Instagram Goes Dark and Cryptocurrency Is Triumphant

dark across Russia. The Russian government has now cut off access to Instagram, Facebook, and Twitter. Will examine how the digital Iron curtain is impacting everyday Russians and China dealing with a crisis of its own. Hong Kong facing the worst COVID outbreak since the pandemic began, China the worst since Wuhan. Why the technology behind the vaccine most widely

used in China maybe failing. Russia's promised ban on Instagram has now kicked into full effect, with a social media platform inaccessible for the vast majority of the country's population. I want to bring in Bloomberg's Kurt Wagner now for more on this. Kurt, you know, what does this exactly mean for everyday Russians given that Facebook and Twitter have

already been cut off. Yeah, I mean, I feel like we're moving towards a relatively dangerous spot here right where suddenly Facebook, Instagram, Twitter, these are services that were really connected tissues between the Russian people and obviously the rest of the world in a crisis like this. It's it's where a lot of people could get information and news that wasn't directly kind of approved by Russian state back media.

And so you know, you look at what's happening now and you wonder, are we ever going to get back to this? Right? Is this maybe the beginning of Russia is kind of looking a little bit more like China, um with a with a closed version of the Internet. And I don't know what happens after this, but obviously

it's a it's a pretty significant deal. Um, Russia is a lot smaller than China from a from a total population and user perspective, but it's a really big deal just symbolically what this means and what this might look like moving forward. Absolutely, China blocking Facebook and Twitter are around the Beijing Olympics in two thousand and eight, and never unblocking, and so you wonder if that's what's going

to happen here. I'm curious in Russia, how widespread are the use of VPNs and other means to get around the firewall? Is that common? Well, it's the kind of thing that companies are trying to make accessible, right. I think we saw last week that Twitter, for example, created a version of its website for the tour browser, UM so that if anyone wanted to kind of get around this this band, they might be able to. They might be able to kind of use the quote unquote dark

web to access these services. But Emily, that's not the kind of thing that's necessarily accessible to the vast majority of people, right. That's for people who are pretty tech savvy. That's for people who are really going above and beyond to try and figure out how to still keep these services in their life. The vast majority of people, you know, unless they can simply get it on their phone, it

means they're not going to have access to it. And so I think that this is something that to your point, like, are we seeing the beginning of of of a major change here that might not be rolled back? And I think the answer might be yes. We're also saying some major changes from the platforms themselves. Facebook, for example, relaxing the rules to allow Ukrainians to talk about violence in the context of Russia's war on Ukraine. And that's really

what I seem to trigger the Russian government. Instagram was a place a lot of people had turned to to protest the war in Russia. Where will these Russian citizens go to next? What social media let's are available to them? Well, the one service that continually keeps getting brought up is telegram. Now, I don't know if that's the kind of place where people will be able to organize in the same way or to promote things publicly in the same way. Um, you know, it is a is a private messaging app

obviously similar to what's app Telegram. There are there are groups, there are ways to broadcast that way, but it just it has a different vibe Emily, as you know. And so I think, you know, you talked about what the

platforms are doing. I mean the Instagram thing in particular, um was announced by Russian regulators after Facebook came out and said, hey, Ukrainians are able to call for violence against Russian soldiers, and they said, you know this is this is a company basically allowing you know, people to attack our citizens. That's what the Russian regulators are saying.

And and again, um, I think that it just has kind of snowballed here the relationship between Meta and Russia and the Russian leaders, and I just don't really know where we go from here. What does this mean for Meta and Twitter? You know, two companies that obviously their growth depends on new users and new ad revenue. So, uh, Meta said something interesting at the end of last week.

Not a lot of people saw it because it was at one of those private banking conferences, but their CFO said that the ad revenue that they get either from Russian businesses or that's targeted at Russian users is one point five percent of their total advertising revenues. So while obviously that's not nothing, it's not insignificant, it's also not

a massive business for for Meta. And I bring that up because when you look into the future and you say, well, is this the kind of thing where Meta is going to bend over backwards to try and get back into Russia, I don't know if they're going to be willing to do that for such a small portion of their business right, they don't have the financial incentives necessarily to make concessions in the way that they might know other parts of the world, and so um that to me is one

of the many reasons why I find this this kind of you know, digital iron curtain you were talking about interesting, because I don't know if there's enough people in Russia for these companies to feel like they can compromise on some of the other parts of their policy that they've so far stood stood firm uh in a in support of Meantime, Mark Zuckerberg making a surprise appearance at south

By Southwest later this week, my guests. Obviously all of these topics are going to be on the agenda, but of course the metaverse and his vision for the future. What do you make of Zuckerberg, who really hasn't been doing a lot of press getting out front. Yeah, I think I heard this was his first time at south Buy since something like two thousand ten or or something like that. Has certainly been a very long time since he had appeared at this particular conference, and and really

a conference like this. Now he's doing it with sort of a familiar interviewer, uh, not someone who's you know, necessarily in the news industry, who's gonna sit there and grill him about all of the stuff that we were just talking about. So I do wonder how substantive the interview will be in terms of news about policy and

world happenings. But for him, it's a way to talk about the metaverse, right, to get out in front of a crowd that has always been very interested in the new upcoming technology, and to pitch kind of his vision for for what he once met at to build. So I don't know if we're going to be fulfilled as as you know a hard eating news journalists from this interview, but I think for him it's a chance to again reached people who care about the future of tech with

his vision for the future of tech. All right, Well, hopefully we'll get some probing questions there and maybe some reaction to what my next guest has to say. Kurt Wagner, who covers Meta and Twitter for us, thank you sticking with Meta and its biggest bet on the future, the metaverse.

I spoke with former Nintendo America President and CEO Reggie fis m A at the south By Southwest Festival in Austin over the weekend, and I asked him what he thought about Mike's Mark Zuckerberg's vision for the evolution of virtual reality. Take a listen to what he had to say. I'm not a buyer of that idea. I don't think that their current definition is going to be successful. Why

why do I say that? I say that because, first, you know, and I don't know if anyone from Facebook is here, but you you have to admit that Facebook itself is not an innovative company. Wow, they're not. I mean you you look at I mean you you look you. They have either acquired really interesting things like oculus, like Instagram, or they've been a fast follower of other people's ideas.

That's Facebook. So I inherently they are not an innovative company other than the very original social platform that was created many years ago. So what do you think Mark Huckerberg is getting wrong here? Well, I I believe that in order to be innovative, you really need to be thinking about the consumer or first, and I don't think they do. I think you need to be looking at first. Uh. Well, I think they think about advertising revenue first, because that's

of their revenue. I mean, that's that's the fact, um, But you have to think about your consumer. You have to think about your customer. You need to think about bringing new and different ideas into the marketplace. You need to reward that within your culture. You know, these are the things that drive innovation. Uh. You need to have

a culture of innovation. Anything that you do within an innovative company, whether you're in accounting, whether you're in UH product development, whether you're in marketing, you need to be challenging yourself to be doing things differently versus doing the same old, same old, or copying someone else's idea. So you know, that's why I look at the vision that's

been to date articulated and I'm not a believer. The other thing I would say about Face Look is they don't have a great history with physical products, all right, Portal, you know, not a big idea. UMIs they bought Oculus and you know they've been working on it for a number of years. Last number I saw was that in total and not just Oculus, in total, about twenty million VR devices have been sold. Million. You know, when I was running Nintendo, that was a good year one year

in terms of hardware. Hoping we're gonna hear Mark Zuckerberg respond to that conversation when he speaks at south By Southwest Now. My convo with Reggie Feza May later turned to game Stop Fisa. May joined the game Stop board in April, just months before the state of Its roller coaster started its roller coaster meme Stop Gride that saw the stock go from just a few dollars a share to over five hundred Peasay left the board after less than a years, saying he was unhappy with the strategy

of Chairman of the board Ryan Cohen. Take a listen. I asked to be part of the team to develop a strategy. I knew the business. I knew it as a consumer, I knew it as a vendor. I had pretty strong opinions on how the business needed to be

uh pivoted. But I was rebuffed. Right. The perspective was, Reggie, we want to keep the team small, um, and so it's going to be you know, myself and a few of the people that I brought on board, who you know, by the way, don't know this business, uh don't understand the players, etcetera, etcetera. I took that as code as you know, thank you, but we really don't want any other ideas and and for me that was that was

not acceptable. So what do you think of the strategy? Well, there there isn't There has not been an articulated strategy. I mean, if you could go on the GameStop website try and find a strategy, there is no artculated strategy. Leadership says, well, we don't want to articulate our strategy because we don't want anyone to steal our strategy. You know. So I come from the business perspective that you need to articulate your strategy to all of your key constituents.

You need to communicate to your business partners, your vendors, your employees, your shareholders. You need to communicate your strategy. M Former Nintendo American President and CEO, Reggie Fisa May there at south By Southwest in Austin. Coming up Disney SEO about Japeck breaking his silence on the controversial Florida

school bill. We'll discuss how it's impacting employees across Disney, Pixar and more and what it means for Chapec ahead Mrs Bloomberg, just two years into his role as Disney CEO, Bob Kpeck under scrutiny following his response to a controversial Florida school bill. For more, I want to bring in Bloombergs, Chris Paul Mary who covers Disney for so, Chris at the stage, what is this Florida school bill and why is it so uh controversial? What Bob Japeck didn't and

now does have to say about it? Well. The bill, which was passed by both houses in Florida, would prohibit schools from discussing sexual orientation or gender identity in kindergarten through third grade. This was designed for parents to be able to control the discussion of these issues with their younger kids. A lot of people in the gay community

obviously don't like it. It's been called don't say gay. Uh. They feel like like this this is really stifling uh kids who may be just trying to discover where where they're going in life. And so um Spick is trying to wrote more broadly, sort of keep Disney out of these political topics. He tried to sort of like work behind the scenes on this issue, would not take a public stance, uh, and set that what he wanted to

do going forward. The rank and file of Disney revolted essentially openly on social media, employees saying they disagree with this policy. A letter from Pixar employees animators union set out statements uh. And so Chapig reversed position a couple of days later on Wednesday last week, saying, you know, we we are openly opposed to this bill. Uh and then a couple of days later even to look it further and publicly apologize to all those employees. A lot

of employees were not happy. And you also had leadership within Disney, for example at Pixar releasing their own statements. You've got Bob Iger, the former CEO of Disney, also speaking out about this. What do you make of the pushback from other executives, Well, this is this is part of a sort of a broader issue that Check has found where he doesn't have the same support from the creative community at the company that his predecessor Bob Iger did, uh and um. And so you know, he's made some

decisions that are very unpopular. For example, he's relocating a lot of employees to Florida's uh you know that work in team park design in that from California. They're not happy about being told they have to move and uh, and so we had a weird situations. Now we're Florida. Governor de Santis just slam Disney last week saying, you know, they don't care about human rights in China, and then Governor Gavin Newsom Ary California is saying, oh, why are

you moving your people to California? So as has shade they predicted away by taking these political stands, he's opening the company up to firing fired people attacking him from both sides. This, of course, as Disney Shares themselves have been struggling. Chris Paul Mary, who covers Disney for US, will continue to follow here. Meantime, struggling carmaker electric car maker Rivian has hired a new CEO from Magna, one

of the world's biggest automotive suppliers. Frank Klin will take the roll on June one, Rivan announced Monday, confirming in earlier Bloomberg scoop kind led Magna's carmaking unit before that at Mercedes parent company at Dymler years. Rivian stock has been crushed in recent days after the company's forecast building just twenty five thousand e v s this year, about half what it's factory in Illinois is capable of due

to a shortage of parts and trouble with production. Rivian's former CEO, Rod Corpus resigned and the last year welcome back to Bloomberg Technology on Emily Chang in San Francisco. The Chinese city of shen Jen, home to seventeen and a half million people, is locked down as COVID cases have doubled to roughly thirty four hundred. This as China faces its biggest COVID outbreaks since Wuhan in early fox con Apple's biggest suppliers now halting operations in shen Jen,

and this could have massive global implications. Are Mark Room and joining us now with more Mark give us a status update on what's happening at fox kN and what the impacts of this more broadly will be. So as of now, the office the main headquarters for fox kN and shen Jen, as well as their iPhone factory UH within shen Jen, those are both closed right now now. Fox Kon isn't saying when they're going to be reopening.

It isn't definite for now, but the order for closures for factories in other places is in effect in that area until March twenty, so it's possible it'll open around then or after them. But we know the fluidity of COVID and how these things can go on for longer, and that's the real fear here right As of now, a week of one iPhone factory being shut down is

not going to have much of an impact. This is a slow season for Apple, right They did just release new products, but they really need the factories running at full steam for the fall and late in the summer for the iPhone fourteen, new iPads in the fall augmented reality headsets early next year, that's when it would be

danger territory. But right now I think they're going to be okay, given that their main iPhone plants called iPhone City, is in another region of China, you know, many many miles away from here, But we don't know what is going to do and expand it exactly. The pandemic is China is hitting a new peak in COVID cases. This is not just happening in shen Jen. What is Apple

doing or what can Apple do to mitigate this? Given that there are already global supply chain issues that have now been reverberating for two years Yeah, it's very much whack bowld. Right. Fox Con has many factories across China where they produced the iPhone and other Apple products, right, So, as you know, limitations go up in some factories, right, they'll have to reallocate that to other factories, and as other factories reopened and they'll have to move production back.

So I'm sure that's what they're you know, on the scene in China figuring out right now, right, I think they want to see how bad this becomes. Obviously, we're in a very different place today than we were basically exactly two years ago now with vaccines and masking and people used to these protocols. So my hope, right, not only for you know, Apple and China, but for globally, that this gets resolved, you know, pretty quickly. In fox Con is able to work through it at a faster

pace than they were able to two years ago. If you remember, however, even at the height of the COVID pandemic, Apple really in fox Con, they were able to figure

it out. In the middle of everything, Apple was still able to ship the iPhone twelve in November of right, that was a two month delay for their flagship product in the middle of COVID pre vaccines right at the at the height of things, right, So if they were able to figure out then with only two month delays, I'm quite optimistic they'll be able to figure it out with you know, more vaccines and masking regulations and such at a slower period for the company. All Right, Mark

German will continue to watch a reporting on this. Thank you. I want to stay on the topic of COVID and the resurgence we're seeing across China and in Hong Kong and bringing Ali Erman. She's a genomics analyst with our invest You know, Ali, we are seeing the spike in Hong Kong and China as the World Health Organized Station has been considering declaring an end to the pandemic. Does this signal to you that it could get worse or maybe a lot worse before it gets better. Thanks Emily

for having me. It's nice to see you again, you know. I I think obviously we've had these spikes before. We've seen you know, multiple mutations arising from COVID nineteen, and this continues to be an ongoing issue that we're monitoring here at ARK. One of the things that we're thinking about is disruptive technologies that are in our portfolios that

could potentially help the crisis. So you know, one such technology is Crisper, which is essentially working to look at different cases and potentially being a diagnostic tool, but it's also used as a therapeutic tool as well. Now, China has had a zero COVID policy, shutting down versus vaccinating on a broad scale. They've been using the Cino vaccine when they do vaccinate, but that's a vaccine that doesn't use m R and A technology and appears to be

not as effective. Are we seeing that vaccine and that technology breaking down. It's possible that are We've been very focused on the m R and E technology and so we know that we've seen pretty great um results from it from the US UM and also from Israel where we've gotten this substantial amount of data. And so you know, this m R and A technol oology is a novel technology. It hasn't been used prior to the COVID nineteen pandemic.

Um you know, we're following very closely what the companies are doing and how they're utilizing that technology, including you know Maderna, but also our tourist Therapeutics UM and several other companies that really are focusing. You know, of course we can talk about Visor and the partnerships that they've started there, but also just the the amount of sheer data that we're going to get from m R and A and be able to compare that to the adenovirus

vaccines as well. How is the pace of innovation in m R and A and biotechnology accelerated during the pandemic given the role we've seen it play in vaccinations along with Crisper as you mentioned. Yeah, so the piece of innovations, Emily is really interesting because we're seeing that. You know, I think Crisper is is an excellent example as you mentioned, right, So we're seeing these amazing examples. So prior to Crisper, you know, zinc finger nucleus is another gene editing form.

Also talents we're going to exist and essentially those took a really long time to move from discovery to the first human dose. So that happened for same fingers in roughly eight years, whereas Cristopher took less than half that time. They were at three years. They also can target many more unknown diseases, and so what we're seeing is there's a proliferation in terms of the piece of innovation. An

example for that could be Crisper Therapeutics. They're working on creating potentially functional cures for diseases like sickle cell and beta thallasmia. They've treated about seventy patients along with their partner Vertex, both companies within our genomic strategy, and we're seeing the data looks like it could potentially really be a functional cure. And so the piece of innovation, but

also what's happening within innovation is really exciting right now. Meantime, there's a controversy evolving in the gene editing world, which I know that you are following closely, where Nobel Prize winner Jennifer Downa, who's made impoor and discoveries in m R and A technology and been recognized for her work on crisper um, has lost a patent dispute surrounding the discovery of her and her team around a specific part of Crisper technology. What does this mean and how significant

is this? That's right, Emily. You know, first of all, I think it's great we're talking about this because it demonstrates a commitment from the scientists across the board. UM. It's also quite a complicated topic, so I think it's great to delve in a little bit here. So first of all, what is Crisper. Maybe we can back up a little bit on that. So Christopher is a precise tool that is used for gene editing. UM. We believe

in it, We've been investing in it for years. We think it's an incredibly innovative tool, UM, and it's revolutionizing the way we think about treatments but also potential cures. Just a little bit of background here. It's essentially from a family of DNA sequences and it was found to affect the genomes of bacteria, and it's now potentially and in trials, be used for correcting genes in humans. So about the patent dispute, as you mentioned, so really quick

background here. You you know, you covered some of this really helpful. In two thousand and twelve, Jennifer Down and Emmanuel Scharpontier they wrote a paper and it detailed the Crispers system, but they didn't show that it worked in eukaryotic cells. And essentially, Emily, a U karyotic cell is a cell that has a nucleus, so that could be a plant and it's also certainly a human. Fang Zang

at Harvard Road was the first one to do this. Um. So there's essentially two sides, Jennifer down and Emmanuel Charpontier on one side that houses that i P from CBC, which is the University of Vienna. Also you see Berkeley for both of them. Other side Fang Sang Harvard and the Broad. So in as you mentioned, Emmanuel Charpontier and Jennifer Downa actually won the Nobel Prize in Chemistry for

their discovery of crisper cast nine. But as you mentioned, this past week we saw that the U s PTO or U s PAT and Trademark Office did not um follow suit. So, um, what does this mean Getting to the point here, Um, this doesn't stop any ongoing trials um so, all clinical trials will continue. It doesn't affect

i P outside of the US. The most likely outcome that ARC ces is through some form of cross licensing among the companies and in terms of sort of the specifics for companies, so Editas, Verve and Beam get their i P through Editas or the Broad Harvard and then cris Burn and Talia through CBC. So through Emmanuel Sharponti and Jennifer Down. Now, interesting controversy we're going to continue to follow. Jennifer Down has been a guest on this

show several times. Ali Erman, Genomics analyst with ARC invest thank you for sharing that background with us. Coming up, Ripple calls it a victory. We're gonna have more on Ripple's long legal battle with the SEC over alleged illegal sales of its x r P token, what that means for the broader crypto industry. Next, this is Bloomberg Time now for our crypto report of the day, and I

want to focus on Ripple. After the SEC alleged that the currency Exchange platform had engaged in the unlawful offer and sales of securities it's XRP token, Ripple counter saying they had not had reasonable fair notice from the SEC about whether it's sales of x RP were indeed illegal, a defense at the court upheld last week. I want to dig into this with our crypto Contributortionale Bosticctionale talk to us about how the markets reacted to this news.

Obviously a volatile market and a volatile market for bitcoin as well. Yeah, even though we see Ripple down a little bit today. It did really rise after this news and over the seven day period. Actually, I leave you take a look. You do see Ripple rising to the point that it's rising almost twice as much as you see in Bitcoin over that period and almost three times as you're seeing in the Theoryum. So, guess, very good

news in terms of Ripple and it's SEC defense. But there are a lot of questions remaining for the market, not just for Ripple, but the crypto industry here at large. And that question is, as Bloomberg Intelligence calls it a factual one, will it cause more issuers to register with the SEC? And what type of regulatory overhang doesn't leave for the market even after they buy it. An executive order that created some clarity for the market. Alright, Sonale,

stick with us. We're gonna get deeper into this conversation with Ripple CEO himself, Brad garling House. Brad, good to have you back here on the show. You called this a victory in your battle against the SEC. What does it mean for you and also the broader crypto industry. Yeah,

I do think I'll start there. Really, I think it is a victory, not just for Ripple, the company, but also the whole crypto industry because the SEC, I think, has consistently tried to take a point to really take expand their reach and their control over the crypto industry. We've seen that not just as Ripple, but in other cases. And to to have the executive order, as Jali was talking about, the executive came out and really said to

all agencies, Hey, we need to be coordinated. If we want the United States to be competitive in this key technology platform, we need to not have one group behaving one way and another group behaving in other ways. We're really pleased by not just the court's decision, but also in the executive order that came out last week. What do you make of the very prominent role that crypto is playing in the war on Ukraine and also concerns about how crypto currency could be used, for example, as

a tool to circumvent sanctions by Russians. You know, I think this is a bit of a red herring, meaning that there's a lot of attention around as like what does this mean? But the practice, the practicality of using it to circumvent sanctions, I think is is really difficult. Uh, And the reality is that if you just take the basic math, before the invasion of Ukraine, there's about fifty billion dollars a day of Russian ruble cross border FX trades.

There's just not enough liquidity in the crypto market to really put much of a dent in that. Moreover, you know, the point at which sanctions are applied is at the end points, so through you know, exchanges, a bit stamp or a binance, and you know, I think you've seen globally that the major exchange around the world say hey, we're going to we're going to acknowledge and force and respect those sanctions. And so I think the idea that crypt has been used at any scale to circumvent sections

is uh not not a really it's not. It doesn't really understand how some of the stuff works. On one hand, you do have plenty of exchanges that seem to be working with a Biden administration to kind of figure out what's going on into the surface in the market. But on the other hand, when it comes to the SEC, it seems like they've been at the crosshairs of a

number of different firms. Do you think the SEC is taking a tougher stance than the administration at large, and do you think that will hinder at all some of the progress that some firms are making. Look, I think there's no question that the United States Secured Exchange Commission has reduced the competitiveness of this critical industry in the

United States. I think they've been out of step not just with other parts of the U S government, but they've been other out of step with other major economies around the world. The only country in the world that considers x RP the digital asset that Ripple uses in our technology stack. The only country in the world that thinks x RP could be a security is the United States.

We work successfully in the u K in Switzerland and Japan, and the UAE in Singapore, all of these countries to acknowledge x rps of currency because that's how it's used. So I think the way the US. If we want the US to be a leader in this new, growing, critical innovative industry like the Internet twenty years ago, we need that regulatory clarity. And the SEC is really just

coming out and saying we're gonna file lawsuits enforcement. They're not going to provide clear rules so that people know how to operate as other countries have done all right, Brad Garlinghouse, CEO of Ripple Brad, always good to have you with us in our Shonali Bostic. Things will continue to follow your situation with the SEC. CNN is preferring to launch its most ambitious effort, Yeah, a new streaming service CNN plus wild consumers buy in when there's a

sea of other streaming options. Here's what Andrew Moore see in an executive vice president who's leading the streaming effort, had to say, I think at our heart, we have always been about the news, and I think every news organization, um you know, in the United States tends to do a bit of a rethink every political cycle. That's natural because politics become such an important coverage area for everybody.

So I don't think that's unusual for any news organization to think about, okay, what's next, And especially now, by the way, at a time when the entire industry is moving quickly at a time and the entire industry is being disruptive, I think it's logical. There's been a lot of controversy surrounding Jeff Sucker's abrupt departure not long after Chris Cuomo's exit tied in part to Chris interviewing his brother, the Governor of New York on air. You've seen all

the criticism. What's your view on what happened? That's a good question, Emily, UM, what is my view? Look when when I heard about Jeff's resignation, UM, I was shocked. We were all shocked. UM, it was a very hard day for CNN. UM, you know, Jeff resigned, and in his resignation, Jeff said that he resigning because he did not disclose a relationship that he had with a colleague, and that was his departure was very hard on the

whole organization. And UM, we've all been doing our best to lead through, you know, a pretty difficult period with Jeff's departure. Some of CNN's own stars have pushed back on the way this was handled. Dana Bash said at an internal meeting reportedly that the punishment didn't fit the crime. Did you think the punishment fit the crime? You know, I think the rules applied to everybody. And the fact is, you know, the three red and white letters of CNN

matter a lot, and they're bigger than any of us. Meantime, shareholders have given discoveries merger with HBO and CNN parent Warner Media. The green light Discovery CEO David zas law of naming Chris Licked, President of CNN. At the south By Southwest Festival, I spoke with Andrew Morris more in depth about the future of CNN plus, the network's news streaming service, and its most ambitious effort since the networks

launch Take a listen. The beauty of a subscription service is if you create something of value, people will pay. You walk into a supermarket, you walk into a mall, you walk into a shop, you go online. If there's something of value, you'll pay. And when you think about what CNN does, you think about the coverage that we have in the Ukraine. You think about the depth of knowledge that Sanjay Gupta has and the role that he's played in this country in terms of informing you know,

informing people about COVID in the last year. We are so infinite that we're building something of such value that people are going to be willing to give a give up one cup of coffee a month to pay for this service. Just in time for your appearance here. Today, shareholders approved the merger of Discovery and Warner Media CNN has a new president, Chris lift has been named Um helped conceive Morning Joe, produce The Colbert Show, revamped CBS. Have you met with Chris Licht and what has he

told you he wants to see from CNN Plus. So we haven't been able to talk to him yet. And in fact, even though the Discovery shareholders have voted, we're in a quiet period, so we actually haven't been able to formally meet with Discovery about our business plans for a while. But look, I've gotten to know Chris over the years. He is what I do know of him. He's an incredibly creative producer. He's a great journalist. He's somebody who really knows what an organization like CNN needs

to be successful. What's the budget for CNN Plus? How much have you spent so far? It is by orders of magnitude, larger than anything CNN has taken on really since the network is founded. It's a it's a very serious undertaking and it requires significant investment. But the reason for the significant investment is it's tied to a very

aggressive and ambitious business plan. We feel very, very confident that we're going to be able to grow a very substantial subscriber base pretty quickly, and so we've been able to put together a business plan, uh and an investment case that gets us to a place where we think we can build a very healthy business. Given all the numbers you've run, the research you've done. When, then, do you expect this bet to pay off? Well, we think it can become profitable within within a few years. Um. Again,

it's it's it all. It's the beauty of a subscription business. And I come back to that every time. You know, it's it's what makes it different from cable television. What's it's what makes it different from advertising. If you build something of value and you deliver value to the customers and you put those customers before anything else, you can build a business. And you have to back it up. You have to have a great product, you have to have great content, you have to have to have great talent.

You can't be afraid to pivot, you can't be afraid to you know, to continue to take chances. But you know, we feel good about what we're building. Andrew Morris, executive vice president of CNN, speaking at the south By Southwest Festival in Austin, Texas. C Plus launches March twenty nine. That does it for this edition of Bloomberg Technology. Tomorrow, we're gonna be joined by Rashima Show, Johnny founder of Girls Who Code. He's out with a brand new book

on the future of women and work. Also Joseph Lubin to talk about all things crypto, the CEO of Consensus and the co founder of a THEORYU. And that's tomorrow right here on Bloomberg Technology. And Emily Chang. This is Bloomberg