Casinos in Crimea: Putin Plans Vegas on Black Sea

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March 28 (Bloomberg) -- Peterson Institute for International Economics' Gary Hufbauer discusses Russian President Vladimir Putin's plan to put casinos in Crimea on Bloomberg Television's "In The Loop." (Source: Bloomberg)

To ipo this fall.

They will join pandora on the floor of the exchange.

For more on spotify, jon erlichman is joining us from los angeles.

What is spotify planning to do with the money it should gain from going public?

This is an ambitious company.

There is no doubt about it.

It wants to be the dominant local subscription music service.

To do that, you have to be a lot of places.

One of the biggest costs for any of these services is the money that they ultimately pay up to the artists.

If you're trying to grow your revenue, and you have a businesslike spotify were you play -- a a certain amount per month like the netflix model, you can get more users in a market or you can say let us make our service of venable in new markets.

You open up the number of subscribers.

You have to hire people.

You've got a lot of early-stage investors who want to make a little bit of money themselves.

It is causing some people to worry a little bit about a market top.

It seems like we are talking about another ipo every day or another company being acquired to the tunes of billions of dollars.

Private equity puts money in companies like spotify.

They are incentivized to get out now.

Is that a worry for a bubble in a specific lace like tech.

There are a lot of people that believe this is the future of music.

A lot of people and not necessarily by it very they don't like to download.

You do have to have some true champions in the business.

Whether or not, and i think we saw this with king digital, just because you have a lot of momentum or there are consumers that like your service does not mean it is the best investment for the individual.

Being public and gives us a better chance to look at what is happening in the scenes.

Spotify has been an ambitious company that wants to dominate this area.

If you are a second-rate subscription service, it does get a lot tougher.

We're looking at a graphic on the screen that was talking about the different streamers out there.

How much pressure is spotify's ipo going to put on the competition right now?

I think if you are a lesser-known name it, you will feel the competition.

The biggest threat that spotify puts out there is toward any business that is more geared around the traditional ways of selling music.

Obviously, physical sales and downloads, we are moving away from the itunes model, even though they still make a boatload of money.

Apple launched the itunes radio so you could discover music and be inclined to buy it.

A lot of people don't necessarily want to own the tracks anymore.

That hurts some of the smaller artists who used to have a small label and a hit song that could go on the music store and the label did well.

It is a lot tougher to be a successful music artist if the only way people are playing in the music is through subscription services.

It is a fascinating issue, this renting versus owning your music.

I am a renter.

Both spotify and pandora, i do love you use itunes very idle longer buy music on itunes.

It is easier.

Music taste changes.

You may listen to something one month and then something different the next.

This week, twitter announced partnership with billboard.

They will discover new music very quickly.

If you look at the pie chart, you are still seeing the traditional cd's as the dominant overall percentage.

We've seen subscription music services grow very quickly with their overall contribution to revenue.

There is still the nice thing about spotify going public and you can look at their financials of pandora.

Pandora is not pushing subscription.

They are pushing internet radio.

They are going to be based on advertising.

Spotify is a different thing.

We were joking during the commercial break because our director was putting some use a gun to cheer people up during the commercial break.

He played "tempted" by squeeze.

I can a member having that cd.

Does anybody buy cds anymore?

At all?

Is anybody buying them?

Yes they are.

Globally, the problem with the industry is the percentage of the sales is going down.

They knew that fewer people down the road were going to do their tvd by mail business -- dvd by mail business.

That is why we only talk about netflix's streaming service.

They still have people that are getting dvds through the mail.

There are people who are buying cds.

There are people who are still getting dvds in the mail.

They watch the kids movies a lot.

Jon erlichman, it is wonderful to see you this morning.

Thank you very much.

You can catch all of his latest in media and tech every day on "bloomberg west err." russia might want to turn crimea into a gambling center.

Would the world shun it?

We will talk about this next.

You can send me a tweet.

? the u.s. senate and the house each past the bills on thursday for further sanctions on russia.

These are bands for russian officials and corporations.

This is a response to the annexation of crimea.

Will sanctions make food and blake?

-- make putin blink.

There wanted to make crimea a gambling zone.

Joining me is gary.

Good morning.

He wants to make it a vegas on the black sea.

Will people go and gamble there?


I think the idea that putin has is to turn this into a resort.

You said las vegas on the black sea to try and attract europeans.

They will try to bring some prosperity to crimea.

The sanctions that have been put in place have no hope of reversing the annexation of crimea.

They are intended to dissuade putin from taking over the rest of ukraine.

President obama has promised much more severe sanctions if the russians move into ukraine.

That is the big question, of course.

Will they actually do that?

It is an interesting idea and one that might succeed economically for the region, to create a gambling haven.

Do you think that given what has played out politically and that given the resentment some europeans feel toward russia and of vladimir putin, would people want to vacation there?

You are right.

They would not want to go there in the next year.

I think he has a five-year problem.

He has some time to turn crimea into a russian the playground which invites western europeans and others to enjoy the black sea and the resorts of all that kind of thing.

We asked the question this morning as -- if he should be doing this.

I got a ton of responses on my twitter account.

Here is one that i think is pretty funny.

"i do play in the crimea before i venture to atlantic city." one final tweet that i got was that gamblers don't care about alex.

-- politics.

Is that what putin would be banking on it?

You are absolutely right.

As you said, other places around the globe just want to be a resort.

You don't want to think about anything except the glitter and the money.

The glitz and the glamour, all law las vegas.

Thank you very much for joining me this morning, gary.

That is about it for this edition of "in the loop." next week we will be talking

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


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