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tv   BBC Business Live  BBC News  April 12, 2019 8:30am-9:01am BST

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you're watching bbc news at nine with me, annita mcveigh. the headlines: after the arrest of julian assange yesterday, labour leaderjeremy corbyn calls on ministers to oppose any attempt this is business live from bbc news with ben bland by america to extradite and victoria fritz. the wikilea ks co—founder. disneyjoins the on—demand revolution — the education watchdog says taking on the likes of netflix and amazon english councils are spending as it unveils plans tens of thousands of pounds putting excluded children in centres for a new video streaming service. that are not registered as schools. live from london, that's our top story on friday the 12th of april. new laws for upskirting offences. anyone caught taking a photo underneath someone's clothing without their knowledge could face two years in jail and be added to the sex offenders register. "tel aviv, we've got a problem." we'll be finding out why the first privately—funded mission to the moon streaming the magic kingdom — disney says it will launch didn't go according to plan. in north america later this year. and in sport, british golfer ian poulter is fourth but will families be willing to shell out money on yet another monthly subscription? also in the programme... jet airways appears to have suspended all international flights — as fears rise about the firm's survival.
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we are keeping an eye on the markets, europe taking its cue from asia, mostly a negative picture. and we'll be talking risky business — the boss of the imf tells the bbc what she sees as the biggest threats to the world economy. we'll be discussing what's in a word? one investment bank finds that using algorithims to detect unclear language could be a good guide for when to sell investments — today we want to know, what value do you place on the words people use? get involved on twitter — use the hashtag #bbcbizlive. hello and welcome to business live. welcome to the programme. we start in the magical world, where media giant disney has announced details of its new streaming service. it hopes families will splash the cash on yet another monthly subscription to see its films and tv shows.
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but disney's entering a very crowded market. leading the pack is of course netflix — with 139 million subscribers around the world. it spends big on content in a bid to attract viewers — it's thought more than $12 billion last year alone. the e—commerce giant amazon has more than 100—million prime subscribers. it says video has been a key driver of growth — but it's thought to spend less on content than netflix. and apple has been spending up big on content and stars — including oprah winfrey — as it gets ready to launch its own streaming service. dave lee is our north america technology reporter and attended the unveiling of disney's plans in los angeles. this is a big launch for disney because it is something that has beenin because it is something that has been in the works for several years.
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they would have wanted to launch it sooner, they would have wanted to launch it sooner, you presume, they would have wanted to launch it sooner, you presume, but because of content deals they had in place with the likes of netflix and other streaming services, they had to wait before they could launch their own exclusive service in those markets. that meant there has been something ofa that meant there has been something of a delay. the service will not launch here until november the 19th of this year. in other parts of the world, it could be more than two yea rs world, it could be more than two years away before disney feels it has enough exclusive content to offer to those markets. when it does launch here in the us, it's going to be pretty aggressively priced. $6.99 for the entire year. some netflix packages cost double that. it's being seen as a very ambitious price from disney to put it out there at that level. with us is amit pau, co—founder, empaua ventures. disney execs have been talking about this seismic shift that we are going to see in the media landscape since 2006. what has taken them so long?
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that seismic shift, firstly, in 2010, there were 20 million customers watching streaming. by 2020 it is 1.2 billion. so, that has already happened. what struck them so long? firstly, the technology needed to be perfect for the mass consumer. secondly, what people forget is that the disney business model originally was to distribute through cinema and cable satellite. when they terminate there agreements, there are still a four year lock in period. they were prohibited from going direct to consumer. when we look at some of those numbers, they want to take on the likes of netflix. can a content creator really take on the technological prowess of the likes of netflix? this is where you are seeing the disruption taking place, the technology giant, whether it is amazon or netflix, versus the rich
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historical content from disney. the a nswer historical content from disney. the answer is, yes, they will win. but you got to remember disney has got such a rich consumer franchise. marvel studios generated 18 billion in renewed just from box offices. the franchise they have is very rich for the whole family, notjust the franchise they have is very rich for the whole family, not just from lacklustre movies, tv shows, but also let's not forget the sports franchises, as the result of the fox acquisition. —— not just franchises, as the result of the fox acquisition. —— notjust from blockbuster movies. what is the appeal of the streaming service? surely it is easier to just make content surely it is easier to just make co nte nt for surely it is easier to just make content for netflix to stream? the simplest way would be to license to third parties, but there is no consumer relationship. and if you look at the obscene amount of money that netflix were investing in original content, 15 billion, you can imagine disney being marginalised. direct to consumer service streaming provides disney the great opportunity to get real customer intimacy, which compliments the theme park revenue stream. customer intimacy, which compliments the theme park revenue streamm customer intimacy, which compliments the theme park revenue stream. it is
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all about this, isn't it? what, fairy dust? shelling out the cash! our minds work very different ways. thank you very much. let's take a look at some of the other stories making the news. toshiba shares have fallen as much as 5% after the sale of its us liquified natural gas business to a chinese group collapsed. the japanese firm has been shedding assets in a bid to turn around its business. the ride—sharing app uber has warned it may not make a profit. the firm made the comment as it unveiled details of its plan to float on the stock exchange. it says growth is slowing and that it lost $1.8 billion last year. despite the losses it's thought the stock market launch could value uber at around $100 billion. the boss of boeing says that a software update designed to prevent disasters like the two recent fatal crashes involving its 737 max jets, is working.
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dennis muilenburg says the update has been successfully operated in simulators — and that more tests are scheduled. the firm's 737 max remains grounded around the world. india'sjet airways appears to have suspended all its international flights, raising fresh fears about the indian airline's survival. this comes after the carrier on thursday grounded 10 more planes over unpaid fees to leasing firms. monica miller is in delhi. does this spell the end ofjet airways? it doesn't look good. the indian aviation minister called this afternoon for a review ofjet airways to see if it is equipped to keep going in light of hundreds of flight keep going in light of hundreds of flight delays and it is facing more than $1 billion in bank debt. angry customers who were stranded overnight took to social media with
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angry words about their flights being cancelled, with very little notice, in places like paris, london, amsterdam and singapore. i did just get off the phone with a jet airways spokesperson who said that officials are meeting this afternoon and they expect to have a statement later today. perhaps we will find out where the planes will be redirected all we will get some kind of clarity. as i mentioned, the airline is saddled in debt, it can't pay leases or pilots. they are about to strike this afternoon. i spoke to someone to strike this afternoon. i spoke to someone from the union who said that by this afternoon they will go on strike. they haven't been paid in more than a month. it doesn't look good forjet airways at this point. monica, thanks very much. asian shares lacking direction but markets in china weakened while japan's nikkei 225 outperformed the other main indexes. investors in the region seem wary ahead of the start of the us. corporate earnings season.
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there's also underlying anxiety over the outlook for global growth. oil prices edged up, lifted by ongoing supply cuts led by producer club opec and also by us. sanctions on petroleum exporters iran and venezuela. european markets taking a cautious approach too — they're waiting to see what emerges from some big name banks' earnings that are due out later. someone else waiting to see what happens with those results and the other things to watch out for on wall street — samira hussain. us financial markets are eager to see the next slew of corporate earnings. on friday, wells fargo andjpmorgan will be reporting earnings. the last time we heard from jpmorgan, it missed analyst expectations for the first time in more than three years. jpmorgan's earnings will be watched not just for what they say about the financial health of the bank, but also for broader clues about the state of the us and global economy.
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as for wells fargo, while the earnings will be closely looked at, analysts will have a lot of questions for the bank after its ceo, tim sloan, abruptly stepped down from his position last month. wells fargo has already said it is only considering candidates from outside the bank. joining us is shanti kelemen, senior portfolio manager at coutts. the last quarter was softer than expected for lots of the banks. what are we expecting here? are they still feeling the pain? yes, banks are very sensitive to interest rates, and if you think since december last year, interest rate expectations have come down a lot.
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the federal reserve saying they are not going to raise rates. banks lend money to people, they want to be able to do so at higher rates. the other factors you have is wages have been rising in the us. we had the government shutdown at the beginning of the year. it is likely going to bea of the year. it is likely going to be a quarter with a fairly flat revenue for a lot of banks. when we look at ipos it seems like unicorns, it is time to go public, and uber are about to do that, but with an unusual warning that we were mentioning earlier, it's saying it may never make a profit? quite a weird pitch to investors? it is honest, in some sense. any company can go bankrupt or go bust. but i think what they have to recognise is they are in an incredibly competitive market, they have got lyft, there are also competing with the fact you might buy a car, and driver to work. they are having to invest a tremendous amount of money on technology, are we going to have d riverless ca rs on technology, are we going to have driverless cars in the future, they are trying to get market share. and they may have to lose money for a long time. that has happened with amazon, they lost money for years. i
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think it is good to be honest about the risks, but they also have a tremendous opportunity in the market that they are in. amazon is not doing too badly. it has done all right. we are going to be talking to you later about the value of words and the value of honesty. still to come, we'll be talking risky business. the boss of the imf tells the bbc what she sees as the biggest threats to the world economy. you're with business live from bbc news. today was the second date the uk could have left the eu without a deal but instead a six month extension has been agreed. so where does this leave businesses — and what should they be planning for now? ben thompson is in salford this morning to find out. what are you up to? good morning,
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welcome to salford. you are right. the deadline has changed again. how does business prepare for a deadline for brexit that just does business prepare for a deadline for brexit thatjust keeps moving? first they had the end of march, now today was the second deadline, april the 12th, and now we are told the end of october. we are looking at haulage. it is one of the businesses thatis haulage. it is one of the businesses that is going to be affected. 98% of things we consume is a country are transported on trucks like this. they have got to deal with all the paperwork, the customs checks that might come into force after we leave the european union. richard is with me from the road haulage association. what are you contending with? you have a lot of plans, but you have to put up with moving goalposts? it's like a moving target, we are preparing for no deal and putting those things in place. but it has moved again. everything that has been negotiated in terms of contingency needs to be renegotiated and moved to the back end of this year. we also need some clarity
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about what we are planning for. we haven't got that clarity at the moment. it is an industry we probably take for granted. 98% of staff is going to be on one of these trucks at some point in this life. 3.5 million went to mainland europe last year. we take it for granted because it works. it is a veryjust thing, things are going to be delivered on time. what happens, is it cost or time not suffers? it is so it cost or time not suffers? it is so slick, sojust in time, that any delay or issue is going to have an impact on the supply chain, manufacturing or retailers. the bottom line is that any delay means you don't get your stuff. you know, those vehicles are potentially courting fees at customs and borders, and that means it is an enormous cost borders, and that means it is an enormous cost for borders, and that means it is an enormous cost for the industry to bear and enormous cost for the industry to bearand a very enormous cost for the industry to bear and a very marginal industry at that. it is fascinating. richard, thank you, i appreciate you explaining that. that really is a problem. every minute, every hour,
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every day those trucks are stuck in queues or imports, it is costing them money. that means extra time, extra costs that we ultimately will end up paying. we will talk more about that a little later. in the meantime, back to you. your‘re watching business live — our top story... this disney has announced its new streaming service. it is hoping that they will splash the cash on a new streaming service. from the cooling global economy to escalating tension between the us and europe over aviation subsidies and the small matter of brexit, it's been another busy week in news. our economics correspondent andrew walker is here in a moment to look at some of big stories that have been causing waves.
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shall we run through the first one? i guess what is going on with the us and trade sanctions? it is a key concern for institutions across the world, including the imf? absolutely. we have the annual meetings over the weekend, ministerial meetings, finance ministers and so forth. in the run—up to that we have had a whole load reports from the imf, including the assessment of global economic outlook, which was continued growth. the chief economist was saying she does not think a recession is an imminentfear, does not think a recession is an imminent fear, but they have revised down their growth forecasts significantly. she does expect the world economy to pick up a bit of momentum later in the year, but she describes that as precarious. there area describes that as precarious. there are a lot of risks. chief among which is the concerns of renewed trade tension centring on the united states. lets hear from christine lagarde. well, it is a delicate moment, because we were under the probable
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illusion that everything was fine, momentum was up, growth was in the air. and i did say a year ago, when the sun is shining, that was growth, please fix the roof. that was structural reform. forward one year, and we have adjusted our growth forecast by a significant amount, compared with a year ago. are we now forecasting 3.3% growth. which is far less than what we had hoped. and we are hoping for some improvement in the second half of 2019. but only if certain risks do not materialise. and those risks include anything from a hard brexit to renewed trade tensions, to financial market trepidations. those are big clouds on the horizon.
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she had some interesting things to say about finance? the imf will put out, in addition to the general global economic forecast, an assessment of the state of global financial stability. no immediate panic, but there are a couple of building concerns, three building consents they have. us corporate debt, in relation to the size of the economy, the highest it has ever been. concerns that some european banks are overloaded, overburdened with euro zone government debt. that was central to the eurozone financial crisis, and also concerns that profitability among some of the smaller and medium—sized chinese banks is very poor and they've not really got very much by way of questions to absorb any losses they might make. the concern is that if there is an economic shock of any sort, may be coming from this trade issue, then the financial situation they think could amplify the shock and potentially give us a nasty downturn a few years down the road.
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it doesn't sound great. let's move on and talk about this kind of long simmering feud between the us and the european union over the latter‘s continued subsidisation of airbus. it could be an all—out trade war, no? in some respects, we are kind of already there with aluminium and steel, and the stuff that the united states is doing, specifically against china. bear in mind this thing about aviation subsidies goes both ways. the eu has also brought a successful complaint and the world trade organisation against the united states over boeing. what we have had this week as some indications of exactly what the united states is proposing to target by way of additional tariffs in terms of european goods, because of the case that they have won in the world trade organisation over airbus subsidies. i would world trade organisation over airbus subsidies. iwould make world trade organisation over airbus subsidies. i would make one point. sometimes the united states, the president trump, has been accused of riding roughshod over wto rules. in this case, they look like they are
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very much following procedures and getting organisation from an arbitrator. at least in europe, they can breathe a sigh of relief that brexit is no longer a concern for six months, at least? ithink brexit is no longer a concern for six months, at least? i think what british businesses will say, certainly the predominant view i have heard is, yes, a degree of relief that a no—deal brexit in about 1k hours' time is not going to happen. but they are not dancing in the streets. you know, it is not clear what the ultimate relationship is going to look like. i think businesses, many are relieved that things are going to carry on as they are for at least six months. they would really like to be able to plan for the long term. there are real concerns about the possibility of having to go through all of this no deal preparation again, come the end of october. this is it. it is expensive. lots of private businesses have been stockpiling, and there was a story in the
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guardian putting the cost at £1.5 billion of the 6000 civil servants that have now been stood down. what are you going to do with them if you need them again? absolutely. in relation to businesses, the stockpiling stuff that they have built up, a lot of inventories and components, they can now use them. it is not like the money has been com pletely it is not like the money has been completely wasted. there is a financing cost. you have to pay for the additional warehousing space, many will have to put working capital in, they will have to pay interest costs on the money they have had to pay up front to increase their inventory is on a short—term basis. and they will be planning for the possibility that they may have to go through that again in six months. it is striking that the government has said they are standing down there no deal preparations. let's see if that remains the case when we come to the end of october. indeed. watch this space. thank you very much.
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the new president of the world bank has told the bbc he's looking forward to a constructive relationship with china. mr malpass took over this week. he was previously part of the trump administration — where he was fiercely critical beijing. but speaking to michelle fleury, mr malpass struck a more concilliatory note. we have common goals. we would like to see the world do well. i would like to see china do well. it is the world's second largest economy, it is growing fast. and the more progress china can make in growth, that helps countries around the world. but i do think, and i want to stress, that their activities need to be transparent in terms of their activities abroad, full disclosure of the types of debt, and trying to have good quality, high quality projects abroad. this is something i think they can work harder on, do better on. and it is something that will encourage and work with them on
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doing. so i'm looking forward to a good, constructive relationship with china, one that benefits countries around the world. is that a message thatis around the world. is that a message that is well received by china, when you are talking about projects like this, saying more transparency, better quality projects, well they say, hang on, that is a bit rich coming from america, coming from the world bank? i think china really wa nts to world bank? i think china really wants to evolve its role within the world, ina wants to evolve its role within the world, in a constructive way. they area world, in a constructive way. they are a world leader, they want to be are a world leader, they want to be a world leader in terms of development. what other business stories has the media been taking an interest in? shanti kelemen from couttsjoins us again. which one are we going to start with? let's start with this one. yes, this was in the financial times. a big bank, merrill lynch, it says it has managed to sort out an algorithm looking for an clear
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language in investor calls, when companies are talking to investors about what is ahead. if these people, the top of the tree, are using an clear language, this bank will sell the stock. what do you make of that question of yes, it's pa rt of make of that question of yes, it's part of a lot of the data analytics, you have seen people doing things like scour reports to find trends, what things are companies talking about. a lot of the algorithms are based on common sense. the common sense here is of somebody at the top cannot articulate in clear language what the strategy is and what is going on, chances are, they probably are not articulating it and managing well in their company. things like that make sense. we try to do that at coutts, and we look for trends. a lot of the reporter hundreds of pages long. why not use data where you can? talking about use of land which, apparently alexa, amazon is using language, listening in, real
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people listening in to recordings made on alexa devices made in people's homes? a bit unsettling? perhaps. the headline sounds worse thanit perhaps. the headline sounds worse than it is. if you read into it, it sounds like they are trying to look at places where the computer didn't doa at places where the computer didn't do a greatjob understanding at places where the computer didn't do a great job understanding what people are saying and figuring out how to make it better. you think about all the different accents, the different languages they are trying to roll out across different places, probably robots need help from humans. the question is, do you have good control in your company to make sure that people can't be identified in the data is deleted, it is done ina in the data is deleted, it is done in a careful way. and what you hear, what if you hear something you really shouldn't? or wrongdoing? exactly, criminal charges. thank you very much. i realised i made the big mistake and i said the name of the device, which apparently sets the ball off at home. i am really sorry. hi, alexa! goodbye, happy weekend.
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good morning. it has been another chilly start to the day. for most of us we chilly start to the day. for most of us we started off with some sunshine. it is not going to finish the day with sunshine, though. more cloud building up compared to the last few days. it will stay dry for most of us. i say most, there will be some showers in the north—east of scotland. if you have watched the weather forecast through this week, i've been showing you this press chart all week. high pressure in scandinavia keeping things quite settled, where the system is being blocked from coming close to the uk. i mentioned there will be some rain in the north—east of scotland today. no showers continuing into the afternoon. dry for most of us. the
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cloud will start to build as we go to lunchtime into the afternoon. we still have this east or north easterly wind, just drawing in that colder air. temperatures still below the average for the time of year. seven or eight celsius on the eastern coast, 12 or 13 possible in the north—west of scotland. through this evening and overnight, we will see some showers moving their way into east anglia and the south—east of england. otherwise, varying amounts of cloud. lengthy clear spells. again, turning quite chilly. they could be frosted places. temperatures in northern ireland, you will notice they are staying above freezing at 5 degrees. during saturday, still the chance of showers in the south—east of england. otherwise, dry and sunny day. plenty of sunshine on saturday. it's still going to feel quite cold. exposed to the wind and some shade, you will notice that. if you are standing in the sunshine, you have a sun trap, it will feel pleasant. seven or 11 celsius. going into sunday, we have a weather system which now is starting to try to push in against the area of low pressure,
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sorry, high pressure. we will see more cloud, a patch of rain moving into the far west of northern ireland, perhaps quarrel. generally speaking we will see more cloud on sunday compared to saturday. also staying dry for most of us. those temperatures creeping up a touch. eight or 11 degrees. as we go into next week, we started to lose that colder air coming next week, we started to lose that colderaircoming in next week, we started to lose that colder air coming in from scandinavia. it will change wind direction. we started to draw in some milder and warmer air going through the week. you will notice temperature started to creep up. by mid week onwards, the temperatures up mid week onwards, the temperatures up to the mid or high teens. goodbye for now.
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