lot, in my experience and before i was at into, i used to run our display and video ads

business at google. that takes years to build out the monetization ability because it takes years to build the products advertisers are looking form so we are in the early stages but i am optimistic. lucas: you mentioned your long time google and youtube. how do you see youtube changing under your leadership and did susan, your predecessor who you worked with is longtime -- for a long time, give you any advice? neal: susan and i have worked together together -- forever both in the ads business and at youtube for the last eight or nine years and she is not just a colleague, she is a great friend and mentor of mine. the advice was a lot of what she and i would talk about even before the transition which is, our lifeblood at youtube is our

creators. i saved the term creators probably. youtubers and artist on our platform and media partners and when you walk the halls of youtube, that is what you see in product reviews and business reviews. that is deep into our culture and dna and i think the advice both in terms of words and interactions. hopefully people will see that is front and center in terms of everything we do. lucas: do you feel that advertisers, people in media, view creators and some of the folks who are original or endemic to your platform as equal to the shows that are on netflix? neal: i will ask you that question because you write about a lot of this. i would say, my opinion. i feel that is an artificial construct that was almost may be relevant 10 years ago.

when i meet with our partners in creators and advertisers -- partners and creators and advertisers, that is in my view, almost a relic of the past and if it comes out, that means they don't understand what is going on in terms of media consumption. the most important part of the question is what viewers expect and if you ask of younger you are, they don't make that distinction. the expectation is everything from that four hour nfl game to that 10 hour gaming livestream to a 50 -- 15 second short. lucas: my 30 minute yoga videos. neal: that is distracting for me, i remember doing that and i broke my back? this is my foray as a shorts creator. that is the viewer expectation.

where do you guys think. you think i could ba.2 shorts creator? i am a very good statement to what creators like to do. lucas: i agree with you. i was in a meeting yesterday someone asked a question that was similar to something i have been asked over the years, if you remember, there is a site called quibi and the whole premise was that it was premium short form and i remember sitting down with my first meeting with their leaders and i did not understand it because there was a big assumption that what was happening on your platform and it was less alert -- lesser than and there needs to be a premium form? there are people who are happy -- or happy what -- with what they have on youtube? svb i understand --neal: i understand you understand this. i was at rhett and link's studio

yesterday and is -- it is amazing what they built. it is this hotbed of creativity, both of them are incredibly creative people but they are enormously successful business entrepreneurs as well and that is what they do. they do the new variety show, the new talkshow and if you are a young person in particular, how to think about any differently, better or worse? that is what you know to consume. i would take any creator's content. one creator's boxing documentary, put up any piece -- put it up against any piece of content, why should it not win emmys? that is where the industry needs to go. lucas: we have one audience question that i have to get to

the key topic which is his youtube doubling down on e-sports and competing with trip -- which --twitch. >> you can continue watching that conversation on live go on your bloomberg terminal. this is a countdown to the close and i am scarlet let's get a check on with markets. we take a look at the equity market and is not too pretty. the s&p 500 down the .9%. we didn't get hotter than expected inflation this morning but the real pain point for the equity market seems to be the auction of treasuries we saw at 1:00 p.m.. yields higher. 10 year yield of 15 basis points, weighing on the equity market. the dollar