tv BBC Business Live BBC News July 18, 2019 8:30am-9:01am BST
this is business live from bbc news with victoria fritz and ben bland. netﬂix latest episode runs into trouble. price rises bite as the streaming giant adds less new customers than expected. live from london, that's our top story on thursday 18th july. netflix is under pressure from growing competition and the huge cost of making original programmes, but will global growth be able to offset a fall in american customers? also in the programme:
a first interest rate cut in three years for south korea — the surprise move comes amid growing trade tensions with japan. investors wary about some of those delays to trade deals around the world. reviving a classic — we'll speak to the man who's brought whisky and gin distilling back to an area of scotland that had been running dry for decades. we wa nt we want to know have price rises put you off netflix or are they are too many streaming options? let us know — just use #bbcbizlive hello and welcome to business live. we start with the streaming service netflix. its shares have fallen sharply — down almost 12% in after—hours trading — after the tv streaming giant released disappointing results.
netflix has shaken up the world of tv with its rapid growth — but that growth seems to be slowing down — as it puts up its prices. in the three months to the end ofjune, netflix had 151.6 million paid subscribers. that's a rise of 2.7 million on this time last year — almost half the 5 million the company itself was forecasting. in the us, netflix actually lost subscribers for the first time ever. that means it brought injust over $4.9 billion — up 26% on this time last year — but again slightly less than wall street was expecting. netflix's dominance in streaming is under threat like never before. next year it will lose the rights to its two most popular shows — the office and friends — as owners nbc and warnermedia launch their own streaming services. disney and apple are also doing that. it's forcing netflix to spend even
more on original content — nerves over that spending have given netflix shares a bumpy ride over the last 12 months. there is also concern about how many streaming services people are willing to pay for. a survey by deloitte found almost half of us consumers are frustrated at having to buy multiple subscriptions to watch what they want. we arejoined by james erskine, who's the managing director of creative agency the big shot. where agency the big shot. do you think netflix have gon wrong where do you think netflix have gone wrong if that is theirjudgment?m any marketplace where you have a zone as a sort of sleeping giant, doesn't that sound crazy, but they are? it's always going to be a tough ride. they have gone wrong by being first to market. they are the ones to beat. they disrupted the way we
watch television and now everybody is trying to jump watch television and now everybody is trying tojump into watch television and now everybody is trying to jump into what they are doing and disrupt what they are doing and disrupt what they are doing so they are the ones to be chased. what about this problem of some of their most popular shows being taken off the platform, things like friends, friends and the offers. big networks had given up on things and they are known not going to give up on that. gossip girl doesn't make hbo but they are bringing it back for they are straining. competition is going to get harder and it is going to get harder to find existing brands that have a big fan base and a loyal fan base. that is something they have to get over. they would say that not in this quarter is their biggest ever hit. stranger things came out at the beginning of the next quarter and
thatis beginning of the next quarter and that is not included in these results so it could be they do nothing, but the other question is that they have to be asking do they present? they have never touched live sport whereas amazon. they never touched mainstream entertainment. most of what next for dexter scripted drama. i don't think they will but they have to consider whether they will look at other entertainment genres and that as a way to bolster their subscriber base. presumably, especially as on the horizon disney its own screening, streaming service and apple, they are going to have to work hard to retain customers. apple, they are going to have to work hard to retain customersm apple, they are going to have to work hard to retain customers. it is the first time that they are subscriber base has gone down in america. not since they split their subscriber dvd rental service have
they seen a drop in customers. always on the record saying words to the effect that netflix want to make your favourite tv show. i am not sure that is right because disney is loved, apple will be investing a lot of money. the advantage they have is they were the first to market and they were the first to market and they already have this big subscriber base. disney of course are going to get people to come onto the streaming service but it is going to be tough to catch netflix who are the market leader. you say netflix makes your favourite tv programme, they do not make business live! let's take a look at some of the other stories making the news. the low cost airline easyjet says sales rose more than 11% in the three months to the end ofjune to almost $2.2 billion.
the airline says it's doing well because of better customer service and fewer delays. at a time when many smaller airlines in europe are stuggling easyjet says it remains on course to make an annual profit of around $500 million. shares in the uk based online fashion retailer asos are down about i2% in london. the company has issued a third profit warning since december. it's expecting a $58 million from the ongoing problems its having with moving to new warehouses in the us and europe. those have meant customers haven't been able to buy everything they want. nonetheless, sales were up i2% in the four months to the end ofjune. instagram has now removed the number of likes on posts in several countries, including australia and japan, in order to "remove pressure" on users. the trial means users will see a user name "and others" below posts, instead of the number, on theirfeed. there is concern social media platforms can contribute to low self—esteem and feelings of inadequacy in young people.
one of asia's most vibrant economies, south korea, has suprsingly cut interest rates for the first time in three years. it comes amid growing fears that trade tensions with japan will hurt the economy. sarah toms is in our asia business hub — what's behind the move? it isa it is a big surprise. they have cut the cost of borrowing to i.5%. why? it isa the cost of borrowing to i.5%. why? it is a sign that the central bank needs to stimulate the economy and get south korean companies to spend and borrow but why now? economists thought this announcement was going to be made in august as everybody is waiting for the said decision. tonight reasons, concerns of the us china trade were and the impact this is having on countries like south
korea which are export driven, and china is of course south korea's biggest trading partner. exports are therefore getting hit as a result. the other reason is the other trade dispute between south korea and japan. these two countries have had long—standing tensions but they have got worse lately as a result of japan announcing tighter restrictions on exports in three key materials used in semiconductor chips and smartphones and this is another massive headache for south korean companies, especially firms like samsung who hold a big part of the market. thank you. global stocks were unnerved on thursday following a set of weak—looking earnings and indications that global trade disputes may not be resolved any time soon. earnings at taiwan semiconductor manufacturing company, the world's largest contract chipmaker, fell again in the second quarter.
online fashion retailer asos has warned that its annual profits will be as much as 46% lower than expected after the botched rollout of new warehouses limited the stock available to shoppers, sending shares down by nearly a quarter. easyjet said it has hired rival ryanair‘s operations chief as it reported a rise in revenue despite intense competition in the european short—haul market. sterling traders are braced for big brexit swings ahead. the pound is stck at its lowest level in two years. investors are piling into contracts which pay out if sterling fluctuates wildly in the run—up to the halloween brexit deadline. kathleen brooks is with me. let's start off with the pound
because it is on a fairly steady downward trajectory. you could argue it has been for the last three yea rs. it has been for the last three years. brexit is kryptonite for the pound and it has been for three yea rs pound and it has been for three years and when we get these flare—ups, real concerns this week about a hard brexit and potentially an election, that has caused the pound to fall. it has had a little bit of respite early on thursday morning but what we are seeing is it is struggling to recover. we have retail sales data out of the uk soon and if that is strong we might see another rise in the pound but the trajectory seems to be lower. we think even economic data does not matter with brexit uncertainty. think even economic data does not matter with brexit uncertaintym the wider context, there does appear to bea the wider context, there does appear to be a sentiment that investors are taking their money off the table. a lot of things seem to be delayed.
brexit uncertainty and uncertainty around trade deals and whether they are going to happen. you're seeing that in stock markets and that is why we are looking at hitachi opening this morning. netflix, that isa opening this morning. netflix, that is a concern because it is one of those big tech sector companies. if they do not do well what is going to pf°p up they do not do well what is going to prop up the stock market? just a month ago we were looking at being quite hopeful that a trade deal that happened between china and the us and recent tweets from president trump suggest that is not on the table and it is in the open about whether there will be more tariffs between china and the us. meanwhile there is this row between south korea and japan at the trade tensions there. we have seen that continuing to weigh in on asian markets and the trading session that has just closed. yes, markets and the trading session that hasjust closed. yes, and boosting began, because that is considered a safe haven. you tend to see the yen
rise and that is what has happened. the euro has been weak against the yen as well so it is the key currency to watch at the moment, the yen. thank you. still to come: revivivng a classic, we'll speak to the man behind whose brought whisky and gin distilling back to an area of scotland that had been running dry for decades. you're with business live from bbc news. ryanair has lost one of its key executives to its main rival, easyjet. peter bellew announced a week ago that he was leaving the irish airline, where he is chief operations officer. mr bellew, 5a, is widely credited with turning around ryanair‘s operations after the disastrous winter of 2017—18, when thousands of flights were cancelled due to a shortage of pilots. ryanair and easyjet have been
arch—rivals for the past 25 years, and there has been very little movement of top staff between them. as we've been hearing — the profit forecasts for the company are in line with expectations and the airline said it was due to improved punctuality and reliability. peter morris is chief economist at aviation analysts ascent by cirium. easyj et easyjet saying they benefited from the timing of easter. the good news is they are saying they are full year profit forecast is on track and giving the prevailing economic conditions in the uk and to some extent across europe as well, that's definitely a good thing. let's talk about this higher from definitely a good thing. let's talk about this higherfrom easyjet. a lot of people saw him as potentially a successor to michael o'leary at ryanair. how much of a win is that
to easyj et ? ryanair. how much of a win is that to easyjet? the two biggest airlines operating across europe, ryanair first hand easyjet second. both of the benefits of that economy of scale to be able to fight of the problems that have happened for a variety of other airlines. inevitably you are going to find personnel at one or the other considering the other as an option, and people do make career changes. i would not be the huge amount into it insofar as both are growing and both offer career opportunities to people. and k. still tough economic conditions across europe. you can have a look
at our page. details of a pub deal. you're watching business live — our top story — shares in streaming giant netflix have fallen after it added less new customers than expected after it put prices up. a quick look at how the markets are faring. this is the picture across europe towards the start of the trading session. negative territory. not great. now let's turn to one of the oldest alcoholic drinks around — gin. it's long had its fans, but more recently its popularity has surged even further worldwide. more than $13 billion worth of gin has sold globally so far this year. and much of it is from the uk, where the industry is booming.
britons bought 75 million bottles of spirit in the last 12 months — worth upwards of $3 billion. was that you? not in one go! well, one company to take advantage of this growth is eden mill. launched in 2012, the firm has gone from small whisky brewery to now gin production — becoming scotland's first single site brewery and distillery. the compa ny‘s co—founder, paul miller, joins us now. it is good to see you, especially when you have gifts! it might seem a very simple idea that has been around for so long. what did you see as the business appeal and all of this? i have been on the booze industry for nearly a0 years and one of the things that i had noticed was
st andrews is a destination was somewhere that a lot of people came to, they love coming there for their golf, but the opportunity to do more than just golf and have other experiences was really paramount in the idea of creating a distillery there. it was a 3am bar conversation with my then boss. the best sort of conversations! that stimulated the idea when he asked me to take him to a distillery the following day and i could not think where there was one. that was the main catalyst. talking about the size of the market, and it is huge, it is trendy, one of those bottles tastes like raspberry ripple, that sort of fancy pink one. raspberry, vanilla and meringue. i wondered if we have hit peak and where do we go from here?
millennials are not drinking nearly as much as the older generation so where do you take it? yeah, there are quitea where do you take it? yeah, there are quite a few points worth picking up are quite a few points worth picking up on. the idea we have hit peak gin is not correct. even the stats we have just seen do not include things like gin liqueurs, which is an exciting area of growth, they do not include some of these ready to drink products. there is still a lot more opportunities for gin. it is a really versatile spirit and has very broad appeal and a lot of people and only beginning their gin journey so they are still a lot of growth to be had domestically and internationally. how far are you in yourgin internationally. how far are you in your gin journey? it depends on the time of night! more than 100 british gin plans already on the market, it
sounds crowded. the consumer already has a lot of choice. what is important is we will see a kind of shake out over the next few years and brands that treat their consumers and drinkers with respect will be the ones that will survive. brands that perhaps work with big chains, trends, as you said a lot of consumers are not going to be drinking alcohol in ten or 20 years, for others it is really important to recognise that and recognise we are in the adult premium drinks market and provide alternatives. what is that? no alcohol gin? yes, we have a working concept about making sure we are providing these kinds of opportunities that relate particularly to health. products with no alcohol but which have a lot of botanical input, that are really good and interesting complex adult beverages, and we think that gin is to step into that. equally things
like sugar content, which is very important for us. other macro trends like sustainability, carbon fruits and so on, or very important trends that think brands that play in that space then but a very good chance of succeeding. i like how you've asked about no alcohol gin with horror in your tone! better for your health, certainly. finally — let's talk burgers — because there is a revolution under way in the world of fast food. plant—based alternatives to meat are being billed as better for the environment and our health. the white castle burger chain in the us is among those now selling pla nt—based burgers alongside the beef version. our new york team went to see how they stack up.
the mission of the company and the bet of the technology is to appeal to meat eaters. not as juicy as i'd expect. a bit salty for my taste. but maybe that's part and parcel with fast food. so far, meat eaters have not really resisted the idea of having innovation food. it's really startling. we genetically modify yeast so it
creates a tremendous amount of this and it is the same that we've been eating in animals and plants. so an impossible burger has all the protein but has no cholesterol, it has less total fat, and it actually has 10—20% less calories than eating a 20g beef pack. i would probably go for the meat one again, so sorry planet! bleurgh! people are not taking up
subscriptions in the same way for services like netflix. we asked if there are too many streaming services or if it is too expensive. thomas says ah, for the days of only a few channels of "free tv" with awful picture quality and programming that was so boring that you would read a book. liu — netflix still haven't solved the regional tv rights issue, which is very disappointing for foreign program lovers. broadchurch is available on netflix uk, but not in taiwan, kathleen brooks from minerva analysis joins us again. an interesting study on the bbc website and in the times about what
website and in the times about what we might see in terms of night—time bans for young drivers. where do you stand? it is probably a good idea when you look at the facts. the number of road accidents in the uk has been going up since 2010. 1700 has been going up since 2010.1700 deaths on the road. something has to be done and young drivers account for about 7% of total licences however about a quarter of all crashes involving young drivers. this is called the graduated license plan so there are bans and restrictions on night—time driving for younger people all over the rest of the world. in the us you can only drive at night if you are young if you can prove you are going to work are coming to and from work. it sounds like a relatively difficult thing potentially to implement but something we probably need to take seriously. i suppose some people who work as delivery drivers it is going to cause problems for them. we do not have time to go into it in more
detail. that's it from business live today. there will be more business news throughout the day on the bbc live webpage and on world business report. it is going to stay fairly unsettled over the next few days. we have got weather systems in the atlantic. you can see one on the satellite imagery and another one across the uk. that is bringing outbreaks of rain in central and eastern areas. that is going to clear and there will be sunny spells and showers for many of us sunny spells and showers for many of us today. quite breezy, particularly in the showers which will be heavy in northern ireland and scotland with the risk of thunder. further south the client will clear taking the rain with it so there will be some sunshine developing. for many there will be sunny spells. a little bit fresher compared to yesterday.
temperature is 21—2a. in between the showers across scotland and northern ireland there will be a bit of sunshine. gusty winds associated with those showers. at portrush for the open starting today the chance of showers and maybe even the odd rumble of thunder. today and tonight those showers will continue across scotland, gradually easing away. clear spells for many of the centre friday morning before the next weather system moves on. that is going to bring heavy rain in the morning in the south—west of england, south west wales. overnight temperatures 10—1a. best weather system is going to spread north and eastward throughout friday, for some of us giving us a spell of quite heavy rain. heavy rain living through northern ireland, wales, central and southern areas. spreading into northern parts. as that as there will be some servers
follow and behind at the far north of scotla nd follow and behind at the far north of scotland remaining largely dry and bright with some sunshine and temperatures on friday getting up into the high teens to the low 20s. the weekend, that weather system will clear. some showers on saturday before the next weather system moves infor before the next weather system moves in for sunday and here the white lines are quite close together so they could be some strong winds developing. thundery showers moving from west to east across many parts of the uk. all of us at some point seeing a shower. maximum temperature is 20-23. seeing a shower. maximum temperature is 20—23. sunday starting dry but more rain coming in from the west.
you're watching bbc news at nine with me, annita mcveigh. the headlines: a stark warning about the impact to the uk of a no—deal brexit from the eu's chief brexit negotiator michel barnier. this document is the only way to leave the eu in an orderly manner. and if we just left, if we just tore up the membership card? the uk would have to face the consequences. at least 20 people are reported to have died in a fire arson is suspected. at an animation studio in the japanese city of kyoto. arson is suspected. the brother of the manchester arena bomber will appear in court later for the first time since being flown to the uk from libya. labour sacks baroness hayter as shadow brexit minister