tv Business Briefing BBC News July 18, 2019 5:30am-5:46am BST
this is the business briefing. i'm ben bland. streaming glitch. netﬂix shares plunge, as subscriber growth falls far short of the company's own target. plus, where's the beef? why america's burger chains are embracing the plant—based patty. and on the markets, asian stocks fell, hit by concerns about the uncertain global economic outlook, the china—us trade war and tepid corporate earnings reports.
we start with 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. let's show you some of the details. 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 five million the company itself was forecasting. in the us netflix actually lost subscribers for the first time ever. revenues were just over $4.9 billion dollars, up 26% on this time last year, but again slightly less than wall street was expecting.
the compa ny‘s market position 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 launching rival services. that means netflix is spending even more on original content. nerves over that spending has given netflix shares to have a bumpy ride over the last 12 months. look at that graph! 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. netflix's chief content officer, ted sarandos, spoke to our media editor amol rajan earlier this summer. he said he's confident people will keep paying for shows
they want. the more competitors you have in the direct space that keep everybody on their toes, it's great for consumers because its price competition and also everybody has to kind of one up each other on quality of programming. do you think that people are going to stop paying for this stuff? you have to find great value in it and our subscribers find great value because there's so many shows to watch and many are your favourite shows on television. they will add other subscriptions to the mixed. if you love netflix but you love game of thrones, you have to go somewhere else for game of thrones, but everything you love is on netflix, and that's what we're trying to focus on. fergus hay from the communications agency leagas delaneyjoins me now. fergus, it's interesting, 2.7 million new subscribers doesn't sound bad but the fact it's about half what they are forecasting, is that a worrying sign? netflix have built incredible value based on acquiring new customers and
keeping them really active, so clearly it's a metric to watch but i suspect the pricing has been affecting that, and that's been well documented, but the real challenge is their contents late. firstly when they came to market they gave amazing content delivery platforms and they were the market leader, that's now going to be a commodity and the base level entry for all parties so now you have to win on content and consumers will follow that. and they are up against the big boys, disney and warner and others. this latest set of results is before disney has launched, that won't happen until november this year, and presumably there will be jitters at netflix about the impact that will have. when disney hit the market, they are going to hit it with real force and ultimately they will take content force and ultimately they will take co nte nt off force and ultimately they will take content off netflix, as will the others, and that makes it a very fragmented market so the jitters should be about consumers' reactions. consumer is going to have to go to lots of different platforms
and pay lots of different subscription models and ultimately it's becoming to be more complicated and fragmented for the consumer and i'm not sure they will benefit. do you think we will see price cuts among the different services on offer to try to win customers? is it a price war that could benefit consumers? clearly everyone is benefiting with pricing, that's where you'll see on the volatility with netflix. some world cup price but i think lots will go with premium content, who has the greatest library that will want you accessing their content. pricing will be affected by that but the battle is for top—quality content. did netflix make a mistake in putting up prices in some of its markets? it's not a mistake. looking at the ten year period of netflix, they've had incredible growth. they've experimented with pricing and ultimately these are relatively small deviations on a ten year norm. every business experiments with
pricing and they are looking for the balance where consumers engage and still pay a price premium. fergus, great to get your thoughts. let's go to asia now, and more fallout from the trade war between the us and china. rico hizon is following developments in south korea and japan. what is going on, what's the latest? well, the big surprise that came today, ben, was the central bank of south korea cutting the cost of borrowing for the first time in three years. you mentioned a couple of troubling issues. one is uncertainty over the ongoing us—china trade conflict, and number two is the technology dispute with japan and japan is reportedly planning to reject south korea's request over talks for export controls affecting technology production. with tighter
restrictions, this will hurt the technology sector that constitutes almost 30% of south korea's exports. this will further dent already anaemic economic growth in the north asian economy. omits this development, the bank of korea, the country's central bank, saw it fit to cut the cost of borrowing by 0.25 ‘x: to cut the cost of borrowing by 0.25 %toi.5% to cut the cost of borrowing by 0.25 %toi.5% and to cut the cost of borrowing by 0.25 % to 1.5% and this came as a surprise to many economists who expected this rate reduction in august. in its bid to further jumpstart august. in its bid to further jumpsta rt the economy, august. in its bid to further jumpstart the economy, analysts are saying the central bank still has a bit of wiggle room to ease more, cut more, and there will also be more pressure on president moonjae—in to pass a stimulus package and to de—escalate regional tension. a conference of factors could hopefully revive the south korean economy. ben. rico, thanks very much. good to see you as always.
we'll speak again soon. now let's brief you on some other business stories. the number of electric car models available to european buyers is expected to triple by 2021, according to the european federation for transport and environment. it says in two years, carmakers will have 214 electric and hybrid models on sale, up from 60 at the end of 2018. a collection of rare sneakers has sold at auction in new york for $850,000. all but one of the pairs went to canadian entrepreneur miles nadal who plans to put them on show at his private museum in toronto. the uk government is launching a scheme to help workers retrain if theirjobs are taken by automation. up to 20 million manufacturing jobs around the world could be replaced by robots by 2030, according to analysis by oxford economics. 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 a company and the bet of the technology is to appeal to everyone. not as you see as i'd expect. a bit salty for my taste i think. but
maybe that's part and parcel with fa st maybe that's part and parcel with fast food. so far, meat eaters have not really resisted the idea of having innovation in food. it's really startling. we genetically modify it so it creates a tremendous amount of this meat and it's the same meat we've all been eating for millennia in animals and implants. an impossible burger pound for pound has all the protein, it has no cholesterol, it has less fat and it has ten to 20% less calories than 80s /20 ground beef patty. i'd probably go for the meet one
again. sorry, my friend! we don't often see them in the same place all the time but clearly when food is involved! we'll take you through ther stories making headlines in the global news media today, including: a new law to crack down on assaults on emergency service staff is not proving enough of a deterrent, according to the mp who campaigned for the legislation. a warning that this report by james vincent includes violent scenes and the moment an officer is assaulted. right, i'm now recording, it's the eighth of february at 9:52am.
i went to have a polite chat as my role as a community support officer and unprovoked, he attacked me. carlos archer‘s attacker is serving seven months in prison after being convicted of two charges, including assault on an emergency worker. the new law is designed to protect ambulance crews, firefighters, police and pcs owes. bbc research shows there was more than 3000 arrests in england and wales under the new law in its first six months. my the new law in its first six months. my two kids asked me, daddy, who did that to your nose? i had to put it into terms they understand and goodies and baddies is the old—fashioned way. u nfortu nately a old—fashioned way. unfortunately a baddie decided to break daddy's knows when daddy won't looking. in the first six months of the law, the metropolitan police said it made 1283 arrests. west yorkshire police made 50a arrests, and in the west midlands, the number of arrests was 497. the new law
means tougher sentencing for those convicted of assaulting an emergency worker with the maximum sentence raised from six months to 12. firefighter dave gillian was the victim of an attack like this in west yorkshire. he's not sure a deterrent is strong enough. it's a personal view but i'm not convinced this is going to change anything. i think these people know what they're doing is wrong and they going to get any trouble with it, so i'm not sure any trouble with it, so i'm not sure any legislation is going to stop it. the police legislation in west yorkshire once a minimum sentence to stop people attacking those who are there to help others. james vincent, bbc news. this is the briefing from bbc news. the latest headlines: the world health organization has declared the outbreak of ebola in the democratic republic of the congo, a public health emergency of international concern. it's only the fifth time the designation has been used. the who has stopped short of ordering the closure of international borders.
the us house of representatives has voted to sideline a motion to impeach president trump. leading democrats had made it clear they did not support it. at a rally in north carolina, mr trump claimed the attempt at impeachment was a disgrace and a witch—hunt. now it's time to look at the stories that are making the headlines in the media across the world. we begin with the new york times, which, along with many papers, looks at the problems facing netflix. it says the streaming juggernaut that's upended the entertainment industry is attracting far fewer subscribers than expected, leading to shares sinking by 10%. the financial times focuses on a story straight out of science fiction, reporting that neuralink, a company set up by entrepreneur elon musk to explore ways of connecting the human brain to a computer interface, has applied to us regulators to start trialling its device on people. the washington post tracks the
terrifying scale of the opiod epidemic in the us. it says drug makers and distributors flooded the country with a staggering seventy six billion opiod painkillers between 2006 and 2012, leaving a trail of addiction. the i looks at the rise of vegan and vegetarian diets and the effect they could have on the very young. parents who've encouraged their children to give up meat and dairy are being urged to get medical advice on whether they need additional vitamin and mineral supplements to stay healthy. and finally the times says young drivers could be banned from the road at night under government plans to cut accident rates. so let's begin. with me is inga beale, board director at london first. let's start with netflix. what has gone wrong for them, if it is fair to say something has gone wrong? well, they had a nice honeymoon