The Future of 3D Printing: B-West (2/5)

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Feb. 5 (Bloomberg) –- Full episode of “Bloomberg West.” Guests include Discern’s Cindy Shaw, Adroll’s Adam Berke, Freshwire’s Shawn Amos, Ztwealth’s Max Wolff, Airware’s Jonathan Downey and Bloomberg’s Ari Levy. (Source: Bloomberg)

Live from san francisco welcome to "bloomberg west" where we cover the companies reshaping our world.

Our focus is on invasion, technology and the future of business.

Will 3-d printers not be one of the next big technologies?

The answer more unclear.

We're talking about the future of the printers that can make everything from airplane parts to guns.

One company said its estimates missed and profits have been sluggish.

This is the most it's fallen in five years, 28%. after doubling over the last year.

Other companies fell 12%. x 113%. so how big a warning sign is this for the 3-d printing industry?

What is happening here?

3-d systems came out.

Much excitement because they were talking about consumer usage of 3-d printing.

They said we're going into the consumer space.

We're shipping a lot of printers to staples.

They said it's because we're spending so much in marketing and this consumer marketing is costing us a lot.

They recognized a lot of revenues for sending these printers to staples and they said actually we have a consumer slowdown in a business that is brand new.

What are they hoping consumers will print.

What could i use it for?

If you needed a coffee cup and you had about three or four hours.

I could print my own.

You have to design it, the coffee cup or gun or airplane part in case you need one of those.

No, thank you.

This is mind blowing new technology that seems so cool.

First we had printers, now we have 3-d printers.

It's something a little more.

I think people get excited about the potential of something new and different.

But the design skill required for this is fairly high.

It's hard enough to draw a which he is piece but to 3-d design one.

It's a smaller market but people get so excited about it.

I want to bring in someone who covers this business.

I know you've been a bit more negative about 3-d printing in general.

Are you saying i told you so today?

I am not negative on the technology or opportunity.

I have been questioning the consumer market.

I think that's more of a hobbyist market.

A good analogy is some people zoe, some people set up shops in garages.

You think consumer markets will never be very big?

I think it will be a niche.

I think for the professional market it's real.

It has been real, it's growing.

From all the media attention in the last year it's getting more interest and accelerated demand.

These stocks to your point more than doubled in the last year.

Extraordinary performance.

The evaluations are not sustainable.

I believe the stocks have been in the early stages of a bubble.

I have been covering 3-d systems since last mar and i said they were setting expectations that were not realistic and that's what we're seeing today is a lot of what they are saying.

The revenue growth is hard to make sense of unless you recognize the fact the company has done a lot of acquisitions in the last year.

The kind of customers they might have, and that was unclear.

It made the revenues look nice because they were spending a lot of money buying other companies.

A lot of people thought they were selling more printers.

If you look at the guidance they just issued.

They are saying revenue in 2014 is about $700 million.

That is almost double.

Almost doubling in two years is extraordinary.

But they are also saying that earnings is probably going to go down by about 5% over that same time period.

Where in the enterprise are 3-d printers thriving.

What industries are using these?

The big use is for protyping.

Rapid prototyping.

You used to have to take things to a machine shop.

This bypasses the machine shop.

This is huge for prototyping.

What is happening now is it's getting into manufacturing in specialty areas, dental, hearing aids, jewelry are big markets.

I hear 3-d markets has taken over the hearing aid markets.

It's a custom item now.

Everyone is different the shape of their ear.

One of the things with this market is it's not new.

I've been in the investment business for a long time.

I bought lots of shares of strat.

There is a market there but it's small.

I was looking today at strattiss, it has a $5 billion market cap.

The retainings for this company since that time is $83 million.

In 20 years they've retained $80 billion in profits.

And has a $5 cap.

That is out of whack.

In terms of the business what do you see broth potential?

It is still growing double digits.

What people are getting excited about that i think is real is the manufacturing part of it.

Cars?

It's very slow technology.

It's not good for large parts.

If you want a hard part, a part that can be used as a gear, it will take a half million dollar machine, a gear that is the size of my hand would take two hours to print.

And that's if it's plastic and it won't be durable.

It's more efficient when it comes to smaller things?

It's better at smaller items.

It's better at custom items.

It's great for complex shapes.

You hear about the g.e. nozzle that's been in the works for ten years.

They can manufacture a part that they can't manufacture using traditional methods.

It's not that it's more cost effect toif use 3-d printing.

It's that the design of the part saves so much in jet fuel, your savings come on jet fuel savings but the part is going to take more and it's been in the works for ten years.

It's a very specialized situation.

A small market.

We are not going to be 3-d printing jets.

You will hear about airplane hinges being 3-d printed.

If that hinge fails the plane is not going to crash.

You could print a hinge for an overhead bin on a plane.

We're going to continue to follow this business.

Obviously the stock is getting pounded today.

Thanks so much for joining us.

Twitter is about to report its first earnings as a public company.

Can they prove they have plenty of room to grow?

We'll discuss that next here on "bloomberg west." ? welcome back to "bloomberg west." stwirt coming out with its first earnings report post i.p.o. the stock soared more than 150% since going public but still no profit.

What does twitter need to prove today?

Chief economist max wolf from new york.

He wrote one of the first twitter reports on the street two years ago and adam burke is here in san francisco one of twitter's organizing partners.

What is one of the things you're looking for in the report today?

I think their going to have an amazing q4. i think one of the thing that is not understood is the season alty of advertising.

One of the things we're seeing is digital span really ramped this quarter.

So i think that will be great.

And of course scale matters and online advertising.

So monthly active unique users and the breakdown between u.s. and international.

When it comes to add revenue growth versus user growth, what is more important?

Right now for twitter is add revenue growth is more important because we have a company that has a really bright future that we are all excited about but has a strat fear i can evaluation and needs to hit every time it steps to the plate the ball out of the park for about 18 months.

Now here is my question: can twitter become the add revenue power house that facebook and google have become?

They don't really have to do anything for search ads to bring in boat loads of money.

Will promoted tweets really do that?

I think yes, absolutely.

It's aton of wild exeermentation ortizers right now.

People are flocking to it.

People skipped a super bowl ad and put their money into twitter.

People want to play around wit and are excited to it and it's hard to rep pli kate on any other platform.

One of the things i note about twitter is how much of their business is in fact international and yet the international growth rate has slowed down.

How big a deal is that?

What's more important than the growth rate is the value of the international user versus the u.s. user.

I think the revenue per u.s. user is in the $2 range so can they monetize international better?

That requires international sales presence, getting in front of international advertisers.

And those are non-trivial things to do.

What about the facts that brands, companies, businesses can get attention on twitter without paying for anything at all.

Like jc penny with drunk tweets that i can't even read and they got all kind of attention for it.

Is there a problem with that?

Sure there is a little bit of a problem with that but we've seen that across the social media complex.

We see that as facebook gets people to struggle for instagram.

We saw as facebook experimented as twitter will have to do.

To go back to the early point, it's one in the same, 75% of the users are offshore but 75% of revenue is on shore.

Twitter has to get them to take the next step to see the value and monetize.

I think the misconception is twitter is not competing with facebook and google.

They are competing on who can take market share from traditional advertising faster.

Promoted tweets is the primary ad engine but they've experimented with tv commercials and target users geographicically.

Do you have any feedback on how these experiments have gone?

Do your clients like these?

Experimentation is the key now.

There are mixed results in all these things but there is a willingness to pay for these.

We're going to a new age of just marketing again.

And people need a different mixture of ads on a variety of platforms, some are digital, some beneficial for brand awareness.

They are trying to figure out to get their infrastructure together to accommodate these platforms.

Expectations are low for a lot of advertisers.

They are trying to figure out the new rules of the roads here.

Amazon just announced a deal with free wheel where they talk about their advertising platform and doing more video ads.

I think one of my favorite facts is amazon ad business were stand alone, it would be the third largest in the united states.

What do you think of their trying to gro, free wheel and amazon partners now?

Amazon is a dark horse in the advertising space.

It's an area not a lot of focus is paid to in terms of amazon's overall business.

But when you think of key aspects you need to be effective.

Twitter gets a big check there.

The other is data and amazon gets a huge check there because they have valuable shopping data, valuable intent data.

The amazon user is fairly intensely focused on what they are doing so they have that as well.

Some of the numbers i've seen as much as $500 million.

When you look at this, it's a very highly motivated, very direct sales pitch, does video make a difference when it comes to e-commerce ads?

Amazon is a complete dark horse and people aren't focusing on it snuff.

Advertisers don't know what to do with it and they treat it like a media platform.

Video is all the rage.

The problem with video is it's costly to produce.

And people want it turned around very quickly and those hurdles are hard to get over yet.

I think facebook's little video trick yesterday on their anniversary was a nice little experiment of how you can turn real time video around quickly and have it be engaging.

But people still have to crack that nut.

Thanks so much for joining us.

We're going to be all over twitter's first earnings report on the late show today.

We're also going to is it down with disney's c.e.o. as the company opens its quarterly report card as well.

We'll talk about that more on "bloomberg west." ? this is "bloomberg west." cbs is expanding its relationship with the nfl winning rights to broadcast some thursday night football games.

Eight early season games will be broadcast on cbs next season and sime you will cast on the nfl network.

The deal is for one year with an option for a second.

They already broadcast fwames on sunday'ses.

You are at disney today speaking with bob iger.

Before i want to talk about football.

What do you make of this deal?

It's a big deal.

It's not everyday you get the rights to nfl that come up and so there were a lot of interest of players in this.

There was a disney angle.

There was some interest on disney's part possibly to bring this game to abc.

I think you highlighted an important thing which is this is a one-year deal with an option for a second.

They are looking to build the platform for football that espn has with sunday night football.

They've chosen cbs as the platform to test it on.

We'll see where it goes from here.

To clarify why these games are sime you will cast on nfl network and cbs.

It's because the nfl network to get paid in subscriber fees, they have to keep it on there too so they had to find a balance of selling the rights and keeping it on the nfl network.

It's interesting when you talk about cable networks.

You have abc that took monday night football and put it on espn.

The notion it would then go back to broadcast is interesting given importance of espn to disney.

I think it's a good point when we're comparing a business like cbs to a business like disney.

In the case of cbs it's largely about the broadcast network.

In the case of disney we're talking about abc but in terms of what drives this business, we are talking about the cable networks and espn and disney channel.

And it goes beyond that because have you the theme parks and movie business and ph.d.ing and licensing.

All these things come together to make a big broad business.

The signs suggest they are seeing a lot of growth in those different areas.

When it comes to earnings later today, what should we be matching for?

You think about the box office performance of a movie like "freezen." i think this is at about $860 million worldwide.

It's an important story for disney in the sense disney animation has seen a bit of a rensauns thanks to the pixar team that builds that animation business.

I'm sure that is going to be one of the big highlights to look at even though it's not the driver the media networks are.

And if you look at what a guy like bob iger is passionate about, he is passionate about technology.

It will be interesting to hear from him about all sorts of stuff.

They have a big deal with netflix, the magic bands at the theme parks to introduce tech to the theme park business.

And even in their interactive business when you have a game like infinity tries to take advantage of what disney is.

I'll be curious to see what they have to say on all those fronts as well.

We'll look forward to your interview with bob iger later today.

We'll be right back.

? bloomberg tv is on the markets.

We have had a down market although not a sharply down market today and that's after we had a little bit of mixed economic data out in the morning.

The dow is higher and s&p is close.

A couple of individual movers including ralph lauren has boosted department store sales.

Ralph lauren has expanded beyond casual wear into handbags and fine julie.

Gaming revenue increased 7% about half the rate analyst were estimating.

We'll be back on the markets in 30 minutes.

? ? you are watching "bloomberg west" where we focus on technology and the future of business.

Sony is in talks to sell its p.c. business to japan industrial partners.

The move is part of a broader restructuring and could result in job cuts.

Sony's p.c., tv business posted a loss last quarter.

Pan sonic is making a successful transition away from tv's. shares rose nearby 20%, the most since 1974 this.

Comes after pan sonic reported a 20% gain in third quarter profits after focusing on things like solar panel and auto parts.

Alley bab ba rose to $153 billion.

It comes after yahoo!

Indicated that revenue surged you 51% last quarter.

They are expected to go public next quarter.

Google settled a big anti-trust investigation by the european union.

The five year pledge let's google add new services or alter its search page as long as they display result frs rival services.

Last year the f.t.c. dropped a similar probe.

This is a big deal.

It is a big deal.

It force rs going toll put competitive services on their own site.

They have tremendous control because that's where everyone goes to search for things.

If you are a competitive search service and you want people to find what you do, you need google to help you get there.

What the settlement forces google to do is be more honest about how it shows result frs competitors.

What kind of teeth are in this because the notion of putting results in there but letting other businesses show up in the monopoly that is google is another?

If you are to talk to executives at google the types of responses you would get is we're still a lot smarter than these guys and there are things we can go around this rule that allow us to promote our services in ways that we don't for others.

The reality is people are going to google to search for everything.

The competitive issues we are dealing with is a small subset of what google does.

Isn't that similar to a settlement they made with the u.s.? it's all about anti-trust.

When you are the dominant player in a technology market, how do you make sure that others have some level of fair treatment on your ground?

This is probably on some level either good or bad, black or white, on some level this is bad for amazon and all those other businesses that want their results to show up in ways the users might intipped when they do the searches on google.

Google is constantly tweaking it's algorithm in ways that are legal.

The risk is when they go into businesses that aren't serged, when they go into the e-commerce business and offering travel advice and getting paid for clicks, that's when the risk comes in when you have a business that dominates as google does.

When you go into a search engine and you say trip to new york or hotel in boston, those results it's a good chance the first or second result you see that's what you use to book.

If that's a google service instead of a price line service, google's advantage becomes that much greater and they are doing all of those things.

Let's talk about something more fun.

Earthquake stock compensation that will vest over four years.

We just got information about new c.e.o. of microsoft is $1.2 million.

He's got a lot of hard work to do but why pay earthquake $100 million?

I come at it from the view that eric schmidt is worth $1.2 billion.

It's a huge amount of money for everyone else and commump change for him.

It raises the question why.

Eric is an important person for the company.

He travels for them and represents the company.

It's a brand the company wants.

It's hard to explain those dollars when someone has more money than you could spend in a lifetime.

And rick at yahoo!

Making $109 for 14 months worth of work.

I don't get that.

The numbers are silly.

Why would he lose goggle.

What is he giving up?

You can understand how that carrot was offered.

You don't think that's ridiculous for a company in the middle of a turn around.

If they think he's going to make them that much money, it wouldn't be a bad idea.

Eric schmidt was in the area forever.

Most of that wealth was created at google.

You wonder if part of their decision making process was what would it cost us if he leaves.

You have to weigh that with how much scrutiny are we inviting by paying him this much money especially with google in this inquality debate.

When you make things like this public, it's only going to cause you more heart ache.

Another google story.

Susan leading u tube going to an unspecified role.

I think google's first office was in her garage or something like that.

What does she bring to the u tube role?

Since superstorm sandien has been in charge -- susan has been in charge of that product since day one.

She understands what google is trying to accomplish and the ecosystem in which google plays better than anyone.

U tube is that property google played a lot of money for and has done all sorts of things to try and monetize.

But google's recognition that video is only going to become more important on desk top and mobile and it's almost as core as google search.

Remember when andy left android going into an unspecified role and he's the guy buying all of these robotics company.

Google is probably not a bad one.

Given choice you want to be chairman.

That specific role i think.

Thanks guys.

Still ahead the future of drones from delivering packages to tracking volcanic activity to protecting african rhinos.

You can watch us streaming on your phone, your tablet, bloomberg.com and apple tv.

? welcome back to "bloomberg west." media giant time warner increased stock buyback program by $5 billion.

Fourth quarter sales were up 5% to $8.6 billion.

Profit up to $983 million.

Subscription revenue at the turner channels was up 6%. i want to bring our correspondent back into this conversation.

Your interview with bob iger later today.

Let's talk about hbo.

We've seen a lot of things with video.

Where does that leave hbo today?

In hollywood circles they love to discuss the battle between hbo and netflix.

Netflix has a disney connection because they have a deal coming where many of the movies are coming to net flix on a first run basis after they've been in theaters.

Hbo results were part of the time warner results you just highlighted.

What you see is a pretty healthy business, a business that generated $4.9 billion in revenue last year.

While netflix gets a lot of attention for adding subscribers and hardware and all the awards they are getting, hbo has been in the position to say thank you very much but we have a very profitable business.

It gets to the bigger question of what is the best model?

Obviously hbo is a service that is part of that cable world, that cable bundle.

Where netflix you sign up for $7.99, come and go.

Netflix looks like it but hb orkse's financials look pretty strong as well.

You reported that the company behind "house of cards" has a new investor.

Goingen hime is the new investor.

We talk about "house of cards," the second season is going to be coming to netflix on value tynes day.

They announced yesterday there is going to be a third season.

When netflix decided to push into organize nals.

They said can we find a partner to make a show like this so we're not carrying all the financial risk.

That turned out to be media rights capitol.

They are behind "house of cards." they included a range of companies.

Goingen hime a large company has come in and replaced some of those investors and the thinking is give them a little bit of a financial boost if they want to go out do more interesting stuff.

They've done film and the "ted" movie.

I for one very excited about the third season of "house of cards." thank you.

We'll get back to you later for disney.

We turn to a company that is at the heart of a growing market for commercial drones.

They just came back from conducting field tests in kenya where they used drones to protect rhinos from the threat of poachers.

So tell me how this field test worked out for you guys.

You sent three people to kenya.

We did for two weeks leading up to christmas.

It turned out really well.

There were a lot of thing we wanted to get out of it in terms of testing a few different vehicles.

We deployed three different aircraft there, a mixed of fixed wing as well as flying wing aircraft.

Tell me how it works.

You use digital imagining, thermal images.

How do you track them?

We flew during the day with zoom cameras as well as flying at night.

During the nighttime operations it's thermal imagining and we used fixed cameras and gimmable cameras and you can fly to an area and survey it and we were able to locate people on the ground as well as animals.

Elephants don't pay much but i wonder what you take away from this?

It's wonderful you are doing this but beyond that?

We said what are some of the applications we want to see happen.

Anti-poaching was one we wrote down.

We thought what are some of the best business cases we think of agriculture, land management, law enforcement, fire response, disaster response, there is such a wide variety of applications.

It's been the motivation for creating the platform others can taylor to a specific market.

What about package delivery?

I think it's going to happen with live ever life saving areas like vaccine delivery.

When you say you are involved in that, does that mean you are talking to amazon?

We are not.

We're focused on applications we think will happen over the next one to three years.

I understand how you picked interesting things.

But were there specific technologies or practices you wanted to take away from the rhino experiment that would be applicable in other scenarios?

We are working on making the aircraft as fully aon the mouse as possible and anybody can use and operate it.

So working with people like the rangers for example so they can operate the vehicle in a very easy to use way and if anything goes wrong the aircraft respond in an intelligent manner.

So for example n africa we had a cable to our radio transmitter severed and lost all communications with the aircraft at one point and it came back and followed it's contingency plan and landed.

What's the latest with the f.c.c.? they are looking at this closely but there are a lot of regulatory hurdles before this could work?

There are rules coming out later this year.

We're pretty involved on what the rules will be and what the standards for who can operate the vehicles as well as safety.

They are doing tests that could go on for many years.

You think standards for small drones will come out before the tests are completed?

The f.a.a. is coming out with rules for small unmanned aircraft before the larger ones and that should be later this year.

Thanks for joining us today on "bloomberg west". what does the future look like for mobile data?

The new forecast will give us a glimpse next.

? kell woman back.

Mobile data usage showing no signs of slowing down.

According to sisco's data traffic forecast, mobile data traffic will increase eight fold by 2018. sisco is driving much of the data use and predicts more people will access data on damage jets in the connected home.

A nasa researcher wants to use technology from space exploration to reserve water in breweries and wineries.

A not so trivial fact for your friends at the pub, for every pint of beer that goes down the hatch, three or four pinets of water go down the drain.

It doesn't take a nasa scientists to tell you that's a lot of waste for a precious resource.

We have limited resources so the industrial infrastructure is going to have to get to the point where it's making better use of those resources.

Matt is a former astronaut.

He took the closed loop system for space and adapted it for earth.

They uploaded their project to planet forward.

It's an advanced waste water treatment system that leverradges active organisms to clean water from waste water.

They brought their system to the bear republic brewery in california.

They plugged in the pipes and those newly discovered microbes went to work.

The majority of what we're treating is organic.

They consume it.

In the process they generate a little bit of electricity and that is consumed by other organisms that generate methane.

Methane that will used to generate the burners.

The big payoff is the water.

We should be able to reuse about 25% of our water.

We estimate 15% will be used to cool chillers and so% will be used for floor washdown.

Like the modules used in space station crauks they come in sealed containers edly added to meet demand frfment pilot projects like this brewery to larger orpses at water treatment plants.

The sky is the limit for the number of applications that this technology has.

A lofty goal that is already brewing down to earth results.

If have you an idea you'd like to submit to planet forward.

Visit plantforward.org.

Check out bloomberg.com/sustainability.

It's time for the number that tells a whole lot.

John is at disney, cory is here.

You have the bite for us today.

How about $870 billion.

870 million is the accumulated retained earnings over the 20 years this company has been public.

Today looks like the 3-did printing bubble might be over.

Even if you focus on the business side of the business, the enterprise side of the business, it's going to be a small market?

I think it's a small market.

One of the leaders really shows that.

If you could buy a 3-d printer for your house, what would you want to print?

Emily printouts.

That seemed like a hit.

Maybe if they were doing more emily khang.

I don't know.

We were talking about this a few months ago.

There were a lot of companies trying to go public as those stocks were going up and that was an unoh moment for the industry.

You know what they might not want to print?

Little cory johnsons.

We have to go to twitter for that one.

I think that's a point.

A lot of the analyst are bullish on these stocks.

The bankers are trying to take these companies public.

The fact everyone is trying to rush into these deals leads to optimism from the analysts.

Thank you all for watching this edition of "bloomberg west." don't miss our late show today.

We're going to be all over twitter and disney earnings.

John is on the disney lot where he will be sitting down the bob iger at 3:00 p.m. pacific.

?

This text has been automatically generated. It may not be 100% accurate.

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