show how well they captured a youth audience. and then let's look at this, what mcdonald's and snapchat did. >> mcdonald's doesn't just talk digital, we do digital. and 2015 turned out to be one hell of a year. let's talk snapchat. we made headlines by being the first brand ever to create geofilters at scale. that's 14,000 plus mcdonald's location full of customers sharing snaps with our messages to their network of friends. ♪ >> so far that's six campaigns and 308 million views. we plan on being the first and being the best wherever our customers are spending their time. we make big things happen. >> so now you see when the line goes down on the tv ads where people are are going, and they're very proud of this. the line that struck me is customers sharing snaps with our

messages to their network of friends. so if there was already some confusion about commercial intent, that completely goes away as these lines between advertising and editorial are completely blurred because it's a friend-to-friend message. so any kind of alert that somebody might have about it being advertising and to take it with that grain of salt -- i shouldn't use salt -- [laughter] is a problem. so what we have now is a situation where kids are physically surrounded in their schools, neighborhoods, with increasing digital, always on personalized information. friends become what the industry likes to call brand ambassadors, going friend to friend. and this is interesting research, and marlene alluded to it as well, about brain development and the connection between what happens in the digital world and what excites young people's brains. and that's, i think, why it's really important to get the age

12, 13 and 14 included in any kind of restrictions we're talking about. so here's, here it is out of the words of the marketer. so is this is jamal henderson, he's the senior brand manager for mountain dew at pepsico, and he said this new digital destination will align everything we've done into a hub for youth culture. it's all in one place, and it's dynamic; a transition from a campaign-specific approach to an always-on approach. and that's key, always on. so i'm going to show you one of the ads that pepsico did for mountain dew. this did not appear on television, this appeared on youtube. i find it very disturbing. and i'm almost sorry to show it to you, but i think it's important to see the kinds of things that are targeted to audiences that might not be sitting in this room.

[gunfire] >> all right, ma'am, we've got 'em all lined up. nail this little sucker. come on, which one is he? point to him. >> you should have gave me some more. >> i don't think i can do this. >> it's easy. just point to him. >> you better not snitch on a player. snitches get stitches, fool. >> come on. the one with the four legs. >> keep your mouth shut, keep mouth shut -- >> no! >> we get out of here, i'm going to dew you up! keep your mouth shut! >> i can't do this! i can't do this! no! no! no! no! no! >> she's just going to do it. >> you're never going to catch me.

>> when i showed this to my darling husband, he said he didn't know what was worse, the racial stereotypes or the violence against women. this is part of a series of ads that were on youtube that have been since taken down when pepsico teamed up with tyler the creator, and there's more to say about it, of course, but it's something that you're not going to see if you're not in part of the target audience. so we need to understand what the whole gamut is here and what people are doing. i think i'll just leave that at that and talk a little bit more about the other avenues of digital marketing. this is a very popular show on youtube which is owned by google. a complaint went in today to the federal trade commission from public citizens center for digital democracy, and the campaign for commercial-free childhood because of some violations they see here. and i'll explain what they're looking at. so this is an ad, it's a long ad

that you can't see on the corner, it's 18 minutes long. these are two kids who have a show where they put on blind folds and then are given tastes of whatever, and they taste them with a blindfold on and, ooh, if it's yucky or spicy. and it's very adorable and very cute. and they've got lots of viewers here. now, keep in mind the 30-second commercials that people were concerned about because the evidence was so strong that the institute of medicine said we ought to do something about this. are just knocked out of the park by this stuff, because it goes on so long. and the engagement is so intense which is what the digital landscape is all about. we're all addicted to our phones. we can't wait to touch them and scroll them and look at them. we have this strong connection. kids are native to this, and they're paying a lot of attention. so the show, this is what was called the pringles challenge. and you see there were 27 million views.

it goes on for 18 minutes, and you're deeply engaged with this. and most of what they're doing is about food. so we've got a real problem here. it's that we don't know a lot about in terms of the effect on kids that we need some research behind. but my assumption is that if we know 30-second television ads had an effect on kids, i'm going to put my money on the fact that 18-minute, deep engagements with kids has an even stronger effect. and it's -- i think there is knowledge about this effect, otherwise the companies wouldn't be doing it. but, of course, that's proprietary knowledge. and it always has kind of irked me as a researcher that the industry doesn't have to go through an institutional review board in order to do its research the way we do at the university. so what we have is a rapidly changing marketing and message environment, the four ps are

being used in lots of different ways but also to target racial ethnic groups, specifically the kids who suffer most from nutrition-related problems. we have to research these effects, and we have to help parents understand what this marketing is. it's not a situation anymore where the whole family is sitting around the television watching the show and the ad comes on together so the kid can say, oh, mom, can we get this, and mom saying, no, no, that's not good more you, we're not going to get that. so you have this disentanglement of the family as everybody's looking at their screen individually. so we need a lot more policy, and i think that discussion will be had deeply later today, so i'm not going to go into it. but i'm going to show you one last thing and then be done. and some of you may have heard earlier this week some of the e-mails from coca-cola executives in europe were leaked. and i don't think i'm in favor of hacking and leaking. nonetheless -- [laughter]

i sort of couldn't take my eyes off of this one, so i want to tell you what it is. in this came from a coca-cola executive europe, says coca-cola europe on the bottom. there are two axes here. they are analyzing their policy focus. they're trying to come to some strategic decisions internally. on the left side is business impact, and on the right side is -- i'm sorry, the x axis is likely to materialize. and so the thing that people got very excited about on some of the public health circles were way up on right side, it says new or increased product taxes in member states. that's soda taxes, sugary drink taxes. so people are excited because it was really high on the impact, but it's also likely to materialize. [laughter] so that was what the buzz was. but as i was looking at this, what i noticed is that a whole bunch of policies that they are concerned about have to do with food marketing, and i circled

them for you. so here's -- this goes right back to what kelly says. we know and we have suspected, at least for me it was very gratifying to see that the things we've been working on, indeed, if we succeed, will have a huge impact on the problems we're facing. and that's all in the upper left corner, high business impact. but right now -- at least according to coca-cola -- this is not likely to materialize. and if we want to move those things over, i think that's going to be up to us, and it's going to be up to the decisions and discussions that we have around law and policy at the end of the conference. and i'll just point out the -- the rest of the conference. i'll point out one little thing because marlene talked a lot about the age breakdown, which i think is important. there's a circle on the bottom, and it says e.u. ban of advertising to children less than 12. so that is going to have a very low impact on their business. which is probably part of the reason they've been willing to do it. but that circle that's much

higher up is e.u. definition of children as greater than 12. so this idea that we need to expand the definition of who we think as a society should be protected here definitely needs to be expanded to 12, 13, 14-year-olds. so i will leave us there and thank you very much. i'm looking forward to our discussion. [applause] >> thanks so much, lori. now i'm happy to introduce dr. jason halford joining us all the way from england today. >> good morning, ladies and gentlemen. or for me it's about 7 or 8:00 friday evening.

[laughter] i flew in yesterday, and i'll be flying back this morning. [laughter] now i'm unusual, perhaps because i'm not a lawyer, i'm a psychologist. i'm also unusual because i'm an appetite scientist. an appetite scientist works with the food industry, and they work with the pharmaceutical industry. so i have major conflicts of interest. but it was only when some of our appetite work went into the area of policy that we got dragged into this area. and some of the things that i'm going to talk about today, very in line with what some colleagues have been doing. so i have some interesting conflicts of interest in my professional life. anyway, moving on, i'd like to recognize those carrying on our post-policy work, and a lot of this work is down to their hard work over the past i think now 12 or 13 years in this area.

now, i show this slide with no apologies. despite what we see -- and i have to say i really can't follow that mountain dew ad, that was truly horrendous. fortunately, we never see anything like that despite the slide from coca-cola which i became aware of on the plane coming over. that was quite a shock as well. but this is from the regulator of media within the u.k. it's 2011, but those are the data to show. tv is still a popular way of communicating with children, particularly the under 12, and the reason is it's the entry level. it gets into the house. and it's till the platform in which -- it's still the platform on which everything else is built around. but remember now, children are multiple media users or. so they'll be using the computer, their phone and their tv at the same time. and remember, all these different platforms are merging. so where we are operating is

becoming incredibly complex. the spend on advertising to children and advertising foods has gone down in the u.k., but that's not an evidence of reduction of advertising on television. that just means competition and tv is less economic as an advertising media. so often advertisers say we're spending less on advertising. doesn't mean anything. that just means advertising's getting cheaper. now, i'm going to talk a little bit about exposure or first of all. i'm going to talk about tv day. and we haven't gone and bought tv data from nielsen because we couldn't afford it. we were stupid enough to record them. we recorded 150,000 in 2008. the first year we did this. 2008 was a very important year. in 2006 the fsa, the food stamps agency in the u.k., published the hastings report which was very, very influential both in the u.k. and on a national level. and it demanded that government take action.

and the regulation came in between 2008 and 2010. now, by 2010 the regulation should cover all advertising targeted at children up to the age of 16. it was phased in. this is our 2010 coding. these are all channels popular with children. so if we have a look at this -- and i'll give you a little guide to what the colors mean. the green is core foods, foods which are defined as being healthy and of value and necessary to diet. red is noncore, these are unhealthy foods, and you can do without them in your diet. it's a nutrient profiling system. there's lots of different nutrient profiling systems, and actually you get pretty similar pictures whichever one you use. now, look at children's television. this is children's television. you'd have thought that would be targeted at children, okay? we can have that assumption.

over 50% of the ads are non-core. so these are foods high in fat, high in sugar, high in salt, low in fiber, okay? this is points of full regulation. but also look at family television, what the family watches together, which is actually much more. kids, by and large, only watch two or three hours a week of kids' television, the family television they're watching 17 hours a week of, okay? now, i'm from liverpool, football or soccer -- as you strangely call it -- is king. [laughter] and little boys and little girls watch it together. they're all women and they all know more about football than i do. look at the sports. three-quarters is sports. and remember, that's the advertising around the soccer matches. that doesn't include what's written on the shirts or the advertising -- [inaudible] which would be coca-cola, mcdonald's, by and large. but also look at music television. popular culture with children as well.

two-thirds, non-core on that. now, this just shows you from 2008 to 2014, and this is children's peak viewing time. so we've refined it down to take out times in which children are not watching those channels even though they're popular with them. 2008, regulation just coming in. so it's not a true baseline, because regulation's already started to creep in. again, over 50% non-core. 2010, still over 50% non-core. regulation has now been in two years at 2012. still the majority of non-core. if we break down what children are seeing or thiess when they're -- or at least when they're most likely to be watching and look at the top ten foods, seven out of the top ten are non-core, okay? only one is core. and the darker lines are 2010 versus the lighter leaner, 2008. -- lines, 2008.

you'll actually see that fast food and sugar-sweetened beverage have gone up, okay in this is a regulatory system. this is not self-regulation, it is an imposed system. this is the one which interests me the most. before regulation came in, there budget any particular -- there wasn't any particular change over the summer. but look what's happening as regulation comes in. look at that red line on the top. look at august which is school holiday time. look at that switch on advertising. so this is post-regulation. and i was glad adver games came up. they immerse the child, and they reward because they're often games. and they get a high score, and then they post the high score. and they share it through social media. and i think we heard a lot about the child as an agent, okay? and one of the trends we did

see, although i don't know -- we might be able to speak to this more -- is actually about children creating advers for the manufacturers. very, very worrying. but this is interesting. it shows the number of web site links going up, okay? from 2008 to 2012 -- 2010. when you look at the 2012 data, we're going to retake the data in 2018 when it's been in place ten years. so this is just a summary for this part of the talk, because i knew people were interested in regulation, so i thought i'd talk about that. so despite u.k. regulation, children remain exposed to food ads during peak viewing on channels popular with them. remember, our legislation is meant to cover up to 16-year-olds, and it's meant to provide a complete coverage. and most of these are from healthy foods. why is that the case? because we talked about this a little bit earlier, what the legislation is based on is the proportion of children in the audience and not the total of

numbers viewing. and so all of the popular family shows are excluded, because there are adults in the room. and i think there was brilliant ranking where they ranked kids' favorite programs, and you have to go down to number 26 which was squarepants spongebob? [laughter] it's not a popular one in our household. [laughter] it was there that the regulation kicked in. so there were 25 more popular programs before the regulation was kicking in. i think the other problem we have with the regulation is brand advertising gets around it, because you advertise the brand. if you're not advertising foods, how can you nutritionally profile? if you can't nutritionally profile, it falls outside again. i would say the trends in fast food and sugar-sweetened beverages is worrying, and we see that in other territories. it's not just us.

we see it in europe and asia. the holiday targeting, we've seen that in asia as well, some of the data coming there, and the web site inclusion. i think that's an obvious one, but it's well worth tracking that phenomena as the nature of advertising comes. i still think tv is ceer here, but it's the entry point. and i would say because, of obviously, people say, well, if we had regulation, it would be brilliant. well, it depends whether your regulation is fit for purpose. and without robust, independent monitoring of that, it's very difficult to tell. so self-regulation is not necessarily inferior to imposed regulation if the imposed regulation is not functioning properly. now, i'm going to talk a little bit about power, and i'm not going to talk so much about other areas. i'm going to stick rather to tv food advertising, because we were doing work along the lines that were being performed at the rudd center at the same time.

but i want to start with this slide. i like this slide because it speaks to the relationship between food advertising and childhood obesity. so this is a prospective study. they're looking at children's tv viewing and see what the health consequences are at a later time. and what they find is commercial -- not noncommercial -- commercial tv viewing predicts weight gain and obesity in these children, and you can remove the effects of exercise, and you can remove the effect of eating in front of the television and the relationship remains, okay? so it's a nice bit of data. so i always like to come back to it. we, as i said, along with our colleagues in the rudd center, we're doing a number of very, very similar studies. in our first study, which is the one right on the left-hand side, which is the study which got us into in this mess. now, i'm an appetite scientist, and so for 25 years i've been studying the feelings of fullness that you get. but it became very clear in the

field that obesity was not down to deficits in our biology so much as the interaction or failure of our biology to cope with our food environment. and so we became very much more interested in external food cues. i had a hypothesis that we can see lean/obese differences in response to food cues. now, i just happened to choose food ads, and i just happened to choose children because as soon as i bring individuals with obesity who are adults into my laboratory, they stop eating because, funny enough, they kind of guess what we're doing. [laughter] so i set out to do this study, and what i found is, first of all, we did a very similar design, we show a series of food ads or toy ads, then a cartoon or something, and then we let the kids eat, okay? and they got a choice of different things. so, first of all, we asked the kids after the cartoon how many food ads do you remember, how many toy ads do you remember.

to to bees kids remembered -- the obese kids remembered about seven toy ads but all ten food ads. okay, that's fine. hypothesis prudent person. but when we actually -- proven. but when we actually looked at what they ate, all the kids overate in respondent to the food ads, okay? and they all switched from the less energy dense, healthier foods after the food ads to the energy-dense, unhealthy foods as well. so you had a switch not only in amount, but in the types of foods consumed. and we replicated this a number of times. now, the reason we got into trouble with this is we got lots of oppress coverage. it was very early days. not many people operating in this space. and we got the press coverage, and then we were attacked by the advertising industry. and the advertising industry, the chair of the advertising industry, dame as she now is who happens to be a lawyer, just saying --

[laughter] wrote a letter demanding all my data, addressed to me. it wasn't sent to me, it was sent to my bosses, okay? we thought, oh, that's interesting. and then colleagues in germany and various other places a started sending us translations of articles published by their advertising associations attacking us as well and asking could we do our type of research in their country, would we share their methods and things like that. we thought, oh, there's something in this. so we've stayed in this area, and we've been involved in lots of policy areas. and i would recommend that you look at some of the excellent work which who have done in this area which came out of the european america for the prevention of marketing of unhealthy foods and beverages as well. it's well worth looking at their work as well from the international angle. now this, as i say, was one of our studies in which the effect was seen close. so what you can see with the white bar is what the children eat after the show, what you can

see in the gray bar is what they eat after they've seen the food ads, and you can see all kids overconsume after the food ads, and the effects gets greater as their weight status increase, okay? so all kids are vulnerable, but obese children respond more. now, i was asked to put something mechanistic in, so i put this slide in late. i put the request out late yesterday while i was in amsterdam, and my grad student actually sent them to me, and they're from a colleague, amanda bruce, who we're trying to do some work with, and she's done a series of studies. i'm just going to summarize these for you quickly. the first study is quite interesting, it's done in normal weight children, not lean/obese difference. what they looked, they did a very similar study to us, but instead of getting children to choose foods and actually eat them, they put them in an fmri scanner and looked at the choices they made to various responses to the items they

chose. and after they gave them the food ads, they tended to choose the foods which were more he donicically palatable. so they shifted to things they like based on taste and because correlates of that, they could see the areas which were lighting up, and and they happened to be the he donic reward sensors within the children's brains. those associated with wanting and liking, the non-homeostatic components of appetite. the second study is particularly interesting because it talks to lean/obese differences. and this is less about the reward system. it's more about the cognitive control, okay? the inhibitor control, your ability to resist food messages, food cues. and we know obese adults have lots of difficulty in this, and this is why the notion of food addiction is quite important and why obese adults will talk about food addiction, because they feel that the food is in control of them rather than them being in control of the food.

and what happened is they showed the children a series of logos. now, they could be nike logos or food logos. and to bees children -- the obese children showed depleted response in inhibitor controlled circuits to the food ads. so they have great difficulty controlling their response to them. so there was a deficit there. i'm going to talk, finally, about three types of means that children are promoted to. the first is celebrity endorsers, the next are licensed characters and the third are brand equity characters, and i'm going to give you an example of each. there's a broad and rich literature here, but i think it's probably good to give an example of each. now, first of all, i'm going to talk about celebrity endorsers. now, this person is gary -- [inaudible] do you all know who he is? no? the famous english footballer,

or soccer player as you -- [laughter] he's a famous international footballer, played for england, played in europe for a while, played for some very famous clubs within the u.k. in his career. and he has become like many more successful people in sports -- it's okay, i'm on it. [laughter] she's wondering how i'm ever going to finish. he's gone into commentary and punditry. and he's the face of bbc1, british television's key sports program. it's called match of the day. when all of the games are shown in preview and get the highlights which sometimes as a liverpool fan can be a little depressing, although this season not too bad. now, what we did, we did a similar study to the kelly group and the rudd center have continued doing and we've continued doing x what we showed was children east a clip of gary promoting crisps. here's the face of walkers, and walkers have about 80% of the

crisp rounds in the u.k., and walkers just happens to be lays, okay? we don't sell it under lays, we sell it under walkers because that's a brand that we recognize, okay? and we still continue with that name. we showed another group a picture of gary presenting the brand of the day. first thing to note, we gave kids two bowls, one labeled walkers and one labeled teskers. that's a home brand, a supermarket. the kids loved the walkers crisps, didn't like the home brand. statement crisps, that -- same crisps, that's just power of the brand. we know that. ..

>> you don't have to pay so much money for your -- but you do pay a lot for licensed characters. shrek is an example which was used a few years ago. d. of breakfast cereals, frozen? in the uk i did know what was frozen for a five year old boy in nursery unfrozen became a big thing. i had no idea. i saw the film about 40 times. it's kind of like an ear worm it. they kept going around and around in my mind. it seemed keen that you could get breakfast cereal which had and also. you want to build a snowman?

that will be in my head and a flyby this evening. this was interesting in use to which they looked at brain things. put the licensed character on packaging or the department a friend was as in similar studies reported when licensed characters were on the packaging, children's taste in taste preferences and also what they chose. those licensed characters had an affect. we did with the brand equity characters like tony the tiger. some familiar, some are not. what we did is we took a series of these things and we put them on foods and we did with on food, so we replicated. we switched them around. we put them on the wrong foods. what happened? it didn't matter what food we put on. it could be concrete or in

congruent with the foods. it increase the preference and liking for the foods. irrespective of what it was. even the ones they were not associated with. so that's power of the character he on the food. you've got to think about these devices and the effects that they have. so my second summer it is, tv is the most direct means. they have demonstrable effects of the food choice in children. that's due to boosting report activation which windows overwhelms normal appetite. it may account for their bridges and responses. want to get exaggerated on this in these children. we know that's true for logos

although more work needs to be done there. celebrity endorses and celebrity characters are not only components but operate beyond. this is the important thing, to reinforce the core brand values. and the independently influenced behavior. a quote from the director-general of the w.h.o. the efforts go against the business interests of powerful economic operators. the biggest challenges we face in health promotion. i'd like to talk about their group. we are working with the school of law in the report so trying to join, it would be great as an international coordination on this. if you've not met her before she's a force of nature. i would encourage you to invite her to speak at one of your events in the future but finally

i think it is important to acknowledge the people i work with but also my link to the potential conflict of interest. id work with industry to try to produce healthy products but coming here to this area and you realize the horrendous conference of interest. i am very alarmed with the operation of business. what i do say is there's no policy work that my group does which has any input from industry whatsoever. having seen that slide from coca-cola, which -- remember industry is much nicer in europe. [laughter] now i've seen that's why i'm beginning to wonder. thank you very much for your attention. have a good day. [applause]

>> wow, we have a lot to digest. i'd like to invite our panelists up for some questions. thank you very much to all three speakers. i think we can all agree those are fantastic talks. thank you. what a way to start the day. >> i'll get us there was the first question and then i would love to open it to the audience. we heard a lot, some of it is overwhelming, a lot to be done, a lot that has been done. so my question to you three is, what's on your wish list? if you could pick a couple of things that policymakers can take away from the presentation as the most important things to be done from your sciences, research perspectives, what would those be? >> what we've been trying to lobby at the uk policy basis,

we've had a change of government in uk, it was post brexit because of the economic challenges that the food industry would have. i would still push for a ban before 9:00 on unhealthy products. that's the policy we've been pushing for the uk but it's simple. policymakers like it in terms of the message. it easy to communicate. >> i think i would still wake with increasing age for the definition and maybe sing of those which have an official definition of children. there are other organizations around the world that have put forth definitions until that he would be good about what are the than ever needed to follow. but would also help about that is if you include up to 14 in the audience then it also makes that shared much more effective

because when you allow those other kids to get counted then it's going to cover many more of an intelligent shows that you are saying. a lot of the popular shows just don't make the cut. >> i will echo that as well. i think the age limitation is very important and healthy eating research programs, expert recommendations have all the data behind them, and makes the argument very clearly. so i think that's important. i also am troubled by the fact that in morley's presentation, the companies have the ability to make products that are healthier. so why don't they? if they can sell those doritos in the package that qualify for school attrition standards, they should be the same doritos on the shelves. it would make not just children held there, it would make everyone healthier. i'd like to see more about reformulation. so that's one thing.

the other thing is a little trickier, and i didn't get into it in a big way but behind all the digital marketing is big data. you have heard that term. it's a very popular term. what that means is that individuals are being sold one by one in microseconds so that adds can be personally delivered to them. there are huge privacy concerns with that and there are a lot of people working on privacy issues around that and i think the fcc and ftc have been engaged in that. we need to learn more about that. right now we don't have any protections for children in the digital space except for the children's online privacy protection act which protects kids who are 12 and under. there's a gap there that needs to be filled and it's a very murky area that people don't know a lot about and it's hard to explain. essentially we have an unfair

exchange where by clicking yes on your app because you want access to that game, you have sold yourself essentially. maybe that's a fair exchange and maybe it's not. >> great, thank you. one more follow-up and then i will open u it up to the audiene and get those questions coming. how do you as people navigate, how do you protect your children? how do you navigate this pernicious world? how can actually navigate this world isn't what we've just learned? is there any way to do it ourselves? >> well, i'll speak up because i don't have kids. i like to protect my nephews. i think what you are saying into question is what can parents do. is that what you're saying? parents are responsible of course for the food of the kids eat and what to put on the table. but it is completely unfair to hold parents responsible for the

billion dollar onslaught of digital marketing that come to their kids out of earshot as parents, and that, i think we want to ask, the thing i would like to see parents get help with is becoming active and vocal when the kids are being targeted in this way. >> i would just add that there's been millions showing the risk of having a television in the child's bedroom. that was always sort of an easy answer to that question that i gave for years and years but it's so much harder now. i think you still want to keep the television out of the child's bedroom but now the kids have phones and ipads. it's virtually impossible to keep the media out of their rooms. i think that is definitely one place where a. could try to have some influen influence.

>> i had a child in 2011, and all my free time went out the window. it's very difficult. obviously, we have the option of the bbc which has no advertising material on children's channels of there. so that's open to us. but as soon as your child goes to school he comes in contact with peers and they want to watch those different things. they can bring the food products to schools. schools are very good about trying to control what children eat but it's a big problem. we do not have the pervasive entry of food, properties into areas of education which you have over here. would shock me, the amount you do have. but i think we had a little bit more control. they're always new routes into children. i think the new media because

kids are getting very good, my child has a new book which is been using since age four. you have to watch what he's looking at. you have to set the controls but it's tough. >> i do like to open it up for questions. yes, in the back. >> i'm just wondering if you could speak to -- [inaudible] >> so you're asking if like how much influence do childre childe on what the parents by? i think have a lot of influence of what the parents by. it becomes kind of a battleground in the grocery store. and including interviews with lots of parents over the years we've done focus groups and surveys. parents feel like you to take your battle. oftentimes that doesn't seem like a big enough battle to pick. so i do think that very frankly

children to influence the brands that their parents by. >> thank you all for not only your great talks but also the work that you are doing. i appreciated. i have a question for lori and it's about the racial disparity in marketing that you pointed out. i wonder if you talk a bit more about why black and latina youth are being targeted. i think in some ways it might seem counterintuitive because often they would come from lower income families and not have as much disposable income but i also know that research shows they are more vulnerable to marketing and more responsive. i'm wondering if you think this has to do with access and the lack of access to healthy foods with the money they have, they spend more on unhealthy foods or is there something else going on? >> i think they are big markets

so there are certainly income disparities. i think that's what they're being targeted. for me it does have to do with the balance of what the options are and whether healthier food choices are and what the supermarkets are in that kind of thing. what comes to mind for me really in this is not just billboards but what it's like to walk through different parts of the city, and in highly concentrated areas, in east l.a. i was talking to somebody earlier when i was in high school, or los angeles now in high school, i went to high school in the san fernando valley and it was a pretty white school and our history teacher i think was disgusted with our little privileged whiteness and decide to put us on a bus and show his los angeles. he took us to east l.a. and we would and that was the first time i ever saw a billboard in spanish. it was also probably the first

time i saw billboards on the site of apartment buildings. in some neighborhoods people had advertising that they cannot turn away from because of where they live out what the neighborhood looks like. i think that is fundamentally unfair than when we hold them only personally responsible for those things. >> so those with are absolutely wonderful talks but may be feel utterly despondent. the news is so grim that it's a tidal wave of advertising and it doesn't seem to be any way to stop it. the two questions that come to mind, what i think were probably get dealt later with a day. if self-regulation has failed and then in the uk the government steps in and that has been so hot either, then what's left? maybe stronger government intervention that the industry can probably find workarounds.

it makes me think whether litigation isn't a possibility. the question i had is if you're going to do things you recommend elect increase the age and then have a 9:00 cutoff, and that apply to the internet as well as television? because with a television you don't know who's watching it. the internet you know who is exactly watching it and you are much more likely to know the age of the particular viewer. why couldn't that be regulated? why couldn't the 9:00 thing applied there, age 14 when it comes to these ads? that might be a more effectively because it's more cost-effective for the industry to advertise that way. there are more migrating their from television. i just wondered if you guys have thought about applying the principles to the internet? >> well, i do think that's a really good idea. one of the challenges with the digital marketing is actually, the type of research we do where

we purchase nielsen data. so i think the are not necessarily already databases unavailable to see who is being exposed to all the different types of marketing. i can wouldn't even know how to start finding out how many kids did at snapchat mcdonald's thing. part of it is we are behind it all the changes are happening and then sort of the companies even that are trying to track are behind and then the researchers are really behind. i think the idea is a great one of making sure we apply the same standards across all of the different neck and isms through which kids are reached. >> i think you are right they do have the data so you could say certain products would be off limits for apple because of the nutrition standards. that would have to be worked out that there are people thinking about that. i also think it's easy to reduce

marketing or promotion. we should remember about place and think about supermarkets and the big exchange of dollars they going to keep certain things at kid levels, certain things in the checkout aisles. a new report has great information about that. i think what to think about the product itself, reformulation, think about the place as well as the promotion. we have to be vocal about saying, vocal and citizens about saying that this is unacceptable so that our agencies, regulars at the ftc and fcc understand what's problematic and why it's harmful. >> i don't think i've got anything more intelligent to say other than i would thoroughly agree we should stop looking at this in forms of media and actually if we're going to regulate, self regulate, we need to take into marketing. marketing. all of which comes to marketing should come under the same principles and guidelines.

a powerful thing which has produced a change in the uk is the joint political perspective on left and right about childhood, okay? so the left and the right differ on personal responsibility. you will get that around self-controlled. this is the responsibly of other agents in terms of obesity. that ensure that both sides of the political spectrum want to be protected and, therefore, you can get good traction with the press. people you would not normally deal with, and i think that can be very, very powerful. they are always interested in stories. >> can our advertising be effective for reducing tobacco use among teenagers, do you think advertising for these

products will be helpful to make a responsiveness for advertising among children's? >> i think it could be that you can't consider it an isolation. so, for example, if you take california where we had a powerful and very effective counter advertising campaign that help people understand that tackled for the campaign was the industry is not your friend. we had billboards up and down the state. those billboards were paid for by an excise tax they can to prop 99 that also put tobacco control program in every county in the state where people worked on the ground and had a whole range of policies and programs that they were seeking. so the campaign was part of that. it did have an independent effect but you have to put in combination with other things. >> you've got remember how much

you spend on food advertising versus how much we can spend in public health. if we have those budgets and we could get the mechanics of advertising to work to promote a healthier message and deal with social norms and aspirations in intelligent ways the same way marketers do, then there wouldn't be a problem. it's a matter of scale. >> we used to the fairness doctrine which forced to have free time for advertising. and if we couldn't over something like that maybe that's an easier fix. >> we have to make the effort. we could tax the advertisers for unhealthy products and didn't invest the money in advertising healthy products i guess. for promoting healthy choices. >> but it's a different direction that might be effective. >> a key concept in the law is whether the advertising is misleading or deceptive and

whether virtual it could be inherently misleading or deceptive. i don't think any of you spoke to the drug but am interested in your thoughts and research about the. >> one observation is children see, when used as part of a healthy diet which is an advertiser saying this is how liberty to give him lots of other food it humbles of the effective. children may read that as it's the same as a healthy diet where it probably is not. there are simple things like a. >> i know samantha has written on that. jennifer has come to. on the fact that it is inherently deceptive just because of children's in the build to understand commercial intent, persuasive intent. >> remember these things are sold not on health. they are sold on friendship and popularity. if you consume these things your life will be better and you will be more popular.

that's very, very powerful, whether you understand that message or whether you don't, it doesn't seem to much effect on the outcome either. >> i think we are out of time. thank you so much to the three of you for really a fantastic -- [applause] >> i look at the lobby of trump tower president-elect donald trump has returned after his thanksgiving trip to palm beach, florida. tease me with a number of people in the fidgets touring -- 58 story building today. >> on our companion network

c-span today, the white house briefing with press secretary josh earnest is going to start at 12:30 p.m. eastern. when it does live coverage on c-span. and then at 2 p.m. on c-span, a conversation from the center for strategic and international studies on the future of u.s. alliances your we will her from several former pentagon and state department officials. >> c-span, where history unfolds daily. in 1979 c-span was greater as a public service by america's cable television companies and is brought to you today by your cable or satellite provider. >> up next on c-span2, a discussion from san francisco about the future of facebook message or and the criminal investigation of the fantasy sports site tracking. this is from the techcrunch

disrupt conference earlier this year. >> ladies and gentlemen, please welcome your disrupt in c. and techcrunch senior writer jordan crook. ♪ ♪ >> what's up, guys? so happy to be back. this is a favorite thing for me in san francisco. this is it, literally. you guys live in a great city. congratulations. i just want to welcome you to the 75th annual hunger games. we are going to have a blast. i'm just getting. it's burma and you guys are never going to laugh at my jokes anyway so i will just give up on that. we have an amazing lineup. a couple things before we get started. we will be using the hashtag tcdisrupt. ahead and do that now. without further ado i will bring

up our first guest to please welcome to the stage david marcus from facebook messenger and our moderator, josh. ♪ >> thank you for joining us today. >> messenger has always strived to be differentiated from sms. first thing of group texting, and embraced stickers come and mitigants and payments. what do you see as for the next big differentiator for facebook messenger? >> we really, really like real-time communications. you have seen recently we just announced and opened up to join this new thing which we call instant video that basically enables you to ambien video. it's like you i mute your video for the other person to see while you're typing and you cann start streaming in the window why the other person can be in a

meeting and can still type in c. or see what you want to show them. we are going to continue investing more in real-time communications. one of the things we haven't talked about is we have over 300 million monthly active users of video and voice and so that makes messenger one of the biggest real-time apps in the world. >> you guys haven't even had video calling for very long, about a year ago. so tell me audio and video help get messenger to 1 billion users but many other critics feel like that was only because you forced people to download messenger and leave the main facebook app. does that ever feel like a hollow victory? >> not really. we don't feel it's a victory or not a victory. it's like a billion users is a lot. it's like this is not downloads. its people using the app on a monthly basis and the vast majority of them on a daily

basis. it's actually people communicating with one another and using the app to stay in touch and go groups and a bunch of different things. it doesn't feel that way to buzz. it just feels like we are such a great opportunity to serve a billion people and we come to work every morning energized by the notion we can build things and ship it and then hundreds of millions of people eventually the full billion people on the platform will get the user. it's energizing. >> there's surely benefits of having messenger be its own app, a lot more room for extra features but you are cramming conversation into a one size fits all. recently you started to remove the ability to message from the mobile website. don't users deserve a bit more choice about how they communicate the? >> do you know of any other mobile messaging app that has a mobile web experience? >> i guess that's a good point. you are also facebook and the

biggest thing on the planet. you must be held to a different standard. >> the whole point of having a separate app is to create, like messaging apps don't work if notifications are not enabled forever. unfazed but that is what has push notification. on messenger everyone has pushed notifications would want to make sure if you use messenger you can get people to respond faster and it works because now when we survey our users they tell us that they feel people respond faster on messenger than even text. that's great because the first thing you want a messaging app to be as reliable, fast and know that people will respond quickly. >> that has to be some situations where people might only be able to use a mobile website and don't have the time or bandwidth to download and at. what do you say to those users? >> we have been very careful not to remove access for people who are older and with devices that

might not have memory to download the app on network conditions to download the app at a certain point in time. like the actual, we stopped serving high-end devices in developed markets on mobile web but not the other markets. >> this brings up the point sometimes you to make decisions users might not like but facebook thinks is in their eventual benefit. at the same time those things benefit of facebook as well. how do you guys balance of facebook's agenda with user benefits? >> i don't think we ever think about it that way. when you build a product like no matter, if you're a startup or a large company it doesn't matter, you want the vast majority of people out there to use it, to like it and to engage with it. that's why you come to work and

you build things that are actually solving real problems in daily lives of people. that's how we think about things. we don't think about let's do that because we're going to make a bunch of money. that's not the way we think about things. >> your lucky because facebook mostly makes its money on newsfeeds and you guys work on bringing people together. you must make decisions think about the long road, whether that is dated your plan from users or boxing out other competitors in terms of the newest capabilities like audio and video calling. when you work with mark zuckerberg on these features how do you make top level strategic decisions about where to go with messenger? is that most of your job or you see doing the? >> we are doing that together. it's really great to work with mark because he has this unbelievable ability to as he did really well in the short and medium term and has a very bold

long-term vision as well. it's been great to work with mark on messenger. so the way we are thinking of things is pretty simple. what are the fundamental things people want to do when they talk to one another? they have one on one conversations, group conversations, interact with businesses and services, and we need to make sure we build the right experiences so that people use the product and find more utility in the product. we have invested in a lot of things we haven't talked about like for instance, in the last six months we've invested massively in performance because while we added a ton of features we made messenger way faster. startup time, aggregate startupp time on iowa's is some one second which is out of. on android it is 1.38 seconds. it's like really fast and we have cut into and messaging latency by 30%. all of those things we don't talk about are things we continue investing in because we

want to make messenger the best messaging app out there. >> you talked about wanting to be useful for people but earlier you guys launched a messenger platform. it seemed half-baked. what do you think was wrong or missing about a messenger platform? >> what we want to do is build an ecosystem. when you want to build an ecosystem and bring developers to the platform and people to discover new experiences and at the same time reinvent the experience and interaction model at that scale. it's not easy and it takes time. what we wanted to do was put a stake in the grant and an able all the enablers, all of the companies out there to come in and start building capabilities and use the apis. from that standpoint it has been successful. we have over 34,000 developers on the platform and the ability either capabilities for third parties or actual experiences.

the problem was that they got really overhyped very, very quickly. the basic capability we provide at the time were not good enough to basically replaced traditional apps, interfaces and experiences, and so what we've done in the past couple of months is we have invested and built more and more capabilities. we've provide a lot of guidance to developers on how to vote based successful experience. what we've seen is there are a number of articles are working really, really well. news is working really well and engagement on news box is really good and techcrunch is want of the best ones. that's true. cnn is another good one and there are a bunch of others. we've seen also other companies have been able to build experiences that convert users to paid users for their services with a much higher conversion been redirected into a mobile website or two and that. match.com and europe has built a

dating experience inside messenger and they're converting all the way to paid subscriber at two x. the rate of redirected to a mobile app or mobile website. there are other experiences like this bot that does bill payments and car headin having and all te things and they're converting 10 x. the rate of retracting to mobile websites. so we are seeing more and more of these things and today we are releasing a brand-new update to the platform. it brings a whole lot of new capabilities for developers to build even more engaging experience. >> one of the things i thought was the most lacking from the platform at the time of launch was the ability make native payments inside of bots. i was going to grill you but it turned that you guys have built that now. now faced with messenger bots will allow native payments.

when you're working with payment networks to build that, so it's not all facebook infrastructure. used to work with paypal. is paypal for you guys are working with the? >> we are working with almost everyone on this solution. we are working with paypal, working with the strike, visa, mastercard, american express and braintree. so like what we have done is like the two main announcements we have on this new update to the platform is that one, we are releasing a new enhanced web view capability so you can basically draw ui inside of the thread and determine the height of the window so you can have the proper ui still in context of the thread. and native payments. those are the two main updates but there are more to this new platform release. we think with that we have the best of both worlds. inside of a thread you actually

have identity, transactional capability, the ability to draw ui, ability to draw native buttons and interfaces, and you have basically different physics to those different spaces. the threat is there to say, imagine you're trying to book an airline ticket. you would go in a thread, the actual intense capture is great in a conversational way. i want to go to paris tomorrow, and then you basically have results that can come up in a web view. then you have native payments but then you can get your itinerary posted back in the fed which is made to say because it's economical and you can check in and have customer support. we believe bringing all of these types of different experiences together is what ultimate is going to make the platform successful over time. >> decided a whole bunch of us

critical aspects of it but many of those were not there when it first launched. honestly what happened was a lot of the developers didn't feel like they ha had enough time now with the final functionality was to build good bots. facebook will always be in the news to everything because he seems important because there so many users but for some developers am i to fully gotten that one big opportunity to make a splash of first impression on users and they didn't have the functionality they needed. how long ahead of the launch date you guys give developers knowing the final functionality speaks it was a couple of weeks only. >> is that enough time? >> probably not. >> i thought it seemed a little short. in the end it seemed like you were focusing more on the set launch date. digit into prioritizing secrecy and making a big splash about putting a stake in the ground or being able to launch a fully baked platform? >> the problem is that you can

look at this different ways. i choose to look at it is this is a long journey and you need to start somewhere. face is a great opportunity to get developers attention. we have a lot of developers that are coming to the conference and that are starting to build your now it has been six months since we launched and we have like 34,000 developers on the platform. we have a lot of middleware enablers that have built connectivity to our apis into platform that enables big brands to start building great experiences. like toda debate is a really god bots that is launching, the absolut vodka bought which will get you a free drink in the city and a bunch of other cities. it's probably too early. the way it works is really cool because you get from newsfeed to messenger which is something we are releasing today which is destination add to news feeds so

you can buy an ad and connect with people directly. so you combine like intent creation of newsfeed and completion of messenger. with the case of absolute, it tells you where to go to get a free drink on absolute. what cocktail you want, get a coat, show up at the bar, give the g go to the bartender can he get you you a free drink and ws you get a notification inside of the thread that offers you a lift ride back home. all of these things when you think about it in a sense like an app, like that's not an app but it's such a great opportunity for brands to engage their users in a brand-new way. those types of things are really working well. >> i'm sure bartenders are going to let me showing my code to the moment for them to figure how to make it all work. when you think about the platform, a lot of people are saying bots are a fad. what you think will end up using

them for? why is facebook commit to making sure bots not just if that? >> it's not about bots. it's about how can you get experience, like we interact with people and we interact with services and with brands and businesses. to our advantage of the things that the capabilities with opened up in april are already really solving. at the very basic, basic stage like customer service on messenger, based on the apis we released in april is really flourishing, and there's a number of large companies. rogers in canada which is the largest carrier in canada is providing customer support on messenger and seeing a live in customer satisfaction is 60% which is nuts for a mobile operator. that's one thing you could do. news is a new thing also on messenger and it's working really well and has high retention. been like if all these experiences that brands are

building inside of messenger that enable them to connect directly with the customer. if you're a cpg company like the ability for you to target a demographic and think it one on one with their customers is a brand-new. you have never been able to do that before. lastly when you combine all of these capabilities that we launched and are announcing today you see companies like hipmunk that are going to launched soon an undated version of the bad where you can book hotels and really fast easy way that i think is going to be pretty close to having a native app. better than mobile web. >> i'm excited not to have to talk to humans on the phone for flights but is a very fast an opportunity for messenger. where do you see the future of navigation and dictation and voice for facebook messenger? >> this is not something we're actively working on right now. we have the ability if you want

to use voice get the ability to leverage voice clips and process these. it's an okay experience that i don't feel it's just great. at some point it's obvious as we develop more and more capability and interactions inside of messenger we will start working on voice exchanges and interfaces. >> i would love to switch from a thread by saying go to my message thread with david marcus and switch around especially if i'm can't use of hands-free while i'm on the go, working. that would be a big deal with amazon ago and a bunch become abdicated. do you think you are waiting too long if they'r if not actively n this stuff yet? >> maybe. >> may be looking further in the future, you guys have bots coming up in working more with businesses but what does messenger look like five years from now?

>> i think when you look at all of these entities that you interact with, it's bringing it all together. can you bring your daily life on messenger in a more organized way and actually have the best high quality, high fidelity interactions with people, groups, businesses, services and give an opportunity for developers to build a presence on a new platform and get this edition and adoption. we are driving not only has messenger gone over to a billion monthly users but engagement as measured by daily send. has grown tremendous in the last couple of years. we want to continue accelerating that trend and make messenger or a central part of the delight of our billion plus users. >> is a group calling video going to be a part of that? >> if you look at what we launched, i have nothing to announce but it's a pretty logical thing to build at some point spent i see a nice smile going on. >> at some point.

>> but thinking about this in the next few years, what is messenger going to do to kill off i think it's final foe which is sms? >> is just a question of reach in messaging. so messaging is all about the ability for you to reach all of the people that you want to reach, not like that of a% of the people you want to reach. gradually we are increasing our reach and our penetration and smartphone users, and we just need to grow, continue growing it. as we grow it people will continue using it. if you look at the sms experience on android, versus messenger, it's a no-brainer if you're an android want to messenger because the experience is so much better than traditional sms clients on android. you can do so much more. now with the building for use can also get your text messages

inside of messenger you get all in one all of their messaging in one place. gradually building more capabilities is the way we're going to make this happen. >> you guys are making good strategy to you have 300 million using video and audio messaging. even though you admit and maybe you guys would like to give messenger developers a bit more time to make something really great come eventually the idea is bring it all together into one app cytometric popping rent into a million different things that don't need all that but you can do it all into messenger. thank you very much for spending time with us. >> thanks. [applause] >> josh looks very dapper. i sat to dress down a little bit. i call this startup cheek. i don't know if he knows that i've got a little tcr on this sweatshirt which is for sale out front. if you think i'm just standing

talking to should combat zone because this is a sweatshirt. go ahead and go buy one but not right now because we've got an amazing panel coming up. please welcome our next guest, jason robins from draftkings at our moderator, fitz tepper. [applause] >> thank you so much for coming. >> thank you. >> are you excited to talk about sports and a room full of nerds? >> as i said many times i a nerd. i'm at home. >> we all are. let's start with who here has played on draftkings before? draftkings is a daily fantasy sports up. >> it's a segment of the overall fantasy sports games are basically instead of playing for an entire season or subset of that, you play for a day or in the case of football, or we can. otherwise it's been much the

same as what typical fantasy sports fans are accustomed to. you pick the team of players as he joined the general manager. naked fantasy points when they perform and then you play against people and whoever scores the most fantasy points wins. >> it last a day and it's over. >> you can play again if you want or you don't have to. i think it brings the best of what traditional fantasy sports provided and also eliminate some of the things people don't like about it everyone loves the draft and the taking of the players process. uk to do that everyday or as often as you want. people love the scoring and playing with her friends. they get to do that. but sometimes people including me who play season-long fantasy claim about his you get an injury or your team is a very good and you're out of the. it. so the daily sports especially, it's more engaging because you don't have the baggage of carrying players that maybe were not can you thought they were te good when you're trapped in an adventure.

also for some of the daily sports is important to have the flexibility if you don't want to put literally every single day you can't play a season-long baseball or hockey. you can do when you want. >> yesterday was a big day. espn fantasy was down all day. >> yes. >> how many people use your product yesterday? >> what was most excited yesterday was we had a big push. we talked a lot over the summer months moving more to getting people like to play with her friends and social play, and that was the focus we rallied the whole company around was driving that. social play was up three x. year over year which is exciting, exceeded what we're hoping for student a ballpark number, like millions of people point the sound of? >> on anon a given sunday we hae generally millions of people across both free and paid games. it depends on title what's going on. yesterday we ran a huge free contest and we had about a

half-million people enter. spiff what was the prize. >> $100,000 total per i think the top prize i want to say was 10 or 15 k. then we ran a $3 it was over, it was almost 2 million interests and ended up going to the 1.5 million entries spewing what to the winner went? >> $1 million speak when i tell people, they say why isn't this gambling? >> there's a distinction in the love between games of skill and games of chance that anyone is played fantasy sports probably attest this, it's a game of skill. it's just the way the law distinguishes between games of skill and chance. >> if there is some chance, if it rains and a player slips and falls my team will be effected. >> if you put a golf tournament, the wind could pick up and the weather could change between

when your key opponent is often a more to when you tee off in the afternoon. there's a lot of things in any game of skill, some chance, but overall is it a game of skill or not? >> i have tried you times and the common last every time. let's talk about the company's history and you personally. four years ago to work at this to print like a marketing manager basically. four years later you're the ceo of a billion dollar company. how? how does that happen speak with i've always had a passion for sports, fantasy sports. i was a big chess was a big chess guy when i was a kid i used to play in tournaments. this was kind of the dream for me was to start something in the field i loved and technology. i work in the tech industry before i had a lot of good friends that were interested in this and interested in starting a company and that the entrepreneur spirit. i always wanted to do. i graduated school right after the bubble burst so i kind of went the traditional route and

worked in corporate america. spent i'm saying it's amazing. four years is incredible. he didn't invent daily fantasy sports but you become the biggest company in the industry. what was your initial pitch when you first raise money speak with i think was emphasizing our backgrounds. we came from the tech world. we loved again. we thought like that was going to be where we could differentiate. if you look at the general market at the time, no one was putting it all together with tech products and analytics and we felt like we could bring it to the table with our backgrounds and histories would allow us to be competitive in the space combined with the fact we just to the industry as a consumer and we hav had an intue feel for what we thought people would want. >> wasn't hard to raise money? >> very hard. it was brutal. we ended up raising a small seed round from an investor in boston and it was hard. we brought in a new board member who i think is here.

i have to give two more shadows. one is to buy why this birthday is today. she let me come to this which i appreciate. secondly, it's to jeremy of orc who were the over the last eight months have helped us come from a tech company did know a lot about legislative affairs and regulation to living sophisticated spin will get into that, don't worry. so it's hard to raise money in the beginning. >> very hard. we had around 50-60 people said no different got to my first yes and then for our series a probably another 50 said no before i got to yes. i mentioned bring on the new board member. we set it up. i knew more by vendor i was just taking a shotgun approach. i was talking to anybody. one big piece of advice to people is target. your type is the most viable

thing in the world and will really make a difference is i prequalified investors. i said is this something that would ever be of interest to you. a lot of people will not tell you up front. front. they will just take me to edit into being a waste of your time. so i prequalify people up front. i didn't think i was traveling. i want to limit my meetings. by the time i got into either great qualified pipeline. from there it was just spending time in the right places. >> you have raised a lot since then. >> yeah, hard to imagine. >> over 600 million. you had some really impressive investors. tell me if i'm wrong but major league baseball as a league, major league soccer, the nhl as a lady, carmelo anthony's firm who was recently in the patriots

all and vested. vested. >> the kraft group, jerry jones, the yankees president. >> any entrepreneur with 2121 of those people invest in the company. >> the most recent round was revolution which had, one of the founding owners owns the washington capitals and the washington wizards. what's cool for us is that people in the sports world canada. it's almost easier in a way. what's fun about having a sports comment but it's also just practically those of the people who understand what the product is and what it means. also the people that can help us can help us get introduced to the right relationships and help us understand how to continue to make the product better. >> what is happening major league baseball do, how does it help you got? >> it brings credibility to our brand. having an endorsement so to speak from major league baseball and a belief in our brand and our company is huge. also does a lot we've done on

the integration sector we have a cool feature you can seamlessly integrate. if a player comes up to bat, see what announced the xyz put this up to bat. you tap a button and it takes you right over to major league baseball. if you're subscribed you watch the player at bat and then you can seamlessly linked right back to draftkings and continue following your scores. >> when you got that investment, that was the first major league to invest what you dislike, wow? >> i knew at that point it was going to happen faster than people thought. off that would have to get bigger before we would really be interested in and they would be like that something small, cool to follow but we'll see how it goes to the fact major league baseball but interest is in many other sports leagues followed suit, it showed me they were ready for this and into this is something that could huge interest mission for the product and the content. >> what benefit do you bring to them?

>> there's a lot of data to show that when people plan on draftkings and play fantasy sports in general they increase the consumption of content. so and content. so in the neighborhood of 80% of her customers, consume or sports content since the start point on draftkings. almost has a distorted followed a new sport that they didn't follow before. since this are going to draftkings. those are powerful effects the drive growth for industry. what i love about fantasy sports and draftkings it's fiscal entity where we are disrupting but we're also lifting these other industries. it's different when you're at just try to take something from someone and when you're helping them boosting of industries and allows you to great unique partnerships and alliances that otherwise you couldn't create. >> i want to get into the lead is the stuff a bit because so far seems like it's been smooth sailing, like start a company to raise half a billion dollars profit but it wasn't really like that. so this is events like i've come

up with, in the course of a month or two the first thing how this all started as one of the employees 1,350,000 on a competitors site. site. like an extent to the department of justice opened an investigation into whether draftkings was gambling. and then the nevada gaming and control board said it was gambling and then three weeks later the new attorney general issued you a cease-and-desist. or you just like holy shit, this is over? >> i think definitely it was a tough time and it was a lot coming at once. we were prepared for it mentally. we were a company that -- i think so. we were certainly required to get a crash course in us and how to navigate those things. of course, i think there are things we learned the we might have done differently but mentally we were prepared. i remember, you talked about all the before stuff a of a member of the earliest days when we couldn't raise capital and we're running out of money at the like it would be the end.

then i remember this amazing run racing with every major sports league in every team owner from everyone wanted to invest in draftkings. this was before. .. i remember talking to the company around like september of last year before what you described happened and i said it feels great right now and we should celebrate and enjoy it, but building a big company is

about ups and downs and you can't get too high, you can't get too low. it won't always be this way, so let's remember that and when we have a low moment let's deal with-- remember what this feels like and a month and a half later everything you described happened and i remember thinking back to the early days when it was so hard to raise funds thinking this will be challenging and i think we have the right people here in the right mental makeup to get through it, but i'm geared up and steve is geared up. let's go and address the issues out there and continue to build what we are building and don't ever take our eye off the ball. the mission was always central to everything and in some ways it helped rally the company to feel like it's as against the world and that really helps a lot in terms of polling never went together and we have below average attrition over the last 12 months. metrics are remarkable over this time and i think it reality--

rallied everyone together. >> you had help. i mean, you hired lobbyists and probably world-class very expensive lawyers. i don't want to see your legal bill? guest: for anyone in a disruptive industry that might be regulated, they did a fantastic job and we had eight unprecedented run in state legislature over the last few months passing bills in 88 states bringing the total up to 10. it was amazing to see the response from the legislative community and listening to their constituents sending e-mails. innumerable-- new york alone, there were over a hundred thousand calls, e-mails and that alone is one state. if you look across the country it was close to a million plus that was sent out and i think that really lets legislators know. i remember in new york a legislator walked up to meet and they were

considering tough issues , dealing with a heroin epidemic another tough things and he said to me i have never gotten in my entire 25 years in the legislature this much outreach and support as i did for this and that meant a ton to me that people cared enough that they wanted it is enough and that's the difference really between why we have been successful. nothing to do other than a great team helping to navigate that stuff end of the support of our customers and everyone who wants as successful. >> during the time when things are really bad i think like a lot of the media was having a field day and there were rumors of you merging. or their talks? guest: there have always been talks and i have gone on record many times over the last two years saying i could it's an interesting discussion and mergers are always tough. it has to be something you think is better than just an idea and can be

executed, so there is always talk. where that actually leads and when we will see, but we have been talking on and off for the last year and a half or so. host: is there a reason it didn't happen when you were talking last? guest: i think the devil is in the details. its, located to put two companies together let alone in an industry that is rapidly changing and i think that when the time is right there is potential for something like that, but it has to be right and i think everyone sort of nose right now is a really important time of year for us. it's been important for us to focus on the nfl season and making sure we are get up for that and we will see if the talks go anywhere. host: what with the benefits between merger? guest: immediately, we would have a company that has more liquidity in our marketplace, which is the most support value to the company. i also think that there is a lot of synergy on

the legislative side, legal side and everything you just talked about that we were double pane for for the most part and there's a lot of synergies there. host: in terms of like-- was there like a rush-- is there a rush to stake your claim and the sports world between you and them? guest: you know, i think maybe there is some of that, but i also think that for us it's more a focus on creating a new industry and try to grow that industry and tried to expand and it's important to have relationships with the league. they control the content and if you don't have a good relationship with them than it limits the things we can do. for example, we just launched an app that i know we will show later in the facebook live feed and a lot of people asked me how do you get video it highlights in there and we don't have that today, but eventually if we want to get those sorts of things and it's

important we have close relationships with the people who on the content. host: let's talk about dk live, the app you are watching today, basically. a lot of people are saying it's a stab at espn and you're trying to become a media company. are you? guest: i don't think anyone does to stab espn. host: establishes the wrong word. guest: for us, we think of things less about who the competition might be and more about what is our customer want what do we need to provide an was the natural expansion for us and we look at it and said there's a lot of scoring apps out there in espn is one, but none that really caters specifically to the sports fan the way this-- fantasy sports fan the way the red zone channel caters to that. the red zone cannot-- channel is part of the nfl network that shows highlighting key place in it is clearly designed for a fantasy audience and we said there are a lot of scoring apps and they are useful if anyone follows scores, but no

one has zeroed in to see how we create experience with the fantasy fans that's every bit as good as the red zone channel and that was the goal and i think no one has really done that, not espn or anyone. it's not about trying to compete with them so much as trying to provide something for our customers and we think we are well-suited to provide this for our over at-- overall brand is. host: if you could create eight with custom content for people that are not so much into fantasy, but a huge sports fan is not a plus? guest: eventually, yes, but right now it's on the focus. it's really for fantasy fans now and the good news is that we have about 7 million customers and about 57 million people in north america alone that play fantasy sports, so it's a huge market for us to address an much bigger than our current customer base. our current customers are natural to go to, but press it's more about reaching the audience of 57 million playing fantasy and then we will see past that if

it makes sense to expand into a broader sports, but right now the focus without app is on the fantasy audience and building something that if you are a fantasy fans there is no there app out there built the way this is. host: while, thank you so much for sitting down with us and congratulations on the growth in getting through the legislative issues and we are excited to see where you go next. guest: thank you. thanks so much. [applause]. >> on our companion network c-span today, the white house briefing with press secretary josh earnest scheduled to start a 12:30 p.m. eastern and what it does live coverage on c-span. at 2:00 p.m. on c-span, conversation from the senate strategic and international studies on the future of us alliances. we will hear from several former pentagon and state department officials. a look at the lobby of

trump tower where president-elect to donald trump has returned after his thanksgiving trip to palm beach florida. he's me with a number of people in the 58 story building today including pennsylvania congressman lou barletta, oklahoma attorney general scott pruitt, milk walkie county sheriff david, john allison former ceo of the bank bbt and former cia director david pretorius. our coverage of the trump tower lobby continues online. you can watch it live at c-span.org. congress returns from his thanksgiving recess this week. of the senate is back in session at 3:00 p.m. eastern and negotiations continue behind closed doors on government spending past december 9, when the current government funding expires. tomorrow the senate vote on legislation dealing with medical care in rural areas. the houses back tomorrow on wednesday democrat

select new leaders with minority leader nancy pelosi being challenged. later in the week the house considers legislation on fda approval of drugs and money for the fda and national institutes of health. former secretary of state madeleine albright and former national security advisor stephen hadley led a discussion last week at the brookings institution about the politics and security of the middle east. of this is an hour and a half. >> good afternoon and welcome on behalf of the brookings institute foreign-policy program and the atlantic council. i'm suzanne maloney deputy director.

i would like to extend a special welcome to my counterparts from the atlantic council who has joined us including brett and deputy director and ambassador richard lebaron and i would also like to extend a special welcome to our distinguished guest including his excellency ambassador. we are here today to launch a report commissioned by the atlantic council middle east strategy task force and written by my colleague who over the past year has convened a task force working group on politics, governance and estate society relations. this is one of five such groups organized by the middle east strategy task force launched in february, 2015. brookings foreman-- foreign-policy has been proud to contribute to the project, not only the at tomorrow's report, but to the security and public order working group that was authored last year by kenneth pollack. the report that you have

here before you is informed by discussions by the working group and reflection on analysis and helps to explain the collapse of the middle east state system, take stock of where we are now and offers recommendations for tackling the crisis of governance in the middle east in the post area of spring environment. tomorrow-- today's breakdown of the regional order within a broader reality, that of years of deteriorating state society relations. tomorrow argues that for the regions develop society that are resilient to terrorism and institutions affective and response for the long-term. there must be a concerted effort to repair trust between governments and their citizens. dialogue is needed as is patience and efforts on the part of the regional and international actors including the us. of these are words of wisdom that i think echo broadly in washington today. as the title of this event suggests realist

security will be determined by the quality of governance. i encourage you all to read the report and to share your thoughts on the report in today's discussion via twitter using the #manna governance. the report we are launching today was cochaired by two today's panelists former secretary of state madeleine albright and former national security advisor stephen hadley. to individuals who need no introduction. to individuals who know more than a little about real security. we are delighted to have them and our third panelist of the middle east program and democracy and rule of law program at the carnegie endowment to join us today to speak about the report. secretary albright will present introductory remarks and then we will turn it over to the panel and finally invite the audience to contribute and ask questions and engage in the discussion. thank you and welcome, secretary albright. [applause].

>> thank you very very much. it's a pleasure to be here and to have the opportunity to share this with brookings and thank you very much for hosting this. i think as you pointed out one of the things that distinguishes the atlantic council middle east strategy task force is the way in which we were able to partner with other institutions and scholars in washington and europe and in the region and it truly is a collaborative effort and i think that as we talk about it today i think i will become even clearer, but it truly was terrific in terms of just working together. enjoyed it very much. i think, also, as we engaged a multitude of institutions in the process we also tackled an awful lot of issues in the working groups that we established and

they were working group to produce papers and so today we are releasing the fifth and final one on governance and if you think this complete our work i went to announce that after we take a break for turkey eating and cooking in my case, steve hadley and i will be publishing our final cochairs report next wednesday and that report will attempt to knit together the topics tackled by each of the working groups into a new long-term approach for the region based largely on ideas from the region itself. our sense really has been that we have all spent a lot of time looking at the region, but a lot of it has been kind of fire drills and band-aids and that the basis of what we are doing is really taking a deeper and longer look. while we have time next week to address our broader strategy, today's discussion really involves one of its most important components and we will

be talking specifically about how in order to find our way out of the crisis in the middle east the states of the region will need to address failures of governance and of course, the problems brought about by the lack of accountable responsive and effective institutions in the middle east as is so well known to people in this audience. i think the role they played in the region order has in fact been downplayed and so what you will hear is that governance is in fact a central cause of the turmoil in the middle east, something with which i hardly great because as she puts it the abandoning of the region did not come from outside intervention or from the top. it really did come from below, from millions of frustrated people whose expectations far exceeded opportunities that were available to them. as we have seen over the past five years it's

easier to identify the cause of turmoil than to find a solution and not for lack of trying, but i really do think that we have to keep that in mind and the first challenge in any journey is to have a destination in mind, so for the people of the region i'm convinced that this destination is governance built on a foundation broad and stable enough to last and that by death-- definition governments that have the trust of their citizens respect their rights they respond to their needs and as suzanne mentioned cammy's paper offers a framework of how that region can begin building towards such a model of sustainable governments and argues this work has to begin now, no matter what else is going on. there are many in the region and the us that do have a different view and they argue that these questions of political development can only be addressed

after nations achieve security and prosperity. i believe that political development and economic development goes together and i know those in various forms a graduate school would argue which came first in which came second in the reason i say that is because people want to work and eat in the governments have to deliver and they also want to live in peace. one of tammy's main arguments is the region security advice our security depends on inclusive transparent and responsive and accountable governments. this raises tough questions about us policy including whether we still have the ability and the responsible to exert kind of leverage on these issues. which-- with transition underway in washington, the answers are more in certain memory have been in the past and it's worth pointing out that for more than a century

stability in the middle east has been understood to be the responsibility of an external power whether it was the british empire or the us of a met-- agreed to the present of the united states: until stable governments are set up and supported locally the middle east will never come down. that pronouncement came from the white house, not barack obama, but dwight eisenhower in 1956. over the decades we have learned not just to expect miracles even though that is where they are supposed to come from, in the middle east, we have also learned not to give up and while the us remains in my mind the indispensable nation to the security of the region i am always quick to point out that there is nothing in the word indispensable that means alone, so after a period of time in which the us has been accused of doing too much and then to little we need an honest discussion about our role and relationships and our sensibilities and that's

why i'm so pleased to be a part of this middle east strategy pass force as my-- and my good friend stephen hadley. it's been a learning experience for both of us and it's been an opportunity to work with truly wonderful people and it's now my pleasure to invite tammy and the rest of my panel to come up on the stage. [applause].

>> thank you for being here and let me begin by thanking my two fantastic cochairs, stephen hadley and amr hamzawy. when we started this project off steve and madeleine told each of us working group chairs not to be afraid to ask big questions and challenge our assumptions. i think recognizing that in the middle east this is a moment of truly historic transition and i think the question both for the region and for those of us outside who care about the

region and have a stake in the region, that questioning of assumption is even more important today than it was when we started the project, so i really want to thank you both for a fantastic process and i want to thank my fellow working group members in the region and all over the us and europe. we were able to meet and i learned a great deal from all of them and they are listed in the report, so i hope you will take a look and share my appreciation. it may seem as though today's topic is on odd choice for focus, maybe not a great time to talk about governance in the middle east. after all, we are dealing with a region in violent turmoil with vicious civil war. us and its allies are now invested in new military conflict in iraq and syria fighting isis and indeed, i just came back from an international security forum where the only

discussion of the middle east there was framed around terrorism, isis, civil war and refugees. these are the urgent problems seen by many governments around the world as a threat to international security, deservedly so and driving attention to the region. but, it's precisely because of those urgent challenges that i think it's valuable to focus in this report on governance in the region because in my mind isis and the civil war are symptoms of something bigger. they are symptoms of a broader breakdown in the region, not the disease and what we have seen beginning in late 2010 was breakdown of individual states and of a state assistant in the middle east that has lasted since eisenhower administration. a state system that had advantage to american interest in those of our regional partners and those that the us sought

to defend and it is that breakdown of the middle east that has led to the civil war and libya and yemen high-end how this regional order. not just the symptoms of the breakdown, but the challenge of storing a lasting ability to the region and that is the premise and driving question of the report we are really seen today. so, let me focus on three things about that breakdown that i think is important first to understand and what they suggest about this. of the first to understand is as madeleine noted the regional order broke down because of things that happen inside states, inside society because of the pressures that have built up over many years in the first part of that story is the story i told in the

book that i publish in 2008, the story of how the bureaucratic authoritarian model in the arab world began to weaken, how the ideologies, that these states relied on to survive were becoming less and less effective in a globalized world. they rested on a certain kind of social contract, a corporatist contract or patronage is contract and over time the systems became more and more inefficient on their own term and then they were challenged both from within and without permit demographic bulge of young people on the cusp of adulthood, from the effects of the globalized economy and from a radically new information environments prompted first by satellite television and then by the world wide web.

the effect on citizens in these countries was that the expectations created under the old social contract could not be fulfilled in these changed conditions to give you a couple of indicators, the egyptian government had promised that university graduates would be able to get a civil service job. by the early two thousands though wait time for those university graduates to get that civil service job was on average eight years, so that's eight years of pushing a food cart or driving a taxi or twiddling your thumbs waiting for your life to begin and in the meantime you can't afford an apartment or to get married you can't afford to become a full adult participant in society. of the second thing to understand of the why and how of the breakdown

in the middle east is that no one in the run-up to the arab uprising was aware of these challenges and that's a very important thing, i think, to understand is how governments dealt with these challenges and ended up in many cases exacerbating the problems rather than resolving them and we had a lot of talk and many efforts in the 1990s and two thousands to promote reform of government in reform of the economy in the middle east, but when he-- when many arab governments sought to adjust that contract they ended up instead of developing a more inclusive contract, negotiating with political and economic elites whether it was elise within their own country or external institutions like the world bank. they reduced government hiring without really liberating the private sector to create growth

and brought new business cronies into their party instead of opening up politics more broadly and the result of these kinds of adjustments exasperated and further empowered groups to the expense of others and really increased the grievances rather than resolving them. so, dissent increased and governments tools to manage politics were weaker and the protests broke out. this brings me to the third thing we have to understand about how this happened, the consequences of how certain states broke down. when the protests came many governments responded poorly in ways that exasperated division, collapsed state institutions and some governments responded with violence in ways that generated demand for more violence and so it's no accident

that syria and libya are the places in the region that are most violence. these are the places where leaders rule in the most personalized manner, where destruction of civil society and community institutions where the making of those things subservient to the state with the most-- that was the most complete and having failed to act in a manner that could have presented uprisings, when uprisings came they sought to repress their people and when basic governance in order broke down those with guns to impose their will gain power and when the state used violence against its citizens it created a market for others with guns to defend those citizens against the state and that allowed emergence of identity -based sectarian marsha groups.

by the time these governments had broken down the social contract had broken down over a long time and social trust, basic trust between people and communities had eroded and there was very little left to manage peaceful politics and this is a challenge we confront today beyond that geopolitical competition, beyond saudi arabia and beyond the threat of extremist terrorism or weapons of mass destruction this, to me, is the biggest challenge in rebuilding a stable order in the region, the breakdown of trust within society. it's a consequence both in the way they will govern in the way they broke down. of the paper goes into detail on these subjects and offers some priorities and approaches on a way forward to tackle that problem. let me give you a few highlights. first, the future of the region will be determined not by the mere existence of

governance, although that's what many are focused on, but also on a quality of the government because if we don't have more accountable responses transparent and effective government it will not be sustainable. it will face more challenge and will break down again. conflicts suppressed will be reemerged so we have to think about the quality of government. it's probably no surprise to any of you that i think liberal democracy is far more likely than any other regime to generate accountable transparent government, but that passed between them region today and liberal democracy is neither swift nor linear and the investor can testify to that although i think he and the justice made impressive