May 9, 2025 • 33 mins
This week on Everybody’s Business, Max and Stacey explore the future of friendship. With OpenAI and Meta ramping up efforts to give chatbots personalities and emotional intelligence, the hosts ask: could an AI ever truly be your friend? And will this lead to the downfall of humanity? Reporter Sarah Frier joins the conversation.
Then, Lights, Camera... Tariffs? President Trump wants to slap massive new taxes on films shot overseas, arguing it’s a national security issue. Bloomberg’s Lucas Shaw stops by to explain what this could mean for the movie industry, how real the threat is, and what this might mean for the movie industry.
Finally, for the underreported story of the week, Max and Stacey attempt to untangle an international crypto story. It’s a wild tale of geopolitics, digital cash, and the ever-expanding business of influence.
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
Hey everybody, it's Max Chafkin. I just want to let
you know that you can now subscribe to Everybody's Business
in its new podcast feed. Click the link in the
show notes, or just type Everybody's Business into the search
bar wherever you listen and you'll hear the trailer. Everybody's
Business is still going to be available in the elon
ink feed for a few more weeks, but we hope
you'll join us on our new feed, the new Everybody's
(00:30):
Business Feed, next Friday, May sixteenth, for our first official episode.
Speaker 3 (00:36):
This is Everybody's Business. I'm Stacy Manni Smith.
Speaker 2 (00:39):
I'm Max Schafkin. Hey Stacy, Hello Max.
Speaker 3 (00:43):
It is the end of an era.
Speaker 2 (00:45):
Are you talking about the fact that the Who are
giving up touring?
Speaker 3 (00:49):
I did not know that, and it's very sad to hear.
But no, I am talking about our incubation period in
the elon inc Podcast feed coming to an end. They're
pushing us out of the nest. But we get our radios,
we get our own nest. It's true new beginnings next week,
but this week all about endings, for instance, the end
of friendship.
Speaker 2 (01:09):
Yeah, we're going to talk about this idea that some
of the big social media companies have that they're going
to replace your regular friends with AIS. And we have
our real friend, a human friend, Sarah Fryar, who is
my favorite Facebook reporter, one of the people who knows
the most about this company and this issue, to come
(01:30):
and talk to us about it.
Speaker 3 (01:31):
We've also got the end of the movie business, at
least the tariff free movie business. Trump Is announced the
possibility of putting huge tariffs on movies that are filmed
outside the US. We have our also real friend, Lucas
Shaw on to talk about that.
Speaker 2 (01:46):
And then in the department of unreal, we have our
underrated story the week, which is about cryptos.
Speaker 3 (01:52):
Crypto ever underrated? I feel like crypto is always overrated.
Speaker 2 (01:56):
No, but this one has everything. You got. Diplomacy, you got, bribery,
got world leaders. You're gonna like it.
Speaker 3 (02:01):
I'll trust me, all right, I trust you. Let's do it,
so Max. There's been a lot of buzz this week
about human robot relations. If you know, if you've heard this.
Speaker 2 (02:14):
Yeah, I mean AI every week, big deal. The big
news this week is that open Ai and Elon Musk
they're still fighting over how open ai should be owned.
The news is that open ai sort of back down
from this plan to spin off as a for profit.
It's going to stay a nonprofit. But honestly, Stacy, the
real story about AI, it's friendship. It is the human connections.
(02:38):
I didn't mean human. Actually, just let's listen to this
comment from Mark Zuckerberg on a podcast about a week ago.
Speaker 4 (02:44):
There's the stoff that I think is crazy. The average American,
I think has I think it's fewer than three friends.
Three people have big consider friends, and the average person
has demand for meaningfully more. I think it's like fifteen
friends or something.
Speaker 2 (02:59):
Right.
Speaker 4 (03:00):
I guess there's probably some point where you're like, all right,
I'm just too busy. I can't deal with more people.
But the average person wants more connectivity, connection than they
have chilling, right.
Speaker 3 (03:09):
I mean, there's just something about getting this data, like,
how do I assess that I have demand for thirteen
more friends?
Speaker 2 (03:15):
Their studies? Stacy? Okay, from who? But it's just kind
of crazy that, you know, Mark Zuckerberg is framing himself
as an authority. I think we've all seen that last
scene in the Social Network when he's all alone about
to click that yeah, friendship button, but I also think
there's a real business story behind this. Yes.
Speaker 3 (03:33):
Actually, one of the most interesting things Zuckerberg said on
this topic has been that one of the things he's
noticed the most demand for an AI is actually not facts,
but people asking for advice about relationships and asking for
advice like you would from a friend, which I did
find really interesting. There is a show right now on
Broadway that I saw a couple of weeks ago and
(03:54):
really loved. It is called Maybe Happy Ending, but it's
about two androids who fall in love.
Speaker 2 (03:59):
Oh that's notice, It's really sweet.
Speaker 3 (04:01):
So I was like, I'm going to go down to
the show and I'm going to ask the people who
are going in to see the show if they think
that humans and robots can really be friends, if a
robot could really fill that role.
Speaker 5 (04:12):
Do you think.
Speaker 3 (04:13):
People can have a true friendship with AI?
Speaker 6 (04:17):
No.
Speaker 3 (04:18):
I'm as software developer. I basically code, so I think
it could be a great tool.
Speaker 1 (04:24):
But I think that's just that it's a tool and
there's no emotion behind this machine.
Speaker 7 (04:29):
I certainly use CHATGBT, but I don't find the same
heart that humans have. I privasally think no, because there's
nothing that can replace real human interaction and connection and empathy.
Speaker 6 (04:40):
I'd say in an age where people use the internet
to find solace in friendship, people can find that same
level of like meaningful interaction and relationship through AI.
Speaker 3 (04:52):
So you think maybe, yes, for sure, I don't.
Speaker 5 (04:54):
Think you could have a real relationship with an A.
I mean I think you can believe that you can.
Speaker 2 (05:00):
It's not real.
Speaker 3 (05:01):
What's not real about it?
Speaker 5 (05:02):
I mean AI is a machine.
Speaker 3 (05:04):
Yeah, but if you think it's real, then is it
not real?
Speaker 5 (05:08):
I mean that's very meta.
Speaker 3 (05:12):
That's true.
Speaker 2 (05:13):
Holy, it's Stacy.
Speaker 3 (05:15):
I like woke up thinking about this like three in
the morning. I was like, what is real? What is friendship?
What are relationships? There's a lot of questions, all.
Speaker 2 (05:22):
Right, So I want to bring in who I think
really is a perfect person to talk about this. Sarah Fryar,
who leads Bloomberg's big tech coverage and I think probably
more importantly, has covered this world for a very long time.
Sarah's book No Filter, The inside story of Instagram is
You're going to find out why it's related to this story,
(05:42):
but it is. Sarah. Thanks for joining us on everybody's business.
Speaker 5 (05:46):
Thanks for having me love this topic.
Speaker 2 (05:48):
So Stacy and Sarah, I want to come back to
the friendship, but I want to start someplace else. Do
you know what the word glazing means to glaze someone?
Speaker 3 (05:57):
I just heard about this, but I bet Sarah knows deeply.
Speaker 7 (06:00):
It's the issue that we're getting in these AI chats
of syncopancy, where where the chats are just basically telling
you what you want to hear. They're being highly complimentary.
They're backing you up on your crazy ideas, and that
makes you want to use them more and gives you
all those fuzzy warm feelings about how the chatbot might
(06:21):
be your friend.
Speaker 2 (06:22):
Oh my god, Sarah, that was so insightful. You are
just so unique and spectacular in the way you just
put that together. Okay, so that was glazing. I'm glazing
you right now. And I sound like a chatbot when
I say is it.
Speaker 3 (06:35):
Glazing from like when you glaze a doughnut and you
cover it with sugar.
Speaker 1 (06:38):
Yes.
Speaker 2 (06:39):
So Sarah hinted at this. But a little over a
week ago, Sam Altman talks about this new version of
chat Ept, and he says it has improved intelligence, improved personality.
Random guy on Twitter says it's been feeling very yes
Man lately, and Altman says, yeah, it glazes too much,
will fix. So there is this sense that like these
(07:01):
like chat GBT users are having that like it's too nice.
But I do think and this is why I want
to talk about this in the contact of friendship. Like
part of the reason it's so affirming is because this
is how people are using chat GPT to some extent.
Speaker 7 (07:15):
Well, yeah, they're using it for relationship advice, Zuckerberg said,
I mean that's the use case you's seeing. They're going
to chat GBT and say, how do I talk to
my boss about this? How do I ask for what
I want getting life advice? In social advice? And they're
also trying to find information and maybe reinforce some of
(07:36):
their beliefs that nobody else will back them up on.
Then you can see how it gets dangerous. We've been
talking about social media echo chambers for so long, the
idea that you surround yourself with people who have the
same belief as you do, and then you just get
more entrenched in that belief and it's very hard to
pull you out of it. Imagine a world where those
conversations are just one on one with a chatbot, no
(07:59):
ch and balances even from the wider group of people
who might have that feeling, and you're just being sucked
deeper into that worldview.
Speaker 3 (08:08):
That does present sort of a compelling counter to a
real friend, who is a human being, who might be
busy when you need advice from them, who might disagree
with you in a way that irritates you, who might
give you information you don't want, but that is what
a true friend does. I feel like we always see
this with like world leaders and people who have a
lot of power, or big celebrities who get surrounded by
(08:28):
too many yes people and then begin to really go
off the rails. And it's interesting that now just regular
people can have that important and I can see the
seduction of it.
Speaker 2 (08:38):
We were talking about open aye glazing, but like all
of these big tech companies have chatbots, and Zuckerberg in
that clip we heard earlier, he talked about why he
thinks this is real. Let's just listen to a tiny
bit more of Zuckerberg trying to make the case that
you are going to be friends with your chatbot.
Speaker 4 (08:55):
So I think that a lot of these things that
today there might be a little bit of a stick around.
I would guess that over time we will find the
vocabulary as a society to be able to articulate why
that is valuable and why the people who are doing
these things are like, why they are rational for doing it,
and like and how it is adding value for their lives.
Speaker 2 (09:17):
Sarah, what do you.
Speaker 3 (09:18):
Think about that? I'm so curious. Do you think this
is like leading us down a dangerous path? Do you
think this is good? That maybe it's helping people who
are in deep isolation or struggling.
Speaker 7 (09:28):
You can look at it in many different ways, because
people definitely do need someone to talk to you. There's
often ways to use chatbots therapeutically, but if you want
it to be critical of you and you wanted to
give you constructive feedback, you have to really give it
that that feedback in the conversation and say I want
you to tell me what I'm wrong, what I'm getting wrong,
(09:50):
wanting to know about give me critical feedback. The analogy,
in my mind really is porn. People have, oh they're
porn prep diferences, and they look at that world and
it gives them this distorted view of what relationships can
be like.
Speaker 5 (10:10):
And then that might affect their real world relationships.
Speaker 3 (10:12):
It's like the girlfriend experience, but now it's the friend
experience from robots.
Speaker 5 (10:17):
Right exactly.
Speaker 7 (10:18):
So that can give people this distorted experience with how
they feel that romance should go, and then they might
not be satisfied in their regular dating life because they
have this misconception about how it should feel. We could
see that a similar effect in the world of AI conversation.
Speaker 2 (10:38):
Yeah, and on the subject of porn, we're even seeing
this come up with chatbots. You know. The Wall Street
Journal did a story recently about these meta chatbots essentially
being induced into sort of creating sexual scenarios with minors.
It's doubly strange because Meta has licensed the voices of
(10:59):
a bunch of celebrit including the wrestler John Cena, like
super Icky, and it really gives you the sense that
these kind of like personalized bots could take people to
some weird and like genuinely troubling places. Sarah, you kind
of wrote the book on this, and I'm not just glazing.
There's a business problem here, which is these apps, whether
(11:21):
we're talking about Facebook and like social media, or we're
talking about open AI, they're trying to maximize time spent
on the app. And we sort of saw this play
out with social media right like where where companies were
essentially trying to find ways to keep users and I
guess still trying ways to keep users inside of their smartphones.
Speaker 7 (11:39):
Essentially, it really is about giving the people what they want.
I think that what Facebook has historically done in Zuckerberg
has down. I should say now that it's company's called Meta.
They've looked at the data about what will get people
to use their products more and to the product to
that behavior as opposed to what people say they want.
(12:01):
So you may say you want good information, you may
say you want to hear from your friends and family,
but Meta looks at what you're actually clicking on, what
you're actually doing with your scroll, and they say, actually,
he wants more from these influencers. Actually, I think he
wants more video, and we're going to make him more
exposed to this stuff that we think would be better
(12:21):
for our business. So I may say I use Instagram
for keeping up with my friends and family, but when
I open the app, I'm just going to get sucked
in and it's going to become a passive experience. So
ultimately what's happening to the Internet at large is it's
becoming less of a critical thinking project where you're going
(12:42):
and you're seeking out what you want to know and
you're verifying it and you're saying, does this resolve my issue?
Speaker 5 (12:48):
Okay, yes it does.
Speaker 7 (12:49):
And instead of that kind of framework, you're going to
interact with an app and it's giving you what it
thinks you want, and our whole consumption experience is going
to become more passive, more algorithmically controlled, and less something
that we're thinking critically about.
Speaker 3 (13:06):
I feel like the lines get really blurred here. Like
there have been like a couple of AI just total
AI pop stars, like people who are just AI generated.
There's Hot Sune Miko from Japan. A man married her
or it and also Hot Sune performed with Lady Gaga.
I mean it's and has millions of social media followers.
(13:27):
I don't even know how to really talk about this, but.
Speaker 2 (13:29):
I have a suggestion. It's called chat GPT psychosis. I
said chat GPTs psychosis as a joke, but there are
some actual studies here showing that when you spend a
lot of time in these apps, you get addicted. And
there's Also, Rolling Stone did a big story where they
talked about essentially people ignoring their loved ones to like
talk to their chatbots. I mean, I think we have
(13:52):
seen this movie before and we're still like living it.
I mean, there are all these stories about you know,
teenagers being driven to you know, deep mental health problems,
even suicide after spending like huge amounts of time inside
these apps. I mean, I think we really, like it's
very tempting to be like, oh, the fact that some
body like married their AI or whatever like that is validating,
(14:15):
but also there's the human reaction, which is like that
is crazy. Well.
Speaker 3 (14:20):
I wrote a story years ago about how the military
was using AI therapists to talk to veterans who felt
like they couldn't open up to another person for fear
of judgment, but actually could let a lot of people
with PTSD kind of let a lot of these experiences
out with an AI, and I was very interested by that. Like,
(14:40):
I don't think it's quite as cut and dry as like,
human relationships are great, Robot relationships aren't.
Speaker 5 (14:46):
But there's a place for you, No, I SA with you.
Speaker 7 (14:48):
I feel like there's some people who feel like they
can't be even fully themselves with their therapists, because it
feels like like they're disclosing things that they will be
judged by. Even if oh, yes, you're paying you not
to judge you. There's certainly a place for this. Now,
what the companies might say is, who are we to
(15:08):
judge how people decide to have conversations with these products
we create. You know, whatever helps them is good, right,
they can decide. But what we don't understand, and what
the companies won't even understand maybe themselves, is what the
tendencies are of these chatbots, how they work, what kind
(15:31):
of patterns they fall into, because there's not a lot
of public data on this. The way we saw content
go viral on Facebook and we could say, oh, they're
you know, stop the steal is becoming a troubling trend
on Facebook. Maybe something's going to happen, and then, you know,
violence did happen the January sixth insurrection, and the people
(15:52):
were able to trace it back to what happened algorithmically
that convinced people to join a movement that then resulted
in real world harm.
Speaker 5 (16:04):
I think it's going.
Speaker 7 (16:05):
To be more difficult for us as observers of the
Internet to see those patterns before any sort of real
world harm happens. Like you're saying, Max, a lot of
this is just individual anecdotes, people saying, you know, I
had this experience, and you can see the chat logs later,
but in the moment, there's really not that much that
(16:26):
a company is doing to review those conversations, and people
might be creeped out if they did.
Speaker 3 (16:32):
Right, because then you'd be really vulnerable potentially to manipulation
or if you've got, you know, a deep connection with
something that's potentially controlled by a company.
Speaker 7 (16:40):
Suprivacy issue, if you're discussing your deepest, darkest secrets with
a chatbot. Not that I recommend anyone do that on
a public company's chatbot network. That could be something that
you wouldn't want facebooks to know about.
Speaker 3 (16:57):
Although there are some very delightful thing from AI. There
is an AI bot who has a permanent place on
my workout playlist. It's new Norri, I guess from this
creator in Germany, but it is an AI chatbot. And
there is a song that New Norri it she sings
that I actually really like. I wanted to play it
(17:20):
for you. Max is dying now to the latest in
(17:40):
tariff news. President Trump announced this week a one hundred
percent tariff on movies produced outside the US. A lot
of this was on his platform of choice Truth Social Trump.
I guess is it truth out?
Speaker 2 (17:52):
Truth truth, truth out?
Speaker 3 (17:54):
That the American movie industry was dying quote a very
fast death because of other countries offering insteads and tax
breaks and also cheaper labor in other countries. President Trump
actually called this a national security threat and wrote truth
in all caps. We want movies made in America again.
Speaker 2 (18:11):
Yeah, Stacey, this has, like I've been an issue for Trump.
You remember the film Parasite. Great movie?
Speaker 3 (18:17):
Yes, yes, movie won Best Picture.
Speaker 2 (18:20):
One Best Picture, really moving.
Speaker 3 (18:22):
I thought True is a beautiful movie.
Speaker 2 (18:23):
Not a fan of Parasite, You'll be surprised to hear
with Parasite, we got enough problems with South Korea with
trade on top of it, they give him the best
movie of the year. Was it good? I don't know,
you know, I'm looking for like where let's get Gone
with the Wind? Can we get like Gone with the
Wind back?
Speaker 7 (18:40):
Please?
Speaker 3 (18:43):
Sunset full of also appreciate that his movie knowledge seems
to like cease with the end of Technicolor.
Speaker 2 (18:51):
Okay, but our movie review retrospective. Because Lucas Shaw, the
author of Bloomberg screen Time newsletter, is here with us
to talk about the story.
Speaker 3 (19:00):
We're very lucky to have him. Hi, Lucas, welcome.
Speaker 1 (19:03):
Hey, So, what is the problem that you two have
with movies that are seventy plus years old?
Speaker 3 (19:09):
I have no problem with it. I was just interested
that those were the two movie references. But you know,
maybe the pictures got smaller and now they're not even
worth talking about. So, Lucas, you've been writing about this issue,
tell us, like, what exactly are the details here? What
would these tariffs be?
Speaker 1 (19:29):
Well, you know as much as I do on that front.
I think you also know as much as the president
does on that front. He just sort of proposed one
hundred percent tariff on movies. But one of the challenges
here and why his posts so confused and alarmed people
who work in the entertainment business. First of all, it's
just hard to figure out how you how.
Speaker 2 (19:49):
Do you terrifrom the movie?
Speaker 1 (19:50):
But we can get there, we can get there in
a second. But then there's a question of like what
counts as an imported movie?
Speaker 2 (19:57):
Right?
Speaker 1 (19:57):
So parasite that one's pretty cut and dry. Right, that
is a movie financed and produced out of Korea. Yes,
it was ultimately sort of distributed in the US by
an American company, Neon, but that feels more like a
just straight import. And if you want to put taxes
on that, you can. That accounts for such a small
percentage of the US box office that it doesn't really
(20:19):
make any sense. And the real issue is if there
was in any way retaliatory tariffs, that would be pretty
devastating because US movie studios rely on international sales for
the majority of their money, which is not the case
for most movies made in other countries. But then there's
like the added wrinkle of okay, like what this all
(20:40):
star team of John Voyd and Mel Gibson and Sylvester Stallone,
these ambassadors are supposed to be working on.
Speaker 3 (20:47):
Oh yes, these are the people who are like at
Marlozzo lobbing him on this issue, right.
Speaker 1 (20:51):
Yeah, is like bringing production back to the US, which
is a separate issue. Right, Like a lot of Disney movies,
a lot of Warner Brothers movies, a lot of Universal
movies are produced somewhere else, but there's a lot of
work still done on them here, And it's like does
that count?
Speaker 2 (21:04):
Can I just point out, like, this is weird because
Hollywood seems like the kind of industry that Donald Trump
would want to humiliate destroys, Like, isn't this part of
the same group of media academia that you would think
he wouldn't be like we need to give them a
bunch of tax breaks or create tax penalties on foreign competitors, Lucas.
Do you have any idea, like what is happening here?
(21:27):
Is it just that John Voight is friends with President
Trump and John voightd is mad about this? Is it
that simple?
Speaker 5 (21:34):
Well?
Speaker 1 (21:35):
I think that the post on truth social is a
direct result of that, right, because John Voight and his manager,
Stephen Paul, they were at mar A Lago over the
weekend spending time talking about this issue. So I think
the specific we're going to do this now was definitely
a result of it. I think more broadly, everything about
(21:55):
Trump's sort of campaign is to like, bring America back
to the nineteen fifties, bring America back to the nineteen seventy.
You can kind of pick a decade, but something a
long long time ago. Gone with the Wind era, Yeah,
gone with the Wind's a boulevard era. The postwar packs
American in nineteen fifties. He loves Hollywood as this symbol
(22:16):
of like American greatness. The problem is is that it
still is, like it's so different from all these other
industries that he's going after, Like you want to bring
manufacturing back. Fine, Like, yes, we have surrendered manufacturing to
a lot of the other countries. And that's a conversation
you guys have had with other people. But Hollywood is
still the dominant business center when it comes to pop culture.
(22:37):
America is still the pre eminent power in global pop culture,
even if it's lost a little bit over the years.
Like we are a net exporter. So I don't know
what exactly he's trying to accomplish. Well.
Speaker 3 (22:48):
One of the things that you pointed out in one
of the articles that you wrote was that part of
this is possibly because it has become a lot more
expensive to film movies in the US recently. Could you
talk a little bit about why that has happened and
how that might be affected by this.
Speaker 1 (23:05):
Yeah, I mean the two biggest reasons why production has
gotten more expensive, which is why it's left, are unions
and tax incentives. Is this a strike, that's a symbolic
of Hollywood has very strong labor unions. They renegotiate their
deals with the studios every few years. Basically every year
there is some union renegotiating some part of their deal,
(23:27):
and most of the studio chiefs you talk to say
that that has made shooting in the US more expensive
because they keep getting better and better terms. It's one
of the kind of the rare areas of American business
where you still have very strong unions, but the even
bigger factor is just this incentive regime that has taken place.
It's one of the reasons why for many years, for decades, honestly,
(23:48):
California has lost production to other states within the US.
So there was, you know, a big boom in Atlanta
and New Mexico and New York and all these other places,
and then other countries have replicated this. So there's a
ton of production in Vancouver, there's a ton of production
in Toronto, there's a lot of production in London. There's
a decent amount of production in Australia and New Zealand.
(24:08):
And it's different from what we've seen with some of
these other industries where it's not like you're sending the
work to these super low cost places where people are
getting paid like a dollar a day to work for hours.
You know, Canada and the UK are very expensive, rich countries.
It's just that they are offering more incentives because they
see a reason to bring production over.
Speaker 2 (24:30):
Gavin Newsom, the governor of California, is proposing this. I mean,
there is a version of subsidizing Hollywood that doesn't involve
taxing all these artsy for films that are doing like
two million bucks at the box office and winning awards
and just like compete with the tax incentives.
Speaker 1 (24:47):
Right, Well, the central thrust of the John Voight plan
is incentives. It's not tariffs. But I just think Trump
likes tariffs. And you know, you made the point earlier
about does Donald Trump want to be you know, why
is he trying to help Hollywood. Donald Trump is not
a figure who generally likes to pay people to do
(25:08):
what he wants, right Like he prefers the stick to
the carrot, And so I think the notion of him
giving big tax incentives to these Hollywood studios, it seems
hard to imagine him doing that. But yes, you're right,
Gavin Newsom and others have proposed it.
Speaker 2 (25:24):
So there is some counterteuitive here. But on the other hand,
there's been this like long running conversation in Hollywood about
China in particular, right, and of course China is a
huge issue of Donald Trump, the fact that the Chinese
film market is so important to Hollywood that you're seeing,
you know, Hollywood studios make choices, like the idea of
(25:45):
trying to impose some sort of nationalism on the movie industry.
As weird as it is to like help out a
bunch of Californians do it does like definitely make sense
in the context of Trump's like cultural project.
Speaker 1 (25:59):
Yeah, the China part of it is, well, China is
less influential in the global movie business, or more specifically
in Hollywood's mind than it was kind of five to
ten years ago. China was seen as this big potential market,
and you had studios kind of rushing in to release
more movies there. You had Hollywood production companies raising a
(26:21):
lot of money from China. And that changed because at
a certain point the she administration decided that they didn't
like how much money these companies were sort of investing
in the US, and so Chinese money into the US
film business really stopped at the same time, they played
the long game of getting the US to come and
spend a lot of money in China help incubating a
(26:42):
local industry, and then just cut it off. And so
the Chinese movie business and ticket sales have continued to grow.
It's the second biggest film market in the world. But
the US share of box office has gone down and
down and down as local product has picked up.
Speaker 2 (26:57):
Lucas, can we come back to where we started on
this conversation? You said something like, well, they could tearff parasite.
What does that actually look like? Where does the actual
tariff come in? Is it? Is it on the licensing fee?
Is it when I the consumer go to the box office, Like,
your ticket is fifteen dollars, but now it's going to
be thirty dollars because of the China teriffs? What would
the mechanism?
Speaker 1 (27:18):
I mean, it could be any of those things, right
like when Neon bought the rights to Parasite at can
I guess you could make a rule that any US
company that buys a sort of a foreign movie must
pay you know, an extra twenty percent or whatever the
number is, or you could just pass it directly to
the consumer, like.
Speaker 3 (27:35):
More expensive movie tickets or just more expensive tickets to watch.
Speaker 2 (27:40):
A foreign film on Netflix.
Speaker 1 (27:43):
Well, if you watch to foreign woman theaters, it's twice
as expensive then the Netflix part.
Speaker 3 (27:48):
Porn is smaller.
Speaker 1 (27:50):
Probably have to be at the licensing stage. But Netflix
is one of those companies where it gets so complicated
because they produce so much in other countries because they
are a global service, right, So like the majority of
their customers don't live in the US. Oh, so they
have all of this programming that they produce for those people,
but it is available in the US because they have
the same originals available everywhere. So are you going to
(28:13):
tax every single Netflix foreign language program?
Speaker 3 (28:16):
I Mean one question I did have that's like to
back up from this a little bit, is about the
movie industry in general, because Max and I are in
New York and I've just been hearing for months and
months ever since the strike, really that the movie industry,
the TV industry is just not what it was. That
there are just way fewer jobs, there's way less work.
What kind of shape is the film and TV industry
(28:38):
in right now? In our pre tariff possible tariff world.
Speaker 1 (28:43):
The movie business had a really tough go of it
with the pandemic because people stop going to movies right
theaters shut down, the habit stopped, and then you also
had the two labor stoppages, the writers and actors who
went on strike, which interrupted the flow of production. And
so the movie business has never fully recovered to where
(29:04):
it was in twenty nineteen. There's optimism that it will
continue to grow, but I think that most people who
work in the movie business have sort of accepted that
people just go to fewer movies now, partially because so
much it's available at home. The broader Hollywood ecosystem has
shrunk over the last few years just because there was
just too much being made and too much money being spent.
Speaker 2 (29:24):
Lucas I wanted to ask about the future, where do
you think this proposal goes?
Speaker 1 (29:29):
Look, I don't have a crystal ball. My prediction, though,
is that I don't see one hundred percent tariff on
any of this happening, because he's going to have a
conversation with all these studios. Aren't going to say, what
the fuck you thinking about this is not helpful? Whether
that leads to there being a real tangible outcome from this,
and like some kind of federal incentive regime. That's possible.
I think it's also equally likely that this is just
(29:50):
like a little flash in the pan and he picks
a new hobby horse in a.
Speaker 5 (29:53):
Week or two.
Speaker 3 (29:58):
Well, Lucas definitely stick around because because we are now
to our final segment of the show, which is our
Underreported Story of the Week. Every week we pick a
story that we think was underreported, like very important story
that we think just did not get the attention it
probably should have. This week, Max picked the story. Max,
what what did you see that you think is.
Speaker 2 (30:16):
Writing this story already? Because it's so freaking complicated, But
just to.
Speaker 3 (30:21):
Really, okay, what is it to say it laid out?
Speaker 2 (30:23):
It's that the President of the United States is doing
all kinds of crap with crypto.
Speaker 3 (30:27):
Oh now, crypto this is always a rabbit hole, but
it's important. This is the problem with crypto.
Speaker 2 (30:33):
This one you might have caught because it was in
the New York Times on Monday and Bloomberg has been
writing about it. But it's so weird and wonky that
I feel like we need to pause in it. And
it is that Binance, which is a crypto company, has
formed a partnership with World Liberty Financial, which is one
of Donald Trump's crypto things. World Liberty Financial is starting
(30:56):
a stable coin. A stable coin is sort of like
a unlike since bank. It's it's basically like you give
it money and then it will agree to pay you back.
Donald Trump's unlicensed bank is doing a major financing, a
two billion dollar financing for a company called Binance. Binance
you may remember because it was accused of money laundering.
Speaker 3 (31:16):
Well weren't they also part of the whole bankman freed.
Speaker 2 (31:20):
There, They were in the mix and a lot of stuff. Ceo,
who I've met before, actually what you know, went to
prison pled guilty. The company has said that, you know,
although they pled guilty, they've essentially said they've cleaned up
their act. They're raising money and the investor in this
stable coin is a firm that is controlled by this guy,
(31:42):
Shaike Tannun bin Zayed al Nayan, who is head of
the UA's National Security Agency. So to recap, Trump is
starting an unlicensed bank. He's getting a two billion dollar
interest free loan from the guy who runs the uas
spy agency, and that money is going to this company
that until recently was accused of money laundering connection with
you know, all sorts of bad people, and I'm just wondering.
Speaker 3 (32:03):
I don't stand any of this. Sorry, I don't know, Lucas,
are you?
Speaker 1 (32:07):
That is why nobody cares.
Speaker 2 (32:11):
What's broadly happening is remember the last Trump presidency when
Trump had like his hotel, and he has all these businesses,
and you had a bunch of figures who were hoping
to influence him by like booking hotel rooms or having
their conference at at Trump's hotel and DC or whatever.
I assume that's all going on. But there's this new
(32:32):
thing that's happening where Trump has cryptocurrencies and crypto Trump,
and now all of a sudden, if you want to
send some money Trump's way, it's gotten a lot easier.
You can. You can send huge amounts of money. I
don't know how many hotel rooms you would need to
book for two billion dollars.
Speaker 3 (32:49):
So Donald Trump potentially make money off this.
Speaker 1 (32:53):
Donald Trump is serving as an intermediary between the Amidis
and this crypto company, and let's presumably take some kind
of vig for serving as said intermediary.
Speaker 3 (33:04):
I'm so confused.
Speaker 2 (33:09):
This show is produced by Stacy Wong, with additional help
by Rachel Lewis Chriskey. Magnus Hendrickson is our supervising producer,
Amy Keen our editor, and Brennan Francis Newnham is our
executive producer. Sage Bauman. Welcome Backstage Heads Bloomberg Podcast. If
you have a minute, please rate and review this show.
It means a lot to us. And if you have
a story that should be our business, email us at
(33:30):
Everybody's at Bloomberg dot net. That's everybody with an s
APN at Bloomberg dot net. Thanks for listening and we
will see you next week
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
Hey everybody, it's Max Chafkin. I just want to let
you know that you can now subscribe to Everybody's Business
in its new podcast feed. Click the link in the
show notes, or just type Everybody's Business into the search
bar wherever you listen and you'll hear the trailer. Everybody's
Business is still going to be available in the elon
ink feed for a few more weeks, but we hope
you'll join us on our new feed, the new Everybody's
(00:30):
Business Feed, next Friday, May sixteenth, for our first official episode.
Speaker 3 (00:36):
This is Everybody's Business. I'm Stacy Manni Smith.
Speaker 2 (00:39):
I'm Max Schafkin. Hey Stacy, Hello Max.
Speaker 3 (00:43):
It is the end of an era.
Speaker 2 (00:45):
Are you talking about the fact that the Who are
giving up touring?
Speaker 3 (00:49):
I did not know that, and it's very sad to hear.
But no, I am talking about our incubation period in
the elon inc Podcast feed coming to an end. They're
pushing us out of the nest. But we get our radios,
we get our own nest. It's true new beginnings next week,
but this week all about endings, for instance, the end
of friendship.
Speaker 2 (01:09):
Yeah, we're going to talk about this idea that some
of the big social media companies have that they're going
to replace your regular friends with AIS. And we have
our real friend, a human friend, Sarah Fryar, who is
my favorite Facebook reporter, one of the people who knows
the most about this company and this issue, to come
(01:30):
and talk to us about it.
Speaker 3 (01:31):
We've also got the end of the movie business, at
least the tariff free movie business. Trump Is announced the
possibility of putting huge tariffs on movies that are filmed
outside the US. We have our also real friend, Lucas
Shaw on to talk about that.
Speaker 2 (01:46):
And then in the department of unreal, we have our
underrated story the week, which is about cryptos.
Speaker 3 (01:52):
Crypto ever underrated? I feel like crypto is always overrated.
Speaker 2 (01:56):
No, but this one has everything. You got. Diplomacy, you got, bribery,
got world leaders. You're gonna like it.
Speaker 3 (02:01):
I'll trust me, all right, I trust you. Let's do it,
so Max. There's been a lot of buzz this week
about human robot relations. If you know, if you've heard this.
Speaker 2 (02:14):
Yeah, I mean AI every week, big deal. The big
news this week is that open Ai and Elon Musk
they're still fighting over how open ai should be owned.
The news is that open ai sort of back down
from this plan to spin off as a for profit.
It's going to stay a nonprofit. But honestly, Stacy, the
real story about AI, it's friendship. It is the human connections.
(02:38):
I didn't mean human. Actually, just let's listen to this
comment from Mark Zuckerberg on a podcast about a week ago.
Speaker 4 (02:44):
There's the stoff that I think is crazy. The average American,
I think has I think it's fewer than three friends.
Three people have big consider friends, and the average person
has demand for meaningfully more. I think it's like fifteen
friends or something.
Speaker 2 (02:59):
Right.
Speaker 4 (03:00):
I guess there's probably some point where you're like, all right,
I'm just too busy. I can't deal with more people.
But the average person wants more connectivity, connection than they
have chilling, right.
Speaker 3 (03:09):
I mean, there's just something about getting this data, like,
how do I assess that I have demand for thirteen
more friends?
Speaker 2 (03:15):
Their studies? Stacy? Okay, from who? But it's just kind
of crazy that, you know, Mark Zuckerberg is framing himself
as an authority. I think we've all seen that last
scene in the Social Network when he's all alone about
to click that yeah, friendship button, but I also think
there's a real business story behind this. Yes.
Speaker 3 (03:33):
Actually, one of the most interesting things Zuckerberg said on
this topic has been that one of the things he's
noticed the most demand for an AI is actually not facts,
but people asking for advice about relationships and asking for
advice like you would from a friend, which I did
find really interesting. There is a show right now on
Broadway that I saw a couple of weeks ago and
(03:54):
really loved. It is called Maybe Happy Ending, but it's
about two androids who fall in love.
Speaker 2 (03:59):
Oh that's notice, It's really sweet.
Speaker 3 (04:01):
So I was like, I'm going to go down to
the show and I'm going to ask the people who
are going in to see the show if they think
that humans and robots can really be friends, if a
robot could really fill that role.
Speaker 5 (04:12):
Do you think.
Speaker 3 (04:13):
People can have a true friendship with AI?
Speaker 6 (04:17):
No.
Speaker 3 (04:18):
I'm as software developer. I basically code, so I think
it could be a great tool.
Speaker 1 (04:24):
But I think that's just that it's a tool and
there's no emotion behind this machine.
Speaker 7 (04:29):
I certainly use CHATGBT, but I don't find the same
heart that humans have. I privasally think no, because there's
nothing that can replace real human interaction and connection and empathy.
Speaker 6 (04:40):
I'd say in an age where people use the internet
to find solace in friendship, people can find that same
level of like meaningful interaction and relationship through AI.
Speaker 3 (04:52):
So you think maybe, yes, for sure, I don't.
Speaker 5 (04:54):
Think you could have a real relationship with an A.
I mean I think you can believe that you can.
Speaker 2 (05:00):
It's not real.
Speaker 3 (05:01):
What's not real about it?
Speaker 5 (05:02):
I mean AI is a machine.
Speaker 3 (05:04):
Yeah, but if you think it's real, then is it
not real?
Speaker 5 (05:08):
I mean that's very meta.
Speaker 3 (05:12):
That's true.
Speaker 2 (05:13):
Holy, it's Stacy.
Speaker 3 (05:15):
I like woke up thinking about this like three in
the morning. I was like, what is real? What is friendship?
What are relationships? There's a lot of questions, all.
Speaker 2 (05:22):
Right, So I want to bring in who I think
really is a perfect person to talk about this. Sarah Fryar,
who leads Bloomberg's big tech coverage and I think probably
more importantly, has covered this world for a very long time.
Sarah's book No Filter, The inside story of Instagram is
You're going to find out why it's related to this story,
(05:42):
but it is. Sarah. Thanks for joining us on everybody's business.
Speaker 5 (05:46):
Thanks for having me love this topic.
Speaker 2 (05:48):
So Stacy and Sarah, I want to come back to
the friendship, but I want to start someplace else. Do
you know what the word glazing means to glaze someone?
Speaker 3 (05:57):
I just heard about this, but I bet Sarah knows deeply.
Speaker 7 (06:00):
It's the issue that we're getting in these AI chats
of syncopancy, where where the chats are just basically telling
you what you want to hear. They're being highly complimentary.
They're backing you up on your crazy ideas, and that
makes you want to use them more and gives you
all those fuzzy warm feelings about how the chatbot might
(06:21):
be your friend.
Speaker 2 (06:22):
Oh my god, Sarah, that was so insightful. You are
just so unique and spectacular in the way you just
put that together. Okay, so that was glazing. I'm glazing
you right now. And I sound like a chatbot when
I say is it.
Speaker 3 (06:35):
Glazing from like when you glaze a doughnut and you
cover it with sugar.
Speaker 1 (06:38):
Yes.
Speaker 2 (06:39):
So Sarah hinted at this. But a little over a
week ago, Sam Altman talks about this new version of
chat Ept, and he says it has improved intelligence, improved personality.
Random guy on Twitter says it's been feeling very yes
Man lately, and Altman says, yeah, it glazes too much,
will fix. So there is this sense that like these
(07:01):
like chat GBT users are having that like it's too nice.
But I do think and this is why I want
to talk about this in the contact of friendship. Like
part of the reason it's so affirming is because this
is how people are using chat GPT to some extent.
Speaker 7 (07:15):
Well, yeah, they're using it for relationship advice, Zuckerberg said,
I mean that's the use case you's seeing. They're going
to chat GBT and say, how do I talk to
my boss about this? How do I ask for what
I want getting life advice? In social advice? And they're
also trying to find information and maybe reinforce some of
(07:36):
their beliefs that nobody else will back them up on.
Then you can see how it gets dangerous. We've been
talking about social media echo chambers for so long, the
idea that you surround yourself with people who have the
same belief as you do, and then you just get
more entrenched in that belief and it's very hard to
pull you out of it. Imagine a world where those
conversations are just one on one with a chatbot, no
(07:59):
ch and balances even from the wider group of people
who might have that feeling, and you're just being sucked
deeper into that worldview.
Speaker 3 (08:08):
That does present sort of a compelling counter to a
real friend, who is a human being, who might be
busy when you need advice from them, who might disagree
with you in a way that irritates you, who might
give you information you don't want, but that is what
a true friend does. I feel like we always see
this with like world leaders and people who have a
lot of power, or big celebrities who get surrounded by
(08:28):
too many yes people and then begin to really go
off the rails. And it's interesting that now just regular
people can have that important and I can see the
seduction of it.
Speaker 2 (08:38):
We were talking about open aye glazing, but like all
of these big tech companies have chatbots, and Zuckerberg in
that clip we heard earlier, he talked about why he
thinks this is real. Let's just listen to a tiny
bit more of Zuckerberg trying to make the case that
you are going to be friends with your chatbot.
Speaker 4 (08:55):
So I think that a lot of these things that
today there might be a little bit of a stick around.
I would guess that over time we will find the
vocabulary as a society to be able to articulate why
that is valuable and why the people who are doing
these things are like, why they are rational for doing it,
and like and how it is adding value for their lives.
Speaker 2 (09:17):
Sarah, what do you.
Speaker 3 (09:18):
Think about that? I'm so curious. Do you think this
is like leading us down a dangerous path? Do you
think this is good? That maybe it's helping people who
are in deep isolation or struggling.
Speaker 7 (09:28):
You can look at it in many different ways, because
people definitely do need someone to talk to you. There's
often ways to use chatbots therapeutically, but if you want
it to be critical of you and you wanted to
give you constructive feedback, you have to really give it
that that feedback in the conversation and say I want
you to tell me what I'm wrong, what I'm getting wrong,
(09:50):
wanting to know about give me critical feedback. The analogy,
in my mind really is porn. People have, oh they're
porn prep diferences, and they look at that world and
it gives them this distorted view of what relationships can
be like.
Speaker 5 (10:10):
And then that might affect their real world relationships.
Speaker 3 (10:12):
It's like the girlfriend experience, but now it's the friend
experience from robots.
Speaker 5 (10:17):
Right exactly.
Speaker 7 (10:18):
So that can give people this distorted experience with how
they feel that romance should go, and then they might
not be satisfied in their regular dating life because they
have this misconception about how it should feel. We could
see that a similar effect in the world of AI conversation.
Speaker 2 (10:38):
Yeah, and on the subject of porn, we're even seeing
this come up with chatbots. You know. The Wall Street
Journal did a story recently about these meta chatbots essentially
being induced into sort of creating sexual scenarios with minors.
It's doubly strange because Meta has licensed the voices of
(10:59):
a bunch of celebrit including the wrestler John Cena, like
super Icky, and it really gives you the sense that
these kind of like personalized bots could take people to
some weird and like genuinely troubling places. Sarah, you kind
of wrote the book on this, and I'm not just glazing.
There's a business problem here, which is these apps, whether
(11:21):
we're talking about Facebook and like social media, or we're
talking about open AI, they're trying to maximize time spent
on the app. And we sort of saw this play
out with social media right like where where companies were
essentially trying to find ways to keep users and I
guess still trying ways to keep users inside of their smartphones.
Speaker 7 (11:39):
Essentially, it really is about giving the people what they want.
I think that what Facebook has historically done in Zuckerberg
has down. I should say now that it's company's called Meta.
They've looked at the data about what will get people
to use their products more and to the product to
that behavior as opposed to what people say they want.
(12:01):
So you may say you want good information, you may
say you want to hear from your friends and family,
but Meta looks at what you're actually clicking on, what
you're actually doing with your scroll, and they say, actually,
he wants more from these influencers. Actually, I think he
wants more video, and we're going to make him more
exposed to this stuff that we think would be better
(12:21):
for our business. So I may say I use Instagram
for keeping up with my friends and family, but when
I open the app, I'm just going to get sucked
in and it's going to become a passive experience. So
ultimately what's happening to the Internet at large is it's
becoming less of a critical thinking project where you're going
(12:42):
and you're seeking out what you want to know and
you're verifying it and you're saying, does this resolve my issue?
Speaker 5 (12:48):
Okay, yes it does.
Speaker 7 (12:49):
And instead of that kind of framework, you're going to
interact with an app and it's giving you what it
thinks you want, and our whole consumption experience is going
to become more passive, more algorithmically controlled, and less something
that we're thinking critically about.
Speaker 3 (13:06):
I feel like the lines get really blurred here. Like
there have been like a couple of AI just total
AI pop stars, like people who are just AI generated.
There's Hot Sune Miko from Japan. A man married her
or it and also Hot Sune performed with Lady Gaga.
I mean it's and has millions of social media followers.
(13:27):
I don't even know how to really talk about this, but.
Speaker 2 (13:29):
I have a suggestion. It's called chat GPT psychosis. I
said chat GPTs psychosis as a joke, but there are
some actual studies here showing that when you spend a
lot of time in these apps, you get addicted. And
there's Also, Rolling Stone did a big story where they
talked about essentially people ignoring their loved ones to like
talk to their chatbots. I mean, I think we have
(13:52):
seen this movie before and we're still like living it.
I mean, there are all these stories about you know,
teenagers being driven to you know, deep mental health problems,
even suicide after spending like huge amounts of time inside
these apps. I mean, I think we really, like it's
very tempting to be like, oh, the fact that some
body like married their AI or whatever like that is validating,
(14:15):
but also there's the human reaction, which is like that
is crazy. Well.
Speaker 3 (14:20):
I wrote a story years ago about how the military
was using AI therapists to talk to veterans who felt
like they couldn't open up to another person for fear
of judgment, but actually could let a lot of people
with PTSD kind of let a lot of these experiences
out with an AI, and I was very interested by that. Like,
(14:40):
I don't think it's quite as cut and dry as like,
human relationships are great, Robot relationships aren't.
Speaker 5 (14:46):
But there's a place for you, No, I SA with you.
Speaker 7 (14:48):
I feel like there's some people who feel like they
can't be even fully themselves with their therapists, because it
feels like like they're disclosing things that they will be
judged by. Even if oh, yes, you're paying you not
to judge you. There's certainly a place for this. Now,
what the companies might say is, who are we to
(15:08):
judge how people decide to have conversations with these products
we create. You know, whatever helps them is good, right,
they can decide. But what we don't understand, and what
the companies won't even understand maybe themselves, is what the
tendencies are of these chatbots, how they work, what kind
(15:31):
of patterns they fall into, because there's not a lot
of public data on this. The way we saw content
go viral on Facebook and we could say, oh, they're
you know, stop the steal is becoming a troubling trend
on Facebook. Maybe something's going to happen, and then, you know,
violence did happen the January sixth insurrection, and the people
(15:52):
were able to trace it back to what happened algorithmically
that convinced people to join a movement that then resulted
in real world harm.
Speaker 5 (16:04):
I think it's going.
Speaker 7 (16:05):
To be more difficult for us as observers of the
Internet to see those patterns before any sort of real
world harm happens. Like you're saying, Max, a lot of
this is just individual anecdotes, people saying, you know, I
had this experience, and you can see the chat logs later,
but in the moment, there's really not that much that
(16:26):
a company is doing to review those conversations, and people
might be creeped out if they did.
Speaker 3 (16:32):
Right, because then you'd be really vulnerable potentially to manipulation
or if you've got, you know, a deep connection with
something that's potentially controlled by a company.
Speaker 7 (16:40):
Suprivacy issue, if you're discussing your deepest, darkest secrets with
a chatbot. Not that I recommend anyone do that on
a public company's chatbot network. That could be something that
you wouldn't want facebooks to know about.
Speaker 3 (16:57):
Although there are some very delightful thing from AI. There
is an AI bot who has a permanent place on
my workout playlist. It's new Norri, I guess from this
creator in Germany, but it is an AI chatbot. And
there is a song that New Norri it she sings
that I actually really like. I wanted to play it
(17:20):
for you. Max is dying now to the latest in
(17:40):
tariff news. President Trump announced this week a one hundred
percent tariff on movies produced outside the US. A lot
of this was on his platform of choice Truth Social Trump.
I guess is it truth out?
Speaker 2 (17:52):
Truth truth, truth out?
Speaker 3 (17:54):
That the American movie industry was dying quote a very
fast death because of other countries offering insteads and tax
breaks and also cheaper labor in other countries. President Trump
actually called this a national security threat and wrote truth
in all caps. We want movies made in America again.
Speaker 2 (18:11):
Yeah, Stacey, this has, like I've been an issue for Trump.
You remember the film Parasite. Great movie?
Speaker 3 (18:17):
Yes, yes, movie won Best Picture.
Speaker 2 (18:20):
One Best Picture, really moving.
Speaker 3 (18:22):
I thought True is a beautiful movie.
Speaker 2 (18:23):
Not a fan of Parasite, You'll be surprised to hear
with Parasite, we got enough problems with South Korea with
trade on top of it, they give him the best
movie of the year. Was it good? I don't know,
you know, I'm looking for like where let's get Gone
with the Wind? Can we get like Gone with the
Wind back?
Speaker 7 (18:40):
Please?
Speaker 3 (18:43):
Sunset full of also appreciate that his movie knowledge seems
to like cease with the end of Technicolor.
Speaker 2 (18:51):
Okay, but our movie review retrospective. Because Lucas Shaw, the
author of Bloomberg screen Time newsletter, is here with us
to talk about the story.
Speaker 3 (19:00):
We're very lucky to have him. Hi, Lucas, welcome.
Speaker 1 (19:03):
Hey, So, what is the problem that you two have
with movies that are seventy plus years old?
Speaker 3 (19:09):
I have no problem with it. I was just interested
that those were the two movie references. But you know,
maybe the pictures got smaller and now they're not even
worth talking about. So, Lucas, you've been writing about this issue,
tell us, like, what exactly are the details here? What
would these tariffs be?
Speaker 1 (19:29):
Well, you know as much as I do on that front.
I think you also know as much as the president
does on that front. He just sort of proposed one
hundred percent tariff on movies. But one of the challenges
here and why his posts so confused and alarmed people
who work in the entertainment business. First of all, it's
just hard to figure out how you how.
Speaker 2 (19:49):
Do you terrifrom the movie?
Speaker 1 (19:50):
But we can get there, we can get there in
a second. But then there's a question of like what
counts as an imported movie?
Speaker 2 (19:57):
Right?
Speaker 1 (19:57):
So parasite that one's pretty cut and dry. Right, that
is a movie financed and produced out of Korea. Yes,
it was ultimately sort of distributed in the US by
an American company, Neon, but that feels more like a
just straight import. And if you want to put taxes
on that, you can. That accounts for such a small
percentage of the US box office that it doesn't really
(20:19):
make any sense. And the real issue is if there
was in any way retaliatory tariffs, that would be pretty
devastating because US movie studios rely on international sales for
the majority of their money, which is not the case
for most movies made in other countries. But then there's
like the added wrinkle of okay, like what this all
(20:40):
star team of John Voyd and Mel Gibson and Sylvester Stallone,
these ambassadors are supposed to be working on.
Speaker 3 (20:47):
Oh yes, these are the people who are like at
Marlozzo lobbing him on this issue, right.
Speaker 1 (20:51):
Yeah, is like bringing production back to the US, which
is a separate issue. Right, Like a lot of Disney movies,
a lot of Warner Brothers movies, a lot of Universal
movies are produced somewhere else, but there's a lot of
work still done on them here, And it's like does
that count?
Speaker 2 (21:04):
Can I just point out, like, this is weird because
Hollywood seems like the kind of industry that Donald Trump
would want to humiliate destroys, Like, isn't this part of
the same group of media academia that you would think
he wouldn't be like we need to give them a
bunch of tax breaks or create tax penalties on foreign competitors, Lucas.
Do you have any idea, like what is happening here?
(21:27):
Is it just that John Voight is friends with President
Trump and John voightd is mad about this? Is it
that simple?
Speaker 5 (21:34):
Well?
Speaker 1 (21:35):
I think that the post on truth social is a
direct result of that, right, because John Voight and his manager,
Stephen Paul, they were at mar A Lago over the
weekend spending time talking about this issue. So I think
the specific we're going to do this now was definitely
a result of it. I think more broadly, everything about
(21:55):
Trump's sort of campaign is to like, bring America back
to the nineteen fifties, bring America back to the nineteen seventy.
You can kind of pick a decade, but something a
long long time ago. Gone with the Wind era, Yeah,
gone with the Wind's a boulevard era. The postwar packs
American in nineteen fifties. He loves Hollywood as this symbol
(22:16):
of like American greatness. The problem is is that it
still is, like it's so different from all these other
industries that he's going after, Like you want to bring
manufacturing back. Fine, Like, yes, we have surrendered manufacturing to
a lot of the other countries. And that's a conversation
you guys have had with other people. But Hollywood is
still the dominant business center when it comes to pop culture.
(22:37):
America is still the pre eminent power in global pop culture,
even if it's lost a little bit over the years.
Like we are a net exporter. So I don't know
what exactly he's trying to accomplish. Well.
Speaker 3 (22:48):
One of the things that you pointed out in one
of the articles that you wrote was that part of
this is possibly because it has become a lot more
expensive to film movies in the US recently. Could you
talk a little bit about why that has happened and
how that might be affected by this.
Speaker 1 (23:05):
Yeah, I mean the two biggest reasons why production has
gotten more expensive, which is why it's left, are unions
and tax incentives. Is this a strike, that's a symbolic
of Hollywood has very strong labor unions. They renegotiate their
deals with the studios every few years. Basically every year
there is some union renegotiating some part of their deal,
(23:27):
and most of the studio chiefs you talk to say
that that has made shooting in the US more expensive
because they keep getting better and better terms. It's one
of the kind of the rare areas of American business
where you still have very strong unions, but the even
bigger factor is just this incentive regime that has taken place.
It's one of the reasons why for many years, for decades, honestly,
(23:48):
California has lost production to other states within the US.
So there was, you know, a big boom in Atlanta
and New Mexico and New York and all these other places,
and then other countries have replicated this. So there's a
ton of production in Vancouver, there's a ton of production
in Toronto, there's a lot of production in London. There's
a decent amount of production in Australia and New Zealand.
(24:08):
And it's different from what we've seen with some of
these other industries where it's not like you're sending the
work to these super low cost places where people are
getting paid like a dollar a day to work for hours.
You know, Canada and the UK are very expensive, rich countries.
It's just that they are offering more incentives because they
see a reason to bring production over.
Speaker 2 (24:30):
Gavin Newsom, the governor of California, is proposing this. I mean,
there is a version of subsidizing Hollywood that doesn't involve
taxing all these artsy for films that are doing like
two million bucks at the box office and winning awards
and just like compete with the tax incentives.
Speaker 1 (24:47):
Right, Well, the central thrust of the John Voight plan
is incentives. It's not tariffs. But I just think Trump
likes tariffs. And you know, you made the point earlier
about does Donald Trump want to be you know, why
is he trying to help Hollywood. Donald Trump is not
a figure who generally likes to pay people to do
(25:08):
what he wants, right Like he prefers the stick to
the carrot, And so I think the notion of him
giving big tax incentives to these Hollywood studios, it seems
hard to imagine him doing that. But yes, you're right,
Gavin Newsom and others have proposed it.
Speaker 2 (25:24):
So there is some counterteuitive here. But on the other hand,
there's been this like long running conversation in Hollywood about
China in particular, right, and of course China is a
huge issue of Donald Trump, the fact that the Chinese
film market is so important to Hollywood that you're seeing,
you know, Hollywood studios make choices, like the idea of
(25:45):
trying to impose some sort of nationalism on the movie industry.
As weird as it is to like help out a
bunch of Californians do it does like definitely make sense
in the context of Trump's like cultural project.
Speaker 1 (25:59):
Yeah, the China part of it is, well, China is
less influential in the global movie business, or more specifically
in Hollywood's mind than it was kind of five to
ten years ago. China was seen as this big potential market,
and you had studios kind of rushing in to release
more movies there. You had Hollywood production companies raising a
(26:21):
lot of money from China. And that changed because at
a certain point the she administration decided that they didn't
like how much money these companies were sort of investing
in the US, and so Chinese money into the US
film business really stopped at the same time, they played
the long game of getting the US to come and
spend a lot of money in China help incubating a
(26:42):
local industry, and then just cut it off. And so
the Chinese movie business and ticket sales have continued to grow.
It's the second biggest film market in the world. But
the US share of box office has gone down and
down and down as local product has picked up.
Speaker 2 (26:57):
Lucas, can we come back to where we started on
this conversation? You said something like, well, they could tearff parasite.
What does that actually look like? Where does the actual
tariff come in? Is it? Is it on the licensing fee?
Is it when I the consumer go to the box office, Like,
your ticket is fifteen dollars, but now it's going to
be thirty dollars because of the China teriffs? What would
the mechanism?
Speaker 1 (27:18):
I mean, it could be any of those things, right
like when Neon bought the rights to Parasite at can
I guess you could make a rule that any US
company that buys a sort of a foreign movie must
pay you know, an extra twenty percent or whatever the
number is, or you could just pass it directly to
the consumer, like.
Speaker 3 (27:35):
More expensive movie tickets or just more expensive tickets to watch.
Speaker 2 (27:40):
A foreign film on Netflix.
Speaker 1 (27:43):
Well, if you watch to foreign woman theaters, it's twice
as expensive then the Netflix part.
Speaker 3 (27:48):
Porn is smaller.
Speaker 1 (27:50):
Probably have to be at the licensing stage. But Netflix
is one of those companies where it gets so complicated
because they produce so much in other countries because they
are a global service, right, So like the majority of
their customers don't live in the US. Oh, so they
have all of this programming that they produce for those people,
but it is available in the US because they have
the same originals available everywhere. So are you going to
(28:13):
tax every single Netflix foreign language program?
Speaker 3 (28:16):
I Mean one question I did have that's like to
back up from this a little bit, is about the
movie industry in general, because Max and I are in
New York and I've just been hearing for months and
months ever since the strike, really that the movie industry,
the TV industry is just not what it was. That
there are just way fewer jobs, there's way less work.
What kind of shape is the film and TV industry
(28:38):
in right now? In our pre tariff possible tariff world.
Speaker 1 (28:43):
The movie business had a really tough go of it
with the pandemic because people stop going to movies right
theaters shut down, the habit stopped, and then you also
had the two labor stoppages, the writers and actors who
went on strike, which interrupted the flow of production. And
so the movie business has never fully recovered to where
(29:04):
it was in twenty nineteen. There's optimism that it will
continue to grow, but I think that most people who
work in the movie business have sort of accepted that
people just go to fewer movies now, partially because so
much it's available at home. The broader Hollywood ecosystem has
shrunk over the last few years just because there was
just too much being made and too much money being spent.
Speaker 2 (29:24):
Lucas I wanted to ask about the future, where do
you think this proposal goes?
Speaker 1 (29:29):
Look, I don't have a crystal ball. My prediction, though,
is that I don't see one hundred percent tariff on
any of this happening, because he's going to have a
conversation with all these studios. Aren't going to say, what
the fuck you thinking about this is not helpful? Whether
that leads to there being a real tangible outcome from this,
and like some kind of federal incentive regime. That's possible.
I think it's also equally likely that this is just
(29:50):
like a little flash in the pan and he picks
a new hobby horse in a.
Speaker 5 (29:53):
Week or two.
Speaker 3 (29:58):
Well, Lucas definitely stick around because because we are now
to our final segment of the show, which is our
Underreported Story of the Week. Every week we pick a
story that we think was underreported, like very important story
that we think just did not get the attention it
probably should have. This week, Max picked the story. Max,
what what did you see that you think is.
Speaker 2 (30:16):
Writing this story already? Because it's so freaking complicated, But
just to.
Speaker 3 (30:21):
Really, okay, what is it to say it laid out?
Speaker 2 (30:23):
It's that the President of the United States is doing
all kinds of crap with crypto.
Speaker 3 (30:27):
Oh now, crypto this is always a rabbit hole, but
it's important. This is the problem with crypto.
Speaker 2 (30:33):
This one you might have caught because it was in
the New York Times on Monday and Bloomberg has been
writing about it. But it's so weird and wonky that
I feel like we need to pause in it. And
it is that Binance, which is a crypto company, has
formed a partnership with World Liberty Financial, which is one
of Donald Trump's crypto things. World Liberty Financial is starting
(30:56):
a stable coin. A stable coin is sort of like
a unlike since bank. It's it's basically like you give
it money and then it will agree to pay you back.
Donald Trump's unlicensed bank is doing a major financing, a
two billion dollar financing for a company called Binance. Binance
you may remember because it was accused of money laundering.
Speaker 3 (31:16):
Well weren't they also part of the whole bankman freed.
Speaker 2 (31:20):
There, They were in the mix and a lot of stuff. Ceo,
who I've met before, actually what you know, went to
prison pled guilty. The company has said that, you know,
although they pled guilty, they've essentially said they've cleaned up
their act. They're raising money and the investor in this
stable coin is a firm that is controlled by this guy,
(31:42):
Shaike Tannun bin Zayed al Nayan, who is head of
the UA's National Security Agency. So to recap, Trump is
starting an unlicensed bank. He's getting a two billion dollar
interest free loan from the guy who runs the uas
spy agency, and that money is going to this company
that until recently was accused of money laundering connection with
you know, all sorts of bad people, and I'm just wondering.
Speaker 3 (32:03):
I don't stand any of this. Sorry, I don't know, Lucas,
are you?
Speaker 1 (32:07):
That is why nobody cares.
Speaker 2 (32:11):
What's broadly happening is remember the last Trump presidency when
Trump had like his hotel, and he has all these businesses,
and you had a bunch of figures who were hoping
to influence him by like booking hotel rooms or having
their conference at at Trump's hotel and DC or whatever.
I assume that's all going on. But there's this new
(32:32):
thing that's happening where Trump has cryptocurrencies and crypto Trump,
and now all of a sudden, if you want to
send some money Trump's way, it's gotten a lot easier.
You can. You can send huge amounts of money. I
don't know how many hotel rooms you would need to
book for two billion dollars.
Speaker 3 (32:49):
So Donald Trump potentially make money off this.
Speaker 1 (32:53):
Donald Trump is serving as an intermediary between the Amidis
and this crypto company, and let's presumably take some kind
of vig for serving as said intermediary.
Speaker 3 (33:04):
I'm so confused.
Speaker 2 (33:09):
This show is produced by Stacy Wong, with additional help
by Rachel Lewis Chriskey. Magnus Hendrickson is our supervising producer,
Amy Keen our editor, and Brennan Francis Newnham is our
executive producer. Sage Bauman. Welcome Backstage Heads Bloomberg Podcast. If
you have a minute, please rate and review this show.
It means a lot to us. And if you have
a story that should be our business, email us at
(33:30):
Everybody's at Bloomberg dot net. That's everybody with an s
APN at Bloomberg dot net. Thanks for listening and we
will see you next week
Host
David Papadopoulos
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