The Shift to the Subscription Economy

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Oct. 14 (Bloomberg) –- Zuora Founder and CEO discusses changing consumption models and using Zuora to manage subscription businesses. He speaks with Deirdre Bolton on Bloomberg Television’s “Money Moves.” (Source: Bloomberg)

But this is "money moves" where we focus on alternative investments.

If you take a look, three americans have been awarded the 2013 nobel prize in economics.

They are being honored for providing 50 years of research on how market prices in assets have moved.

Schiller spoke earlier today at yale where he is a professor.

There's rising inequality in the united states and elsewhere in the world.

This is a problem that has solutions.

Many of them are financial solutions.

Moving on, netflix is said to be holding talks to add a set top box.

Microsoft is focusing on software for tablets.

It windows eight update tomorrow , customers in the coming months.

As you know, at least the u.s. if not the world, focus on the debt ceiling.

There is a key meeting expecting to start in about 30 minutes time.

How hopeful can citizens be?

Cautiously optimistic is the way to describe people in the white house to right now.

It is also the way to describe the key negotiators on capitol hill.

Just take a look to -- at what harry reid said moments ago on the floor.

Constructive and good faith negotiations continue between the republican leader boehner and me.

I am optimistic we will reach a -- an agreement with a reasonable nature this week.

To reopen the government and pay the nations bill and to put our nation on sound fiscal footing.

Those are the words that markets and americans around the country have an waiting for.

The two most important players in the senate are in the room and they are talking and starting to get the outline of a potential deal.

Leader harry reid has been a strong force so far.

He really has been.

There has been very little daylight whatsoever from where the obama administration is and where harry reid is on a daily basis.

Officials feel good about his ability to run the negotiations.

This is something mcconnell alluded to on the floor today as well.

We have had the opportunity in the last few days to have some very constructive exchanges of views about how to move forward.

Those discussions continue.

I share his optimism that we are going to get a result that will be acceptable to both sides.

Harry reid and mitch mcconnell meet just about every morning on the senate floor.

When you see the optimism that both are showing right now, that is a good view forward about a pathway that has not existed, for the most part, in the past couple of weeks.

We know this meeting will be starting in less than 30 minutes.

What is the best case area of?

Best case scenario -- what is the best case scenario?

S k scenario is the work that reid and mcconnell have been doing.

I think everybody feels like they are close.

There is a lot of procedural work that needs to be done.

And don't even mention the house were john boehner is going to have to figure out a way to get this through.

We will see where mcconnell and reid are in an effort to map out what is ahead.

You just heard phil say, the key meeting is less than 30 minutes away.

We will bring in bob rice from tengion capital partners.

-- tangent capital partners.

If you are a hedge fund manager right now what are you doing with this?

Couple of things.

One thing you are probably doing is getting more insurance still.

Because although now it looks like it is going to resolve, you want more insurance.

What they have been doing is increasing their insurance to guard against volatility.

On the thing that others have been doing lately is going long on volatility.

Not trying to predict where it is going to go, but simply that it will move a lot.

You can go short, but you can also get squeezed.

And we have had a few days where the markets have been hired through this.


Those who have been long on volatility have done well and those who have been doing just short have not done as well.

Hedge fund managers is -- their job is to not lose a lot of money.

Those guys have been increasing their short positions and doing what their investors want them to do, frankly.

If we look at the hedge fund industry, let's come to it in grocery terms.

We have a chart that we can put up.

Oh, i guess we don't have it.

What do we need to know?

A lot of people are looking at the s&p well into the double digits this year.

The s&p -- the hedge fund impacts -- the hedge fund index is only up nominally.

You don't take someone else's date to the prom, but your date.

And look at all of these dates that you can select from.

These are very different dates.

They can be very misleading when they are bundled together.

Look at the top two.

Those are in the same index?

That is like trying to manage matter and antimatter.

A fundamental growth in quantitative direction.

When you bundle these together, you do not get an index that tells you very much about how hedge funds are performing.

What do we make of that gecko the long and the short of it.

-- what do we make of that?

The long and the short of it.

The average hedge fund might be that just today we got news that one of the tiger cubs has launched a new long only hedge fund to raise over $1 billion.

You cannot overgeneralize.

As long as you make money, history tends to look at you kindly.

It does.

Bob rice, thank you for joining me.

We have a break to take.

When we come back, steve: may be looking to unload some of his art collection.

We will show you some of his works that may go on sale.

? welcome back to "money moves" on bloomberg television and streaming all day long at

We want to get you caught up on private equity news.

Severus planning a german market spinoff initially valued at $1.4 billion.

The ipo may happen in the first half of next year.

And boeing and -- and sac's stevecohen is selling some of his celebrated our collection next month.

There are estimated to sell between $7 million and $10 million.

And in other art news, for $60 you could have bought canvases from the anonymous british artist banks he -- banksy.

Each one usually goes for tens of thousands of dollars.

By the end of the day, one vendor only made $420 and two of the campuses were bartered down to 50% off.

We focus now on renewable energy.

The 140 billion dollar solar industries getting a high-tech upgrade.

Silicon valley -- this silicon valley startup is positioning itself to be the superhero of solar.

We got a firsthand look.

Robots are basking in the light of yet another industry.

Solar, a sector with historically high barriers to entry, has been seeing and him -- dramatic increase in automation, paving the way for innovation.

Why is it ideal for robotics gecko because currently, solar plants are dumped.

A silicon valley startup is securing the solar industry with robots, each sporting a superhero nickname.

Is that captain america gecko that is captain america.

If a solar panel was smart, it would know that at a given time it moves with the sun.

It goes from one to the next every 45 minutes and tells it to move with the sun.

Just like a sunflower.


Behind us are the dinosaurs with the old way of doing things.

The old way is a building of great large structures, which use a lot of steel and has a 20% loss.

The real proof will be in their ability to last.

We are working to design our robots that they last for the lifetime of the solar plant.

It is 20 to 25 years in harsh conditions.

It is a bit of a challenge.

When we come back, it is not just magazines that run off subscriptions anymore.

Is this is from netflix to zip car are embracing the model.

-- businesses from netflix to zip car are embracing the model.

? some breaking news out of washington, the white house says the budget talks scheduled for 3 p.m. today has been postponed, allowing for more time for lawmakers to talk.

As of right now, that 3:00 p.m. -- 3:00 p.m. meeting has been postponed.

In the meantime, as the subscription economy grows, so do software media and telecom companies that manage subscriptions.

We are joined by the ceo who was employee number 11 at salesforce.

How do you realize the subscription economy was big enough to build a business on?

We saw that there was a massive shift going on in how people were consuming stuff.

You and i would find ourselves buying fewer cds and cars and subscribe to services that meet our needs instead.

Six years later, there is a lot of evidence that this is happening.

Perhaps you no longer by cbd -- dvds and cds and subscribe to services for those instead.

You do not want to deal with hassles with parking and insurance, so you subscribe to services like the car.

One of the really interesting studies recently that we saw from the economist is that they did a survey where four out of five companies are saying that they are seeing this shift going on in their consumers preferences for services and products.

Just over half of the companies are thinking of launching services to meet these needs.

It seems like consumers more and more actually prefer paying a membership if the product or service is what they want.

That is what -- that is exactly right.

If you have a car, you can describe your zip car membership is 50,000 cars over the weekend -- over the nation.

Why get stuck with a car that sits idly 90% of the time?

And in some cities, spaces at a premium, so the less stuff you have is better.

Where do you see this going?

Software will be the software of service.

New see it in media, newspapers, magazines, videos with paying walls on the newspapers.

Netflix, spotify.

He we see this happening across the industry.

We should this happening with health care, education.

And a lot of the products that you buy now are tethered to services in the cloud.

It makes sense to take advantage of things like cloud computing and josh on amazon servers and mobile device networks.

-- like cloud computing on amazon servers and mobile device networks.

You recently raised some money.

What are you using it for?

Companies today run their businesses on things called erp systems.

These are all great systems when we were dealing with a manufacturing economy, warehouses and fleet management.

But when these are services, these products don't help with things like reising.

They don't help you acquire customers or build long time customer relationships.

There is a host of applications that are required that will ultimately replace these traditions from sap and oracle.

That is the big challenge.

Sap and oracle worked 20 to 30 years to build these companies.

It will help companies like american express, at&t, qualcomm.

A sharing and subscription economy.

Glad to have you with us.

He is the founder and ceo of zuoara -- of zuora.

? click on "money moves" tomorrow, we will be joined by ed conard, formerly of bain capital.

Debt is at nearly twice its historical average and he says he sees no significant improvement in sight.

I will probably take the other side of that and ask if the shutdown is the way to go.

You will not want to miss that conversation coming your way tomorrow.

In the meantime, it is 56 minutes past the hour.

We will get you out to the newsroom.

It is time for bloomberg "on the markets." it has been a pretty crazy day.

The s&p is still in positive territory, up almost four.

However we did see some kind of drop in the session high after learning that obama and russian leaders will postpone, however it is to allow the senate to continue working.

All of this tells -- and congressional leaders will postpone, however it is to allow the senate to continue working.

All of this tells us that it has been the theme throughout the day.

Potbelly restaurant chain has fallen five percent.

That after analysts said it is grossly overvalued.

And merck is down today, sanford bernstein cutting shares.

It is time for the sector report.

We are focusing on technology.

Some of the gift names in the sector will report earnings for this week him a a google, ebay.

For a preview, we are joined by a former research analyst at the chelsea advisory group.

Some of the indicators we have gotten from micron and citrus point to some week fundamentals.

What is your charge?

Some things are working in their favors for the large multinational.

The dollar weaker in the quarter helps the pound and the euro.

The general challenge for technology right now is transitioning to a more mobile world.

I think that has winners and losers.

Which would be the winners in terms of that technology?

Amazon and ebay i would put at the top of the list.

If you look at the mobile

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


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