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First Move with Julia Chatterley
Tesla: This Year in Review & 2023 Predictions; 90 Percent of Electric Power Knocked out in Lviv; EU Meets to Discuss "Possible Measures" over China's COVID Situation; Tesla Shares have Fallen more than 65 percent this Year; Nominee: The World of Journalism is Obsessed with Elon Musk; Former Zuckerberg Adviser: Journalism Doesn't Need Twitter. Aired 9-10a ET
Aired December 29, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
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JULIA CHATTERLEY, CNN HOST FIRST MOVE: And a warm welcome to "First Move", live once again from London. My Last show into 2023, dramatic news you're
behind us. I think we can all agree seven Fed rate hikes or growth Investors flee a Central Bank pivot next year, still no guarantee.
Also, Elon Musk bought Twitter for an exorbitant fee. What happens next year that we can pursue? Well, no one better to ask than Roger McNamee, the
Co-Founder of private equity firm Elevation Partners and Mark Zuckerberg Former mentor to likens the media's obsession with Musk to the outsized
attention given to Former President Donald Trump. He's calling for a different approach to Musk mania.
But of course, we still need to cover the Tech business. Somehow Tech Analyst Dan Ives is charged up on his 2023 outlook on the firm's core EV
business. So we will be discussing that too. Key sales numbers set to be released that will shed important light on consumer demand.
And of course production too for Tesla, especially in key market China. In the meantime U.S. futures currently higher on this second to last trading
day of the year, but still a challenging week it seems for U.S. stocks. The U.S. majors fell more than 1 percent during Wednesday's session, the S&P
and the NASDAQ currently on track for a fourth straight week of losses and a rare December pullback.
Just to give you some context for the year the S&P is now down 20 percent year to date, and the NASDAQ down 34 percent. Of all the major global stock
markets only the HANG SENG in fact can truly be seen as a December winner down today but up more than 6 percent over the past month. The HANG SENG,
in fact making a stunning 30 percent turnaround since November amid China's sharp pivot from zero COVID policies and Hong Kong officially scrapping
almost all of its COVID health measures, Thursday.
Reports say it will reopen its border to Mainland, China early next month too. But of course, as we've long discussed now reopening carry sizable
health risks. And we're learning that many passengers on two planes from China to Milan on Monday, tested positive for COVID.
Most had no symptoms at all. A full report on that just ahead, but first we begin in Ukraine and Ukrainian officials are calling on residents to stay
in shelters after what they called a massive missile attack. The Ukrainian Military says 54 of the 69 missiles launched by Russia were downed.
At least two people though were killed in attacks on the Kharkiv region. According to a local official in the west of the country Lviv's Mayor says
90 percent of his city is currently without power. And CNN's Ben Wedeman is in the capital Kyiv with more
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Julia, according to the Mayor of Kyiv, 16 missiles was fired in the direction of the capital.
All of them successfully intercepted but the problem is even when these interceptions take place, debris falls to the ground. Here at this
location, you're seeing massive destruction to clear up crews are already here.
Police tell us that a 14 year old girl was injured at this location. Her mother also injured, her mother currently in surgery. Another man nearby
was also hurt. Now this does seem to be one of the largest attacks by the Russians using missiles and drones.
According to the Ukrainian government, more than 120 missiles and drones were fired today. In across the country at various cities hear in Kyiv 40
percent of the power is out at the moment. The Mayor is called upon people to charge their phones stuck up on water because they don't know when the
electricity will be restored.
In the City of Lviv in the Western part of the country 90 percent of the electricity has been knocked out in Kharkiv in the East. We understand that
four missiles did successfully hit energy infrastructure and it does appear that energy infrastructure was the target of this massive Russian strike.
It appears the Russians want to leave this country cold and in the dark just before New Year. Now according to the Commander in Chief of the
Ukrainian Armed Forces, in addition to the drones 69 of the missiles fired 54 of them were successfully intercepted, Julia.
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CHATTERLEY: Ben Wedeman there. Now nations across the world taking action amid relaxed travel restrictions that are mounting surging COVID cases in
China. The U.S. has ordered all passengers from China to take a COVID test now before boarding flights. EU health security officials are meeting today
to discuss ways that response may even be coordinated.
Italy, however, has already responded and is enforcing mandatory testing on arrival. Prime Minister Georgia Maloney is urging the EU to follow its lead
in fact, on one flight from China to Milan, over half the passengers tested positive for the virus this week. Barbie Nadeau has more from Rome.
Barbie, great to have you with us, it's interesting I was looking at the new rules that the United States is going to impose. And they don't come
into effect until midnight on January the fifth, and I never really understand that week gap because a lot of people could travel. And I think
Italy in terms of their testing on what they're finding proves that point.
BARBIE NADEAU, CNN CONTRIBUTOR: Oh, that's absolutely right, but you know, you have to remember Italy is a little bit stung from the first round of
this pandemic. Italy was, of course, the first Epicenter outside of China back in early 2020. And I remember sitting here talking about how they were
restricting flights then too.
This testing is mandatory on these flights coming from China. And one of the things that are really interesting about it is that while the test
itself is mandatory, it's just an antigen tests being done at the airport. People are then being told they can have to isolate that's not exactly
being enforced with any sort of law enforcement.
People who tested positive are told they must isolate. Now how they get out of the airport? Or how do they get to their hotels? That's all just a
little bit sketchy at this point, but I suspect those rules will be stricter now that these tests are proving to be very, very inconclusive
indeed, Julia.
CHATTERLEY: Yes and this is part of the challenge. What are people saying there? Because I think we've seen political shifts, political changes and
of course, we heard from the new Prime Minister today on some of these measures as well, and what they're finding, in terms of testing. What are
people saying about these restrictions? Are they welcoming them? Are they concerned? What are people saying there?
NADEAU: Well, you know, I think it's either two ways to look at this, you know, you're looking at number one what kind of vaccine did the people that
are coming on these flights have? A lot of the Chinese citizens, Chinese nationals would have had the Chinese Vaccine. A lot of other people, maybe
people who are resident in Italy, maybe people who were travelling back and forth for work or what not?
What would have the board the other vaccines of Pfizer than Moderna are some of those that have proven to be far more effective? So what they're
doing is sequencing some of the results of these tests in order to find out what variant it is? And now so far, Omicron seems to be the prevalent
variant on that flight for Milan.
And so people I think, here in Italy, trust the healthcare system. They trust that the vaccines are going to work and they trust that the
government is going to kind of guide them through it. We saw that the first time around and I haven't seen anybody really protest the fact that the
people are being tested off a flight. And in fact, I've seen some reports of people saying well, to every flight, not just from China, everyone
should get tested once they arrive in this country, Julia.
CHATTERLEY: Barbie, great to have you with us. Thank you so much for that. Barbie Nadeau there! Let's begin Paula Hancocks now, who is following
developments in Seoul on the China side of the equation. Paula, as you and I have been discussing, as China's rapidly trying to reduce restrictions
and allow people to move from inside China outside.
What we're seeing, of course, is restrictions being put up to some degree at least around the world, how are they being met by both Chinese citizens
and of course, by authorities there as well?
PAULA HANCOCKS, CNN CORRESPONDENT: Well, Julia, certainly Beijing is resisting and criticizing what it sees happening in certain countries
around the world. Even before the U.S. officially announced that it was going to renew some of its quarantine, excuse me, some of its testing
requirements of travelers from China. Beijing had already reacted, they said, all parties need to work together scientifically against the epidemic
to ensure the safe movement of people between countries.
Now, of course, the irony wasn't lost on many given the fact that China has been one of the most stringent countries when it comes to border
restrictions when it comes to lock down mass testing. And it's also had the longest zero COVID policy. But of course, that did end rather abruptly, the
restrictions are continuing to be lifted and certainly from January 8, the international travel restrictions will be lifted even further.
So we are seeing a number of countries around the world putting back these kinds of testing requirements that they had disbanded months ago, believing
that they were no longer necessary. We heard from U.S. officials when discussing the fact that they felt the need to put these restrictions back
in place.
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HANCOCKS: That it was from a public health point of view because there was a lack of transparent data coming from China itself saying that it would be
very difficult for public health officials to be able to pinpoint or identify any potential new variants. And be able to act on them quickly to
be able to reduce that spread.
One interesting point, though, we have heard from the virus database, the global virus database suggests aid which says that China has actually
increased the amount of data that it is submitting and the genome sequencing up until this point does appear to be that which has been
circulating around the globe since July.
So that will put some minds at rest at this point. But at the same time, we're also hearing from Beijing that they have scrapped their daily
reporting of COVID cases. They have refined what they consider now to be a death due to COVID. So the figures that will be coming out are not those
that many public health officials around the world we'll be relying on or we'll be using to try and gauge the threat, Julia.
CHATTERLEY: Part of the problem, it's the point that you made about the transparency and the ability to trust the data. And I think that's part of
the reason perhaps why countries like Italy and of course, the U.S. talking about it, the United States already acting to make decisions for
themselves, with or without the provision of decent data. Paula, do we have any sense of how China's handling this?
Particularly in the biggest cities, there's some degree of was a great degree of a lack of understanding over whether or not their healthcare
systems as fast as they're ramping up the provisions and the ability of resources to be able to tackle the rising cases and those that sadly, are
very sick or worse in this case? Do we have any sense any clarity at this stage, how well they're handling it? I think perhaps one of the bigger
fears over the coming weeks is whether some of these measures have to be reversed?
HANCOCKS: Well, certainly what we're hearing from our teams on the ground? What we are seeing from social media is that many hospitals are overwhelmed
that they are struggling to cope with the sheer number of hospitalizations of people coming in needing to have hospitalized care. And also when it
comes to the very basic level of being able to find the drugs that you need to treat yourself at home.
We have been hearing about a lack of fever medication of cold medication to be able to treat you at home and not have to put an extra burden on the
hospitals within the country itself. And we've also seen from our Correspondent in Beijing, Selina Wang. She has been to areas where they
have seen in Beijing crematoriums being filled.
There have been queues of cars and people outside these crematoriums waiting to hear when their loved one may be able to put to final rest. So
it does appear to be a very difficult situation in China. I have to point out it is very difficult also, to be able to get an overwhelming idea and a
broad idea of just how bad the situation is given the fact.
Official data is not available. It's not even clear at this point whether official data is being gathered. But health officials in China have made it
very clear that they will not be publishing the daily COVID numbers that they will not be considering a COVID death the same way that many countries
around the world may be.
And so those numbers are going to be artificially low. So anecdotally, we can assess what it is like? Our teams on the ground can assess in a very
small part what it is like? But to get that big picture, I think will take some time to come out, Julia.
CHATTERLEY: Now an impossible. Paula, great to have you with us thank you, Paula Hancocks there. OK, returning to Italy on a short time ago, the
Vatican announced that the Pope Emeritus Benedict the 16th is "Absolutely Lucid and Vigilant". The 95 year olds condition remains serious but stable
at the moment.
Catholic leaders around the world as well as Pope Francis are urging the faithful to pray for the former pontiff and joining us now CNN's Vatican
Correspondent Delia Gallagher. Delia, good to have you with us again, yesterday, you were saying it was a surprise what we heard the current Pope
say at the end of prayers yesterday asking for those messages of support for him. And now it seems a small positive tone, can we say that?
DELIA GALLAGHER, CNN VATICAN CORRESPONDENT: Yes, absolutely, relatively good news Julia from the Vatican on Pope Benedict's health. As you say they
say he rested well, last night he is in serious but stable condition and very interestingly, they say he's absolutely lucid and vigilant. And what
this suggests to me is exactly that, Julia that from the news yesterday that his health was deteriorating and it was rather alarming.
It seems now they are trying to calm the waters somewhat. Of course, we are still talking about a 95 year old in frail health. So anybody who's cared
for an elderly person knows that you cannot really tell.
[09:15:00]
GALLAGHER: Sometimes there are ups and downs in these things. But certainly from this update today I think the message from the Vatican is exactly as
they say the situation is stable. He is aware of what's happening and it seems to me that they do want to reassure people that at least for the
moment, the Pope Emeritus is doing OK, Julia.
CHATTERLEY: Good news and beautiful late afternoon sunshine there in Rome. Delia, great to have you with us thank you. Delia Gallagher, there from
Rome. Now Tesla has a lot riding on how China handles its sudden exit from zero COVID.
As we were just discussing China's Tesla's second largest market, and a country with massive global potential growth potential too, but recent
reports suggest the company is having trouble hitting its year end targets with Chinese insurance registrations coming in weaker than expected
production setting to be impacted by the recent spike in COVID cases too.
And report suggests the company Shanghai plant could face an extended shutdown next month. China fear is just one of the factors behind the
recent weakness in Tesla's share price down some 68 percent year to date.
Shares though have been perking up a little this week, a higher close Wednesday and a 6 percent pre market bounce today too. But the wild ride
for Tesla shortly not yet over Elon Musk sent an email to employees this week, urging them to "ignore stock market craziness". Craziness, one could
argue is an understatement.
And Dan Ives joins us now He's the senior equity analyst at Wedbush Securities; we can talk about that comment Dan and great to have you on the
show. But I do want you to put some context on these China production fears as well. And the importance of that to the business, as you and I have
discussed many times.
DAN IVES, SENIOR EQUITY ANALYST, WEDBUSH SECURITIES: Yes, I mean Julia, China is the hearts and lungs of the tests or growth story. And I think for
the first time we're seeing cracks in the armor domestically, as well, Neo and other players, it's an Arms Race and clearly softening demand. And now
for Musk and Tesla, it's navigating through the storm. It's been a smooth ride last four or five years. And now there's clearly a Category 5 storm
ahead.
CHATTERLEY: Category 5 storm we can bear that in mind the stocks already down 68 percent year to date and we've also discussed that endlessly.
You've now named three conditions that you think are required to be certain that we've seen the bottom for the share price and to see it rise again.
Just walk us through those because they're sort of obvious, but very important.
IVES: Well, I mean, look, first, I think most important, is really ultimately on CEO, Twitter. And it's not just talking the talk, walking the
walk. It's much removing himself from day to day duties, because that's part of the problem attention focused on Twitter, instead of Tesla has been
a black eye movement for Musk and a black eye for Tesla.
So that's the first thing needs to happen, the second, you know, ultimately, in our opinion, is really sort of weighing out conservative
numbers for 2023. I think that's extremely important numbers that they can hit. It's a softer macro, as we're talking about. And the third a Pinocchio
boy that cried wolf, stop selling stock.
And if you are put a 10b5 plan to investors know about it. And that's been the biggest problem. I mean, this has really been a crashing plane, you
know, from the eyes of investors. And Musk is focused on salted, unsalted peanuts.
CHATTERLEY: Have you had any client say I'm done? Because and I know, again, you and I have discussed this many times where there's this sort of
back and forth on this. And there have been promises not to sell any more stock and then those have been broken.
Have you had any investors say to you, Dan? I understand why we're in the stock and why we're invested and why we liked the longer term story. But at
this moment, it's just too painful. Have you had any of those comments?
IVES: Definitely, I think institutional viewers, has changed because I think there has been deterioration in the Musk brand. And institutional
investors they will and tested for the transformational EV. You know what I'll call arms race over the coming years that Tesla continues to lead and
the valuation of what that could be?
The problem is a lot of this Musk and it's been an albatross in the stock. And I think institutionally, you've seen many throw in the towel and that's
why this is a moment of truth for Musk to really navigate through this. And I think you've seen the clock strikes midnight for a lot of investors in
the near term and you've seen reflected in the stock.
CHATTERLEY: It's funny, coming up on the show, we're going to speak to Former Mark Zuckerberg mentor Roger McNamee, and he wrote an op-ed. You
probably read it in Time Magazine saying that the media needs to rethink the way that they cover the Musk mania and we're going to talk to him in a
few moments.
But he does say that we're doing it in a similar way that the media treated Donald Trump and that they're giving oxygen to a story and actually
investors in Tesla would be better off if the media stop talking about Elon Musk and all the different headlines irrespective of whether they're about
Tesla or Twitter or anything else?
[09:20:00]
CHATTERLEY: Dan, do you think it would make your life easier? Do you have a view on this if the media actually just stopped doing some of this?
IVES: Strong respect for ride, I just disagree with the view. I mean, my view is that Musk is most fouled individual in the world. A modern day
Albert Einstein, you know what, however you want to call him? But he's going through a Howard Hughes moment.
And ultimately, despite Thomas Edison label, that's the word and this is self-inflicted. Remember, he started the five alarm fire himself with
Twitter, that's going to be known as a $700 billion mistake. He's the only one that can extinguish it. So I think that's the difference here is that,
you know, I sort of disagree with that view in terms of what really Musk be brought on here.
CHATTERLEY: Do you think he goes away of Howard Hughes?
IVES: Look, I believe for much the problem is that you like OK, turn left, he'll be left. I'm going to turn right. And I'm going to love while I do
it. So that's part of the problem here is that he needs to course correct. I think it's reflected in Tesla stock.
And that's why this is a key four to six weeks ahead, because it's still in the early days of what I've used the transformational Tesla story. And I
think Musk can navigate through this and course correct. But again, right now, investors need a pilot for Tesla, not a Ted striker.
CHATTERLEY: Yes, it's funny, isn't it? I mean, that whole left, right thing is perhaps why we have SpaceX and we've brought down the cost of
spaceflight and things. There's just some balance there, and we still have to find it. Dan, great to have you on as always!
IVES: Thank you.
CHATTERLEY: Happy New Year!
IVES: You too.
CHATTERLEY: Dan Ives Senior Equity Analyst at Wedbush Securities. I've done the teeth now so you know what's coming next. Stay with us we'll back after
this.
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CHATTERLEY: Welcome back to "First Move", any moment now we'll see the swearing in of Benjamin Netanyahu marking his returns. Israeli Prime
Minister live pictures here of the Knesset which confirmed his cabinet just a short time ago and to which majority Netanyahu cemented alliances with
heartbreak parties opposed to Palestinian statehood.
Elliott Gotkine is watching all of this and - in Jerusalem. Any moment now for that swearing in Elliott and then a new Netanyahu era begins.
ELLIOTT GOTKINE, JOURNALIST: Very much so Julia, well, looks like the opposition is perhaps stalling for a bit of time now.
[09:25:00]
GOTKINE: But any moment now Netanyahu will be confirmed will be sworn in as Prime Minister for a record 6th time. The one thing that they have managed
to do today we've had speeches from Prime Minister designate still Netanyahu and also the Outgoing Prime Minister Yair Lapid.
One thing that they did manage to do is they have voted in a new speaker, the first openly gay speaker of Israel's Knesset, Amir Ohana, a very
staunch Netanyahu ally, who has held ministerial positions before with his husband and two children in the audience.
And I would imagine that Netanyahu would point certainly to the speaker as being the perfect rejoinder to those who are concerned that this new
government may discriminate against members of the LGBTQ community. But as I say, we heard from Netanyahu outlining his priorities for this new
government. He talked about preventing Iran getting a nuclear bomb, boosting public transportation, including a bullet train.
Although anyone in this country who's seen how long it takes to build a kind of light rail in Tel Aviv will know that that's still going to be some
years away. He's also talked as well about bringing more peace agreements with other countries in the region to build on the so called Abraham
accords as well. One thing he didn't talk about in his speech.
But that was published in this new government's agenda was the plan to develop the periphery of Israel talking about the Galilee talking about the
Negev in the south, but also talking about Judea and Samaria.
In other words, the West Bank so this government says that it is planning to boost construction of settlements in the occupied West Bank something
that is illegal under international law and is sure to raise hackles among the Biden Administration and other allies of Israel, Julia.
CHATTERLEY: More certainly, Elliott, great to have you with us and once again, that swearing in set to take place any moment and we'll bring it to
our viewers when it does? For now thank you for that. OK to Cambodia now, new developments at the scene of a huge fire to Hotel and Casino.
Rescue operations have been suspended at the Grand diamond hotel in the City of Poipet just outside Thailand. 19 people have died and at least 70
people are missing after flames engulf the building. Rescuers say that thick smoke is making it difficult to search the rooms. They've warned that
the death toll is likely to rise. OK we're back after this.
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CHATTERLEY: Welcome back to "First Move"! Journalism does not need Twitter. It cannot win a fight with Elon Musk on Musk's home turf, "That's what Tech
Investor and Former Adviser to Mark Zuckerberg Roger McNamee says in his latest Op-Ed about Musk's turbulent Twitter takeover".
McNamee goes on to say, "The only way to beat people like Musk is not to play that game. That is the lesson we should have learned from Trump. It's
the lesson we must learn now". The Author who is also an early investor in Facebook and Google says journalists who are consumed by Musk's actions
surrounding Twitter are making a mistake.
Joining us now is Roger McNamee, the Co-Founder of Elevation Partners. Roger, it's always a pleasure to have you on the show! Talk to me about the
parallels that you're seeing and what the fundamental message in this Op-Ed was because I read this and it certainly struck me.
ROGER MCNAMEE, CO-FOUNDER, ELEVATION PARTNERS: So Julia, I think it works this way. Twitter matters, because it has been an unmediated broadcast
platform, embraced by politicians, by celebrities, and therefore by journalists, and it was never perfect. It was always a place with a
tremendous amount of hate on it.
But what it did that was really unique was that it gave both consumers but especially underserved communities and opportunity to send their message
directly to politicians, journalists, and celebrities.
And as a result, a lot of communities that have historically been left out of our political conversation were involved in it. And a big part of what's
been going on the right is pushing back against all of those communities.
And what Musk has done is he's come in, and he's basically turned Twitter into a soap opera, in which he is not just the star, but he's the only
character with a light shining on him. And he's used that spectacle as cover for essentially undoing all of what's been good about Twitter.
And going after all of those communities that have historically dependent on Twitter to participate in our political system and journalists have been
covering the spectacle, and missing the underlying point, the really important point which is that private ownership of the most important
communications vehicles in our country makes you very dependent on the owner. And in this case, the owner is somebody with really bad intent.
CHATTERLEY: And amplifying, I think some of the noise and amplifying the engagement on Twitter itself. How would you have journalists act? I think
that's the response. Because certainly in the discussions that I've already seen you the hexane you have that the tendency is, as a business
journalist, in particular, to defend one when it's now a private company.
But there's an impact on a public company like Tesla as a result, I think we have to get away from that discussion and get back to the point that you
were trying to make here which is how best we handle a character like this and a situation like this, particularly when I think democracy free speech,
all of these things are what you're talking about in the article are under consideration. And perhaps at stake how should journalists act?
MCNAMEE: So Julia here's what I think the challenges. The incentives of journalism are to follow spectacle, because they have been sucked into the
economic model of internet platforms like Twitter, like Facebook, like Instagram.
And so they're playing constantly for attention. The problem is that the role of journalism historically, in our politics, and in our culture, has
been to stand up against powerful people to be a counterweight against those who have power to protect those who do not.
And journalism in this era has lost sight of that. And the example I use is imagine if back in the era of the Pentagon Papers, or Watergate, that "The
Washington Post" or "New York Times" had buckled to the political pressure not to cover those stories. It's hard to imagine how bad things would have
gotten in that area.
And yet, we routinely did this with Trump, and we're doing it again with Musk. And I do think that the key thing is to recognize that journalism has
responsibilities not every single day, but at critical junctures to recognize when democracy is at stake.
And to recognize that there are times to cover spectacle, and there are times when you need to simply be an adult and to look at the whole thing
and recognize that wait a minute today I'm not going to give this guy attention. Today I'm going to focus on the needs of democracy. And I'm
quite confident today is one of the days we should be doing that.
[09:35:00]
CHATTERLEY: It's quite funny. It's not breathing further oxygen when a fire is also burning, can I just make a counterpoint to this, and it is a
conversation that I have, certainly, among my friends on a regular basis.
Could an argument be made that the initial attempt in taking over Twitter in this case was about rebalancing and finding some form of middle ground
between saying inappropriate, hateful things, which will always be wrong?
And as you said, there was data now suggesting that that's been amplified on Twitter, versus not being able to say anything that might be taken
offense or puts you at risk of being, for want of a better word canceled, or endanger of a career ending event.
There is a middle ground, and I'm still not sure, in society, wherever you are in the world, we've sort of found that balance yet, could the
intentions in the beginning be pure, but the whole thing is now out of control?
MCNAMEE: I think in principle that point is correct, what I think makes it less relevant here?
CHATTERLEY: Right.
MCNAMEE: Is that we're dealing with a platform that is controlled by an individual. And it's centralized. It used to be the internet was highly
distributed. And there were lots and lots of places where conversations took place. And the scale was much smaller. And therefore the economics
were much, much smaller.
And what happened was Google than Facebook, and then later Twitter figured out how to centralize the communications on the internet, and decentralized
in a way where individuals wound up having huge amounts of control. And that made us tremendously dependent on the values, the principles and the
behavior of those individuals.
And if those individuals had proved to be, you know, focused on the interests of society, and very pro-democracy and pro-civil liberties, that
would have worked out well, in which case, your point would be completely the core one.
But in this particular case, that's not what happened, that these platforms are dominated by people with very extreme viewpoints, who've attempted to
impose their views on the entire country, which by the way, if we had a national debate about this, and concluded, that's what we wanted, that
would be fine.
But that's not what's going on. This is going on, basically, because we as a country are not acting as though we're in control. We're acting as though
we're powerless in this equation. And we're not. And I just wish we could have the debate and have that thing right out in the open.
Right now, we're just sort of sitting there and going, well, Musk is in charge. And he is it's a private business; he can do whatever he wants. But
we should not give so much power to that business. And that's what journalists are doing now. They're pretending like there's no other place
for them to have their conversations.
CHATTERLEY: I'm getting a Deja vu sensation, because I think there are other tech companies we could substitute in for this conversation as well
that you and I have had in the past. It's such an important conversation to have.
What's going on in the tech sector Roger, let's broaden this out, quite frankly, what has been achieved over the last 10 years, because some of the
big tech companies that we were talking about there, they were, or at least were founded in the decades previous to the loss.
And I just look at the investment tide having gone out, and a lot of the public companies share prices having fallen over the last year, but it's
sort of reminiscent of, I think, something that was or wasn't achieved over the last decade. What do you make of what we've seen over the last 10
years? What's the message today? And what are your hopes for perhaps the next decade?
MCNAMEE: So Julia, if you think back to the late 90s, into the early bots, a set of companies got created in that era, in one case, Apple rebuilt in
that, that became enormously valuable and absolutely central to our economy.
So you know, Google, Facebook, LinkedIn and Netflix, you know, a whole bunch of companies became really substantial, not just by market value, but
also by revenue and impact on culture. If we look at the past decade, the hallmark of that decade was the concept of the unicorn, the private tech
company, a startup that would be worth billions of dollars before it had any revenues.
And there were thousands of them as recently as the first quarter of this year. But now, we've had this big shock to the economy. First, we had the
COVID pandemic, and then Russia's invasion of Ukraine, and that's driven up interest a rate is driven by inflation, and it's caused countries.
It's really taken political unrest around the world and caused countries to move away from optimizing for economic growth, to now take into account all
kinds of other geopolitical issues. And so there's a lot of tension in global trade that has disrupted the whole economy it's disrupted the
market.
[09:40:00]
MCNAMEE: It's taken tech stocks down I think there 450 that are down 70 percent or more this year, there are now no tech startups from the past
decade that are ranked in the top 250 market cap companies in the world, there are at least none in the from the U.S.
And there is one company in the Fortune 500 at number 437. It's Coinbase a company that not be able to hold that position. I'm think we're looking at
a lost decade. And, you know, because I've been arguing that this has been an issue for a number of years, that when stock prices were up, nobody
wanted to take the risk of messing.
But now that we're flushing all of this nonsense out, we can actually look back at the last decade and realize in many ways, it was just a massive
confidence game, that people were promoting ideas in some cases, like self- driving cars, or crypto that either defied the laws of physics or defied the laws of finance.
And, you know, now that those things are being washed out. I think it's an opportunity for tech to redirect itself at the biggest issues that society
faces, things like climate change, things like health care, education, things like income inequality, technology can make our life so much better.
And we have a moment and opportunity right now, where the cost is actually really low. We can recognize that we made a mistake for the past decade and
go, you know what, we're just not going to do that again.
We're going to do something better. So I'm very optimistic about what tech can do now. And in part because the market is doing the corrective action
that we desperately needed to do to clean up the mess.
CHATTERLEY: Yes, and now we as journalists have do not breathe oxygen into lifeless stories or stupidity, perhaps and push for the solutions to some
of the world's biggest problems. I've got my marching orders. Roger, it's always a pleasure to talk to you. Thank you so much.
MCNAMEE: Thanks for having me on.
CHATTERLEY: Happy New Year! The Co-Founder of Elevation Partners, thank you. OK and a brief update. Just moments ago, Benjamin Netanyahu took the
reins of the Israeli government for the sixth time he's just been sworn in as the Israeli Prime Minister. Netanyahu stitched together a right wing
coalition which was approved by the Knesset just a few moments ago.
He was already of course; Israel's longest serving Prime Minister. OK, that's it for the show. Thank you so much for watching. "Marketplace
Europe" is next. Sure, very Happy New Year!
(COMMERCIAL BREAK)
[09:45:00]
ANNA STEWART, CNN CORRESPONDENT, MARKET PLACE, EUROPE: I'm Anna Stewart this month we are taking it to the next level with Europe's video games
sector from the kings of consoles to the masters of mobile.
We'll be looking at how gaming can dominate on every side of screen. And anyone can play. We'll meet some of the companies trying to open up the
industry to new demographics, all that coming up here on "Marketplace Europe".
(BEGIN VIDEO TAPE)
STEWART (voice over): Video gaming used to be seen as niche and nerdy. Now it is the most popular show in town. Industry revenues have hit a record.
And according to consultants at PWC gaming has been one of the fastest growing sectors in entertainment.
STEWART (on camera): If you want to roll back the years with a retro game, arcades like this one still attract the crowd. But today for many users,
gaming is all about using any screen anytime and on any platform.
STEWART (voice over): That's why streaming services from giants like Apple and Microsoft are the newest way for gamers to play whenever they want. But
developers like sports interactive and makers, a football manager; it's a chance to reach more users than ever before.
MILES JACOBSON, STUDIO DIRECTOR, SPORTS INTERACTIVE: My name is Miles Jacobson, and I'm Studio Director at Sports Interactive, who make the
Football Manager Series of Games. Football Manager 23, which came out at the start of November has become our most played game where 60 percent up
on player's year on year.
And part of that is because one of the ways that games are really growing is through subscriptions. So you have Microsoft Game Pass, which is an all
you can eat buffet of games on Microsoft's platform and Apple Arcade is similar for Apple devices.
And we're in both of those services. And they tend to bring a lot of new consumers in who maybe don't stick around as much as people who've gone out
there and bought the game. But they tend to come back each year and get into it over time. So as an industry, I think we're growing up with our
business models.
STEWART (voice over): From the days when kids would crowd around arcade games, to the rise of LAN Parties and online play. Gaming is now something
that happens mainly on your phone or tablet. In Europe apps are now the industry's biggest source of revenue as mobile games have taken over the
screen.
GUY COCKER, EDITOR-IN-CHIEF OF MAXIMUM PC: Mobile gaming has absolutely exploded so the growth there is extraordinary and is far outpacing your
traditional consoles that the PlayStation gamers you know they're well catered for. That's a big market.
They're the ones that tend to get the sort of mainstream attention. But over on the other side is a huge market of untapped gamers that are sort of
coming to gaming don't consider themselves gamers may play on their mobile only, and are spending real money in that market.
STEWART (voice over): With these new users on board revenues in the gaming sector have blown past other sectors like cinema and TV. For developers,
that's a sign the industry is getting the mainstream recognition it deserves.
STEWART (on camera): Do you think gaming's now got the same sort of credibility as movies or music?
JACOBSON: The credibility word is quite a strange word for me, because amongst the demographics who play games, we are the most credible
entertainment form that there is, as people who've grown up playing games are ending up in more senior positions in the media.
And more senior positions in politics and in other industries as well, where it's completely natural.
That's really where the credibility has come from. But people aren't moved. I've been playing games for 40 years. They've always been credible. It
doesn't matter what other people think of them. It's always been a credible, credible art formula and a way to spend your entertainment time.
STEWART (voice over): It's a global stage for gaming and one way European companies are holding their own. France's Ubisoft has big franchises like
Far Cry and Assassin's Creed and Sweden's Embrace a group has snapped up games like Saints Row.
COCKER: Europe has an amazing reputation within the video game development community. If you look at the overall video games market, you've got huge
hardware manufacturers in Japan and the U.S. but a lot of those games are actually made in Europe. It's easy to forget that some of the biggest
selling titles of all time a European.
STEWART (voice over): Now with more sales and more success comes to scrutiny to match it's an industry that by its very nature is at the
cutting edge of technology.
[09:50:00]
JACOBSON: It's the technological changes that really keep the industry fresh and exciting. And those don't happen overnight. They happen over
periods of time so it's kind of trying to predict what's going to be next technology wise.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
STEWART: It's been a time of major growth for many gaming companies. And just like a classic video game is all about moving up the levels. Well, now
some of them are taking their consoles directly down the corridors of power to try and find some new players. Nina Dos Santos has more.
(BEGIN VIDEOTAPE)
NINA DOS SANTOS CNN REPORTER (voice over): It's been the site of historic debates, momentous votes and now this. The British Houses of Parliament
don't seem like an obvious place for a gaming showcase. But that's where UKIE the British gaming industry trade association has come. It says it
wants to change our perception of which gamers really are.
JO TWIST, CEO UKIE: Well, it's so important that our politicians, our decision makers understand the value of this sector in the UK and its
contribution to the UK economy. But it's also showing its contribution to culture to society.
You know, people often think it's a kid's thing. 99 percent of children and young people play games, its part of their everyday culture. But actually
the average age is 30 something. And it's 50/50, roughly gender split across all platforms. So it's a really interesting kind of, I think, life
stage regains itself.
SANTOS (voice over): And it's not just politicians being courted by the gaming sector, its banks as well. Barclays now has its own gaming division
in the hopes of expanding an industry which it says still has room to grow.
DAVID GOWANS, HEAD OF CREATIVE INDUSTRIES GAME AND ESPORTS, BARCLAYS: The demographics around games really kind of prove that gaming is for everyone.
The games industry is such a vibrant sector, there's an incredible amount of growth that we see in the industry. And you have these workforces that
are incredibly creative with a deep technical knowledge. So ourselves apart is we want to help support that and help the industry grow in any way that
we have.
SANTOS (voice over): That growth requires a pipeline of new talent. So across London, the developers at Hutch who make mobile games like F1 Clash
have been trying to woo new staff even trying out a four day workweek. Its founder says the industry can always use new blood.
SHAUN RUTLAND, CEO AND CO-FOUNDER, HUTCH: Mobile brought about a huge change in terms of how people make games, how we look after our players,
really empowering teams and enabling teams to do things quite quickly.
I mean, we've been a growth industry for the last 10 years; we've grown from five to 160 people. I think there's a lot we can do helping people
that have not had traditional education and help bring them into the industry.
I think we can do a lot more. I think there's a lot of talent out there that hasn't been tapped. I came from a really untraditional background in
terms of getting into doing this. So I feel quite passionate about the subject.
SANTOS (on camera): So do you think that that also includes more women playing games? Because obviously the gaming industry has had a difficult
rapport with trying to get more coders engineers involve, and also more women playing games?
RUTLAND: Yes, I think there are a lot of initial biases when we - when I got into games, we pretty much made games for ourselves, which were men.
And now if I look at how many women play our games so we make racing games. Racing as a content you just assume as male dominated actually 30 percent
of our players are women.
[09:55:00]
RUTLAND: So in terms of the workforce, you need to be more diverse, if you want to be commercially minded you want to build for your players. So yes,
as company, we're really proud that we're almost as diverse as our player base. And, we know we've got lots of work to do. But it's a really
interesting subject.
SANTOS (voice over): It's an issue that has sometimes been a sore spot for the sector Hutch's Head of Analytics Anna Yukhtenko says that while
progress has been made, there's still work to be done.
ANNA YUKHTENKO, HEAD OF ANALYTICS, HUTCH: I feel like the first step to having a woman in leadership to having a woman in gaming is to hire a
woman, right? So I think there were more women entering the industry.
UNIDENTIFIED FEMALE: I think it's going in the right direction. Industry wise, I wouldn't say like every company is there yet, but I feel like I'm
really lucky to be here touch because I feel like there's a lot of care from that part.
SANTOS (voice over): Of course, it's not only the staff, the games they make have to be inclusive, too. That's why Xbox has launched controllers
aimed at players with limited mobility. Back in Westminster, the Company's Head of Operations told me it's important to keep expanding gaming's reach.
DAVID MCCARTHY, CORPATE VICE PRESIDENT, XBOX PLAYER SERVICE: It's really important for us that our entire player base is welcomed and feels
represented. On Xbox, you see demographics of all types, and all shapes playing all genres, which is really our vision. We want Xbox to be a place
where everyone can play and have fun.
We created something called the Xbox Adaptive Controller, which was a wonderful collaboration actually came out of a Research Hackathon Project
that we did, in consultation with the disability community to allow them to have a controller that takes a bunch of different peripheral inputs and
essentially acts like any other regular Xbox controller when.
SANTOS (voice over): As the gaming pool gets bigger so just the potential for growth. UKIE's hope is that it could even help the economy through some
tough time.
SANTOS (on camera): And how can some of the sector be for growth at a time like this for a country like the UK even further afield? Also, how can you
make sure that it continues to grow at this time?
TWIST: Games are a hugely popular and important pastime, and part of our entertainment culture. So they are going to continue to grow. And it is
about understanding the economic or the global opportunity and market opportunity for games.
(END VIDEOTAPE)
STEWART: Well, it is game over for "Marketplace Europe" this month. Thank you very much for joining us, you can find more of our reporting online
@cnn.com/mpe, but for now, I got to race off.
(COMMERCIAL BREAK)
END
