Tesla's Price Drop and Netflix's Earnings

From Mahart that we're Innovation of Money and Power Collie in Silicon Valley, NBN.

This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

I'm Caroline Hyde at Bloomberg's World headquarters in New York, ed on assignment today.

This is Bloomberg Technology. Today.

We dive into Teza's drop in car prices ahead of tonight's earnings report. It's how the cut and Price is now making the modern wine nearly thirty percent cheaper this year.

Plus.

Netflix falls off the missing subscriber growth estimates, but points to its passwords sharing crackdown as.

A saving grace.

And despite all the concerns over privacy, people are getting extremely personal the chatch ept as some turned to it for therapy. We discussed but first that's check in on these markss and nervousness once again around some of the big earnings that come in a little bit drab.

We look at Mongo sally.

We're going to dig into the likes of Netflix in a moment, but we're also still thinking about what the Federal Reserve, what global central banks have to do to tackle inflation still running hot in the UK, nawslack off by tenth five percent two year yield, which reflects, of course, concerns about interest rate hikes, up almost seven basis points on the day.

We're looking at the.

Vixendex though still well low, we're sub seventeen, so that anxiety not really playing into some of those fear indices as they're known flicking on. Let's look at this fear indext because we are seeing some nervousness around the riskier assets such as crypto. After what has been a phenomenal run up in bitcoin, we are seeing it just off about three point seven percent on the day, twenty nine thousands,

She's here for well, talk us through some of those moves.

Yeah. Well, I think the big one at Caroline is going to be those Netflix there shares. You are seeing them really plumbing here down about three point two percent after reporting those earnings after the bell yesterday. Look, Netflix thought they would increase your subscriber account by really cracking down on the password chairing. The exact opposite has happened. Remember last quarter, a big focus was not necessarily on

Crazy the perfect roundup. We thank you, Critty, go up to there. Let's dig in on the Tesla perspective now the price cuts, the look ahead today's earnings.

Let's bring in the.

One I know, any Danah Hall before the storm of earnings, you sit down with us just to talk through some of the price cuts. I mean these are really now adding up well thirty percent off of over why.

Yeah, and the model.

Why is Tesla's most important car right now in terms of volume? And you know Elon Musk signaled at the end of last year that he was going to chase volume over profit margins. And today we're going to figure out, well, what is the impact of that. I mean, when you when you have price cuts, you know, as many of the days as they've had since the beginning of the year. That really does begin to eat into your profit margins.

But don't through that march.

And it's one important when you're putting in the context of Tesla versus itself, but versus.

The rest of the auto industry looking at evs, they're really not making them at any sort of profit yet.

Right, I mean, that's why Tesla is doing what it's doing. They have wiggle room. They have the best profit margins in the industry when it comes to evs, and they're willing to sacrifice them to kind of continue to gain market share and maintain this pole position. On the last earnings call, zat Kerkhorn, Tesla's CFO, said that he expects profit margins to remain at about twenty percent this quarter, so we're waiting to see if that is the case, and it really is putting other arto makers on note.

Started this price war. It's hard for everybody else.

Although he'll claim it's not a price for Dana Hall. We thank you so much. We're going to be called glued to your top Live blog when we get those numbers after the bell today, Let's go back to the numbers we've already got Netflix, which apparently is pretty hopeful about the second half of twenty twenty three, when, of course it starts to really crack down on password sharing because Q one a bit of a dismal start, the

Maybe not, but a supplementary source of additional revenue moving forward probably Now, you have to remember every time Netflix has rolled out a price hike, it all results in temporary churn before stabilization. This really isn't so different. And while right now you're seeing churn rates go high in the regions that they're rolling it out, it is widely expected to stabilize moving forward, even when it comes to the ukn market, which is their most mature market and

Oh, looking at margins, with Tesla looking at margins, with Netflix looking at the content being king It was interesting that well, adding only one point seventy five million customers in the first quarter, less than had been hoped. Is that because of the content slate and you in particular focus in on not just what the content is more broadly, but what Netflix makes versus what it licenses.

Yeah, it's a complicated question. We saw Netflix hit yet another record low in terms of global audience demand for its originals, and that happens because the streaming market is as cut it as a best buy on Black Friday, and that's not going to change anytime soon. But one saving grace is the fact that companies are reopening the

What about the people that they license the content from, you highlight Sony in particular, when they know that Netflix is out there pushing for advertising spots that are really quite expensive, how much can they negotiate for the price point of these sorts of content deals.

If someone like a Sony, the premier arms dealer of content in Hollywood, has immense leverage in these conversations. Netflix is already paying them one billion over four years for their pay one film deal. That can continue to skyrocket

And I want to go to what was perhaps a bit of a debarkle over the weekend for Netflix when it came to stress testing its live offering. They've done it before once with Chris Rock and then Love Is Blind happened. You were meant to be tuning in live to be able to give your own questions if you're an addict to this particular reality show, and it had a whole load of hitches. How important is that, Brandon to the future of the profits of Netflix.

I had my glass of wine ready, I was excited for the live event, and unfortunately, as you mentioned, it did disappoint. Now Netflix really is being seen as test casing with Chris Rock with Love is Blind their ability to move into live sports, which is really the last vestige of hope that linear TV has and as we've seen, live sports continue to migrate more and more towards digital platforms.

And let's talk leadership.

Lastly, Brandon, because all of this comes under what has been a very compared to many other tech orrantine content tech companies, a pretty slick transfer of power that seems to be going on with Netflix. What do you make of it under the new leadership and same more problems though.

Listen, there's always going to be snaffoos here and there, but I think overall you're seeing a pretty seamless transition. You're seeing issues that we've discussed that a important but not insurmountable. I would never bet against Netflix at this stage, given the way they've been able to innovate and adapt and continue expanding their products. So I think when we're talking about leadership them hyper focusing on the ad toier long term is a great call. That's what investors want

Part analytics industry strategist Brandon Katz, great to have your energy on today.

We thank you.

Now.

When people think of AI, they may think of robots threatening repetitive jobs, blue collar work, legal work, even but it may also be replacing one of the most secretive intimate lines of work therapy fly mergs. Rachel Metz reports that more and more people are actually turning to chat GPT that's open AI's chatbot as a solution to therapy, telling it their problems seeking reassurance despite potential privacy implications.

Let's bring in Rachel as well as Margaret.

Mitchell, chief ethics scientist for Hugging Face AI really is AI could be a solution to certain areas of therapy, like crisis helplines. Rachel, I turn to you first, how are people using chat GPT? You've had some really intimate discussions with certain people who.

Turn to it.

Yeah, I've spoken to some people who say they've used it either instead of speaking to a therapist or perhaps in addition to having a human therapist. And even though it's still really early days, some people are finding it quite helpful, which I thought was really interesting.

It's actually not what I was expecting. But with that, of course comes concerns.

Meg.

And when you're let's start on the hopeful areas of this, Meg, where do you see opportunity for such viral AI chat bolts to be helpful in the world of mental health?

Right, So there's a few areas. One in particular is around triaging, so figuring out who someone should talk to given that they have some issues. So basically there are like crisis text lines that are or crisis phone lines that are overrun with requests for help, especially for veterans, but there aren't enough people with expertise to help them.

Yeah, yeah, Rachel, there were clearly alleviation of the fact that they feel that this isn't a therapist that's going to charge them alade or indeed get bored of them asking questions.

But when you spoke to open.

Ai the company, or indeed when you're thinking of people who use them alongside a therapist, does that seem to be the better approach here?

I think that right now it's really important to keep in mind that there are a lot of limitations here, and perhaps the most obvious is that this is not intended to be any kind of therapist.

Is the general used chatbot.

Any data that you're providing to the system, it could be viewed by open ai if it can be deleted, but it might take up to a month to delete your account. So I personally try to avoid giving it any information when I'm typing with chat GPT because I want control of my own personal data. So it's not like talking to a professional therapist, where you would have some sort of confidentiality in almost all cases.

But also when asking a question of open AI, does it realize that perhaps this is a sensitive area. Does it push back on giving any direct medical advice for example?

Yeah, there are policies include don't use the chatbot to diagnose any kind of actual medical diagnoses.

But also if you yeah.

If you're approaching it and saying like, hey, I need you know, I need help, you know, help me as like sort of a therapist, it may push back. But also at the same time it may maybe like, but if you want, I can try to give you some advice. So one of the people I spoke to said that that it was like, well, I am not intended as a therapist, however I can I can try to help.

And interestingly, of course Meg there are other companies out there how are thinking about the ways in which loneliness can be helped. Replica is one that comes to mind, but you over at hugging face and hugging Face is an AI community, right, You're you're building, you're training the models, you're putting them into practice in an open source manner. How are you thinking about ethics around its use, whether it be for mental health or other wise.

Yeah, I mean with ethics work, you're always thinking through different values, different tensions, different pros and cons. There's never like one very obvious clear answer when you're getting into the leads of how this technology can affect people. And so we're working on things like gating mechanisms where while the source code is still open, the ability to interact

The education to the users as well.

Meg I'm going to execut a tough quick one to finish. Is open AI behaving responsibly here? Do you think in the use of chatchipt for into the broader community.

Yes and no.

With everything with ethics, they are doing some things responsibly. They are doing some things very irresponsibly. Well, I can go on, but yes, yes and no, they're being irresponsible in some ways that this technology is made available.

Dig into that. On another occasion, we thank you so much for joining us. Margaret Mitchell of course hugging face chief ethics Officer and our own Rachel Mets just amazing reporting coming from her and all things artificial intelligence, And in fact, starting today you can find a new AI

You do not want to miss it. Coming up.

Legislation surrounding a ban of TikTok is giving the attention a big tech not in the way you'd think mobbists are actually pushing for changes to that Bill.

We have a rapport from Capitol Hill. Next, this is Bloomberg time for talking Tech.

Some other key stories on our radar today. Meta set to begin at second round of company wide layoffs today, so move towards founder Mark Zuckerberg's goal of well greater efficiency and a company memo that was seen by Bloomberg News and indicates that Facebook, WhatsApp, Instagram, and Meta's virtual reality lab will all be impacted. Eventually ten thousand jobs will be cut. Snap says it can't be sued for allegedly addicting young users and contributing to a mental health crisis.

And speaking of social media, tech.

Giants are resisting legislation that would ban TikTok in the United States now. The Information Technology Industry Council, which includes Snap, Meta, as well as IBM, Apple or Microsoft, is among groups lobbying to narrow what is the bipartisan legislation being considered in the Senate right now. They're worried that the bill's broad language could impact their businesses. So we want to dig in on that reporting Bloomberg's and edgeton.

It's on Capitol Hill.

And it's interesting, isn't it that actually a lobbyist for technology seems to be against a pushing back on the Chinese made TikTok.

Why.

Well, one thing that is concerning about this bill to US tech companies is that it's written very broadly. So this isn't a bill that would just come out and ban TikTok. Would actually empower the Commerce Secretary to evaluate the national security risk in any technology from a foreign

It is interesting because, of course, every time that we mentioned that maybe it'd be realistic for TikTok to be banned, share price dissolve, snap jump higher. We think about the repercussions and help to Google's YouTube shorts and Instagram.

But who are the companies who are most worried about this? Would it more likely be the.

Apples, the Cisco's, the ibms that are more dependent on Chinese made technologies.

Well, our reporting shows that both hardware and software companies are worried about this, and part because.

Of the precedent it sets.

And that's one of the things we've heard from the tech industry throughout this conversation about TikTok is they're asking US lawmakers to be very careful in the steps that they take. Even if they might initially benefit US tech companies, it could set a really bad precedent for US companies operating abroad, like what if India decides that it wants to ban Meta, What if Brazil sides that it wants

I suppose the show only on the foot being much of the argument is that China does ban an awful lot of US companies over there, and this would be the response to it.

Well, and that's one thing that we see that I've heard from some lawmakers who are worried about this bill is they're saying, even though we're in a strategic competition with China, we don't want to become more like China.

Deer and it's great reporting.

Thank you for bringing us the latest and jutant over there on Capitol Hill. Welcome back to lumbag Technology. I'm Carienne Hyde in New York. Let's get a quick check on these markets right now, because we are eeking out gains on the Nasdaq one hundred.

In fact, we've eat them out for three straight days.

It's the longest winning street we've seen on this particular tech heavy benchmark since the end of March.

So managing to just rally up.

On the heavy lift that's going on with Apple, with Amazon doing the heavy lifting on the points perspective on

Let's flick gears. Now, let's talk about something different to.

Our Airbnb how it's adding Starwarard Capital some other landlords to a program that will allow renters to lease their apartments part time on the home sharing platform. Look, this actually helps landlords perhaps attract tenants who aim to boost become those hosts themselves. Airbnb co founders here to talk all about it. Nate Blatcharzik, We're pleased to welcome offering first that actually rolled out what in November. But people

We're telling the landlords to get on board.

The Airbnb Friendly Apartment's program is off to a very strong start, and I think that's because it addresses a real need out there for renters, which is housing affordability. In the United States, renters, forty six percent of renters are cost burdened.

That means they're spending thirty percent or more of their income just to pay their rent.

And this disproportionately impacts young people and those living in cities. About two thirds of young people two thirds of those in Citi's rent. And that's really Airbnb's for audience, and it's an audience I can relate to because when we started Airbnb, it was simply to help us afford our own rent. We had quit our jobs to become entrepreneurs, and we rented out an extra bedroom.

And if I were to do that today, it's a good chance my lard wouldn't allow me to.

And so with this program, we're helping renters to find apartment landlords who will support their hosting activity on a part time basis. And you can come to our site now and find two hundred and sixty apartment buildings across thirty eight cities in the United States that will allow you to host.

The thirty eight cities is interesting because that's ramped up since you first launched back in November as well. Is this a regulatory discussion that you're having as well?

Well?

We launched one hundred and seventy five buildings across twenty five cities. It's now two hundred sixty buildings and thirty eight cities. And there's two layers of this. Of course, there's the regulation that exists city by city, and in most cities there's regulation now in place, and it allows people to rent their primary homes on a part time basis. But even if the regulation allows you to do this,

What gets them comfortable because they need to have a lot of faith in the tenants, so they'll keep the building that they're going to be.

Offering up to scratch.

That becomes a pleasant experience for anyone who's walking into one of their particular high rises.

Yeah, first and foremost, just visibility.

Into what's happening in their buildings, right.

They want to have an atmosphere that is conducive to a good sense of community in their buildings, and so they want to have certain controls to make sure that this is happening only on a part time basis, and that they know who's coming and going from the buildings. So we have a software suite that allows the landlord to see who's hosting in the building, how many guests are coming and going, and really have a sense of

This is an importance to them too.

As the economy rolls over, do you think more and more will seek this have you Have you been able to line it up as to people are more worried about cost of living and whether or not this does well.

Yeah, absolutely, I mean I think it definitely plays to the times where there's economic uncertainty and questions about housing affordability. So I think now more than ever this is relevant and I think in particular. You know, we're well positioned to create this product because we have the audience that really understands that hosting enables people to pay their bills to you know, start their company. H These are folks who are young, they're often in urban areas, they're very

Supply, and often these are international landlords. Would this ever go beyond the United States?

Yeah, So we're working with a range of landlords, smaller landlords and larger ones including Gray Star, UDR Equity, Residential Star, Wars Capital now just signed on, and many more. And this will continue to grow. We're actively partnering. We have a backlog of landlords we're working with. I do think

The US as well.

Why does it work for you.

For Airbnb the company?

Yes, it's important because look, one third of Americans rent, and that's a large part of the market, and so we want to make sure that they're not categorically disallowed from participating in Airbnb. And so this is really meant to unlock a big part of the market, and particularly

Nat.

Thanks so much for spending time with us. Airbnb co founder Nagra Chasing there.

Thank you.

Now, as we ramp up to Earth Day this Saturday, we continue to cover the new technologies really striving to protect the planet, and today we take a look at the concerns of the impact of offshore wind farms and whales, dolphins and other marine life and how AI can actually help with that. Pimbag's Stefan Jodovic has their story.

Whaleship collisions are a leading cause of death for endangered whales off the North Atlantic coast of Massachusetts, as well as the North and southern California coast of the Pacific. Despite their large stature, weighing anywhere between seventy and one hundred and sixty tons, they are no match for a two hundred thousand ton cargo ship.

For example.

North Atlantic right whales have been listed as endangered under the Endangered Species Act since nineteen seventy and have had a population decline since twenty ten.

The right whale is highly endangered and jasmal Leo the utmost concern that we protect them and ensure that you know, we don't do anything during our operations or construction to negatively and points of population.

In order to prevent this problem, organization like Charles River Analytics and Whale Safe have been using artificial intelligence in order to.

Combat whale fatalities.

Based in Cambridge, Massachusetts, Charles River Analytics developed a whale detection technology system to be used by a vineyard wind who is planning to install over sixty general electric wind

The great part about the Aware Island AI software is that it works with this incorrect video camera and it's able to detect small changes temperature, which enables us to detect whales during times of women if visibility or parkness.

In contrast, the Benioff Ocean Initiative back organization Whale Safe deploys underwater microphones called hydrophones off the Californian coast to listit for blue whale vocalizations near busy shipping lanes, where the two rule is able to rank vessels and shipping companies according to their cooperation rates with NOAA's voluntary speed restrictions.

In both regions.

THO goal is an integrate that these technologies will feature winning projects as we develop LO on the tern seyboard. We need to find ways where you know, we can advance the technology so that we can build off optional and you know, as quickly as possible to meet these goals that the states.

And the federal government have for knowable energy.

Whether a company uses infrared camera technology or sonic wave detection, these initiatives provide an eco friendly solution to a problem that has resulted in the increasing development of renewable energy products combating climate change.

Sefanjovich there, we thank him.

Now coming up we'll have more climate change related news and then while the benched capital stick for it.

That's next as a bring bad.

Time now for our VC roundup, starting with Congruent Ventures, which has raised three hundred million dollar fund to help its stable of climate focus startups grow their businesses. This brings the total amount of assets managed by Congruent to more than seven hundred million. Meanwhile, General Motors GM ventures fund is participating in an investment around nanoramic laboratories to help the startup develop nanotechnology that could make EV batteries

Yeah, so it really goes across, It really goes across the spectrum.

Here.

You know, Fiat growth we get to work hands on as a growth consultant to a lot of these early stage businesses. And then on Fiat ventures we get to take advantage of an investment. We actually get the right to invest on the Fiat growth side. So on the Fiat growth sides, we're working with companies as early as pre seed and as late stage as public. On the Fiat venture side, we're investing in pre Series A companies. So that's typically preceed seed and of course Series A,

That's really interesting, this whole follow on investment because what you're writing checks of one hundred to five hundred thousand, and you then have to do three times the allocation four future rounds. What's it like when you're trying to co invest at later rounds with bigger players? Are they what are they trying to be pushy at the moment? Are you looking at pay to play being enforced a lot more?

Yeah?

You know, well, in the VC world, especially in the later stage, elbows get a lot sharper. You know, there's bigger names or spokes with a lot more money. I think one unique thing that FIAT can really lean on is we are their growth partners. And so when I say growth meaning we're not just being the strategy, but we're also being the execution. As really being their outsource

Okay, so asking those founders to really fight for you basically when doing those sort of later rounds of funding, talk to about those founders that you back. I'm thinking of what you're backing. Companies that have gen z helping finance their side hustles. You've got rental home surpassive income. You've also got well disability insurance companies.

Where is the suitees? What makes you invest in these companies?

True? You know, we focus on fintech, but I would also say the fintech adjacent. You know, we're big believers that the future of fintech is going to be deeply embedded into every action we take. We're seeing it become part of our day to day lives. We're also big believers that finance is getting younger. You know kids that are gen Z or even gin Alpha, they are engaging

As a mother, I really hope my kids remain engaged in wanting to develop the financial literacy and education.

No matter what the economy looks like.

But we are coming off the back of a period where it was really exciting to have a side hustle. It was really a time to think about investing in a young age because we suddenly saw meteoric growth in stocks and shares, But when we go into an economic slowdown, does that remain as appetizing and do your companies remain as appetizing to invest in.

It's a really good question. You know.

The public markets are always going to play a really big role on how we evaluate and put evaluation on some of these early stage businesses. As an investor, you know, we're always having to think ten years out, fifteen years out, twenty years out. If we think back to the Ubers and the airbnbs, who was just on in the last last segment, you know, it took them fifteen years to get to where they needed to be and become a really success full public companies. So it'll always affect the valuation.

Two years ago.

But we have to be able to see where the generational shift is going to come and be able to see how the market and more importantly, the consumers and the clients are going to evolve over time. So for us, it's really around you know, seeing into the future, and we know that in moments like this, especially in the market, some of the best opportunities are are sitting right in

Often built by diversity of thought and with more than fifty percent of your portfolio being underrepresented founders, I'm sure that helps in any ways. Fiat Ventures General partner Drew Gloverer, great to have some time with you.

Thank you. Some breaking news.

Now from the Bloomberg Meta is planning to cut or relocate its London based Instagram employees. According to a person familiar with the matter, the London office became pretty much a center for growth for the app when it's leader, Adamiseri, moved there temporarily last year. Now, Massari is planning to relocate to the US along with staffers who aren't maaid off.

Junias Now is a founder of that company, Mark.

Seger, And for the uninitiated, just tell us what personal rapid transit is all about. Why is it more efficient than say, like a subway or a bus.

Well, good morning, Caroline, thank you so much for letting me be here and speak with you. So what we do is the exact opposite of a bus or a train. Rather than cramming lots of people into one vehicle that stops from stop to stop to stop and you have to wait on it, we bring vehicles to you. Every passenger gets their own vehicle on demand anytime twenty four to seven, and that vehicle only stops once once it's

Interesting it kind of makes me think of the Minority Report, where we kind of still Tom Cruise breaking out on one.

But these ideas have been long in the making.

In fact, I think it's London Heathrow has had them for a while, so has to buy Why isn't sort of.

Picked up in mass They have been the ide idea of PRT personal rappid trands. It has indeed been a very around for a very long time, but no one could make it work. And frankly we have to thank the one hundred dodds billion dollars a VC capital that went into autonomous vehicle technology, which, while it isn't ready, it has provided the platform to make a closed autonomous personal rappid trendsit system like ours work and work really really well.

So you're authorized for pre development agreement. What next? What about environmental engineering reviews and the likes?

Well, that's precisely what's next. But because we're a fraction of the size of a traditional rail system, for example, we're also at a fraction of the cost and a fraction of the time. So we're going to go through environmental reviews next, but at a fairly rapid clip, just because our footprint is so much smaller. And then we're going to build it. But again, building it happens in a matter of months, not typically decades, or maybe even longer than that.

In some instances.

We'll see how quickly this gets on the rails. We thank you so much, Glideway's founder Mark Sega. There and that does it for this edition of BlueBag Technology. Do not forget to check out our podcast. You can find it on the terminal. You can go to Apples, Spotify, iHeart, and so much more to be digesting tomorrow tune in, of course, we'll have the latest on the analysis around Tesla's numbers. They're coming after the close of market today.